Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Mar. 26, 2014 | Jun. 30, 2013 |
Document Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'JetPay Corp | ' | ' |
Entity Central Index Key | '0001507986 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Trading Symbol | 'JTPY | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 11,530,490 | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $21.80 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $4,799 | $1,391 |
Restricted cash | 121 | 125 |
Accounts receivable, less allowance for doubtful accounts | 2,089 | 3,069 |
Settlement processing assets | 18,876 | 0 |
Prepaid expenses and other current assets | 614 | 747 |
Current assets before funds held for clients | 26,499 | 5,332 |
Funds held for clients | 32,521 | 44,213 |
Total current assets | 59,020 | 49,545 |
Property and equipment, net | 1,252 | 1,382 |
Goodwill | 31,166 | 30,944 |
Identifiable intangible assets, net of accumulated amortization of $2,241 and $0 at December 31, 2013 and 2012, respectively | 22,811 | 25,052 |
Deferred financing costs, net of accumulated amortization of $2,058 and $0 at December 31, 2013 and 2012, respectively | 2,335 | 4,393 |
Other assets | 5,151 | 3,783 |
Cash and cash equivalents held in trust | 0 | 1,948 |
Total assets | 121,735 | 117,047 |
LIABILITIES | ' | ' |
Current portion of long-term debt and derivative liability | 10,674 | 7,479 |
Accounts payable and accrued expenses | 12,154 | 8,284 |
Settlement processing liabilities | 18,140 | 0 |
Deferred revenue | 501 | 470 |
Derivative liability | 380 | 0 |
Other current liabilities | 1,724 | 0 |
Notes payable to affiliate | 0 | 15 |
Current liabilities before client fund obligations | 43,573 | 16,248 |
Client fund obligations | 32,521 | 44,213 |
Total current liabilities | 76,094 | 60,461 |
Long-term debt, net of current portion | 8,071 | 17,090 |
Derivative liability | 0 | 2,110 |
Deferred income taxes | 239 | 524 |
Other liabilities | 109 | 2,326 |
Total liabilities | 84,513 | 82,511 |
Common stock, pending redemption 320,486 shares at December 31, 2012 | 0 | 1,948 |
Commitments and Contingencies | ' | ' |
Stockholders' Equity | ' | ' |
Preferred stock value | 0 | 0 |
Common stock, $0.001 par value Authorized 100,000,000 shares; 11,529,094 and 11,519,094 issued and outstanding at December 31, 2013 and 2012, respectively (which excludes 320,486 shares pending redemption at December 31, 2012) | 12 | 12 |
Additional paid-in capital | 41,305 | 39,934 |
Accumulated deficit | -12,316 | -7,358 |
Total Stockholders' Equity | 29,001 | 32,588 |
Total Liabilities and Stockholders' Equity | 121,735 | 117,047 |
Redeemable Convertible Series A Preferred Stock [Member] | ' | ' |
Stockholders' Equity | ' | ' |
Preferred stock value | $8,221 | $0 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $2,241 | $0 |
Accumulated Amortization, Deferred Finance Costs | 2,058 | 0 |
Temporary equity, shares outstanding | ' | 320,486 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 11,529,094 | 11,519,094 |
Common stock, shares outstanding | 11,529,094 | 11,519,094 |
Redeemable Convertible Series A Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in dollars per share) | $300 | $300 |
Preferred stock, shares issued | 33,333 | 33,333 |
Preferred Stock, Shares Outstanding | 33,333 | 33,333 |
Preferred Stock, Liquidation Preference, Value | $10,314 | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 28, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | |
Processing revenues | $0 | $30,905 | $0 | $18,287 |
Cost of processing revenues | 0 | 18,417 | 0 | 13,140 |
Gross profit | 0 | 12,488 | 0 | 5,147 |
Selling, general and administrative expenses | 4,576 | 11,745 | 547 | 4,028 |
Non-cash transaction expense | 2,030 | 0 | 0 | 0 |
Change in fair value of contingent consideration liability | 0 | -690 | 0 | 0 |
Amortization of intangibles | 0 | 2,241 | 0 | 0 |
Depreciation | 22 | 388 | 90 | 140 |
Operating (loss) income | -6,628 | -1,196 | -637 | 979 |
Other expenses (income) | ' | ' | ' | ' |
Interest expense | 14 | 2,215 | 0 | 562 |
Amortization of deferred financing costs | 0 | 2,058 | 0 | 0 |
Amortization of debt discounts and conversion options | 0 | 1,510 | 0 | 0 |
Change in fair value of derivative liability | 0 | -2,050 | 0 | 0 |
Other (income) expense | 11 | -10 | -22 | -88 |
(Loss) income before income taxes | -6,653 | -4,919 | -615 | 505 |
Income tax expense | 0 | 39 | 0 | 108 |
Net (loss) income | -6,653 | -4,958 | -615 | 397 |
Accretion of convertible preferred stock | 0 | -360 | 0 | 0 |
Net (loss) income applicable to common stockholders | ($6,653) | ($5,318) | ($615) | $397 |
Loss per share applicable to common stockholders (basic and diluted) | ($1.60) | ($0.46) | ($0.16) | ' |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic and diluted (in shares) | 4,160,124 | 11,525,943 | 3,825,660 | ' |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Predecessor [Member] | Common Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit during Development Stage [Member] | Accumulated Deficit during Development Stage [Member] | Members Deficiency [Member] |
In Thousands, except Share data | Predecessor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | Successor [Member] | Predecessor [Member] | ||
Balance at Sep. 30, 2011 | $5,080 | ' | ' | $4 | ' | $5,166 | ' | ($90) | ' |
Balance (in shares) at Sep. 30, 2011 | ' | ' | ' | 3,825,709 | ' | ' | ' | ' | ' |
Net Income (loss) | -615 | ' | ' | 0 | ' | 0 | ' | -615 | ' |
Repurchase of 22,307 units in accordance with Companybs Share Repurchase Plan | -129 | ' | ' | 0 | ' | -129 | ' | 0 | ' |
Repurchase of 22,307 units in accordance with Companybs Share Repurchase Plan (in Shares) | ' | ' | ' | -22,307 | ' | ' | ' | ' | ' |
Reduction of net proceeds subject to possible redemption | 129 | ' | ' | 0 | ' | 129 | ' | 0 | ' |
Reduction of net proceeds subject to possible redemption (in shares) | ' | ' | ' | 22,224 | ' | ' | ' | ' | ' |
Balance at Sep. 30, 2012 | 4,465 | ' | ' | 4 | ' | 5,166 | ' | -705 | ' |
Balance (in Shares) at Sep. 30, 2012 | ' | ' | ' | 3,825,626 | ' | ' | ' | ' | ' |
Deficiency as of at Dec. 31, 2011 | ' | 0 | 0 | ' | 0 | ' | 0 | ' | -5,068 |
Distribution to member | ' | 0 | 0 | ' | 0 | ' | 0 | ' | -357 |
Net Income (loss) | ' | 0 | 0 | ' | 0 | ' | 0 | ' | 397 |
Deficiency as of at Dec. 28, 2012 | ' | 0 | 0 | ' | 0 | ' | 0 | ' | -5,028 |
