Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 11, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Net Element, Inc. | |
Entity Central Index Key | 1,499,961 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | NETE | |
Entity Common Stock, Shares Outstanding | 2,454,457 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 922,102 | $ 621,635 |
Accounts receivable, net | 4,446,358 | 7,126,429 |
Prepaid expenses and other assets | 1,658,200 | 1,467,897 |
Total current assets, net | 7,026,660 | 9,215,961 |
Fixed assets, net | 64,381 | 117,295 |
Intangible assets, net | 3,242,889 | 3,589,850 |
Goodwill | 9,643,752 | 9,643,752 |
Other long term assets | 456,948 | 603,209 |
Total assets | 20,434,630 | 23,170,067 |
Current liabilities: | ||
Accounts payable | 6,067,319 | 7,510,113 |
Accrued expenses | 3,419,879 | 5,518,823 |
Deferred revenue | 1,196,743 | 1,355,972 |
Notes payable (current portion) | 503,041 | 808,976 |
Due to related parties | 376,593 | 299,004 |
Total current liabilities | 11,563,575 | 15,492,888 |
Notes payable (net of current portion) | 6,887,382 | 3,615,782 |
Total liabilities | 18,450,957 | 19,108,670 |
STOCKHOLDERS' EQUITY | ||
Series A Convertible Preferred stock ($.0001 par value, 1,000,000 shares authorized, no shares issued and outstanding at September 30, 2017 and December 31, 2016) | 0 | 0 |
Common stock ($.0001 par value, 100,000,000 shares authorized and 2,141,208 and 1,535,349 shares issued and outstanding at September 30, 2017 and December 31, 2016 | 2,142 | 1,535 |
Paid in capital | 167,805,711 | 163,918,685 |
Accumulated other comprehensive loss | (2,528,424) | (2,486,616) |
Accumulated deficit | (163,272,959) | (157,442,585) |
Noncontrolling interest | (22,797) | 70,378 |
Total stockholders' equity | 1,983,673 | 4,061,397 |
Total liabilities and stockholders' equity | $ 20,434,630 | $ 23,170,067 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 2,141,208 | 1,535,349 |
Common stock, shares outstanding | 2,141,208 | 1,535,349 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net revenues | ||||
Service fees | $ 14,901,131 | $ 12,874,386 | $ 43,263,217 | $ 34,355,912 |
Branded content | 0 | 1,135,266 | 1,340,896 | 4,607,647 |
Total Revenues | 14,901,131 | 14,009,652 | 44,604,113 | 38,963,559 |
Costs and expenses: | ||||
Cost of service fees | 12,756,627 | 10,683,897 | 36,232,170 | 28,285,984 |
Cost of branded content | 0 | 1,011,271 | 1,302,841 | 4,279,218 |
General and administrative | 2,357,729 | 2,284,737 | 7,788,068 | 6,372,361 |
Non-cash compensation | 111,277 | 732,701 | 836,218 | 3,108,274 |
Bad debt expense | 319,690 | 301,170 | 1,465,311 | 678,150 |
Depreciation and amortization | 630,020 | 764,886 | 1,860,401 | 2,497,538 |
Total costs and operating expenses | 16,175,343 | 15,778,662 | 49,485,009 | 45,221,525 |
Loss from operations | (1,274,212) | (1,769,010) | (4,880,896) | (6,257,966) |
Interest expense, net | (302,813) | (608,716) | (894,553) | (1,186,207) |
Loss from stock value guarantee | 0 | (1,559,281) | 0 | (3,722,142) |
Other income (expense) | (92,904) | 433,784 | (148,099) | 392,257 |
Net loss before income taxes | (1,669,929) | (3,503,223) | (5,923,548) | (10,774,058) |
Income taxes | 0 | 0 | 0 | 0 |
Net loss | (1,669,929) | (3,503,223) | (5,923,548) | (10,774,058) |
Net (income) loss attributable to the noncontrolling interest | (32,607) | 33,683 | 93,175 | 110,350 |
Net loss attributable to Net Element, Inc. stockholders | (1,702,536) | (3,469,540) | (5,830,373) | (10,663,708) |
Foreign currency translation gain (loss) | 92,191 | (96,786) | (41,809) | (622,568) |
Comprehensive loss attributable to common stockholders | $ (1,610,345) | $ (3,566,326) | $ (5,872,182) | $ (11,286,276) |
Loss per share - basic and diluted | $ (0.90) | $ (2.47) | $ (3.29) | $ (8.65) |
Weighted average number of common shares outstanding - basic and diluted | 1,891,023 | 1,403,020 | 1,770,947 | 1,232,593 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (5,830,373) | $ (10,663,708) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities | ||
Non controlling interest | (93,175) | (110,350) |
Share based compensation | 836,218 | 3,108,274 |
Deferred revenue | (159,228) | 135,003 |
Depreciation and amortization | 1,860,401 | 2,497,538 |
Non cash interest | 98,774 | 741,857 |
Changes in assets and liabilities | ||
Accounts receivable | 3,421,265 | (610,384) |
Prepaid expenses and other assets | (352,551) | (331,498) |
Accounts payable and accrued expenses | (2,390,495) | 4,165,778 |
Net cash used in operating activities | (2,609,164) | (1,067,490) |
Cash flows from investing activities | ||
Client acquisition costs | (1,380,661) | (1,346,718) |
Receipt of excess reserves and ( purchase) of fixed and other assets | 77,430 | 0 |
Net cash used in investing activities | (1,303,231) | (1,346,718) |
Proceeds from common stock | 1,150,098 | 0 |
Proceeds from indebtedness | 3,239,033 | 2,668,500 |
Repayment of indebtedness | (273,360) | (110,434) |
Related party advances | 77,587 | 117,779 |
Net cash provided by financing activities | 4,193,358 | 2,675,845 |
Effect of exchange rate changes on cash | 19,504 | 97,902 |
Net (decrease) increase in cash | 300,467 | 359,539 |
Cash at beginning of period | 621,635 | 1,025,747 |
Cash at end of period | 922,102 | 1,385,286 |
Cash paid during the period for: | ||
Interest | 795,779 | 461,673 |
Taxes | 86,942 | 94,718 |
Share issuance for settlement of unpaid compensation | 0 | 1,042,509 |
Shares issued for redemption of indebtedness | 363,986 | 2,328,351 |
Shares issued in settlement of advances from from board member | $ 0 | $ 909,285 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Net Element, Inc. (“we”, “us”, “our” or the “Company”) is a global financial technology and value-added solutions group specializing in mobile payments and other transactional services in emerging countries and in the United States. We have three reportable segments: (i) North American Transaction Solutions for electronic commerce, (ii) Mobile Solutions which primarily serves the Russian Federation and Eurasia and (iii) Online Solutions, comprehensive online payment acceptance solution, with access to 100+ payment methods in 50 countries and 120+ currencies. We are differentiated by our proprietary technology which enables us to provide a broad suite of payment products, end-to-end transaction processing services and superior client support. We are able to deliver these services across multiple points of access, or “multi-channel,” including brick and mortar locations, software integration, e-commerce, mobile operator billing, mobile and tablet-based solutions. In the United States, via our U.S. based subsidiaries, we generate revenues from transactional services and other payment technologies for small and medium-sized businesses (“SMBs”). Through Digital Provider, LLC (“Digital Provider”) and PayOnline, we have mobile operator relationships and contracts allowing us to facilitate transactional services, mobile payment transactions, online payment transactions and other payment technologies in emerging countries in the Russian Federation, Europe and Asia. Our transactional services business enables merchants to accept credit cards as well as other forms of payment, including debit cards, checks, gift cards, loyalty programs and alternative payment methods in traditional card-present or swipe transactions, as well as card-not-present transactions, such as those conducted over the phone or through the Internet or a mobile device. We market and sell our services through both independent sales groups (“ISGs”), which are non-employee, external sales organizations and other third-party resellers of our products and services, and directly to merchants through electronic media, telemarketing and other programs, including utilizing partnerships with other companies that market products and services to local and international merchants. We have agreements with several banks that sponsor us for membership in the Visa ® ® ® ® Our Mobile Solutions business, Digital Provider, provides relationships and contracts with mobile operators that give us the ability to offer our clients in-app, premium SMS (short message services, which is a text messaging service), Wireless Application Protocol (WAP)-click, one click and other carrier billing services. We also market our own branded content as a separate line of business for our mobile commerce business from offices in Russia and Kazakhstan. In August 2017, we substantially reorganized this business, and consolidated its operations into PayOnline and TOT Group Russia. We currently are not generating revenues from new mobile content and we continue to explore partnership opportunities that can monetize our relationships and contracts with mobile operators. PayOnline provides flexible high-tech payment solutions to companies doing business on the Internet or in the mobile environment. PayOnline specializes in integration and customization of payment solutions for websites and mobile apps. In particular, PayOnline arranges payment on the website of any commercial organization, which increases the convenience of using the website and helps maximize the number of successful transactions. In addition, PayOnline is focused on providing online and mobile payment acceptance services to the travel industry through direct integration with leading Global Distribution Systems (“GDS”), which include Amadeus® and Sabre®. Key geographic regions that PayOnline serves include Eastern Europe, Central Asia, Western Europe, North American and Asia major sub regions. PayOnline offices are located in Russia, Kazakhstan and in the Republic of Cyprus. Also part of our transactional services business, Aptito is a proprietary, cloud-based payments platform for the hospitality industry, which creates an online consumer experience in offline commerce environments via tablet, mobile and all other cloud-connected devices. Aptito’s easy to use point-of-sale (“POS”) system makes things easier by providing a comprehensive solution to the hospitality industry to help streamline management and operations. Orders placed tableside by customers directly speed up the ordering process and improve overall efficiency. Aptito's mobile POS system provides portability to the staff while performing all the same functions as a traditional POS system, and more. Company Overview Net Element is a global financial technology and value-added solutions group that supports companies in accepting electronic payments in an omni-channel environment that spans across point-of-sale (“POS”), e-commerce and mobile devices. The Company operates in three segments as a provider of North America Transaction Solutions, Mobile Solutions and Online Solutions. We enable merchants of all sizes to accept and process over 100 different payment options in more than 120 currencies, including credit, debit and prepaid payments. We also provide merchants with value-added services and technologies including integrated payment technologies, POS solutions, security solutions, fraud management, information solutions and analytical tools. We provide a range of solutions to our clients across the value chain of commerce-enabling services and technologies. We create our value-added solutions from a suite of proprietary technology products which includes cloud-based applications, processing services, security offerings, and customer support programs that we configure to meet our clients’ individual needs. We provide additional services including: ⋅ Payment processing POS solutions and value-added services throughout the United States provided by TOT Payments doing business as Unified Payments ⋅ Proprietary cloud-based POS platform for the hospitality industry and SMB merchants through Aptito Restoactive ⋅ Proprietary integrated, global e-commerce and mobile payments processing platform and fraud management system through PayOnline ⋅ Integrated payment processing solutions to the travel industry, which includes integrations with various GDS, such as Amadeus®, Galileo® and Sabre®, and additional geo filters and passenger name record (PNR) through Pay-Travel service offered by PayOnline ⋅ PayNet Solutions universal payment platform provided by PayOnline PayOnline We have operations and offices located within the United States (“U.S.”) (domestic) and outside of the U.S. (international) where sales, customer service and/or administrative personnel are based. Through U.S. based subsidiaries, we generate revenues from transactional services, valued-added payment services and technologies for SMBs. Through wholly owned subsidiaries, we operate internationally with a focus on transactional services, mobile payment transactions, online payment transactions, value-added payment services and technologies in selected international markets. Our business is characterized by transaction related fees, multi-year contracts, and a diverse client base which allows us to grow alongside our clients. Our multi-year contracts allow us to achieve a high level of recurring revenues. While the contracts typically do not specify fixed revenues to be realized thereunder, they do provide a framework for revenues to be generated based on volume of services provided during the contract’s term. The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of expenses for the period presented. Actual results could differ from those estimates. Significant estimates include (i) the valuation of acquired merchant portfolios, (ii) collectability of accounts receivable, (iii) the recoverability of long lived and indeterminate-lived assets, (iv) the remaining useful lives of tangible long-lived assets, and (v) the sufficiency of merchant, aggregator, legal, and other reserves. On an ongoing basis, we evaluate the sufficiency and accuracy of our estimates. Actual results could differ from those estimates. Certain reclassifications have been made to the comparative period amounts to conform to our current period presentation. These reclassifications had no impact on previously presented financial condition or results of operations. We maintain our U.S. dollar-denominated cash in several non-interest bearing bank deposit accounts. All U.S. non-interest bearing transaction accounts are insured up to a maximum of $ 250,000 We had $ 222,815 498,308 Accounts receivable are stated net of allowance for doubtful accounts. We estimate an allowance based on experience with our service providers and judgment as to the likelihood of their ultimate payment. We also consider collection experience and make estimates regarding collectability based on payout trends of the customers. Total allowance for doubtful accounts was $ 636,022 603,031 0 We maintain an inventory of POS terminals which we use to service both merchants and independent sales agents. If the terminals are sold for a fee, we expense the cost of these terminals, plus any setup fees at the time of the sale. Often, we will provide the terminals as an incentive for merchants and independent sales agents to enter into merchant contracts with us. The term of these contracts have an average length of three years and the cost of the terminal plus any setup fees are capitalized and amortized over the contract period. If the merchants early terminate their contract with us, they are obligated to either return the terminal or pay for the terminal. The Company had $ 451,672 311,206 442,783 308,582 We depreciate our furniture and equipment over a term of three to ten years. Computers and software are depreciated over terms between two and five years. Leasehold improvements are depreciated over the shorter of the economic life or term of each lease. All of our assets are depreciated on a straight-line basis for financial statement purposes. Expenditures for repairs and maintenance are charged to operating expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. At the time of retirements, sales, or other dispositions of property and equipment, the original cost and related accumulated depreciation are removed from the respective accounts, and the gains or losses are presented as other expenses. Included in our intangible assets are merchant portfolios which represent the net carrying value of merchant customer bases acquired. Merchant portfolios are amortized on a straight-line basis over their respective contract terms, generally three to five years. Merchant portfolios are assessed for impairment if events or circumstances indicate that their respective carrying values are not recoverable from the future anticipated undiscounted net cash flows attributable to such assets. In such cases, the amount of any potential impairment would be measured as the excess, if any, of carrying value over the fair value of such assets. We capitalize direct expenses associated with filing of patents and patent applications and amortize the capitalized intellectual property costs over five years beginning when the patent is approved. Additionally, we capitalize the fair value of intangible assets acquired in business combinations. We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets. Acquired intangible assets include: merchant portfolios, trade names, non-compete agreements, customer relationships and technology. We review our long-lived assets for impairment whenever events or changes indicate that the carrying amount of an asset or group of assets may not be recoverable. During the three months ended September 30, 2017 and 2016, we did not recognize any charges for impairment of goodwill or intangible assets. Capitalized customer acquisition costs consist of up-front cash payments made to Independent Sales Groups (“ISGs”) for the establishment of new merchant relationships. Capitalized customer acquisition costs represent incremental, direct customer acquisition costs that are recoverable through gross margins associated with merchant contracts. The up-front cash payment to the ISG is based