Balance at Dec. 31, 2011 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Income (loss) | -6,653 | ' | ' | 0 | ' | 0 | ' | -6,653 | ' |
Reduction of net proceeds subject to possible redemption | 3,036 | ' | ' | 0 | ' | 3,036 | ' | 0 | ' |
Reduction of net proceeds subject to possible redemption (in shares) | ' | ' | ' | 499,442 | ' | ' | ' | ' | ' |
Common stock issued for warrant conversion | 0 | ' | ' | 3 | ' | -3 | ' | 0 | ' |
Common stock issued for warrant conversion (in shares) | ' | ' | ' | 2,527,359 | ' | ' | ' | ' | ' |
Contingent stock consideration - JetPay | 840 | ' | ' | 0 | ' | 840 | ' | 0 | ' |
Non-cash stock transaction cost | 2,030 | ' | ' | 0 | ' | 2,030 | ' | 0 | ' |
Deferred financing costs | 4,370 | ' | ' | 0 | ' | 4,370 | ' | 0 | ' |
Common stock issued for acquisitions | 24,500 | ' | ' | 5 | ' | 24,495 | ' | ' | ' |
Common stock issued for acquisitions (in Shares) | ' | ' | ' | 4,666,667 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | 32,588 | ' | ' | 12 | ' | 39,934 | ' | -7,358 | ' |
Balance (in Shares) at Dec. 31, 2012 | ' | ' | ' | 11,519,094 | ' | ' | ' | ' | ' |
Net Income (loss) | -4,958 | ' | ' | 0 | ' | 0 | ' | -4,958 | ' |
Common shares issued as compensation | 37 | ' | ' | 0 | ' | 37 | ' | 0 | ' |
Common shares issued as compensation (in shares) | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' |
Stock-based compensation expense | 194 | ' | ' | 0 | ' | 194 | ' | 0 | ' |
Beneficial conversion feature on redeemable convertible preferred stock | 1,500 | ' | ' | 0 | ' | 1,500 | ' | 0 | ' |
Accretion of preferred stock to redemption value | -360 | ' | ' | 0 | ' | -360 | ' | 0 | ' |
Balance at Dec. 31, 2013 | $29,001 | ' | ' | $12 | ' | $41,305 | ' | ($12,316) | ' |
Balance (in Shares) at Dec. 31, 2013 | ' | ' | ' | 11,529,094 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 28, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | |
Operating Activities | ' | ' | ' | ' |
Net (loss) income | ($6,653) | ($4,958) | ($615) | $397 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities | ' | ' | ' | ' |
Depreciation | 0 | 388 | 0 | 140 |
Stock-based compensation | 0 | 194 | 0 | 0 |
Common shares issued as compensation | 0 | 37 | 0 | 0 |
Amortization of intangibles | 0 | 2,241 | 0 | 0 |
Provision for losses on receivables | 0 | 27 | 0 | 348 |
Amortization of deferred financing costs | 0 | 2,058 | 0 | 0 |
Amortization of debt discounts and conversion options | 0 | 1,510 | 0 | 0 |
Change in fair value of contingent consideration liability | 0 | -690 | 0 | 0 |
Change in fair value of derivative liability | 0 | -2,050 | 0 | 0 |
Non-cash expense related to Officer/Director grant of personal shares | 2,030 | 0 | 0 | 0 |
Change in operating assets and liabilities | ' | ' | ' | ' |
Restricted cash | 0 | 4 | 0 | 0 |
Accounts receivable | 0 | 953 | 0 | 401 |
Settlement processing assets and obligations, net | 0 | -736 | 0 | 0 |
Prepaid expenses and other current assets | 223 | 133 | 0 | -2,549 |
Other assets | 0 | -1,368 | 0 | 0 |
Deferred revenue | 0 | 31 | 0 | 0 |
Accounts payable and accrued expenses | 3,459 | 3,323 | 244 | 799 |
Net cash provided by (used in) operating activities | -941 | 1,097 | -371 | -464 |
Investing Activities | ' | ' | ' | ' |
Investment in restricted cash and cash equivalents | 0 | 0 | -9 | 0 |
Net decrease in restricted cash and cash equivalents held to satisfy client fund obligations | ' | 11,692 | ' | ' |
Acquisition of businesses, net of cash acquired of $1,026 | -22,097 | 0 | 0 | 0 |
Purchase of property and equipment | 0 | -258 | 0 | -427 |
Proceeds on sale of property and equipment | 0 | 1 | 0 | 0 |
Cash and cash equivalents released from trust | 66,863 | 1,948 | 0 | 0 |
Amounts released from restricted cash and cash equivalents to repurchase shares of common stock | 0 | 0 | 129 | 0 |
Net cash provided by (used in) investing activities | 44,766 | 13,383 | 120 | -427 |
Financing Activities | ' | ' | ' | ' |
Payments on long-term debt | -2,331 | -7,370 | 0 | -411 |
Trust funds paid to redeeming stockholders | -58,807 | -1,948 | 0 | 0 |
Proceeds from long-term debt | 19,000 | 592 | 0 | 0 |
Net decrease in client funds obligations | ' | -11,692 | ' | ' |
Distributions to member | 0 | 0 | 0 | -357 |
Proceeds from the sale of Series A preferred stock, net of issuance costs | 0 | 9,361 | 0 | 0 |
Proceeds from note payable to affiliate | 91 | 72 | 335 | 417 |
Repayment of note payable to affiliate | -411 | -87 | 0 | 0 |
Repurchase of common stock | 0 | ' | -129 | 0 |
Net cash (used in) provided by financing activities | -42,458 | -11,072 | 206 | -351 |
Net increase (decrease) in cash and cash equivalents | 1,367 | 3,408 | -45 | -1,242 |
Cash and cash equivalents, beginning | 24 | 1,391 | 69 | 2,217 |
Cash and cash equivalents, ending | 1,391 | 4,799 | 24 | 975 |
Supplement Disclosure of cash flow information: | ' | ' | ' | ' |
Cash paid for interest | 0 | 1,783 | 0 | 523 |
Cash paid for taxes | 0 | 149 | 0 | 109 |
Summary of non-cash investing and financing activities: | ' | ' | ' | ' |
Debt assumed in business acquisition | 8,331 | 0 | 0 | 0 |
Conversion features of convertible notes payable | 2,110 | 0 | 0 | 0 |
Common stock issued for acquisitions | 24,500 | 0 | 0 | 0 |
Beneficial conversion feature - convertible preferred stock | 0 | 1,500 | 0 | 0 |
Measurement period adjustment | 0 | 222 | 0 | 0 |
Deferred financing costs | 4,370 | 0 | 0 | 0 |
Deferred consideration | 1,486 | ' | ' | ' |
Contingent consideration | 1,540 | 0 | 0 | 0 |
ADC additional tax adjustment consideration | 70 | 0 | 0 | 0 |
Note issued in JetPay acquisition | 2,331 | 0 | 0 | 0 |
Fair value of assets acquired | 110,574 | 0 | 0 | 0 |
Cash paid | -23,123 | 0 | 0 | 0 |
Fair value of company stock issued | -24,500 | 0 | 0 | 0 |
Fair value of deferred consideration | -4,582 | 0 | 0 | 0 |
Liabilities assumed | $58,369 | $0 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_CHA2
CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Cash Acquired from Acquisition | $1,026 |
Organization_and_Business_Oper
Organization and Business Operations | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
Note 1. Organization and Business Operations | |
Effective August 2, 2013, Universal Business Payment Solutions Acquisition Corporation changed its name to JetPay Corporation with the filing of its Amended and Restated Certificate of Incorporation. The Company’s ticker symbol on the Nasdaq Capital Market (“NASDAQ”) changed from “UBPS” to “JTPY” effective August 12, 2013. The name Jetpay Corporation describes the Company as being in the payment processing business, providing fast, safe, and secure payments. | |
The Company currently operates in two business segment, the Payment Processing Segment, which is an end-to-end processor of credit and debit card and ACH payment transactions to businesses with a focus on those processing internet transactions and recurring billings and the Payroll Processing Segment, which is a full-service payroll and related payroll tax payment processor. The Company also initiated operations of JetPay Card Services in the fourth quarter of 2013, a division which is focused on providing low-cost money management and payment services to un-banked and under-banked employees of our business customers. The activity within the JetPay Card Services division was not material for the year ended December 31, 2013. The Company entered the payment processing and the payroll processing businesses upon consummation of the acquisitions of JetPay, LLC (or “JetPay Payment Services”) and A D Computer Corporation (“ADC” or “JetPay Payroll Services”) on December 28, 2012 (the “Completed Transactions”). See Note 2. Business Acquisitions. | |
The Company was incorporated in Delaware on November 12, 2010 as a blank check company whose objective was to acquire, through a merger, share exchange, asset acquisition, stock purchase, plan of arrangement, recapitalization, reorganization or other similar business combination, one or more operating businesses. Until December 28, 2012, the Company’s efforts were limited to organizational activities, its initial public offering (the “Offering”) and the search for suitable business acquisition transactions. | |
Pursuant to our Restated Certificate of Incorporation, the Company had until February 9, 2013 to consummate a business combination or it would (i) cease all operations except for the purposes of winding up, (ii) redeem 100% of its public shares of common stock for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account including interest, less taxes, which redemption would have completely extinguished public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and subject to the requirement that any refund of income taxes that were paid from the trust account which is received after the redemption shall be distributed to the former public stockholders, and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders. | |
A registration statement relating to the Offering was declared effective by the SEC on May 9, 2011. On May 13, 2011, the Company sold 12,000,000 units in the Offering at a price of $6.00 per unit. Each such unit consisted of one share of our common stock, $.001 par value per share, and one common stock purchase warrant. Each such warrant entitled the holder to purchase one share of common stock at a price of $6.90. The warrants were exercisable on the later of (1) May 9, 2012 and (2) the consummation of a business combination and would have expired on the earlier of (1) five years from the date on which a business combination was completed, (2) the liquidation of the trust account if the Company had not completed a business combination within the required time periods, or (3) upon redemption. We had the ability to redeem the warrants at a price of $0.01 per warrant upon 30 days prior notice after the warrants become exercisable, only in the event that the last sale price of the common stock is at least $9.50 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given. | |
Concurrently with the closing of the Offering, the Company’s initial stockholders purchased 6,240,000 warrants at a price of $0.50 per warrant, for an aggregate purchase price of $3,120,000, in a private placement. In addition, EarlyBirdCapital, Inc., representative of the several underwriters of the Offering (“EarlyBirdCapital”), or its designees purchased 720,000 warrants on the same terms for an aggregate purchase price of $360,000. All of the proceeds we received from the purchase of these warrants were placed in the trust account described below. The warrants issued to the Company’s initial stockholders and EarlyBirdCapital were identical to the warrants offered by the Company in the Offering, except that such warrants were non-redeemable and could have been exercised on a cashless basis so long as such warrants were held by the individuals who acquired them or their affiliates. The Company also sold to EarlyBirdCapital for $100, as additional compensation, an option to purchase up to a total of 600,000 units at a price of $6.60 per unit. The units issuable upon exercise of the unit purchase option (“UPO”) are identical to those offered by the Company in the Offering. | |
On May 13, 2011, the Company received net proceeds of $69,366,994 from the Offering and $3,480,000 from the private placement of warrants to the initial stockholders of the Company and the underwriters of the Offering. An amount of $72,720,000 (including the $3,480,000 of proceeds from the sale of warrants to the Company’s initial stockholders and the underwriters of the Offering) was being held in a trust account for the benefit of the Company and invested in United States Treasuries having a maturity of 180 days or less until the earlier of (i) the consummation of the Company’s first business combination, (ii) the Company’s failure to consummate a business combination within the prescribed time, and (iii) such time as the Company’s common stock trades at or below $5.75 per share, subject to certain criteria discussed below. In the event that the Company’s common stock traded at or below $5.75 per share, there would be released to the Company from the trust account amounts necessary for the Company to purchase up to an average of $1,900,000 worth of shares each month up to an aggregate amount of 50% of the shares sold in the Offering (or 6,000,000 shares). Such purchases were eligible to commence on July 10, 2011. Through December 31, 2012, a total of 680,307 shares had been repurchased at a cost of $3,925,393. | |
On May 10, 2011, the Company’s units commenced trading on the NASDAQ Capital Market under the symbol “UBPSU”. Holders of the Company’s units were able to separately trade the common stock and warrants included in such units under the symbols “UBPS” and “UBPSW”, respectively, commencing on August 8, 2011 and the trading in the units continued under the symbol UPBSU until December 28, 2012. The common stock is currently quoted on the NASDAQ Capital Market under the symbol “JTPY”. | |