on the estimated gross margin for the first year of the merchant contract. The deferred customer acquisition cost asset is recorded at the time of payment and the capitalized acquisition costs are primarily amortized on a straight-line basis over a period of three years. Management evaluates the capitalized customer acquisition cost for recoverability at each balance sheet date by comparing, on a pooled basis by vintage month of origination, the expected future net undiscounted cash flows from underlying merchant relationships to the carrying amount of capitalized customer acquisition costs. If the estimated future net cash flows are lower than the recorded carrying amount, indicating an impairment of the carrying value of the capitalized customer acquisition costs, the impairment loss is charged to operations. During the nine months ended September 30, 2017 and the twelve months ended December 31, 2016, we recorded additional capitalized customer acquisition costs of $ 1,311,262 1,319,820 2,258,877 1,697,337 We report commission payments as a cost of revenues in the accompanying condensed consolidated statement of operations and comprehensive loss. We pay agent commissions to ISGs and independent sales agents based on the processing volume of the merchants enrolled. The commission payments are based on varying percentages of the volume processed by us on behalf of the merchants. Percentages vary based on the program type and transaction volume of each merchant. At September 30, 2017 and December 31, 2016, the residual commissions payable to ISGs and independent sales agents were $ 807,535 1,347,352 We pay agent commission on annual fees between January and April of each year. We amortize the annual fees paid in equal monthly amounts from date of payment to end of year. We pay our agent commissions for annual fees in advance of recognizing the associated revenue. We deferred $ 784,711 863,604 Our financial instruments consist primarily of cash, accounts receivable, merchant portfolios, trade payables and debt instruments. The carrying values of cash and cash equivalents, accounts receivable and trade payables are considered to be representative of their respective fair values due to the short-term nature of these instruments. The carrying amount of the long-term debt of $ 7.5 4.6 We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use a three-level fair value hierarchy to prioritize the inputs used to measure fair value and maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 Quoted market prices in active markets for identical assets or liabilities as of the reporting date Level 2 Observable market based inputs or unobservable inputs that are corroborated by market data Level 3 Unobservable inputs that are not corroborated by market data These non-financial assets and liabilities include intangible assets and liabilities acquired in a business combination as well as impairment calculations, when necessary. The fair value of the assets acquired and liabilities assumed in connection with the PayOnline acquisition were measured at Level 3 fair value by us at the acquisition date. The fair values of our merchant portfolios are primarily based on Level 3 inputs and are generally estimated based upon independent appraisals that include discounted cash flow analyses based on our most recent cash flow projections, and, for years beyond the projection period, estimates based on assumed growth rates. Assumptions are also made regarding appropriate discount rates, perpetual growth rates, and capital expenditures, among others. In certain circumstances, the discounted cash flow analyses are corroborated by a market-based approach that utilizes comparable company public trading values, and, where available, values observed in private market transactions. The inputs used by management for the fair value measurements include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3. The goodwill recoverability calculation was primarily based on observable inputs using company specific information and is classified as Level 3. We are subject to foreign currency exchange rate risk in our foreign operations in Russia, the functional currency of which is the Russian Ruble, where we generate service fee revenues and interest income and incurs product development, engineering, website development, and general and administrative costs and expenses. The Russian engineering operations pay a majority of their operating expenses in their local currencies, exposing us to exchange rate risk. We do not engage in any currency hedging activities. We recognize revenue when the following four basic criteria have been met: (1) persuasive evidence of a sales arrangement exists, (2) performance of services or delivery of goods has occurred, (3) the sales price is fixed or determinable, and (4) collectability is reasonably assured. We consider persuasive evidence of a sales arrangement to be the receipt of a billable transaction from aggregators, merchants or a signed contract. Collectability is assessed based on a number of factors, including transaction history with the customer and the credit worthiness of the customer. If it is determined that the collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash. We record cash received in advance of revenue recognition as deferred revenue. Our revenues for the three and nine months ended September 30, 2017 and 2016 were principally derived from the following sources: Transactional Processing Fees: Our transactional processing businesses derive revenues primarily from the electronic processing of services including: credit, debit, electronic benefits transfer and alternative payment methods card processing authorized and captured through proprietary and third-party networks, electronic gift certificate processing, and equipment sales. These revenues are recorded as bankcard and other processing transactions when processed. In addition to generating service fees, Aptito earns monthly license fees for use of its platform. Typically, fees charged to merchants for these processing services are based on a variable percentage of the dollar amount of each transaction and in some instances, additional fees are charged for each transaction. Merchant customers also may be charged miscellaneous fees, including statement fees, annual fees, monthly minimum fees, fees for handling chargebacks, gateway fees, and fees for other miscellaneous services. Generally, we (i) are the primary obligor in our arrangements with our merchant customers, (ii) have latitude in establishing the price of our services, (iii) have the ability to change the product and perform parts of the services, (iv) have discretion in supplier selection, (v) have latitude in determining the product and service specifications to meet the needs of our merchant customers, and (vi) assume credit risk. In such cases, we report revenues as gross of fees deducted by our sponsoring member banks, as well as fees deducted from card-issuing member banks and card associations on behalf of our sponsoring member banks for interchange and assessments. These fees charged by the card associations to process the credit card transactions are recorded separately as a cost of revenue in the accompanying condensed consolidated statement of operations and comprehensive loss. We have multiple element arrangements that include bundled transactions with merchants encompassing annual PCI (Payment Card Industry) fees, annual membership fees, and monthly processing fees. We adopted Accounting Standard Update (“ASU”) 2009-13, “MultipleDeliverable Revenue Arrangements.” ASU 2009-13 requires the use of the relative selling price method of allocating total consideration to units of accounting in a multiple element arrangement and eliminates the residual method. This accounting principle requires an entity to allocate revenue in an arrangement using estimated selling price deliverables if it does not have vendor specific objective evidence (VSOE) or third-party evidence (TPE) of selling price. VSOE is the price charged when the same or similar product or service is sold separately. We define VSOE as a median price of recent stand-alone transactions that are priced within a narrow range. TPE is determined based on the prices charged by our competitors for a similar deliverable when sold separately. We evaluate each deliverable in its arrangements to determine whether it represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has stand-alone value to our customers. Our products (i.e., POS terminals) and services qualify as separate units of accounting under ASU 2009-13. As noted above, merchant customers may be charged miscellaneous fees, including statement fees, annual fees, monthly minimum fees, fees for handling chargebacks, gateway fees, and fees for other miscellaneous services. The fair value for annual fees is based on the annual contract renewal price and is deemed to represent stand-alone selling price based upon VSOE. The fair value for processing is based on prices charged by our competitors for similar deliverables when sold separately and is deemed to represent stand-alone selling price based upon TPE. Deferred revenue represents primarily amounts received in advance for annual fee billings and are recognized on a pro rata basis over the service period. Service Fees by Digital Provider Mobile payment processing revenues for third-party content providers are accounted for as service fees and presented net of aggregator and mobile operator payments on the condensed consolidated financial statements as these revenues are considered to be agency fees. Subscription revenues for our branded content are recognized when a content subscriber initiates the purchase of access to content using WAP-click, Internet-click, or a SMS-to-short number registered to us. Digital Provider’s subscription revenues are recorded at the amounts charged to the third party customer. Cost of revenues for Digital Provider branded content includes fees due to mobile operators and marketing partners, as well as short number fees. Cost of revenues for Digital Provider is comprised primarily of mobile operator fees, content provider fees and fees for short numbers paid to mobile operators. Additionally, penalties and penalty recoveries are recorded as cost of sales. Service revenues for mobile payment processing services are presented net as these revenues are considered to be agency fees. Cost of revenues for TOT Payments, Aptito and PayOnline is comprised primarily of processing fees paid to third parties attributable to providing transaction processing and service fees for POS system usage by our merchant customers. Interchange fees and cost of services are recognized as incurred and generally occur in the same period in which the corresponding revenue is recognized. Interchange fees are set by the card networks and are paid to the card-issuing bank. Interchange fees are calculated as a percentage of the dollar volume processed plus a per transaction fee. We also pay Visa® and MasterCard® network dues. Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period as adjusted for the effect of reverse stock splits (see Note 13). Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares issuable upon exercise of common stock options or warrants. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would have an anti-dilutive effect. At both September 30, 2017 and December 31, 2016, we had warrants outstanding to purchase 89,389 228,256 193,601 Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes indicate that the carrying amount of an asset or group of assets may not be recoverable. During the quarter ended September 30, 2017 and the year ended December 31, 2016, there was no impairment of goodwill and intangible assets. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent that our management believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. In addition, see "Recently Issued Accounting Pronouncements" below regarding our adoption of guidance related to deferred taxes in the first quarter of 2017. We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. We recognize a liability for unrecognized tax benefits as current to the extent that we anticipate payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. Our evaluation of uncertain tax positions was performed for the tax years ended December 31, 2012 and forward, the tax years which remain subject to examination at September 30, 2017. Please see Note 15 for discussion of our uncertain tax positions. In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, which defers by one year the effective date of ASU 2014-09. Accordingly, this guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted for interim and annual periods beginning after December 15, 2016. We are evaluating the effects that the adoption of ASU 2014-9 will have on our consolidated financial statements, and currently do not expect a material impact on our financial position, results of operations or cash flows. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability. We adopted this ASU in the first quarter of 2017, which had no impact on our financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases” which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. The ASU is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. While we are currently evaluating the effects that the adoption of ASU 2016-02 will have on our consolidated financial statements, we expect an increase in assets and liabilities on our balance sheet associated with the recognition of right-of-use office leases. In March 2016, the FASB issued Accounting Standards Update 2016-08 Revenue from Contracts with Customers (Topic 606) to clarify implementation guidance on principal versus agent considerations (for reporting revenue on a gross or net basis). The ASU is an amendment to Topic 606, clarifies the implementation guidance, and requires an entity to account for revenue as an agent when another entity controls the specified good or service before that good or service is transferred to the customer. This ASU is effective for annual periods beginning after December 15, 2017. We currently are preparing analyses, across all business lines and customers, to determine the effect of the new revenue recognition standard. While we are currently evaluating the effects that the adoption of ASU 2016-08 will have on our consolidated financial statements, we believe that a portion of our revenue recognized for branded content in our Mobile Solutions business segment may no longer meet the conditions for gross reporting upon adoption of this ASU in 2018. |
BASIS OF PRESENTATION AND PRINC
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and reflect all adjustments, which are of a normal and recurring nature, that are, in the opinion of management, necessary for a fair presentation of our condensed consolidated financial position and results of operations for the related periods. All significant intercompany transactions and balances have been eliminated in consolidation. The consolidated results of operations for any interim periods are not necessarily indicative of results to be expected for the full year. On May 25, 2016 and October 5, 2017, we effected one-for-ten reverse stock splits of our common stock. Our condensed consolidated financial statements and disclosures reflect these changes in capital structure for all periods presented. Following the consolidation principles promulgated by U.S. GAAP, these condensed consolidated financial statements include the assets, liabilities, results of operations, and cash flows of the following subsidiaries: (1) TOT Group, Inc., a 100 The subsidiaries listed above are the parent companies of several other subsidiaries, which hold the Company’s underlying investments or operating entities. TOT Group is the parent company of TOT Payments, LLC (“TOT Payments”) doing business as Unified Payments a wholly owned subsidiary formed in Florida, Aptito, LLC, a 80 ⋅ TOT Payments, LLC is the parent company of: - Process Pink, LLC, a wholly owned subsidiary formed in Florida; - TOT HPS, LLC, a wholly owned subsidiary formed in Florida; - TOT FBS, LLC, a wholly owned subsidiary formed in Florida; - TOT New Edge, LLC, a wholly owned subsidiary formed in Florida; - TOT BPS, LLC, a wholly owned subsidiary formed in Florida ⋅ OOO TOT Group Russia is the parent company of its wholly owned subsidiary OOO Digital Provider (a company formed in Russia), PayOnline Systems, LLC (a wholly-owned company formed in Russia), Innovative Payment Technologies, LLC (a wholly-owned company formed in Russia) and TOT Group Kazakhstan, a wholly owned subsidiary formed in Kazakhstan. ⋅ Netlab Systems, LLC is the parent company of Tech Solutions LTD (Cayman Islands). ⋅ Net Element Russia is the parent company of a 100% owned OOO TOT Group. Net Element Russia and OOO TOT Group are inactive and in the process of being liquidated. ⋅ TOT Group Europe LTD is a 100% owner of Polimore Capital Limited (Cyprus) and Brosword Holding Limited (Cyprus) All material intercompany accounts and transactions have been eliminated in consolidation. |
LIQUIDITY AND GOING CONCERN CON
LIQUIDITY AND GOING CONCERN CONSIDERATIONS | 9 Months Ended |
Sep. 30, 2017 | |
Liquidity And Going Concern Considerations [Abstract] | |