The Company, after signing a definitive agreement for the acquisition of a target business, was required to provide stockholders who acquired shares in the Offering (“Public Stockholders”) with the opportunity to redeem their shares of common stock for a pro rata interest in the Trust Account. In the event that stockholders owning 93.1% (87.5% as adjusted for repurchases through September 30, 2012) or more of the shares sold in the Offering exercised their redemption rights (the “Redemption Threshold”) described below or are sold to the Company for cancellation, the Business Combination would not be consummated. All of the Company’s stockholders prior to the Offering, including all of the officers and directors of the Company (“Initial Stockholders”), had waived any redemption rights they had in connection with a Business Combination. Upon consummation of the acquisitions of JetPay and ADC, $8.05 million was released from the Trust Account to the Company and $58.8 million was used to redeem 9,674,139 shares of Common Stock. At December 31, 2012, $1.95 million of cash remained in the trust pending redemption of 320,486 shares which occurred on January 2, 2013. | |
The Company was considered to be a development stage company and as such, its financial statements were prepared in accordance with the Accounting Standards Codification (“ASC”) Topic 915 Development Stage Entities. The Company was subject to all of the risks associated with development stage companies. With the Company’s completion of its Business Combinations on December 28, 2012, the Company exited the development stage. | |
Effective December 28, 2012, the Company changed its fiscal year end from September 30 to December 31. The consolidated financial statements as of December 31, 2012 and the year ended December 31, 2013 include the accounts of JetPay and its wholly owned subsidiaries, JetPay, LLC and ADC. All significant inter-company transactions and balances have been eliminated in consolidation. JetPay, LLC is considered the predecessor company and accordingly, its results of operations are included within the Statement of Operations for the period January 1, 2012 to December 28, 2012, which are included within this Annual Report on Form 10-K. ADC’s results of operations are included in the Company’s consolidated financial statements post-acquisition. The results of operations for the three and nine months ended September 30, 2012, prior to consummation of the ADC and JetPay, LLC acquisitions, consisted largely of transaction costs. | |
In order to fund its working capital requirements, the Company expects that the historic cash flow of the acquired companies will provide sufficient liquidity to meet its current operating requirements. The Company believes that the investments made by JetPay and ADC in their technology, infrastructure, and sales staff will generate cash flows sufficient to cover its working capital needs. In addition to funding ongoing working capital needs, the Company’s cash requirements for the next twelve months ending December 31, 2014 include, but are not limited to: principal and interest payments on long-term debt of approximately $3.4 million; the payoff of $10 million of secured convertible notes maturing on December 31, 2014, should the notes not be converted into common stock by the note holders; $2.0 million of deferred consideration due to the stockholders of ADC on December 28, 2014; a $492,000 promissory note to a related party maturing on July 31, 2014; and satisfaction of the $2.8 million arbitration award to EarlyBirdCapital, as described in Note 16-Commitments and Contingencies; planned capital expenditures of approximately $250,000 to $300,000 and the possible funding of future acquisitions or new business initiatives. The Company expects fund its cash needs, including capital required for acquisitions, with cash flow from its operating activities, equity investments and borrowings. As disclosed in Note 13-Redeemable Convertible Preferred Stock, on October 11, 2013, the Company was successful in selling an initial 33,333 shares of Series A Convertible Preferred Stock to Flexpoint for an aggregate of $10 million, less certain costs, and it has an agreement to potentially sell an additional $30 million of Series A Preferred to Flexpoint. This additional $30 million will be used to repay the $10 million secured convertible notes maturing in December 2014 if such notes are not converted into common stock, and as partial consideration for future acquisitions. Additionally, the Company expects to fund a portion of the $2.8 million liability to EBC by issuing its common stock at a price of $3.00 per share to Bipin C. Shah, its Chairman and Chief Executive Officer, and C. Nicholas Antich, the President of its payroll services operation, in a private placement, which Mr. Shah and Mr. Antich would be obligated to purchase up to an aggregate of $1.0 million of the Company’s common stock at such price upon its demand; and the sale of up to $1.4 million of Series A Preferred to Flexpoint under the Securities Purchase Agreement noted above. The Company cannot provide any assurance that it will be successful in securing new financing or that it will secure such future financing with commercially acceptable terms. If the Company is unable to raise additional capital, it may need to limit its future growth plans. | |
Business_Acquisitions
Business Acquisitions | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Business Combination Disclosure [Text Block] | ' | ||||
Note 2. Business Acquisitions | |||||
On July 6, 2012, the Company entered into three definitive agreements (the “Acquisition Agreements”) to acquire the following three companies: (i) JetPay, LLC, a Texas limited liability company and certain affiliated entities; (ii) Francis David Corporation (d/b/a/ Electronic Merchant Systems), an Ohio corporation (“EMS”) and certain affiliated entities; and (iii) ADC, and certain affiliated entities. The Company’s board of directors approved each of the agreements and the transactions contemplated thereby (collectively, the “Completed Transactions”). On August 10, 2012, the Company entered into amendments with respect to each of the definitive agreements for the Completed Transactions. On December 11, 2012, the Company and EMS mutually agreed to terminate the Acquisition Agreement. The transactions with JetPay, LLC and ADC were consummated on December 28, 2012. | |||||