Liquidity and Going Concern Considerations [Text Block] | NOTE 3. LIQUIDITY AND GOING CONCERN CONSIDERATIONS Our condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the three and nine months ended September 30, 2017, we sustained a net loss of $1.7 million and $5.9 million, respectively, and had an 4.5 6.3 Failure to successfully continue developing our payment processing operations and maintain contracts with merchants, mobile phone carriers and content providers who use TOT Group’s services could harm our revenues and materially adversely affect our financial condition and results of operations. We face all of the risks inherent in a new business, including the need for significant additional capital, management’s potential underestimation of initial and ongoing costs, and potential delays and other problems in connection with developing our technologies and operations. We are continuing with our plan to further grow and expand our payment processing operations in the United States and emerging markets and seek sources of capital to expand and pay our contractual obligations as they come due. Management believes that its current operating strategy will provide the opportunity for us to continue as a going concern as long as we are able to obtain additional financing; however, there is no assurance this will occur. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. We are required to continually meet the listing requirements of The Nasdaq Capital Market (including a minimum bid price for our common stock of $1.00 per share and a $2.5 million minimum of stockholders’ equity) to maintain the listing of our common stock on The Nasdaq Capital Market. On October 20, 2017, the Company regained its compliance with Nasdaq as it evidenced compliance with the $1.00 bid price and stockholders’ equity requirements. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | NOTE 4. ACCOUNTS RECEIVABLE Accounts receivable (net) consist of amounts due from processors and Russian mobile operator intermediaries. Total net accounts receivable amounted to $ 4,446,358 7,126,429 108,038 2,391,646 157,883 185,650 4,180,437 4,549,133 Our allowance for doubtful accounts was $ 636,022 603,031 500,000 32,991 |
FIXED ASSETS
FIXED ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | NOTE 5. FIXED ASSETS Useful life September 30, 2017 December 31, 2016 Furniture and equipment 3 - 10 $ 118,952 $ 185,301 Computers 2 - 5 156,958 168,942 Total 275,910 354,243 Less: Accumulated depreciation (211,529) (236,948) Total fixed assets, net $ 64,381 $ 117,295 Depreciation expense for fixed assets for the three and nine months ended September 30, 2017 was $ 7,901 25,419 20,215 39,737 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | NOTE 6. INTANGIBLE ASSETS Shown below are the details of intangible assets at September 30, 2017 and December 31, 2016: IP Software Portfolios Client Acquisition PCI Trademarks Domain Names Covenant Total Balance at December 31, 2015 $ 1,548,601 $ 1,489,175 $ 1,048,060 $ 355,458 $ 561,772 $ 339,147 $ 81,667 $ 5,423,880 Additions 102,689 - 1,319,820 - - 83 - 1,422,592 Amortization (1,271,226) $ (704,184) (670,543) (149,668) (234,064) (145,270) (81,667) (3,256,622) Balance at December 31, 2016 380,064 784,991 1,697,337 205,790 327,708 193,960 - 3,589,850 Additions 45,591 - 403,585 - - - 449,176 Amortization (60,739) (158,434) (221,195) (37,417) (58,516) (36,317) - (572,618) Balance at March 31, 2017 $ 364,916 $ 626,557 $ 1,879,727 $ 168,373 $ 269,192 $ 157,643 $ - $ 3,466,408 Additions - - 403,300 - - - 403,300 Disposals (11,099) - - - - - - (11,099) Amortization (49,042) (117,501) (251,485) (37,417) (59,004) (35,931) - (550,380) Balance at June 30, 2017 $ 304,775 $ 509,056 $ 2,031,542 $ 130,956 $ 210,188 $ 121,712 $ - $ 3,308,229 Additions 10,168 - 504,377 - - - - 514,545 Amortization (53,092) (117,501) (277,042) (37,417) (59,004) (35,829) - (579,885) Balance at September 30, 2017 $ 261,851 $ 391,555 $ 2,258,877 $ 93,539 $ 151,184 $ 85,883 $ - $ 3,242,889 Total depreciation and amortization expense for the three month and nine months period ended September 30, 2017 was $ 630,020 1,860,401 579,886 1,702,884 42,233 132,098 7,901 25,419 Total depreciation and amortization expense for the three month and nine months period ended September 30, 2016 was $ 744,670 2,457,800 701,065 2,345,078 43,605 112,722 20,215 39,737 Year Amortization Expense 2017 (3 months) $ 269,716 2018 1,078,862 2019 1,078,862 2020 815,449 2021 - Total $ 3,242,889 Software At times, capitalized software development costs that add value to or extend the useful of the related software it develops for internal use and licensing. Costs for routine software updates are expensed as incurred. Capitalized costs are amortized over 36 During the nine months and twelve months ended September 30, 2017 and December 31, 2016, respectively, we capitalized $ 55,759 81,428 · point of sale software ($ 53,344 1,469 · payment processing software ($ 0 89,101 · mobile payments billing software ($ 2,415 12,119 For the three months and nine months ended September 30, 2017, amortization was $ 53,092 162,873 246,727 950,206 Merchant Portfolios Merchant Portfolios consist of portfolios purchased by us that earn future streams of income. The remaining contract terms of these portfolios range from 15 36 391,555 784,991 117,501 393,436 176,046 528,138 Trademarks and Domain Names At September 30, 2017 and December 31, 2016, the net book value of trademarks was $ 151,184 327,708 193,960 59,004 176,524 41,667 125,001 108,077 24,999 74,997 PCI Certification At September 30, 2017 and December 31, 2016, the net book value of our PCI certification was $ 93,539 205,790 37,417 112,251 37,417 112,251 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | NOTE 7. ACCRUED EXPENSES At September 30, 2017 and December 31, 2016, accrued expenses amounted to $ 3,419,879 5,518,823 September 30, 2017 December 31, 2016 Accrued professional fees $ 220,140 $ 220,140 PayOnline accrual 1,633,271 3,784,451 Accrued interest 180,844 183,778 Accrued bonus 1,253,577 774,485 Accrued franchise taxes - 180,000 Accrued foreign taxes 108,456 131,810 Short term loan advances - 174,376 Other accrued expenses 23,591 69,783 $ 3,419,879 $ 5,518,823 The accrual for PayOnline at September 30, 2017 consists of a $ 480,936 1,152,335 The accrual for PayOnline at December 31, 2016 consists of a $ 199,000 2,075,687 1,433,475 Accrued bonuses are attributed to our TOT Group subsidiaries resulting from a discretionary bonus accrual for $ 1,253,577 774,485 |
SHORT TERM DEBT
SHORT TERM DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Short-term Debt [Text Block] | NOTE 8. SHORT TERM DEBT At September 30, 2017 and December 31, 2016, short term debt consists of $ 503,041 808,976 |
LONG TERM DEBT
LONG TERM DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | NOTE 9. LONG TERM DEBT September 30, 2017 December 31, 2016 RBL Capital Group, LLC $ 4,544,087 $ 4,044,056 Priority Payments Systems LLC 2,477,678 - MBF Merchant Capital, LLC 504,794 520,303 Subtotal 7,526,559 4,564,359 Less Deferred loan costs (136,136) (139,601) Subtotal 7,390,423 4,424,758 Less Current portion (503,041) (808,976) Long term debt $ 6,887,382 $ 3,615,782 RBL Capital Group, LLC Effective June 30, 2014, TOT Group, Inc. and its subsidiaries as co-borrowers, TOT Payments, LLC, TOT BPS, LLC, TOT FBS, LLC, Process Pink, LLC, TOT HPS, LLC and TOT New Edge, LLC, entered into a Loan and Security Agreement with RBL Capital Group, LLC (“RBL”), as lender (the “RBL Loan Agreement”). Pursuant to the original terms of the RBL Loan Agreement, we could borrow up to $ 10,000,000 18 13.90 10.65 3,315,000 400,000 250,000 10 15 10,455,913 10,955,414 The co-borrowers’ obligations to RBL pursuant to the RBL Loan Agreement are secured by a first priority security interest in all of the co-borrowers’ tangible and intangible assets, including but not limited to their merchants, merchant contracts and proceeds thereof, and all right title and interest in co-borrowers’ processing contracts, contract rights, and portfolio cash flows with all processors of the co-borrowers. On July 17, 2014, we entered into a $ 3,315,000 3.0 239,000 13.90 90,421 2 4 1,849,481 16,426 99,203 19,608 0 Effective February 10, 2015, we entered into a $ 400,000 13.90 10,911 8,000 21,928 0 Effective March 27, 2015, we entered into a $ 250,000 13.90 6,819 5,000 9,174 0 On May 4, 2016, we entered into a $ 250,000 14.15 6,850 2 4 0 On May 20, 2016, we entered into a $ 400,000 14.15 10,961 2 4 0 On June 23, 2016, we entered into a $ 190,000 14.15 5,206 2 4 0 On July 15, 2016, we entered into a $ 350,000 14.15 9,591 2 4 0 On August, 15, 2016, we entered into a $ 400,000 14.15 10,961 2 4 0 On September 15, 2016, we entered into a $ 350,000 14.15 9,591 2 4 0 On November 7, 2016, we entered into a $ 350,000 14.15 9,591 2 4 0 On December 15, 2016, we entered into a $ 325,000 14.15 8,906 2 4 0 On December 20, 2016, we entered into a $ 4,044,055 14.15 47,686 110,814 20,000 104,600 0 On March 30, 2017, we entered into a $ 100,000 14.4 2,753 2,000 4,000 0 On April 17, 2017, we entered into a $ 400,000 14.4 5,208 11,011 8,000 16,000 0 On April 26, 2017, we exchanged 10,235 75,000 3,315,000 0.73 4,500 9,951 On April 26, 2017, the $ 4,044,055 75,000 108,759 On May 19, 2017, we entered into a $ 75,000 947 14.4 2,065 On May 24, 2017, we exchanged 23,058 150,000 3,315,000 0.65 23,156 On May 26, 2017, we entered into a $ 150,000 1,479 14.4 4,129 On June 1, 2017 the $ 4,044,055 4,544,055 14.19 124,607 On July 27, 2017, the $ 4,544,055 105,969 105,969 121,810 4,438,087 On August 1, 2017, we entered into a $ 106,000 822 1,316 14.9 2,945 2,120 4,240 Also see Note 17 for activity subsequent to September 30, 2017. MBF Merchant Capital, LLC We issued the following notes payable to MBF, an entity owned by William Healy, a former member of our Board of Directors. On March 28, 2016, we entered into a $ 75,000 14 7,990 6 0 23,420 On April 19, 2016, we entered into a $ 300,000 15.5 14,617 6 110,424 221,826 On July 1, 2016 353,500 15.5 July 28, 2016 28 17,224 1 6.6 145,462 275,056 On August 29, 2017, our subsidiary, TOT Group, Inc., entered into a $ 275,000 13.95 16,500 5,500 29,288 248,908 0 Crede CG III, Ltd. On May 2, 2016, we entered into a Master Exchange Agreement with Crede (the “Master Exchange Agreement”), an entity that purchased a portion our previously issued notes held by RBL described above. Pursuit to the Master Exchange Agreement, we have the right to request that Crede exchange up to $ 3,965,000 On July 27, 2017, we exchanged 26,772 105,969 3,315,000 4.00 19,865 For the year ended December 31, 2016, we exchanged 166,340 2,499,481 400,000 250,000 1,849,481 3,315,000 16.80 302,294 487,064 Priority Payment Systems LLC Effective as of May 18, 2017, we entered into a loan agreement and security agreement with Priority Payment Systems LLC and issued a promissory note dated May 18, 2017. Pursuant to the loan agreement and the note, we borrowed $ 2,000,000 Pursuant to the security agreement, the loan is secured by collateral consisting of accounts, cash or cash equivalents, residuals related to the merchants originated by us and processed by Priority Payments Systems LLC. The loan agreement, the note and the security agreement contain customary representations, warranties, events of default, remedies and affirmative and negative covenants, as well as the right of first refusal and the right related to the merchants. Effective as of May 17, 2017, we entered into a corporate guaranty in favor of Priority Payments Systems LLC, pursuant to which we unconditionally guaranteed the full and prompt payment of each present and future liability, debt and obligation under the loan agreement, the note, the security agreement and other related documents. On June 27, 2017, we entered into an amendment to the loan agreement with Priority Payment Systems LLC pursuant to which: (i) The original term loan was modified into a multi - draw loan with an increase of the borrowing limit to $ 2,500,000 (ii) The loan maturity was extended to May 20, 2021. During the quarter ended September 30, 2017, we borrowed a total of $ 284,000 2,500,000 306,323 2,477,677 Also see Note 17 for activity subsequent to September 30, 2017. Scheduled Debt Principal Repayment 2017 (3 months) 503,041 2018 2,440,661 2019 1,716,673 2020 1,162,309 2021 1,338,621 thereafter 365,254 Balance September 30, 2017 $ 7,526,559 Also see Note 17 for activity subsequent to September 30, 2017. |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk Disclosure [Text Block] | NOTE 10. CONCENTRATIONS The Company’s total revenue was $ 44,604,113 38,963,559 Of the $44,604,113 in revenues for the nine months ended September 30, 2017, $ 43,263,217 1,340,896 Total revenue was $38,963,559 for the nine months ended September 30, 2016, of which $ 29,442,868 5,000,137 The credit card processing revenues were from merchant customer transactions, which were processed primarily by two third-party processors (greater than 5 77 61 5 7 Mobile electronic payment revenues were derived from merchant customer transactions processed by mobile operators. For the nine months ended September 30, 2017, no mobile operator processed transactions that generated more than 5 11 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 11. COMMITMENTS AND CONTINGENCIES PayOnline Acquisition Commitments On May 20, 2015, our subsidiaries TOT Group Europe, Ltd. and TOT Group Russia LLC, entered into an agreement with Maglenta Enterprises Inc. and Champfremont Holding Ltd. (together, the “PayOnline Sellers”) to acquire all of the assets and liabilities that comprise PayOnline. PayOnline’s business includes the operation of a protected payment processing system to accept bank card payments for goods and services. Purchase consideration consisted of a combination of $ 3.6 3.6 2,162,861 On October 25, 2016, we entered into a settlement agreement with the PayOnline Sellers relating to the stock price guarantee provision in the PayOnline acquisition agreement pursuant to which we agreed to pay the PayOnline Sellers an aggregate of $ 2,288,667 On October 25, 2016, we entered into an amendment to the PayOnline acquisition agreement with the PayOnline Sellers, in which we agreed to assume $ 1,433,475 30,759 252,223 On May 20, 2017, we entered into an amendment to the PayOnline settlement agreement, which reflected the new terms under which the Company agreed to pay to the PayOnline Sellers an aggregate of $ 1,792,071 29,604 623,762 197,912 Leases In May 2013, we entered into a lease agreement for approximately 4,000 December 31, 2016 16,800 19,448 233,377 In September 2016, this lease was extended for a period of five years commencing January 1, 2017 and expiring December 31, 2021 20,421 245,046 24,821 297,855 14,354 172,248 Effective June 1, 2017, Netlab Systems, LLC, through its Russian representative office, executed a lease for 1,654 24,000 June 1, 2018 PayOnline leases approximately 5,435 153,623 5,268 167 3,104 April 30, 2018 275 3,444 155 1,536 On May 12, 2017, Digital Provider leased approximately 1,566 27,500 We believe that our current facilities are suitable and adequate for our present purposes, and we anticipate that we will be able to extend our existing leases on terms satisfactory to us or acquire new facilities on acceptable terms. Litigation Aptito.com, Inc. On August 6, 2014, our subsidiary (Aptito, LLC) filed a lawsuit against Aptito.com, Inc. and the shareholders of Aptito.com, Inc., in state court in the 11th Judicial Circuit in and for Miami-Dade County. This is an interpleader action in regards to 12,500 12,500 On March 20, 2017, Aptito.com filed amended counterclaims against Aptito, LLC as well as claims against us alleging amongst other matters, breach of contract and violations of federal and state securities laws. Management believes that these counterclaims are without merit, and we and Aptito, LLC and the Company have filed a motion to dismiss the claims and a motion for sanctions. Counsel is waiting for a hearing date for determination on these matters. A hearing on the motion to interplead was heard in July 2017 and the Court granted Aptito, LLC’s motion to interplead. Aptito.com, Inc. shareholders will now have to settle their internal dispute regarding this matter. Aptito, LLC still has potential liability arising from an alleged delay in issuing the shares to Aptito.com, Inc. The company is disputing these allegations through the ongoing litigation process. Gene Zell In June 2014, we, as plaintiff, commenced an action in the Miami-Dade Circuit Court, Florida against Gene Zell for defamation of our Company and CEO and tortious interference with our business relationships. In October 2014, the court granted a temporary injunction against Zell enjoining him from posting any information about our Company and CEO on any website and enjoining him from contacting our business partners or investors. Zell violated the Court Order and the Court granted a Motion imposing sanctions against Zell. We continue to seek enforcement of the Court Order. On April 13, 2015, Zell filed a Motion to set aside the Court Order alleging he was unaware of the Court Proceedings. The Court, on August 26, 2015, dismissed Zell’s Motion to dissolve the injunction. In March 2017, the Court dismissed another Motion brought by Zell to dissolve the injunction. Accordingly, the injunction order prohibiting Zell from making further defamatory posts remains in place. The Company continues to protect its rights by ongoing enforcement of the injunction. Other Legal Proceedings We are involved in certain legal proceedings and claims which arise in the ordinary course of business. In our opinion, based on consultations with outside counsel, the results of any of these ordinary course matters, individually and in the aggregate, are not expected to have a material effect on our results of operations, financial condition, or cash flows. As more information becomes available, if management should determine that an unfavorable outcome is probable on such a claim and that the amount of such probable loss that it will incur on that claim is reasonably estimable, we will record a reserve for the claim in question. If and when we record such a reserve is recorded, it could be material and could adversely impact our results of operations, financial condition, and cash flows. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 12. RELATED PARTY TRANSACTIONS We and our subsidiary, TOT Group, Inc., have entered into certain term loan notes with MBF. For additional information about such term loan notes, see “MBF Merchant Capital, LLC” in Note 9. William Healy, a former member of our Board of Directors, is the sole member of MBF. During the nine months ended September 30, 2017 and 2016, agent commissions resulting from merchant processing of $ 67,483 0 On March 1, 2017, we entered into a promissory note with Star Equities, LLC, an entity which our CEO is the managing member, in the principal amount of $ 348,083 290,954 3,481 12 5 348,083 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders Equity Note Disclosure [Text Block] | NOTE 13. STOCKHOLDERS’ EQUITY On May 25, 2016 and October 5, 2017, we effected one-for-ten reverse stock splits of our common stock. Our condensed consolidated financial statements and disclosures reflect these changes in capital structure for all periods presented. On June 12, 2015 and June 13, 2016, our shareholders approved 100,000,000 300,000,000 400,000,000 300,000,000 100,000,000 On July 5, 2017, the Company entered into a common stock purchase agreement (the “Cobblestone Purchase Agreement”) with Cobblestone Capital Partners LLC (“Cobblestone Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Cobblestone Capital is committed to purchase up to an aggregate of $ 10 200,000 45,676 4.38 234,135 1,057,500 4.52 Also see Note 17 regarding our regaining compliance with Nasdaq requirements (including a minimum bid price for our common stock of $1.00 per share and a $2.5 million minimum of stockholders’ equity). Equity Incentive Plan Activity On December 5, 2013, our shareholders approved the Net Element International, Inc. 2013 Equity Incentive Plan (the “2013 Plan”). Awards under the 2013 Plan may be granted in any one or all of the following forms: (i) incentive stock options meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as amended; (ii) non-qualified stock options (unless otherwise indicated, references to “Options” include both Incentive Stock Options and Non-Qualified Stock Options); (iii) stock appreciation rights, which may be awarded either in tandem with Options or on a stand-alone basis; (iv) shares of common stock that are restricted; (v) units representing shares of common stock; (vi) units that do not represent shares of common stock but which may be paid in the form of common stock; and (vii) shares of common stock that are not subject to any conditions to vesting. The maximum aggregate number of shares of common stock available for award under the 2013 Plan at September 30, 2017 and December 31, 2016 were 23,488 128,026 On February 28, 2017, the Compensation Committee (the “Committee”) of our Board of Directors approved and authorized grants of the following equity awards to our employees and consultants pursuant to the 2013 Plan, as amended: (i) 45,105 50 50 (ii) 62,668 50 50 For the nine months ended September 30, 2017, we recorded $ 677,467 Other Stock Issuance We accrued 1,667 On July 27, 2017, we exchanged 26,772 105,969 3,315,000 4.00 On July 19, 2017, we issued 30,759 252,223 1.4 Agreement with ESOUSA Holdings On July 6, 2016, we entered into a common stock purchase agreement (“Purchase Agreement”), with ESOUSA Holdings, LLC, a New York limited liability company (“ESOUSA”), which provides that ESOUSA is committed to purchase up to an aggregate of $ 10 |
WARRANTS AND NON-INCENTIVE PLAN
WARRANTS AND NON-INCENTIVE PLAN OPTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | NOTE 14. WARRANTS AND NON-INCENTIVE PLAN OPTIONS Warrants In 2013, our predecessor entity (then known as Cazador Acquisition Corporation Ltd.) issued warrants to purchase 89,400 89,389 750.00 0.0 0.75 Non-Incentive Plan Options At September 30, 2017 and December 31, 2016, we had 160,214 21.80 3.17 3.92 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 15. INCOME TAXES Our net deferred tax assets primarily are comprised of net operating loss carryforwards (“NOLs”), and basis difference in goodwill and intangibles. These NOLs total approximately $ 53.8 48.6 13.8 13.2 The timing and manner in which we will be able to utilize our NOLs is limited by Section 382 of the Internal Revenue Code of 1986, as amended (IRC). IRC Section 382 imposes limitations on a corporation’s ability to use its NOLs when it undergoes an “ownership change.” Generally, an ownership change occurs if one or more shareholders, each of whom owns 5% or more in value of a corporation’s stock, increase their percentage ownership, in the aggregate, by more than 50% over the lowest percentage of stock owned by such shareholders at any time during the preceding three-year period. Because on June 10, 2014, we underwent an ownership change as defined by IRC Section 382, the limitation applies to us. The losses generated prior to the ownership change date (pre-change losses) are subject to the Section 382 limitation. The pre-change losses may only become available to be utilized by us at the rate of $2.4 million per year. Any unused losses can be carried forward, subject to their original carry forward limitation periods. In the year 2017, approximately $2.4 million in the pre-change losses was released from the Section 382 loss limitation. We can still fully utilize the NOLs generated after the change of the ownership, which was approximately $14.0 million. Thus, we expect the total of approximately $18.1 million as of September 30, 2017 is available to offset future taxable income. In order to fully utilize the net deferred tax assets, we will need to generate sufficient taxable income in future years to utilize its NOLs prior to their expiration. ASC Topic 740, “Income Taxes”, requires us to analyze all positive and negative evidence to determine if, based on the weight of available evidence, we are more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon our conclusions regarding, among other considerations, estimates of future earnings based on information currently available, current and anticipated customers, contracts and product introductions, as well as historical operating results and certain tax planning strategies. We have evaluated the available evidence and the likelihood of realizing the benefit of our net deferred tax assets. From our evaluation, we have concluded that based on the weight of available evidence, it is more likely than not that we will not realize any of the benefit of its net deferred tax assets. Accordingly, at September 30, 2017, we maintain a full valuation allowance totaling approximately $ 24.9 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | NOTE 16. SEGMENT INFORMATION Our three reportable segments include: (i) North American Transaction Solutions for electronic commerce, (ii) Mobile Solutions (primarily servicing the Russian Federation and Eurasia) and (iii) Online Solutions. Management determines the reportable segments based on the internal reporting used by our Chief Operating Decision Maker to evaluate performance and to assess where to allocate resources. During the three months ended September 30, 2017 and 2016, the principal revenue stream for all segments came from services fees. Factors management used to identify the entity’s reportable segments The Company’s reportable segments are business units that offer different products and services in different geographies. The reportable segments are each managed separately because they offer distinct products with different delivery and service processes. North American Transaction Solutions Our U.S. payment processing business segment consists of the former Unified Payments business and Aptito. This segment operates primarily in North America. In March 2013, we acquired all of the business assets of Unified Payments, a provider of comprehensive turnkey, payment processing solutions to small and medium size business owners (merchants) and independent sales organizations across the United States. In April 2013, we purchased 80% of Aptito, a cloud based Software-as-a-Service (“SaaS”) restaurant management solution, which provides integrated POS, mPOS, Kiosk, Digital Menus functionality to drive consumer engagement via Apple® iPad®-based POS, kiosk and all other cloud-connected devices. Mobile Solutions Our Russian mobile and online payment processing segment consists of Digital Provider, which operates primarily in the Russian Federation and Eurasia. In June 2012, we formed our mobile payment subsidiary that launched initial operations in Russia as a payment facilitator using SMS (short message services, which is a text messaging service) and MMS (multimedia message services) for mobile phone subscribers. During 2015, we changed or business model, rebranded our name to Digital Provider and began to offer branded content to subscribers. The business model required significant working capital investment as payments were advanced and then collected from mobile operators 45 days later. During 2016, we began working to raise additional capital for this business and develop an alternative business model that did not require large amounts of working capital to advance the business. This process is on-going and in August 2017, we substantially reorganized this business, and consolidated its operations into PayOnline and TOT Group Russia. We currently are not generating revenues from new content, and we continue to explore partnership opportunities that can monetize our relationships and contracts with mobile operators. Online Solutions On May 20, 2015, we acquired the net assets that comprise PayOnline, which includes a protected payment processing system to accept bank card payments for goods and services. PayOnline primarily operates in Russia and Eurasia. The accounting policies of the individual transactions in the reportable segments are the same as those of the company, as described in Note 1. Transactions between reportable segments are primarily conducted at market rates, resulting in segment profits or expenses that are eliminated for reporting consolidated results. Segment Summary Information Three Months Ended September 30, 2017 North Mobile Online Corporate Total Net revenues $ 13,123,204 $ - $ 1,777,927 $ - $ 14,901,131 Cost of revenues 11,279,098 - 1,477,529 - 12,756,627 Gross Margin 1,844,106 - 300,398 - 2,144,504 Gross margin % 14 % 0 % 17 % - 14 % General, administrative, and asset disposal 661,505 41,880 548,676 1,105,668 2,357,729 Non-cash compensation - - - 111,277 111,277 Provision for bad debt 248,279 68,305 3,106 - 319,690 Depreciation and amortization 372,858 555 256,607 - 630,020 Interest expense (income), net 276,644 (32,010) (5,616) 63,795 302,813 Other expenses (income) 208 94,267 (1,571) - 92,904 Net (loss) income for segment $ 284,612 $ (172,997) $ (500,804) $ (1,280,740) $ (1,669,929) Segment assets 20,863,462 226,136 4,219,400 (4,874,368) 20,434,630 Three Months Ended September 30, 2016 North Mobile Online Corporate Total Net revenues $ 11,186,287 $ 1,226,241 $ 1,597,124 $ - 14,009,652 Cost of revenues 9,585,952 1,045,836 1,063,380 - 11,695,168 Gross Margin 1,600,335 180,405 533,744 - 2,314,484 Gross margin % 14 % 15 % 33 % - 17 % General, administrative, and asset disposal 633,918 150,884 447,902 1,052,033 2,284,737 Non-cash compensation - - - 732,701 732,701 Provision for bad debt 291,965 7,679 1,526 - 301,170 Depreciation and amortization 359,814 5,405 392,880 6,787 764,886 Interest expense (income), net 90,897 (15,682) (12,549) 546,050 608,716 Loss from stock value guarantee - - - 1,559,281 1,559,281 Other expenses (income) 3,184 (444,343) 5,256 2,119 (433,784) Net (loss) income for segment $ 220,557 $ 476,462 $ (301,271) $ (3,898,971) $ (3,503,223) Segment assets 12,596,088 2,470,845 5,743,882 2,584,991 23,395,806 Nine Months Ended September 30, 2017 North Mobile Online Corporate Total Net revenues $ 37,701,136 $ 1,375,160 $ 5,527,817 $ - $ 44,604,113 Cost of revenues 32,213,056 1,319,704 4,002,251 - 37,535,011 Gross Margin 5,488,080 55,456 1,525,566 - 7,069,102 Gross margin % 15 % 4 % 28 % - 16 % General, administrative, and asset disposal 2,098,121 363,270 1,690,640 3,636,037 7,788,068 Non-cash compensation - - - 836,218 836,218 Provision for bad debt 1,193,657 265,149 5,020 1,485 1,465,311 Depreciation and amortization 1,063,475 2,208 783,545 11,173 1,860,401 Interest expense (income), net 698,627 (91,547) (23,051) 310,524 894,553 Other expenses (income) 48,481 93,784 (3,294) 9,128 148,099 Net (loss) income for segment $ 385,719 $ (577,408) $ (927,294) $ (4,804,565) $ (5,923,548) Segment assets $ 20,863,462 $ 226,136 $ 4,219,400 $ 4,874,368 $ 20,434,630 Nine Months Ended September 30, 2016 North Mobile Online Corporate Total Net revenues $ 29,442,868 $ 4,999,452 $ 4,521,239 $ - 38,963,559 Cost of revenues 25,206,769 4,427,043 2,931,390 - 32,565,202 Gross Margin 4,236,099 572,409 1,589,849 - 6,398,357 Gross margin % 14 % 11 % 35 % - 16 % General, administrative, and asset disposal 1,921,296 21,232 1,228,877 3,200,956 6,372,361 Non-cash compensation - - - 3,108,274 3,108,274 Provision for bad debt 668,414 7,790 1,946 - 678,150 Depreciation and amortization 1,010,103 15,332 1,370,960 101,143 2,497,538 Interest expense (income), net 377,473 (19,725) (36,137) 864,596 1,186,207 Loss from stock value guarantee - - - 3,722,142 3,722,142 Other expenses (income) 4,118 (433,750) 35,240 2,135 (392,257) Net (loss) income for segment $ 254,695 $ 981,530 $ (1,011,037) $ (10,999,246) $ (10,774,058) Segment assets 12,596,088 2,470,845 5,743,882 2,584,991 23,395,806 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 17. SUBSEQUENT EVENTS On October 1, 2017, our previously outstanding warrants to purchase 89,389 The Company’s stockholders approved at the Annual Meeting on October 3, 2017 the issuance of 47,139 In connection with our reverse stock split effected on October 5, 2017, we issued 2,968 On October 20, 2017, we made the final payment of $ 197,912 Pursuant to the terms of the Cobblestone Purchase Agreement, we sold 196,203 1,106,857 On October 20 has over $2.5 million in stockholders’ equity as a result of its conversion of the Company’s indebtedness and the sales 348,083 374,253 67,312 On October 20, 2017, we repaid Priority Payments, LLC. $ 111,118 105,000 |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization [Policy Text Block] | Organization Net Element, Inc. (“we”, “us”, “our” or the “Company”) is a global financial technology and value-added solutions group specializing in mobile payments and other transactional services in emerging countries and in the United States. We have three reportable segments: (i) North American Transaction Solutions for electronic commerce, (ii) Mobile Solutions which primarily serves the Russian Federation and Eurasia and (iii) Online Solutions, comprehensive online payment acceptance solution, with access to 100+ payment methods in 50 countries and 120+ currencies. We are differentiated by our proprietary technology which enables us to provide a broad suite of payment products, end-to-end transaction processing services and superior client support. We are able to deliver these services across multiple points of access, or “multi-channel,” including brick and mortar locations, software integration, e-commerce, mobile operator billing, mobile and tablet-based solutions. In the United States, via our U.S. based subsidiaries, we generate revenues from transactional services and other payment technologies for small and medium-sized businesses (“SMBs”). Through Digital Provider, LLC (“Digital Provider”) and PayOnline, we have mobile operator relationships and contracts allowing us to facilitate transactional services, mobile payment transactions, online payment transactions and other payment technologies in emerging countries in the Russian Federation, Europe and Asia. |