On December 28, 2012, JP Merger Sub, LLC merged with and into JetPay, LLC, with JetPay, LLC surviving such merger. In connection with the closing, the Company paid approximately $6.9 million in cash to WLES, LP (“WLES”), JetPay, LLC’s sole member, and issued a $2.3 million unsecured promissory note to WLES. This promissory note was recorded at its fair value of $1.49 million. Additionally, the Company issued 3,666,667 shares of its common stock, par value $0.001 (“Common Stock”), to WLES, 3,333,333 of which were deposited in an escrow account to secure certain obligations of WLES. See Note 16. Commitments and Contingencies. The stock consideration was valued at $19.25 million at the date of acquisition. The cash consideration payable to JetPay, LLC was also subject to certain adjustments relating to the net working capital, cash and indebtedness of JetPay, LLC and its subsidiaries. In addition to the consideration paid at closing, WLES, through December 28, 2017, is entitled to receive 833,333 shares of the Common Stock if the trading price of the Common Stock is at least $8.00 per share for any 20 trading days out of a 30 trading day period and $5,000,000 in cash if the trading price of the Common Stock is at least $9.50 per share for any 20 trading days out of a 30 trading day period. This cash and stock contingent consideration was valued at $1.54 million at the date of acquisition based on utilization of option pricing models and was recorded as a non-current liability for $700,000 and as additional paid-in capital for $840,000 at December 31, 2012, respectively. The fair value of the cash contingent consideration was $10,000 at December 31, 2013. See Note 3. Summary of Significant Accounting Policies. The acquisition of JetPay, LLC provides the Company a base operation for providing merchant card processing services and the ability to cross-market to its merchant card processing services to its ADC payroll client base. | |||||
The fair value of the identifiable assets acquired and liabilities assumed in the JetPay, LLC acquisition as of the acquisition date include: (i) $1.1 million cash and restricted cash, (ii) $1.54 million for accounts receivable; (iii) $3.8 million for prepaid expenses and other assets; (iv) $647,000 for fixed assets and capital leased assets; (v) the assumption of $12.9 million of liabilities; and (vi) the remainder, or approximately $34.9 million, allocated to goodwill and other identifiable intangible assets. Within the $34.9 million of acquired intangible assets, $22.7 million was assigned to goodwill, which is not subject to amortization expense and includes $524,000 of goodwill recorded in connection with a deferred tax liability related to the current non-deductibility of certain intangible assets acquired. The amount assigned to goodwill was deemed appropriate based on several factors, including: (i) multiple paid by market participants for businesses in the merchant card processing business; (ii) levels of JetPay’s current and future projected cash flows; and (iii) the Company’s strategic business plan, which includes cross-marketing the Company’s payroll processing services to JetPay’s customer base as well as offering merchant credit card processing services to the Company’s ADC payroll customer base. The remaining intangible assets were assigned to customer relationships for $8.6 million, software costs of $2.1 million and tradename for $1.5 million. The Company determined that the fair value of non-compete agreements were immaterial. Customer relationships and software costs were assigned a life of ten and eight years, respectively. The tradename was determined to have an indefinite life. | |||||
On December 28, 2012, ADC Merger Sub, Inc. merged with and into ADC, with ADC surviving such merger. In connection with the closing, the Company paid $16.0 million in cash and issued 1.0 million shares of its Common Stock to the stockholders of ADC valued at $5.25 million at the date of acquisition. Additionally, the Company paid consideration of $324,000 related to working capital and tax adjustments. On the 24 month anniversary of the closing of the transaction, the ADC stockholders are entitled to receive an additional $2.0 million in cash consideration. The $2.0 million of deferred consideration was recorded as a non-current liability as of the date of acquisition of $1.49 million representing the estimated fair value of this future payment utilizing a 16% discount rate. The fair value of the deferred consideration was $1.72 million at December 31, 2013 and is recorded as a current liability. The acquisition of ADC provides a base operation to the Company for providing payroll and related payroll tax processing and payment services to its clients and provides the Company the ability to cross-market its payroll payment services to its JetPay, LLC customer base. | |||||
The fair value of the identifiable assets acquired and liabilities assumed in ADC acquisition, as of the acquisition date, include: (i) $51,000 cash, (ii) $1.53 million for accounts receivable; (iii) $946,000 for prepaid expenses and other assets; (iv) $735,000 for fixed assets; (v) $44.2 million of funds held for clients offset by the related client fund obligation in the same amount; (vi) the assumption of $1.3 million of liabilities; and (vii) the remainder, or approximately $21.1 million, allocated to goodwill and other intangible assets. Within the $21.1 million of acquired intangible assets, $8.27 million was assigned to goodwill, which is not subject to amortization expense. The amount assigned to goodwill was deemed appropriate based on several factors, including: (i) multiples paid by market participants for businesses in the payroll processing business; (ii) levels of ADC’s current and future projected cash flows; and (iii) the Company’s strategic business plan, which includes cross-marketing the Company’s merchant card services products to ADC’s customers base as well as the Company offering payroll processing services to the Company’s JetPay merchant card customer base. The remaining intangible assets were assigned to customer relationships for $9.95 million, software costs of $2.6 million and tradename for $250,000. The Company determined that the fair value of non-compete agreements were immaterial. Customer relationships, software costs and tradename were assigned a life of fifteen, seven and three years, respectively. | |||||
Assets acquired and liabilities assumed in the Completed Transactions were recorded on the Company’s Consolidated Balance Sheets as of the respective acquisition date based upon their estimated fair values at such date. The results of operations of businesses acquired by the Company have been included in the statements of operations since their date of acquisition. The Company deemed the business combinations to have been completed as of December 31, 2012 in that the results of operations post December 28, 2012 to December 31, 2012 were immaterial. The excess of the purchase price over the estimated fair values of the underlying identifiable assets acquired and liabilities assumed were allocated to goodwill. | |||||
The allocation of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed are shown below (in thousands): | |||||
Cash | $ | 1,151 | |||
Accounts receivable | 3,069 | ||||
Prepaid expenses and other assets | 4,763 | ||||
Property and equipment, net | 1,382 | ||||
Funds held for clients | 44,213 | ||||
Goodwill | 30,944 | ||||
Identifiable intangible assets | 25,052 | ||||
Total assets acquired | 110,574 | ||||
Accounts payable and accrued expenses | 4,969 | ||||
Client fund obligations | 44,213 | ||||
Deferred tax liability | 524 | ||||
Promissory notes | 8,663 | ||||
Total liabilities assumed | 58,369 | ||||
Net assets acquired | $ | 52,205 | |||
Unaudited pro forma results of operations information for the year ended December 31, 2012 as if the Company and the entities described above had been combined on January 1, 2012 follow. The pro forma results include estimates and assumptions which management believes are reasonable. The pro forma results do not include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combinations had been in effect on the dates indicated, or which may result in the future. | |||||
Unaudited Pro Forma | |||||
Results of Operations | |||||
Year Ended | |||||
December 31, 2012 | |||||
(in thousands) | |||||
Revenues | $ | 31,093 | |||
Operating income | $ | 624 | |||
Net Loss | $ | -2,381 | |||
Net Loss per share (Basic and Diluted) | $ | -0.21 | |||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||
Note 3. Summary of Significant Accounting Policies | ||||||||||||||
Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. The Company’s critical accounting policies are described below. | ||||||||||||||
Use of Estimates | ||||||||||||||
The accompanying financial statements have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the Company’s financial statements. Such estimates include, but are not limited to, the value of purchase consideration of acquisitions; valuation of accounts receivable, reserves for chargebacks, goodwill, intangible assets, and other long-lived assets; legal contingencies; and assumptions used in the calculation of stock-based compensation and in the calculation of income taxes. Actual results may differ from these estimates under different assumptions or conditions. | ||||||||||||||
Revenue Recognition and Deferred Revenue | ||||||||||||||
The Company recognizes revenue in general when the following criteria have been met: persuasive evidence of an arrangement exists, a customer contract or purchase order exists and the fees are fixed and determinable, no significant obligations remain and collection of the related receivable is reasonably assured. Allowances for chargebacks, discounts and other allowances are estimated and recorded concurrent with the recognition of revenue and are primarily based on historic rates. | ||||||||||||||
Revenues from the Company’s credit and debit card processing operations are recognized in the period services are rendered as the Company processes credit and debit card transactions for its merchant customers or for merchant customers of its Independent Sales Organization (“ISO”) clients. The majority of the Company’s revenue within its credit and debit card processing business is comprised of transaction-based fees, which typically constitute a percentage of dollar volume processed, or a fee per transaction processed. In the case where the Company is only the processor of transactions, it charges transaction fees only and records these fees as revenues. In the case of merchant contracts or contracts with ISOs for whom it processes credit and debit card transactions for the ISO’s merchant customers, revenue is primarily comprised of fees charged to the merchant, as well as a percentage of the processed sale transaction. The Company’s contracts in most instances involve three parties: the Company, the merchant, and the sponsoring bank. Under certain of these sales arrangements, the Company’s sponsoring bank collects the gross revenue from the merchants, pays the interchange fees and assessments to the credit card associations, collects their fees and pays the Company a net residual payment representing the Company’s fee for the services provided. Accordingly, under these arrangements, the Company records the revenue net of interchange, credit card association assessments and fees and the sponsoring bank’s fees. Effective June 1, 2013, a majority of the Company’s merchant contract and ISO merchant customer credit and debit card transactions business was transferred to a new sponsoring bank whereby the Company is billed directly for certain fees by the credit card associations and the processing bank. In this instance, revenues and cost of revenues include the credit card association fees and assessments and the sponsoring bank’s fees which are billed to the Company and for which it assumes credit risk. The impact of this change resulted in an increase in revenues and cost of revenues of approximately $1.9 million in the year ended December 31, 2013. In all instances, the Company recognizes processing revenues net of interchange fees, which are assessed to its merchant and ISO merchant customers on all processed transactions. Interchange rates and fees are not controlled by the Company. The Company effectively functions as a clearing house collecting and remitting interchange fee settlement on behalf of issuing banks, debit networks, credit card associations and their processing customers. Additionally, the Company’s direct merchant customers have the liability for any charges properly reversed by the cardholder. In the event, however, that the Company is not able to collect such amount from the merchants due to merchant fraud, insolvency, bankruptcy or any other reason, it may be liable for any such reversed charges. The Company requires cash deposits, guarantees, letters of credit and other types of collateral by certain merchants to minimize any such contingent liability, and it also utilizes a number of systems and procedures to manage merchant risk. The Company has historically experienced losses due to chargebacks resulting from merchant defaults. | ||||||||||||||