Business Description [Policy Text Block] | Business Our transactional services business enables merchants to accept credit cards as well as other forms of payment, including debit cards, checks, gift cards, loyalty programs and alternative payment methods in traditional card-present or swipe transactions, as well as card-not-present transactions, such as those conducted over the phone or through the Internet or a mobile device. We market and sell our services through both independent sales groups (“ISGs”), which are non-employee, external sales organizations and other third-party resellers of our products and services, and directly to merchants through electronic media, telemarketing and other programs, including utilizing partnerships with other companies that market products and services to local and international merchants. We have agreements with several banks that sponsor us for membership in the Visa ® ® ® ® Our Mobile Solutions business, Digital Provider, provides relationships and contracts with mobile operators that give us the ability to offer our clients in-app, premium SMS (short message services, which is a text messaging service), Wireless Application Protocol (WAP)-click, one click and other carrier billing services. We also market our own branded content as a separate line of business for our mobile commerce business from offices in Russia and Kazakhstan. In August 2017, we substantially reorganized this business, and consolidated its operations into PayOnline and TOT Group Russia. We currently are not generating revenues from new mobile content and we continue to explore partnership opportunities that can monetize our relationships and contracts with mobile operators. PayOnline provides flexible high-tech payment solutions to companies doing business on the Internet or in the mobile environment. PayOnline specializes in integration and customization of payment solutions for websites and mobile apps. In particular, PayOnline arranges payment on the website of any commercial organization, which increases the convenience of using the website and helps maximize the number of successful transactions. In addition, PayOnline is focused on providing online and mobile payment acceptance services to the travel industry through direct integration with leading Global Distribution Systems (“GDS”), which include Amadeus® and Sabre®. Key geographic regions that PayOnline serves include Eastern Europe, Central Asia, Western Europe, North American and Asia major sub regions. PayOnline offices are located in Russia, Kazakhstan and in the Republic of Cyprus. Also part of our transactional services business, Aptito is a proprietary, cloud-based payments platform for the hospitality industry, which creates an online consumer experience in offline commerce environments via tablet, mobile and all other cloud-connected devices. Aptito’s easy to use point-of-sale (“POS”) system makes things easier by providing a comprehensive solution to the hospitality industry to help streamline management and operations. Orders placed tableside by customers directly speed up the ordering process and improve overall efficiency. Aptito's mobile POS system provides portability to the staff while performing all the same functions as a traditional POS system, and more. |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet date and the reported amounts of expenses for the period presented. Actual results could differ from those estimates. Significant estimates include (i) the valuation of acquired merchant portfolios, (ii) collectability of accounts receivable, (iii) the recoverability of long lived and indeterminate-lived assets, (iv) the remaining useful lives of tangible long-lived assets, and (v) the sufficiency of merchant, aggregator, legal, and other reserves. On an ongoing basis, we evaluate the sufficiency and accuracy of our estimates. Actual results could differ from those estimates. |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain reclassifications have been made to the comparative period amounts to conform to our current period presentation. These reclassifications had no impact on previously presented financial condition or results of operations. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents We maintain our U.S. dollar-denominated cash in several non-interest bearing bank deposit accounts. All U.S. non-interest bearing transaction accounts are insured up to a maximum of $ 250,000 We had $ 222,815 498,308 |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated net of allowance for doubtful accounts. We estimate an allowance based on experience with our service providers and judgment as to the likelihood of their ultimate payment. We also consider collection experience and make estimates regarding collectability based on payout trends of the customers. Total allowance for doubtful accounts was $ 636,022 603,031 0 |
Other Current Assets [Policy Text Block] | Other Current Assets We maintain an inventory of POS terminals which we use to service both merchants and independent sales agents. If the terminals are sold for a fee, we expense the cost of these terminals, plus any setup fees at the time of the sale. Often, we will provide the terminals as an incentive for merchants and independent sales agents to enter into merchant contracts with us. The term of these contracts have an average length of three years and the cost of the terminal plus any setup fees are capitalized and amortized over the contract period. If the merchants early terminate their contract with us, they are obligated to either return the terminal or pay for the terminal. The Company had $ 451,672 311,206 442,783 308,582 |
Property, Plant and Equipment, Policy [Policy Text Block] | Fixed Assets We depreciate our furniture and equipment over a term of three to ten years. Computers and software are depreciated over terms between two and five years. Leasehold improvements are depreciated over the shorter of the economic life or term of each lease. All of our assets are depreciated on a straight-line basis for financial statement purposes. Expenditures for repairs and maintenance are charged to operating expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. At the time of retirements, sales, or other dispositions of property and equipment, the original cost and related accumulated depreciation are removed from the respective accounts, and the gains or losses are presented as other expenses. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Intangible Assets Included in our intangible assets are merchant portfolios which represent the net carrying value of merchant customer bases acquired. Merchant portfolios are amortized on a straight-line basis over their respective contract terms, generally three to five years. Merchant portfolios are assessed for impairment if events or circumstances indicate that their respective carrying values are not recoverable from the future anticipated undiscounted net cash flows attributable to such assets. In such cases, the amount of any potential impairment would be measured as the excess, if any, of carrying value over the fair value of such assets. We capitalize direct expenses associated with filing of patents and patent applications and amortize the capitalized intellectual property costs over five years beginning when the patent is approved. Additionally, we capitalize the fair value of intangible assets acquired in business combinations. We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets. Acquired intangible assets include: merchant portfolios, trade names, non-compete agreements, customer relationships and technology. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | We review our long-lived assets for impairment whenever events or changes indicate that the carrying amount of an asset or group of assets may not be recoverable. During the three months ended September 30, 2017 and 2016, we did not recognize any charges for impairment of goodwill or intangible assets. |
Capitalized Customer Acquisition Costs [Policy Text Block] | Capitalized Customer Acquisition Costs, Net Capitalized customer acquisition costs consist of up-front cash payments made to Independent Sales Groups (“ISGs”) for the establishment of new merchant relationships. Capitalized customer acquisition costs represent incremental, direct customer acquisition costs that are recoverable through gross margins associated with merchant contracts. The up-front cash payment to the ISG is based on the estimated gross margin for the first year of the merchant contract. The deferred customer acquisition cost asset is recorded at the time of payment and the capitalized acquisition costs are primarily amortized on a straight-line basis over a period of three years. Management evaluates the capitalized customer acquisition cost for recoverability at each balance sheet date by comparing, on a pooled basis by vintage month of origination, the expected future net undiscounted cash flows from underlying merchant relationships to the carrying amount of capitalized customer acquisition costs. If the estimated future net cash flows are lower than the recorded carrying amount, indicating an impairment of the carrying value of the capitalized customer acquisition costs, the impairment loss is charged to operations. During the nine months ended September 30, 2017 and the twelve months ended December 31, 2016, we recorded additional capitalized customer acquisition costs of $ 1,311,262 1,319,820 2,258,877 1,697,337 |
Commissions, Policy [Policy Text Block] | Accrued Residual Commissions We report commission payments as a cost of revenues in the accompanying condensed consolidated statement of operations and comprehensive loss. We pay agent commissions to ISGs and independent sales agents based on the processing volume of the merchants enrolled. The commission payments are based on varying percentages of the volume processed by us on behalf of the merchants. Percentages vary based on the program type and transaction volume of each merchant. At September 30, 2017 and December 31, 2016, the residual commissions payable to ISGs and independent sales agents were $ 807,535 1,347,352 We pay agent commission on annual fees between January and April of each year. We amortize the annual fees paid in equal monthly amounts from date of payment to end of year. We pay our agent commissions for annual fees in advance of recognizing the associated revenue. We deferred $ 784,711 863,604 |
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements Our financial instruments consist primarily of cash, accounts receivable, merchant portfolios, trade payables and debt instruments. The carrying values of cash and cash equivalents, accounts receivable and trade payables are considered to be representative of their respective fair values due to the short-term nature of these instruments. The carrying amount of the long-term debt of $ 7.5 4.6 We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We use a three-level fair value hierarchy to prioritize the inputs used to measure fair value and maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 Quoted market prices in active markets for identical assets or liabilities as of the reporting date Level 2 Observable market based inputs or unobservable inputs that are corroborated by market data Level 3 Unobservable inputs that are not corroborated by market data These non-financial assets and liabilities include intangible assets and liabilities acquired in a business combination as well as impairment calculations, when necessary. The fair value of the assets acquired and liabilities assumed in connection with the PayOnline acquisition were measured at Level 3 fair value by us at the acquisition date. The fair values of our merchant portfolios are primarily based on Level 3 inputs and are generally estimated based upon independent appraisals that include discounted cash flow analyses based on our most recent cash flow projections, and, for years beyond the projection period, estimates based on assumed growth rates. Assumptions are also made regarding appropriate discount rates, perpetual growth rates, and capital expenditures, among others. In certain circumstances, the discounted cash flow analyses are corroborated by a market-based approach that utilizes comparable company public trading values, and, where available, values observed in private market transactions. The inputs used by management for the fair value measurements include significant unobservable inputs, and therefore, the fair value measurements employed are classified as Level 3. The goodwill recoverability calculation was primarily based on observable inputs using company specific information and is classified as Level 3. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | We are subject to foreign currency exchange rate risk in our foreign operations in Russia, the functional currency of which is the Russian Ruble, where we generate service fee revenues and interest income and incurs product development, engineering, website development, and general and administrative costs and expenses. The Russian engineering operations pay a majority of their operating expenses in their local currencies, exposing us to exchange rate risk. We do not engage in any currency hedging activities. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition We recognize revenue when the following four basic criteria have been met: (1) persuasive evidence of a sales arrangement exists, (2) performance of services or delivery of goods has occurred, (3) the sales price is fixed or determinable, and (4) collectability is reasonably assured. We consider persuasive evidence of a sales arrangement to be the receipt of a billable transaction from aggregators, merchants or a signed contract. Collectability is assessed based on a number of factors, including transaction history with the customer and the credit worthiness of the customer. If it is determined that the collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash. We record cash received in advance of revenue recognition as deferred revenue. Our revenues for the three and nine months ended September 30, 2017 and 2016 were principally derived from the following sources: Transactional Processing Fees: Our transactional processing businesses derive revenues primarily from the electronic processing of services including: credit, debit, electronic benefits transfer and alternative payment methods card processing authorized and captured through proprietary and third-party networks, electronic gift certificate processing, and equipment sales. These revenues are recorded as bankcard and other processing transactions when processed. In addition to generating service fees, Aptito earns monthly license fees for use of its platform. Typically, fees charged to merchants for these processing services are based on a variable percentage of the dollar amount of each transaction and in some instances, additional fees are charged for each transaction. Merchant customers also may be charged miscellaneous fees, including statement fees, annual fees, monthly minimum fees, fees for handling chargebacks, gateway fees, and fees for other miscellaneous services. Generally, we (i) are the primary obligor in our arrangements with our merchant customers, (ii) have latitude in establishing the price of our services, (iii) have the ability to change the product and perform parts of the services, (iv) have discretion in supplier selection, (v) have latitude in determining the product and service specifications to meet the needs of our merchant customers, and (vi) assume credit risk. In such cases, we report revenues as gross of fees deducted by our sponsoring member banks, as well as fees deducted from card-issuing member banks and card associations on behalf of our sponsoring member banks for interchange and assessments. These fees charged by the card associations to process the credit card transactions are recorded separately as a cost of revenue in the accompanying condensed consolidated statement of operations and comprehensive loss. We have multiple element arrangements that include bundled transactions with merchants encompassing annual PCI (Payment Card Industry) fees, annual membership fees, and monthly processing fees. We adopted Accounting Standard Update (“ASU”) 2009-13, “MultipleDeliverable Revenue Arrangements.” ASU 2009-13 requires the use of the relative selling price method of allocating total consideration to units of accounting in a multiple element arrangement and eliminates the residual method. This accounting principle requires an entity to allocate revenue in an arrangement using estimated selling price deliverables if it does not have vendor specific objective evidence (VSOE) or third-party evidence (TPE) of selling price. VSOE is the price charged when the same or similar product or service is sold separately. We define VSOE as a median price of recent stand-alone transactions that are priced within a narrow range. TPE is determined based on the prices charged by our competitors for a similar deliverable when sold separately. We evaluate each deliverable in its arrangements to determine whether it represents a separate unit of accounting. A deliverable constitutes a separate unit of accounting when it has stand-alone value to our customers. Our products (i.e., POS terminals) and services qualify as separate units of accounting under ASU 2009-13. As noted above, merchant customers may be charged miscellaneous fees, including statement fees, annual fees, monthly minimum fees, fees for handling chargebacks, gateway fees, and fees for other miscellaneous services. The fair value for annual fees is based on the annual contract renewal price and is deemed to represent stand-alone selling price based upon VSOE. The fair value for processing is based on prices charged by our competitors for similar deliverables when sold separately and is deemed to represent stand-alone selling price based upon TPE. Deferred revenue represents primarily amounts received in advance for annual fee billings and are recognized on a pro rata basis over the service period. Service Fees by Digital Provider Mobile payment processing revenues for third-party content providers are accounted for as service fees and presented net of aggregator and mobile operator payments on the condensed consolidated financial statements as these revenues are considered to be agency fees. Subscription revenues for our branded content are recognized when a content subscriber initiates the purchase of access to content using WAP-click, Internet-click, or a SMS-to-short number registered to us. Digital Provider’s subscription revenues are recorded at the amounts charged to the third party customer. Cost of revenues for Digital Provider branded content includes fees due to mobile operators and marketing partners, as well as short number fees. Cost of revenues for Digital Provider is comprised primarily of mobile operator fees, content provider fees and fees for short numbers paid to mobile operators. Additionally, penalties and penalty recoveries are recorded as cost of sales. Service revenues for mobile payment processing services are presented net as these revenues are considered to be agency fees. Cost of revenues for TOT Payments, Aptito and PayOnline is comprised primarily of processing fees paid to third parties attributable to providing transaction processing and service fees for POS system usage by our merchant customers. Interchange fees and cost of services are recognized as incurred and generally occur in the same period in which the corresponding revenue is recognized. Interchange fees are set by the card networks and are paid to the card-issuing bank. Interchange fees are calculated as a percentage of the dollar volume processed plus a per transaction fee. We also pay Visa® and MasterCard® network dues. |
Earnings Per Share, Policy [Policy Text Block] | Net Loss per Share Basic net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period as adjusted for the effect of reverse stock splits (see Note 13). Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares issuable upon exercise of common stock options or warrants. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would have an anti-dilutive effect. At both September 30, 2017 and December 31, 2016, we had warrants outstanding to purchase 89,389 228,256 193,601 |
Income Tax, Policy [Policy Text Block] | Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize net deferred tax assets to the extent that our management believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. In addition, see "Recently Issued Accounting Pronouncements" below regarding our adoption of guidance related to deferred taxes in the first quarter of 2017. We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. We recognize a liability for unrecognized tax benefits as current to the extent that we anticipate payment (or receipt) of cash within one year. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. Our evaluation of uncertain tax positions was performed for the tax years ended December 31, 2012 and forward, the tax years which remain subject to examination at September 30, 2017. Please see Note 15 for discussion of our uncertain tax positions. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, which defers by one year the effective date of ASU 2014-09. Accordingly, this guidance is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted for interim and annual periods beginning after December 15, 2016. We are evaluating the effects that the adoption of ASU 2014-9 will have on our consolidated financial statements, and currently do not expect a material impact on our financial position, results of operations or cash flows. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes,” which requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability. We adopted this ASU in the first quarter of 2017, which had no impact on our financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases” which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. The ASU is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. While we are currently evaluating the effects that the adoption of ASU 2016-02 will have on our consolidated financial statements, we expect an increase in assets and liabilities on our balance sheet associated with the recognition of right-of-use office leases. In March 2016, the FASB issued Accounting Standards Update 2016-08 Revenue from Contracts with Customers (Topic 606) to clarify implementation guidance on principal versus agent considerations (for reporting revenue on a gross or net basis). The ASU is an amendment to Topic 606, clarifies the implementation guidance, and requires an entity to account for revenue as an agent when another entity controls the specified good or service before that good or service is transferred to the customer. This ASU is effective for annual periods beginning after December 15, 2017. We currently are preparing analyses, across all business lines and customers, to determine the effect of the new revenue recognition standard. While we are currently evaluating the effects that the adoption of ASU 2016-08 will have on our consolidated financial statements, we believe that a portion of our revenue recognized for branded content in our Mobile Solutions business segment may no longer meet the conditions for gross reporting upon adoption of this ASU in 2018. |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | Fixed assets are stated at cost less accumulated depreciation and amortization as follows: Useful life September 30, 2017 December 31, 2016 Furniture and equipment 3 - 10 $ 118,952 $ 185,301 Computers 2 - 5 156,958 168,942 Total 275,910 354,243 Less: Accumulated depreciation (211,529) (236,948) Total fixed assets, net $ 64,381 $ 117,295 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Shown below are the details of intangible assets at September 30, 2017 and December 31, 2016: IP Software Portfolios Client Acquisition PCI Trademarks Domain Names Covenant Total Balance at December 31, 2015 $ 1,548,601 $ 1,489,175 $ 1,048,060 $ 355,458 $ 561,772 $ 339,147 $ 81,667 $ 5,423,880 Additions 102,689 - 1,319,820 - - 83 - 1,422,592 Amortization (1,271,226) $ (704,184) (670,543) (149,668) (234,064) (145,270) (81,667) (3,256,622) Balance at December 31, 2016 380,064 784,991 1,697,337 205,790 327,708 193,960 - 3,589,850 Additions 45,591 - 403,585 - - - 449,176 Amortization (60,739) (158,434) (221,195) (37,417) (58,516) (36,317) - (572,618) Balance at March 31, 2017 $ 364,916 $ 626,557 $ 1,879,727 $ 168,373 $ 269,192 $ 157,643 $ - $ 3,466,408 Additions - - 403,300 - - - 403,300 Disposals (11,099) - - - - - - (11,099) Amortization (49,042) (117,501) (251,485) (37,417) (59,004) (35,931) - (550,380) Balance at June 30, 2017 $ 304,775 $ 509,056 $ 2,031,542 $ 130,956 $ 210,188 $ 121,712 $ - $ 3,308,229 Additions 10,168 - 504,377 - - - - 514,545 Amortization (53,092) (117,501) (277,042) (37,417) (59,004) (35,829) - (579,885) Balance at September 30, 2017 $ 261,851 $ 391,555 $ 2,258,877 $ 93,539 $ 151,184 $ 85,883 $ - $ 3,242,889 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The following table presents the estimated aggregate future amortization expense of other intangible assets: Year Amortization Expense 2017 (3 months) $ 269,716 2018 1,078,862 2019 1,078,862 2020 815,449 2021 - Total $ 3,242,889 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | The following table details the items comprising the balances outstanding at September 30, 2017 and December 31, 2016: September 30, 2017 December 31, 2016 Accrued professional fees $ 220,140 $ 220,140 PayOnline accrual 1,633,271 3,784,451 Accrued interest 180,844 183,778 Accrued bonus 1,253,577 774,485 Accrued franchise taxes - 180,000 Accrued foreign taxes 108,456 131,810 Short term loan advances - 174,376 Other accrued expenses 23,591 69,783 $ 3,419,879 $ 5,518,823 |
LONG TERM DEBT (Tables)
LONG TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long term debt consists of the following: September 30, 2017 December 31, 2016 RBL Capital Group, LLC $ 4,544,087 $ 4,044,056 Priority Payments Systems LLC 2,477,678 - MBF Merchant Capital, LLC 504,794 520,303 Subtotal 7,526,559 4,564,359 Less Deferred loan costs (136,136) (139,601) Subtotal 7,390,423 4,424,758 Less Current portion (503,041) (808,976) Long term debt $ 6,887,382 $ 3,615,782 |
Schedule of Maturities of Long-term Debt [Table Text Block] | Scheduled principal maturities on indebtedness at September 30, 2017 is as follows: 2017 (3 months) 503,041 2018 2,440,661 2019 1,716,673 2020 1,162,309 2021 1,338,621 thereafter 365,254 Balance September 30, 2017 $ 7,526,559 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following tables present financial information of the Company’s reportable segments at September 30, 2017 and 2016. The “Corporate Expenses & Eliminations” column includes all corporate expenses and intercompany eliminations for consolidated purposes. Three Months Ended September 30, 2017 North Mobile Online Corporate Total Net revenues $ 13,123,204 $ - $ 1,777,927 $ - $ 14,901,131 Cost of revenues 11,279,098 - 1,477,529 - 12,756,627 Gross Margin 1,844,106 - 300,398 - 2,144,504 Gross margin % 14 % 0 % 17 % - 14 % General, administrative, and asset disposal 661,505 41,880 548,676 1,105,668 2,357,729 Non-cash compensation - - - 111,277 111,277 Provision for bad debt 248,279 68,305 3,106 - 319,690 Depreciation and amortization 372,858 555 256,607 - 630,020 Interest expense (income), net 276,644 (32,010) (5,616) 63,795 302,813 Other expenses (income) 208 94,267 (1,571) - 92,904 Net (loss) income for segment $ 284,612 $ (172,997) $ (500,804) $ (1,280,740) $ (1,669,929) Segment assets 20,863,462 226,136 4,219,400 (4,874,368) 20,434,630 Three Months Ended September 30, 2016 North Mobile Online Corporate Total Net revenues $ 11,186,287 $ 1,226,241 $ 1,597,124 $ - 14,009,652 Cost of revenues 9,585,952 1,045,836 1,063,380 - 11,695,168 Gross Margin 1,600,335 180,405 533,744 - 2,314,484 Gross margin % 14 % 15 % 33 % - 17 % General, administrative, and asset disposal 633,918 150,884 447,902 1,052,033 2,284,737 Non-cash compensation - - - 732,701 732,701 Provision for bad debt 291,965 7,679 1,526 - 301,170 Depreciation and amortization 359,814 5,405 392,880 6,787 764,886 Interest expense (income), net 90,897 (15,682) (12,549) 546,050 608,716 Loss from stock value guarantee - - - 1,559,281 1,559,281 Other expenses (income) 3,184 (444,343) 5,256 2,119 (433,784) Net (loss) income for segment $ 220,557 $ 476,462 $ (301,271) $ (3,898,971) $ (3,503,223) Segment assets 12,596,088 2,470,845 5,743,882 2,584,991 23,395,806 Nine Months Ended September 30, 2017 North Mobile Online Corporate Total Net revenues $ 37,701,136 $ 1,375,160 $ 5,527,817 $ - $ 44,604,113 Cost of revenues 32,213,056 1,319,704 4,002,251 - 37,535,011 Gross Margin 5,488,080 55,456 1,525,566 - 7,069,102 Gross margin % 15 % 4 % 28 % - 16 % General, administrative, and asset disposal 2,098,121 363,270 1,690,640 3,636,037 7,788,068 Non-cash compensation - - - 836,218 836,218 Provision for bad debt 1,193,657 265,149 5,020 1,485 1,465,311 Depreciation and amortization 1,063,475 2,208 783,545 11,173 1,860,401 Interest expense (income), net 698,627 (91,547) (23,051) 310,524 894,553 Other expenses (income) 48,481 93,784 (3,294) 9,128 148,099 Net (loss) income for segment $ 385,719 $ (577,408) $ (927,294) $ (4,804,565) $ (5,923,548) Segment assets $ 20,863,462 $ 226,136 $ 4,219,400 $ 4,874,368 $ 20,434,630 Nine Months Ended September 30, 2016 North Mobile Online Corporate Total Net revenues $ 29,442,868 $ 4,999,452 $ 4,521,239 $ - 38,963,559 Cost of revenues 25,206,769 4,427,043 2,931,390 - 32,565,202 Gross Margin 4,236,099 572,409 1,589,849 - 6,398,357 Gross margin % 14 % 11 % 35 % - 16 % General, administrative, and asset disposal 1,921,296 21,232 1,228,877 3,200,956 6,372,361 Non-cash compensation - - - 3,108,274 3,108,274 Provision for bad debt 668,414 7,790 1,946 - 678,150 Depreciation and amortization 1,010,103 15,332 1,370,960 101,143 2,497,538 Interest expense (income), net 377,473 (19,725) (36,137) 864,596 1,186,207 Loss from stock value guarantee - - - 3,722,142 3,722,142 Other expenses (income) 4,118 (433,750) 35,240 2,135 (392,257) Net (loss) income for segment $ 254,695 $ 981,530 $ (1,011,037) $ (10,999,246) $ (10,774,058) Segment assets 12,596,088 2,470,845 5,743,882 2,584,991 23,395,806 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Significant accounting policies [Line Items] | |||||||
Long-term Debt, Total | $ 7,390,423 | $ 7,390,423 | $ 4,424,758 | ||||
Cash Fdic Insured Amount Cash Noninterest Bearing Transaction Accounts | 250,000 | 250,000 | |||||
Foreign bank balances that are not FDIC insured | 222,815 | 222,815 | 498,308 | ||||
Terminals Acquired Amount, Net | 451,672 | 311,206 | |||||
Terminals Acquired Amount, Net Held With Merchants | 442,783 | 308,582 | |||||
Accrued Sales Commission, Current | 807,535 | 807,535 | 1,347,352 | ||||
Deferred Sales Commission | 784,711 | $ 784,711 | 863,604 | ||||
Impairment of Intangible Assets, Finite-lived | 0 | $ 0 | |||||
Property, Plant and Equipment, Depreciation Methods | straight-line basis  | ||||||
Finite-lived Intangible Assets Acquired | 514,545 | $ 403,300 | $ 449,176 | 1,422,592 | |||
Amortization of Intangible Assets | 579,885 | $ 550,380 | $ 572,618 | $ 701,065 | $ 1,702,884 | $ 2,345,078 | 3,256,622 |
Allowance for Doubtful Accounts Receivable | $ 636,022 | $ 636,022 | $ 603,031 | ||||
Warrant [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Warrants issued and outstanding that are anti-dilutive in effect | 89,389 | ||||||
Employee Stock Option [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Warrants issued and outstanding that are anti-dilutive in effect | 228,256 | 193,601 | |||||
Customer Acquiaition Cost [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Finite-lived Intangible Assets Acquired | $ 1,311,262 | $ 1,319,820 | |||||
Amortization of Intangible Assets | $ 2,258,877 | $ 1,697,337 | |||||
Maximum [Member] | Computers And Software [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 5 years | ||||||
Maximum [Member] | Furniture equipment and computers [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 10 years | ||||||
Maximum [Member] | Merchant portfolios [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Intangible Assets, Useful life | 5 years | ||||||
Minimum [Member] | Computers And Software [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 2 years | ||||||
Minimum [Member] | Furniture equipment and computers [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Property, Plant and Equipment, Useful Life | 3 years | ||||||
Minimum [Member] | Merchant portfolios [Member] | |||||||
Significant accounting policies [Line Items] | |||||||
Intangible Assets, Useful life | 3 years |
BASIS OF PRESENTATION AND PRI30
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION (Details Textual) | 9 Months Ended |
Sep. 30, 2017 | |
TOT Group [Member] | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions | 100.00% |
Florida Aptito LLC [Member] | |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Parent | 80.00% |
LIQUIDITY AND GOING CONCERN C31
LIQUIDITY AND GOING CONCERN CONSIDERATIONS (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Liquidity and Going Concern Considerations [Line Items] | |||||
Net income (loss) | $ (1,702,536) | $ (3,469,540) | $ (5,830,373) | $ (10,663,708) | $ 13,600,000 |
Working capital deficit | 4,500,000 | 4,500,000 | 6,300,000 | ||
Accumulated deficit | $ (163,272,959) | $ (163,272,959) | $ (157,442,585) | ||
Minimum Bid Price Closing Requirement Description | We are required to continually meet the listing requirements of The Nasdaq Capital Market (including a minimum bid price for our common stock of $1.00 per share and a $2.5 million minimum of stockholders equity) to maintain the listing of our common stock on The Nasdaq Capital Market. On October 20, 2017, the Company regained its compliance with Nasdaq as it evidenced compliance with the $1.00 bid price and stockholders equity requirements. |
ACCOUNTS RECEIVABLE (Details Te
ACCOUNTS RECEIVABLE (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 4,446,358 | $ 7,126,429 |
Allowance for Doubtful Accounts Receivable, Current | 636,022 | 603,031 |
Provision for Doubtful Accounts | 32,991 | 500,000 |
Credit Card Processing Receivable [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 4,180,437 | 4,549,133 |
Mobile Operators [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 108,038 | 2,391,646 |
Pay Online [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 157,883 | $ 185,650 |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Total fixed assets, gross | $ 275,910 | $ 354,243 |
Less: Accumulated depreciation | (211,529) | (236,948) |
Total fixed assets, net | 64,381 | 117,295 |
Furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets, gross | 118,952 | 185,301 |
Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets, gross | $ 156,958 | $ 168,942 |
Maximum [Member] | Furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 10 years | |
Maximum [Member] | Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 5 years | |
Minimum [Member] | Furniture and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 3 years | |
Minimum [Member] | Computers [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 2 years |
FIXED ASSETS (Details Textual)
FIXED ASSETS (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 7,901 | $ 20,215 | $ 25,419 | $ 39,737 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | $ 3,308,229 | $ 3,466,408 | $ 3,589,850 | $ 3,589,850 | $ 5,423,880 | $ 5,423,880 | |
Additions | 514,545 | 403,300 | 449,176 | 1,422,592 | |||
Disposals | (11,099) | ||||||
Amortization | (579,885) | (550,380) | (572,618) | $ (701,065) | (1,702,884) | (2,345,078) | (3,256,622) |
Balance Ending | 3,242,889 | 3,308,229 | 3,466,408 | 3,242,889 | 3,589,850 | ||
IP Software [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 304,775 | 364,916 | 380,064 | 380,064 | 1,548,601 | 1,548,601 | |
Additions | 10,168 | 0 | 45,591 | 102,689 | |||
Disposals | (11,099) | ||||||
Amortization | (53,092) | (49,042) | (60,739) | (1,271,226) | |||
Balance Ending | 261,851 | 304,775 | 364,916 | 261,851 | 380,064 | ||
Portfolios and Client Lists [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 509,056 | 626,557 | 784,991 | 784,991 | 1,489,175 | 1,489,175 | |
Additions | 0 | 0 | 0 | 0 | |||
Disposals | 0 | ||||||
Amortization | (117,501) | (117,501) | (158,434) | $ (176,046) | (393,436) | (528,138) | (704,184) |
Balance Ending | 391,555 | 509,056 | 626,557 | 391,555 | 784,991 | ||
Client Acquisition Costs [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 2,031,542 | 1,879,727 | 1,697,337 | 1,697,337 | 1,048,060 | 1,048,060 | |
Additions | 504,377 | 403,300 | 403,585 | 1,319,820 | |||
Disposals | 0 | ||||||
Amortization | (277,042) | (251,485) | (221,195) | (670,543) | |||
Balance Ending | 2,258,877 | 2,031,542 | 1,879,727 | 2,258,877 | 1,697,337 | ||
PCI Certification [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 130,956 | 168,373 | 205,790 | 205,790 | 355,458 | 355,458 | |
Additions | 0 | 0 | 0 | 0 | |||
Disposals | 0 | ||||||
Amortization | (37,417) | (37,417) | (37,417) | (149,668) | |||
Balance Ending | 93,539 | 130,956 | 168,373 | 93,539 | 205,790 | ||
Tradmarks [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 210,188 | 269,192 | 327,708 | 327,708 | 561,772 | 561,772 | |
Additions | 0 | 0 | 0 | 0 | |||
Disposals | 0 | ||||||
Amortization | (59,004) | (59,004) | (58,516) | (234,064) | |||
Balance Ending | 151,184 | 210,188 | 269,192 | 151,184 | 327,708 | ||
Domain Names [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 121,712 | 157,643 | 193,960 | 193,960 | 339,147 | 339,147 | |
Additions | 0 | 0 | 0 | 83 | |||
Disposals | 0 | ||||||
Amortization | (35,829) | (35,931) | (36,317) | (145,270) | |||
Balance Ending | 85,883 | 121,712 | 157,643 | 85,883 | 193,960 | ||