Revenues from the Company’s payroll processing operation are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Certain processing services are provided under annual service arrangements with revenue recognized over the service period based on when the efforts and costs are expended. The Company’s service revenue is largely attributable to payroll-related processing services where the fees are based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in processing revenue, and the costs for delivery are included in selling, general, and administrative expenses on the Consolidated Statements of Operations. | ||||||||||||||
Interest on funds held for clients is earned primarily on funds that are collected from clients before due dates for payroll tax administration services and for employee payment services, and invested until remittance to the applicable tax or regulatory agencies or client employee. These collections from clients are typically remitted from 1 to 30 days after receipt, with some items extending to 90 days. The interest earned on these funds is included in total revenue on the Consolidated Statements of Operations because the collecting, holding, and remitting of these funds are critical components of providing these services. | ||||||||||||||
Reserve for Chargeback Losses | ||||||||||||||
Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, JetPay, LLC must bear the credit risk for the full amount of the transaction. JetPay, LLC evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. JetPay, LLC believes its reserve for chargeback losses is adequate to cover both the known probable losses and the incurred but not yet reported losses at the balance sheet dates. Chargeback reserves totaling $262,000 and $200,000 were recorded as of December 31, 2013 and 2012, respectively. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The carrying amounts of financial instruments, including cash and cash equivalents, restricted cash, settlement processing assets and liabilities, receivables, prepaid expenses, accounts payable, accrued expenses and deferred revenue, approximated fair value as of the balance sheet date presented, because of the relatively short maturity dates on these instruments. The carrying amounts of the financing arrangements approximate fair value as of the balance sheet date presented, because interest rates on these instruments approximate market interest rates after consideration of stated interest rates, anti-dilution protection and associated warrants. | ||||||||||||||
Concentration of Credit Risk | ||||||||||||||
Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. | ||||||||||||||
Accounts Receivable | ||||||||||||||
The Company’s accounts receivable are due from its merchant credit card and its payroll customers. Credit is extended based on evaluation of customers’ financial condition and, generally, collateral is not required. Payment terms vary and amounts due from customers are stated in the financial statements net of an allowance for doubtful accounts. Accounts which are outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivables when they are deemed uncollectible. | ||||||||||||||
Settlement Processing Assets and Obligations | ||||||||||||||
Funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants. Depending on the type of transaction, either the credit card interchange system or the debit network is used to transfer the information and funds between the sponsoring bank and card issuing bank to complete the link between merchants and card issuers. In certain of our processing arrangements, merchant funding primarily occurs after the sponsoring bank receives the funds from the card issuer through the card networks creating a net settlement obligation on the Company’s balance sheet. In a limited number of other arrangements, the sponsoring bank funds the merchants before it receives the net settlement funds from the card networks, creating a net settlement asset on the Company’s balance sheet. Additionally, certain of the Company’s sponsoring banks collect the gross revenue from the merchants, pay the interchange fees and assessments to the credit card associations, collect their fees for processing and pays the Company a net residual payment representing the Company’s fees for the services. In these instances, the Company does not reflect the related settlement processing assets and obligations in its consolidated balance sheet. | ||||||||||||||
Timing differences in processing credit and debit card and ACH transactions, as described above, interchange expense collection, merchant reserves, sponsoring bank reserves, and exception items result in settlement processing asset and obligations. Settlement processing assets consist primarily of our receivable from merchants for the portion of the discount fee related to reimbursement of the interchange expense, our receivable from the processing bank for transactions we have funded merchants in advance of receipt of card association funding, merchant reserves held, sponsoring bank reserves and exception items, such as customer chargeback amounts receivable from merchants. Settlement processing obligations consist primarily of merchant reserves, our liability to the processing bank for transactions for which we have received funding from the members but have not funded merchants and exception items. | ||||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment acquired in the Company’s recent business acquisitions have been recorded at estimated fair value. The Company records all other property and equipment acquired in the normal course of business at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, which are generally as follows: leasehold improvements – shorter of economic life or initial term of the related lease; machinery and equipment – 5 to 15 years; and furniture and fixtures – 5 to 10 years. Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. | ||||||||||||||