Covenent Not to Compete [Member] | |||||||
Finite-Lived Intangible Assets [Line Items] | |||||||
Balance Beginning | 0 | 0 | 0 | 0 | $ 81,667 | 81,667 | |
Additions | 0 | 0 | |||||
Disposals | 0 | ||||||
Amortization | 0 | 0 | 0 | (81,667) | |||
Balance Ending | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | |||||
2017 (3 months) | $ 269,716 | ||||
2,018 | 1,078,862 | ||||
2,019 | 1,078,862 | ||||
2,020 | 815,449 | ||||
2,021 | 0 | ||||
Total | $ 3,242,889 | $ 3,308,229 | $ 3,466,408 | $ 3,589,850 | $ 5,423,880 |
INTANGIBLE ASSETS (Details Text
INTANGIBLE ASSETS (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization of Intangible Assets | $ 579,885 | $ 550,380 | $ 572,618 | $ 701,065 | $ 1,702,884 | $ 2,345,078 | $ 3,256,622 | |
Finite-Lived Intangible Assets, Net | 3,242,889 | 3,308,229 | 3,466,408 | 3,242,889 | 3,589,850 | $ 5,423,880 | ||
Costs Incurred, Development Costs | 55,759 | 81,428 | ||||||
Finite-lived Intangible Assets Acquired | 514,545 | 403,300 | 449,176 | 1,422,592 | ||||
Depreciation, Depletion and Amortization | 630,020 | 764,886 | 1,860,401 | 2,497,538 | ||||
Terminals Amortization Amount Net | 42,233 | 43,605 | 132,098 | 112,722 | ||||
Depreciation, Total | 7,901 | 20,215 | $ 25,419 | 39,737 | ||||
Maximum [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 36 months | |||||||
Minimum [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 months | |||||||
Point Of Sale Software [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-lived Intangible Assets Acquired | $ 53,344 | 1,469 | ||||||
Payment Processing Software [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-lived Intangible Assets Acquired | 0 | 89,101 | ||||||
Mobile Payments Billing Software [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-lived Intangible Assets Acquired | 2,415 | 12,119 | ||||||
Portfolios and Client Lists [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization of Intangible Assets | 117,501 | 117,501 | 158,434 | 176,046 | 393,436 | 528,138 | 704,184 | |
Finite-Lived Intangible Assets, Net | 391,555 | 509,056 | 626,557 | 391,555 | 784,991 | $ 1,489,175 | ||
Finite-lived Intangible Assets Acquired | 0 | $ 0 | $ 0 | 0 | ||||
Computer Software, Intangible Asset [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization of Intangible Assets | 53,092 | 246,727 | 162,873 | 950,206 | ||||
PCI Certifiction [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization of Intangible Assets | 37,417 | 37,417 | 112,251 | |||||
Finite-Lived Intangible Assets, Net | 93,539 | 93,539 | 205,790 | |||||
Trademarks [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization of Intangible Assets | 59,004 | 41,667 | 176,524 | 125,001 | ||||
Finite-Lived Intangible Assets, Net | 151,184 | 151,184 | 327,708 | |||||
Merchant portfolios [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-Lived Intangible Assets, Net | 85,883 | 85,883 | $ 193,960 | |||||
Internet Domain Names [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amortization of Intangible Assets | $ 108,077 | $ 24,999 | $ 35,829 | $ 74,997 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued professional fees | $ 220,140 | $ 220,140 |
PayOnline accrual | 1,633,271 | 3,784,451 |
Accrued interest | 180,844 | 183,778 |
Accrued bonus | 1,253,577 | 774,485 |
Accrued franchise taxes | 0 | 180,000 |
Accrued foreign taxes | 108,456 | 131,810 |
Short term loan advances | 0 | 174,376 |
Other accrued expenses | 23,591 | 69,783 |
Accrued expenses | $ 3,419,879 | $ 5,518,823 |
ACCRUED EXPENSES (Details Textu
ACCRUED EXPENSES (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued Bonuses, Current | $ 1,253,577 | $ 774,485 |
Accrued Liabilities, Current | 3,419,879 | 5,518,823 |
Accrued Pay Online Earnout Current | 480,936 | 199,000 |
Provision For Stock Price Guarantee | $ 1,152,335 | 2,075,687 |
Accrued Pay Online Merchant Reserve Liabilities Current | $ 1,433,475 |
SHORT TERM DEBT (Details Textua
SHORT TERM DEBT (Details Textual) - USD ($) | Mar. 01, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | |||
Debt Instrument, Periodic Payment, Principal | $ 348,083 | ||
RBL Capital Group LLC [Member] | Due To Third Quarter Of 2017 [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Periodic Payment, Principal | $ 503,041 | ||
RBL Capital Group LLC [Member] | Due To Fourth Quarter Of 2017 [Member] | |||
Short-term Debt [Line Items] | |||
Debt Instrument, Periodic Payment, Principal | $ 808,976 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 7,526,559 | |
Less Deferred loan costs | (136,136) | $ (139,601) |
Subtotal | 7,390,423 | 4,424,758 |
Less Current portion | (503,041) | (808,976) |
Long term debt | 6,887,382 | 3,615,782 |
RBL Capital Group, LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 4,544,087 | 4,044,056 |
MBF Merchant Capital LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 504,794 | 520,303 |
Priority Payments Systems LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 2,477,678 | 0 |
Subtotal [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 7,526,559 | $ 4,564,359 |
LONG TERM DEBT (Details 1)
LONG TERM DEBT (Details 1) | Sep. 30, 2017USD ($) |
2017 (3 months) | $ 503,041 |
2,018 | 2,440,661 |
2,019 | 1,716,673 |
2,020 | 1,162,309 |
2,021 | 1,338,621 |
thereafter | 365,254 |
Balance September 30, 2017 | $ 7,526,559 |
LONG TERM DEBT (Details Textual
LONG TERM DEBT (Details Textual) - USD ($) | Jul. 28, 2017 | Jul. 27, 2017 | Mar. 30, 2017 | Mar. 01, 2017 | Dec. 15, 2016 | Sep. 15, 2016 | Aug. 15, 2016 | Jul. 15, 2016 | May 20, 2016 | May 04, 2016 | Feb. 10, 2015 | Sep. 30, 2017 | Aug. 29, 2017 | Aug. 20, 2017 | May 26, 2017 | May 24, 2017 | May 20, 2017 | May 18, 2017 | Apr. 26, 2017 | Apr. 17, 2017 | Dec. 20, 2016 | Nov. 07, 2016 | Jun. 30, 2016 | Jun. 23, 2016 | May 19, 2016 | Apr. 19, 2016 | Mar. 28, 2016 | Mar. 27, 2015 | Aug. 20, 2014 | Jul. 17, 2014 | Jun. 30, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Aug. 03, 2017 | Jun. 30, 2017 | Jun. 27, 2017 | May 19, 2017 | Jul. 31, 2016 | May 02, 2016 | Jul. 31, 2014 |
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment | $ 124,607 | |||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 290,954 | |||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | $ 7,390,423 | $ 7,390,423 | $ 4,424,758 | 7,390,423 | $ 4,424,758 | |||||||||||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 5,000,000 | |||||||||||||||||||||||||||||||||||||||||||
Working Capital Deficit | 4,500,000 | 4,500,000 | 6,300,000 | 4,500,000 | 6,300,000 | |||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 12.00% | |||||||||||||||||||||||||||||||||||||||||||
Debt Issuance Costs, Net | 136,136 | 136,136 | 139,601 | 136,136 | 139,601 | |||||||||||||||||||||||||||||||||||||||
Priority Payment Systems LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,500,000 | 2,500,000 | $ 2,500,000 | $ 2,500,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 10.25% | |||||||||||||||||||||||||||||||||||||||||||
Repayments of Lines of Credit | 306,323 | |||||||||||||||||||||||||||||||||||||||||||
Proceeds from Issuance of Debt | $ 2,000,000 | 284,000 | ||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Current Borrowing Capacity | 2,477,677 | 2,477,677 | $ 2,477,677 | |||||||||||||||||||||||||||||||||||||||||
MBF Merchant Capital LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 13.95% | |||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment | $ 29,288 | $ 17,224 | $ 14,617 | $ 7,990 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | 275,000 | $ 300,000 | $ 75,000 | $ 353,500 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 15.50% | 15.50% | 14.00% | |||||||||||||||||||||||||||||||||||||||||
Front End Fee Percentage | 1.00% | |||||||||||||||||||||||||||||||||||||||||||
Backend Fee Percentage | 6.00% | 6.00% | 6.60% | |||||||||||||||||||||||||||||||||||||||||
Debt Issuance Costs, Net | 16,500 | |||||||||||||||||||||||||||||||||||||||||||
Amortization of Debt Issuance Costs | $ 5,500 | |||||||||||||||||||||||||||||||||||||||||||
MBF Merchant Capital LLC [Member] | Promissory Note One [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | 0 | 0 | 23,420 | 0 | 23,420 | |||||||||||||||||||||||||||||||||||||||
MBF Merchant Capital LLC [Member] | Promissory Note Two [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | 110,424 | 110,424 | 221,826 | 110,424 | 221,826 | |||||||||||||||||||||||||||||||||||||||
MBF Merchant Capital LLC [Member] | Promissory Note Three [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | 145,462 | 145,462 | 275,056 | 145,462 | 275,056 | |||||||||||||||||||||||||||||||||||||||
MBF Merchant Capital LLC [Member] | Promissory Note Four [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | 248,908 | 248,908 | 0 | 248,908 | 0 | |||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment | $ 2,000 | $ 8,906 | $ 9,591 | $ 10,961 | $ 9,591 | $ 10,961 | $ 6,850 | $ 10,911 | $ 4,129 | $ 0 | $ 8,000 | $ 110,814 | $ 9,591 | $ 5,206 | $ 2,065 | $ 6,819 | $ 90,421 | 121,810 | ||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 4,544,055 | 100,000 | $ 325,000 | $ 350,000 | $ 400,000 | $ 350,000 | $ 400,000 | $ 250,000 | $ 400,000 | 4,544,055 | 150,000 | 0 | 400,000 | 4,044,055 | $ 350,000 | $ 190,000 | $ 250,000 | 4,544,055 | $ 4,544,055 | $ 106,000 | $ 4,044,055 | $ 75,000 | ||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 0 | 2,499,481 | ||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | $ 150,000 | |||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 21,928 | 23,058 | 10,235 | 9,174 | ||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Interest Rate During Period | 14.40% | 14.19% | ||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | $ 400,000 | 4,438,087 | $ 250,000 | $ 3,315,000 | 4,438,087 | $ 4,438,087 | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 105,969 | $ 2,753 | $ 1,316 | $ 822 | $ 1,479 | $ 5,208 | $ 11,011 | $ 47,686 | $ 947 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.65 | $ 0 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 105,969 | $ 3,315,000 | $ 3,315,000 | $ 28 | $ 3,315,000 | |||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 14.40% | 14.15% | 14.15% | 14.15% | 14.15% | 14.15% | 14.15% | 13.90% | 14.90% | 0.00% | 14.40% | 14.15% | 14.15% | 14.15% | 13.90% | 13.90% | 13.90% | |||||||||||||||||||||||||||
Payments of Debt Issuance Costs | $ 8,000 | $ 5,000 | ||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Term | 18 months | |||||||||||||||||||||||||||||||||||||||||||
Interest Expense, Debt | 4,500 | |||||||||||||||||||||||||||||||||||||||||||
Front End Fee Percentage | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | 2.00% | |||||||||||||||||||||||||||||||||||
Backend Fee Percentage | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | 4.00% | |||||||||||||||||||||||||||||||||||
Proceeds from Lines of Credit | 1,849,481 | |||||||||||||||||||||||||||||||||||||||||||
Debt Conversion Converted Instrument Exchange Premium | $ 23,156 | 9,951 | ||||||||||||||||||||||||||||||||||||||||||
Back End Refinancing Fee | $ 4,000 | $ 104,600 | ||||||||||||||||||||||||||||||||||||||||||
Front End Refinancing Fee | $ 20,000 | |||||||||||||||||||||||||||||||||||||||||||
Repayments of Lines of Credit | $ 75,000 | |||||||||||||||||||||||||||||||||||||||||||
Debt Issuance Costs, Net | $ 16,000 | 16,000 | $ 16,000 | |||||||||||||||||||||||||||||||||||||||||
Debt Instrument Transaction Adjustments | 105,969 | |||||||||||||||||||||||||||||||||||||||||||
Debt Issuance Costs, Noncurrent, Net | 4,240 | 4,240 | 4,240 | |||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note One [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Two [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Three [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Four [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Five [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Six [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Seven [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Eight [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Nine [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Ten [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Eleven [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Term Note Twelve [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Tern Loans Thirteen [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Line of Credit | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Shares Issued One [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | $ 400,000 | |||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Shares Issued Two [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | 250,000 | |||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Maximum [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | |||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Letter of Credit [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 10,455,913 | 10,455,913 | $ 10,955,414 | $ 10,455,913 | $ 10,955,414 | |||||||||||||||||||||||||||||||||||||||
Debt Instrument, Debt Default, Description of Violation or Event of Default | After maturity of the loan, until all borrowings are paid in full, with respect to the advances under the credit facility, an additional three percent per annum would be added to such interest rate, and for any other amounts, obligations or payments due to RBL, an annual default rate not to exceed the lesser of (i) the prime rate plus 13% per annum and (ii) 18.635% per annum. | |||||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | $ 3,315,000 | |||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | Letter of Credit [Member] | Prime Rate [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 10.65% | |||||||||||||||||||||||||||||||||||||||||||
RBL Capital Group LLC [Member] | MBF Loan [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | 3,000,000 | 3,000,000 | $ 3,000,000 | |||||||||||||||||||||||||||||||||||||||||
Working Capital Deficit | $ 239,000 | $ 239,000 | 239,000 | |||||||||||||||||||||||||||||||||||||||||
Crede CG III, Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 105,969 | $ 3,315,000 | ||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 26,772 | 19,608 | 99,203 | 16,426 | 166,340 | |||||||||||||||||||||||||||||||||||||||
Long-term Debt, Total | $ 3,965,000 | |||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 4 | $ 4 | $ 4 | $ 16.80 | $ 4 | $ 16.80 | ||||||||||||||||||||||||||||||||||||||
Interest Expense, Debt | $ 302,294 | |||||||||||||||||||||||||||||||||||||||||||
Proceeds from Lines of Credit | $ 282,016 | 1,849,481 | ||||||||||||||||||||||||||||||||||||||||||
Debt Conversion Converted Instrument Exchange Premium | $ 19,865 | $ 487,064 |
CONCENTRATIONS (Details Textual
CONCENTRATIONS (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Concentration Risk [Line Items] | ||
Revenues | $ 44,604,113 | $ 38,963,559 |
Revenue, Other Financial Services | 43,263,217 | 29,442,868 |
Fees and Commissions | $ 1,340,896 | $ 5,000,137 |
Credit Card Processing Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 77.00% | 61.00% |
Mobile Electronic Payment Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 5.00% | |
Cynergy Data [Member] | Credit Card Processing Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 5.00% | 5.00% |
NPC [Member] | Credit Card Processing Revenue [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 5.00% | 7.00% |
Beeline [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 11.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) | Aug. 09, 2017USD ($) | Aug. 03, 2017shares | Jul. 05, 2017USD ($) | May 12, 2017USD ($)a | Sep. 12, 2016USD ($) | Jul. 06, 2016USD ($) | Aug. 06, 2014shares | May 10, 2013USD ($)ft² | Jan. 31, 2021USD ($) | Jul. 19, 2017USD ($)shares | May 20, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 25, 2016USD ($) | May 19, 2016USD ($) | May 20, 2015USD ($) | Sep. 30, 2017USD ($)ft² | Sep. 30, 2017USD ($)ft² | Dec. 31, 2021USD ($) | Dec. 31, 2016USD ($) | Mar. 01, 2017USD ($) |
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | shares | 45,676 | 197,912 | ||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 3,600,000 | |||||||||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 200,000 | |||||||||||||||||||
Provision For Stock Price Guarantee | $ 1,152,335 | $ 2,075,687 | ||||||||||||||||||
Payonline Acquisition Agreement Description | an aggregate of $2,288,667 plus 10% per annum interest accrued from May 20, 2016 in installments pursuant to the payment schedule set forth in the settlement agreement. | |||||||||||||||||||
Refundable Merchant Deposit Reserves | $ 1,433,475 | |||||||||||||||||||
Operating Leases, Rent Expense | $ 172,248 | |||||||||||||||||||
Long-term Purchase Commitment, Amount | $ 10,000,000 | $ 10,000,000 | $ 2,288,667 | |||||||||||||||||
Interest Payable | $ 3,481 | |||||||||||||||||||
Operating Leases, Rent Expense, Minimum Rentals | $ 14,354 | |||||||||||||||||||
Florida [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Lease Expiration Date | Dec. 31, 2021 | Dec. 31, 2016 | ||||||||||||||||||
Area of Land | ft² | 4,000 | |||||||||||||||||||
Operating Leases, Rent Expense | $ 20,421 | $ 16,800 | $ 19,448 | $ 245,046 | $ 233,377 | |||||||||||||||
Florida [Member] | Scenario, Forecast [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Operating Leases, Rent Expense | $ 24,821 | $ 297,855 | ||||||||||||||||||
Pay Online [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 623,762 | |||||||||||||||||||
Provision For Stock Price Guarantee | $ 2,162,861 | |||||||||||||||||||
Long-term Purchase Commitment, Amount | $ 1,792,071 | |||||||||||||||||||
Interest Payable | $ 29,604 | |||||||||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 252,223 | |||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 3,600,000 | |||||||||||||||||||
Aptito, LLC [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | shares | 12,500 | |||||||||||||||||||
Shares Pledged As Collateral | shares | 12,500 | |||||||||||||||||||
Pay Online System Leases [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Lease Expiration Date | Apr. 30, 2018 | |||||||||||||||||||
Operating Leases, Rent Expense, Net, Total | $ 27,500 | $ 153,623 | ||||||||||||||||||
Area of Land | 1,566 | 5,435 | 5,435 | |||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | shares | 30,759 | |||||||||||||||||||
Operating Leases, Rent Expense | $ 3,104 | |||||||||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 252,223 | |||||||||||||||||||
Pay Online System Leases [Member] | First Regional Office [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Area of Land | ft² | 275 | 275 | ||||||||||||||||||
Operating Leases, Rent Expense | $ 3,444 | |||||||||||||||||||
Pay Online System Leases [Member] | Second Regional Office [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Area of Land | ft² | 155 | 155 | ||||||||||||||||||
Operating Leases, Rent Expense | $ 1,536 | |||||||||||||||||||
Net Labs Systems, LLC [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Operating Leases, Rent Expense | $ 24,000 | |||||||||||||||||||
Yekaterinburg [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Area of Land | ft² | 1,654 | 1,654 | ||||||||||||||||||
Yekaterinburg [Member] | Net Labs Systems, LLC [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Lease Expiration Date | Jun. 1, 2018 | |||||||||||||||||||
Moscow [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Area of Land | ft² | 167 | 167 | ||||||||||||||||||
Moscow [Member] | Pay Online System Leases [Member] | ||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||
Area of Land | ft² | 5,268 | 5,268 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | Mar. 01, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||
Due to Related Parties, Current | $ 376,593 | $ 299,004 | ||
Debt Instrument, Face Amount | $ 290,954 | |||
Debt Instrument, Interest Rate During Period | 12.00% | |||
Debt Instrument, Periodic Payment, Principal | $ 348,083 | |||
Debt Instrument, Periodic Payment, Interest | 5,000,000 | |||
Interest Payable | $ 3,481 | |||
Prime Portfolios, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Payments for Commissions | $ 67,483 | $ 0 |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) - USD ($) | Aug. 03, 2017 | Jul. 27, 2017 | Jul. 05, 2017 | Feb. 28, 2017 | Jul. 06, 2016 | Nov. 14, 2017 | Oct. 20, 2017 | Aug. 31, 2017 | Jul. 19, 2017 | May 20, 2017 | Oct. 25, 2016 | May 20, 2015 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Jun. 13, 2016 | Oct. 02, 2017 | Jun. 12, 2015 |
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 400,000,000 | 300,000,000 | ||||||||||||||||
Shares Issued, Price Per Share | $ 4.38 | |||||||||||||||||||||
Allocated Share-based Compensation Expense | $ 111,277 | $ 732,701 | $ 836,218 | $ 3,108,274 | ||||||||||||||||||
Increase In Common Stock Shares Authorized | 100,000,000 | |||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 45,676 | 197,912 | ||||||||||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 200,000 | |||||||||||||||||||||
Long-term Purchase Commitment, Amount | $ 10,000,000 | $ 10,000,000 | $ 2,288,667 | |||||||||||||||||||
Minimum Bid Price Closing Requirement Description | We are required to continually meet the listing requirements of The Nasdaq Capital Market (including a minimum bid price for our common stock of $1.00 per share and a $2.5 million minimum of stockholders equity) to maintain the listing of our common stock on The Nasdaq Capital Market. On October 20, 2017, the Company regained its compliance with Nasdaq as it evidenced compliance with the $1.00 bid price and stockholders equity requirements. | |||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 196,203 | |||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,106,857 | |||||||||||||||||||||
Minimum Bid Price Closing Requirement Description | As of October 20, 2017, the Company filed an 8K stating (i) it has evidenced compliance with the $1.00 bid price requirement insofar as the bid price for the Company’s common stock has closed at or above $1.00 per share for more than 10 consecutive business days; and (ii) t he Company has over $2.5 million in stockholders’ equity as a result of its conversion of the Company’s indebtedness and the sales of equity to Cobblestone Capital Partners LLC pursuant to the Common Stock Purchase Agreement between the Company and Cobblestone Capital Partners LLC. | |||||||||||||||||||||
Pay Online [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 30,759 | |||||||||||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 252,223 | |||||||||||||||||||||
Long-term Purchase Commitment, Amount | $ 1,792,071 | |||||||||||||||||||||
Increase (Decrease) in Liability for Claims and Claims Adjustment Expense Reserve | $ 1,400,000 | |||||||||||||||||||||
Minimum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Common Stock, Shares Authorized | 100,000,000 | |||||||||||||||||||||
Maximum [Member] | Subsequent Event [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Common Stock, Shares Authorized | 300,000,000 | |||||||||||||||||||||
Employee Stock Option [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 45,105 | |||||||||||||||||||||
Share-based Compensation Award, Tranche One [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||||
Share-based Compensation Award, Tranche Two [Member] | Employee Stock Option [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||||
RBL Capital Group LLC [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Long-term Line of Credit | $ 3,315,000 | |||||||||||||||||||||
Crede CG III, Ltd. [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | $ 105,969 | $ 3,315,000 | ||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 26,772 | 19,608 | 99,203 | 16,426 | 166,340 | |||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 4 | $ 4 | $ 16.80 | $ 4 | $ 16.80 | |||||||||||||||||
Esousa Holdings Llc [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share Purchase Agreement Description | ESOUSA is committed to purchase up to an aggregate of $10 million of our shares of common stock over the 30-month term of the Purchase Agreement. We did not issue any shares of our common stock to ESOUSA during the three months ended September 30, 2017. | |||||||||||||||||||||
Cobblestone Capital Partners LLC [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 234,135 | |||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,057,500 | |||||||||||||||||||||
Shares Issued, Price Per Share | $ 4.52 | $ 4.52 | ||||||||||||||||||||
Director [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,667 | |||||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 62,668 | |||||||||||||||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 3,600,000 | |||||||||||||||||||||
Restricted Stock [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||||
Restricted Stock [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% | |||||||||||||||||||||
Plan 2013 [Member] | ||||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 23,488 | 128,026 | 23,488 | 128,026 | ||||||||||||||||||
Allocated Share-based Compensation Expense | $ 677,467 |
WARRANTS AND NON-INCENTIVE PL48
WARRANTS AND NON-INCENTIVE PLAN OPTIONS (Details Textual) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | |
Class of Warrant or Right [Line Items] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 750 | ||
Cazador Acquisition Corporation Ltd [Member] | |||
Class of Warrant or Right [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 0 years | ||
Class of Warrant or Right, Outstanding | 89,389 | ||
Class Of Warrant Or Right Weighted Average Remaining Contract Term | 9 months | ||
Common Stock [Member] | Cazador Acquisition Corporation Ltd [Member] | Private Placement [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants Issued to Purchase Common Stock | 89,400 | ||
Employee Stock Option [Member] | |||
Class of Warrant or Right [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 160,214 | 160,214 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 21.80 | $ 21.80 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years 2 months 1 day | 3 years 11 months 1 day |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2016 | |
Schedule of Income Tax Disclosure [Line Items] | ||
Tax Credit Carryforward, Limitations on Use | IRC Section 382 imposes limitations on a corporations ability to use its NOLs when it undergoes an ownership change. Generally, an ownership change occurs if one or more shareholders, each of whom owns 5% or more in value of a corporations stock, increase their percentage ownership, in the aggregate, by more than 50% over the lowest percentage of stock owned by such shareholders at any time during the preceding three-year period. Because on June 10, 2014, we underwent an ownership change as defined by IRC Section 382, the limitation applies to us. The losses generated prior to the ownership change date (pre-change losses) are subject to the Section 382 limitation. The pre-change losses may only become available to be utilized by us at the rate of $2.4 million per year. Any unused losses can be carried forward, subject to their original carry forward limitation periods. In the year 2017, approximately $2.4 million in the pre-change losses was released from the Section 382 loss limitation. We can still fully utilize the NOLs generated after the change of the ownership, which was approximately $14.0 million. Thus, we expect the total of approximately $18.1 million as of September 30, 2017 is available to offset future taxable income. | |
Deferred Tax Assets, Valuation Allowance | $ 24.9 | |
Foreign Tax Authority [Member] | ||
Schedule of Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | 13.8 | $ 13.2 |
Federal And State Jurisdiction [Member] | ||
Schedule of Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | $ 53.8 | $ 48.6 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Net revenues | $ 14,901,131 | $ 14,009,652 | $ 44,604,113 | $ 38,963,559 | |
General, administrative, and asset disposal | 2,357,729 | 2,284,737 | 7,788,068 | 6,372,361 | |
Non-cash compensation | 111,277 | 732,701 | 836,218 | 3,108,274 | |
Provision for bad debt | 319,690 | 301,170 | 1,465,311 | 678,150 | |
Depreciation and amortization | 630,020 | 764,886 | 1,860,401 | 2,497,538 | |
Interest expense (income), net | (302,813) | (608,716) | (894,553) | (1,186,207) | |
Loss from stock value guarantee | 0 | (1,559,281) | 0 | (3,722,142) | |
Other expenses (income) | (92,904) | 433,784 | (148,099) | 392,257 | |
Net (loss) income for segment | (1,669,929) | (3,503,223) | (5,923,548) | (10,774,058) | |
Segment assets | 20,434,630 | 20,434,630 | $ 23,170,067 | ||
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 14,901,131 | 14,009,652 | 44,604,113 | 38,963,559 | |
Cost of revenues | 12,756,627 | 11,695,168 | 37,535,011 | 32,565,202 | |
Gross Margin | $ 2,144,504 | $ 2,314,484 | $ 7,069,102 | $ 6,398,357 | |
Gross margin (in percentage) | 14.00% | 17.00% | 16.00% | 16.00% | |
General, administrative, and asset disposal | $ 2,357,729 | $ 2,284,737 | $ 7,788,068 | $ 6,372,361 | |
Non-cash compensation | 111,277 | 732,701 | 836,218 | 3,108,274 | |
Provision for bad debt | 319,690 | 301,170 | 1,465,311 | 678,150 | |
Depreciation and amortization | 630,020 | 764,886 | 1,860,401 | 2,497,538 | |
Interest expense (income), net | 302,813 | 608,716 | 894,553 | 1,186,207 | |
Loss from stock value guarantee | 3,722,142 | ||||
Other expenses (income) | 92,904 | (433,784) | 148,099 | (392,257) | |
Net (loss) income for segment | (1,669,929) | (3,503,223) | (5,923,548) | (10,774,058) | |
Segment assets | 20,434,630 | 23,395,806 | 20,434,630 | 23,395,806 | |
North American Transaction Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 13,123,204 | 11,186,287 | 37,701,136 | 29,442,868 | |
Cost of revenues | 11,279,098 | 9,585,952 | 32,213,056 | 25,206,769 | |
Gross Margin | $ 1,844,106 | $ 1,600,335 | $ 5,488,080 | $ 4,236,099 | |
Gross margin (in percentage) | 14.00% | 14.00% | 15.00% | 14.00% | |
General, administrative, and asset disposal | $ 661,505 | $ 633,918 | $ 2,098,121 | $ 1,921,296 | |
Non-cash compensation | 0 | 0 | 0 | 0 | |
Provision for bad debt | 248,279 | 291,965 | 1,193,657 | 668,414 | |
Depreciation and amortization | 372,858 | 359,814 | 1,063,475 | 1,010,103 | |
Interest expense (income), net | 276,644 | 90,897 | 698,627 | 377,473 | |
Loss from stock value guarantee | 0 | 0 | |||
Other expenses (income) | 208 | 3,184 | 48,481 | 4,118 | |
Net (loss) income for segment | 284,612 | 220,557 | 385,719 | 254,695 | |
Segment assets | 20,863,462 | 12,596,088 | 20,863,462 | 12,596,088 | |
Mobile Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 0 | 1,226,241 | 1,375,160 | 4,999,452 | |
Cost of revenues | 0 | 1,045,836 | 1,319,704 | 4,427,043 | |
Gross Margin | $ 0 | $ 180,405 | $ 55,456 | $ 572,409 | |
Gross margin (in percentage) | 0.00% | 15.00% | 4.00% | 11.00% | |
General, administrative, and asset disposal | $ 41,880 | $ 150,884 | $ 363,270 | $ 21,232 | |
Non-cash compensation | 0 | 0 | 0 | 0 | |
Provision for bad debt | 68,305 | 7,679 | 265,149 | 7,790 | |
Depreciation and amortization | 555 | 5,405 | 2,208 | 15,332 | |
Interest expense (income), net | (32,010) | (15,682) | (91,547) | (19,725) | |
Loss from stock value guarantee | 0 | 0 | |||
Other expenses (income) | 94,267 | (444,343) | 93,784 | (433,750) | |
Net (loss) income for segment | (172,997) | 476,462 | (577,408) | 981,530 | |
Segment assets | 226,136 | 2,470,845 | 226,136 | 2,470,845 | |
Online Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 1,777,927 | 1,597,124 | 5,527,817 | 4,521,239 | |
Cost of revenues | 1,477,529 | 1,063,380 | 4,002,251 | 2,931,390 | |
Gross Margin | $ 300,398 | $ 533,744 | $ 1,525,566 | $ 1,589,849 | |
Gross margin (in percentage) | 17.00% | 33.00% | 28.00% | 35.00% | |
General, administrative, and asset disposal | $ 548,676 | $ 447,902 | $ 1,690,640 | $ 1,228,877 | |
Non-cash compensation | 0 | 0 | 0 | 0 | |
Provision for bad debt | 3,106 | 1,526 | 5,020 | 1,946 | |
Depreciation and amortization | 256,607 | 392,880 | 783,545 | 1,370,960 | |
Interest expense (income), net | (5,616) | (12,549) | (23,051) | (36,137) | |
Loss from stock value guarantee | 0 | 0 | |||
Other expenses (income) | (1,571) | 5,256 | (3,294) | 35,240 | |
Net (loss) income for segment | (500,804) | (301,271) | (927,294) | (1,011,037) | |
Segment assets | 4,219,400 | 5,743,882 | 4,219,400 | 5,743,882 | |
Corporate Expenses and Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenues | 0 | 0 | 0 | 0 | |
Cost of revenues | 0 | 0 | 0 | 0 | |
Gross Margin | $ 0 | $ 0 | $ 0 | $ 0 | |
Gross margin (in percentage) | 0.00% | 0.00% | 0.00% | 0.00% | |
General, administrative, and asset disposal | $ 1,105,668 | $ 1,052,033 | $ 3,636,037 | $ 3,200,956 | |
Non-cash compensation | 111,277 | 732,701 | 836,218 | 3,108,274 | |
Provision for bad debt | 0 | 0 | 1,485 | 0 | |
Depreciation and amortization | 0 | 6,787 | 11,173 | 101,143 | |
Interest expense (income), net | 63,795 | 546,050 | 310,524 | 864,596 | |
Loss from stock value guarantee | 1,559,281 | 3,722,142 | |||
Other expenses (income) | 0 | 2,119 | 9,128 | 2,135 | |
Net (loss) income for segment | (1,280,740) | (3,898,971) | (4,804,565) | (10,999,246) | |
Segment assets | $ 4,874,368 | $ 2,584,991 | $ 4,874,368 | $ 2,584,991 |
SEGMENT INFORMATION (Details Te
SEGMENT INFORMATION (Details Textual) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |
Segment Reporting, Disclosure of Major Customers | In April 2013, we purchased 80% of Aptito, a cloud based Software-as-a-Service (“SaaS”) restaurant management solution |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) | Oct. 05, 2017 | Oct. 03, 2017 | Nov. 14, 2017 | Oct. 20, 2017 | May 20, 2015 | Sep. 30, 2017 | Oct. 02, 2017 |
Subsequent Event [Line Items] | |||||||
Payments to Acquire Businesses, Gross | $ 3,600,000 | ||||||
Minimum Bid Price Closing Requirement Description | We are required to continually meet the listing requirements of The Nasdaq Capital Market (including a minimum bid price for our common stock of $1.00 per share and a $2.5 million minimum of stockholders equity) to maintain the listing of our common stock on The Nasdaq Capital Market. On October 20, 2017, the Company regained its compliance with Nasdaq as it evidenced compliance with the $1.00 bid price and stockholders equity requirements. | ||||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Issued During Period, Value, New Issues | $ 1,106,857 | ||||||
Stock Issued During Period, Shares, New Issues | 196,203 | ||||||
Minimum Bid Price Closing Requirement Description | As of October 20, 2017, the Company filed an 8K stating (i) it has evidenced compliance with the $1.00 bid price requirement insofar as the bid price for the Company’s common stock has closed at or above $1.00 per share for more than 10 consecutive business days; and (ii) t he Company has over $2.5 million in stockholders’ equity as a result of its conversion of the Company’s indebtedness and the sales of equity to Cobblestone Capital Partners LLC pursuant to the Common Stock Purchase Agreement between the Company and Cobblestone Capital Partners LLC. | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 89,389 | ||||||
Stock Issued During Period, Shares, Reverse Stock Splits | 2,968 | ||||||
Subsequent Event [Member] | Pay Online [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Payments to Acquire Businesses, Gross | $ 197,912 | ||||||
Proceeds from Lines of Credit | 105,000 | ||||||
Repayments of Lines of Credit | $ 111,118 | ||||||
Subsequent Event [Member] | Star Equities, LLC [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 67,312 | ||||||
Debt Conversion, Original Debt, Amount | $ 348,083 | ||||||
Notes and Loans Payable | $ 374,253 | ||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total | 47,139 |