Goodwill | ||||||||||||||
Goodwill represents the premium paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations. The Company performs a goodwill impairment test on at least an annual basis. Application of the goodwill impairment test requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. The Company will conduct its annual goodwill impairment test as of December 31 of each year or more frequently if indicators of impairment exist. The Company periodically analyzes whether any such indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a sustained significant decline in our stock price and market capitalization, a significant adverse change in legal factors or in the business climate, unanticipated competition and/or slower expected growth rates, adverse actions or assessments by a regulator, among others. The Company compares the fair value of its reporting unit to its respective carrying value, including related goodwill. Future changes in the industry could impact the results of future annual impairment tests. The Company’s annual goodwill impairment testing indicated there was no impairment as of December 31, 2013. There can be no assurance that future tests of goodwill impairment will not result in impairment charges. | ||||||||||||||
Identifiable Intangible Assets | ||||||||||||||
Identifiable intangible assets consist primarily of customer relationships, software costs, and tradenames. Certain tradenames are considered to have indefinite lives, and as such, are not subject to amortization. These assets are tested for impairment using undiscounted cash flow methodology annually and whenever there is an impairment indicator. Estimating future cash flows requires significant judgment and projections may vary from cash flows eventually realized. Several impairment indicators are beyond the Company’s control, and determining whether or not they will occur cannot be predicted with any certainty. Customer relationships, tradenames, and software costs are amortized on a straight-line or accelerated basis over their respective assigned estimated useful lives. | ||||||||||||||
Impairment of Long–Lived Assets | ||||||||||||||
The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. The Company’s annual testing indicated there was no impairment as of December 31, 2013. | ||||||||||||||
Convertible Preferred Stock | ||||||||||||||
The Company accounts for the redemption premium, beneficial conversion feature and issuance costs on its Convertible Preferred Stock using the effective interest method, accreting such amounts to its Convertible Preferred Stock from the date of issuance to the earliest date of redemption. | ||||||||||||||
Share-Based Compensation | ||||||||||||||
The Company expenses employee share-based payments under ASC Topic 718, Compensation-Stock Compensation, which requires compensation cost for the grant-date fair value of share-based payments to be recognized over the requisite service period. The Company estimates the grant date fair value of the share-based awards issued in the form of options using the Black-Scholes option pricing model. | ||||||||||||||
Loss per share | ||||||||||||||
Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. The dilutive effect of the conversion option in the $10 million Secured Convertible Promissory Notes Payable (the “Notes”) of 3,333,333 shares, the effect of the conversion option in the Flexpoint Preferred Stock of 3,333,333 at December 31, 2013, and the effect of 104,167 exercisable stock options granted under the Company’s Stock Incentive Plan have been excluded from the loss per share calculation for the year ended December 31, 2013 in that the assumed conversion of the options would be anti-dilutive. At December 31, 2012 and September 30, 2012, 320,486 shares of common stock pending redemption and 10,494,067 shares of common stock subject to possible redemption, respectively, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the earnings on the Trust Account. Loss per share assuming dilution would give effective to dilutive options, warrants and other potential common shares outstanding during the period. The Company did not considered the effect of warrants to purchase 18,960,000 shares of common stock or the effect of the unit purchase option in the calculation of diluted loss per share at September 30, 2012, since the exercise of the warrants and the unit purchase would be anti-dilutive. Additionally, at December 31, 2012, the potential dilutive effect of the conversion option related to the Notes of 1,941,748 shares and potential issuable shares related to the conversion option within the Ten Lords, Ltd. note of 1,000,000 shares, a total of 2,941,748 shares, have been excluded from the per share calculation loss as they would also be anti-dilutive. | ||||||||||||||
Derivative Financial Instruments | ||||||||||||||
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company does review the terms of the convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. | ||||||||||||||
Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges recorded within other expense (income), using the effective interest method. | ||||||||||||||
Fair value measurements | ||||||||||||||
The Company accounts for fair value measurements in accordance with ASC Topic No. 820, Fair Value Measurements and Disclosures, (“ASC Topic 820”) which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. | ||||||||||||||
ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC Topic 820 are described below: | ||||||||||||||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |||||||||||||
Level 2 | Applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | |||||||||||||
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | |||||||||||||
The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by ASC Topic 820, assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement. | ||||||||||||||
Fair Value at December 31, 2013 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Derivative liabilities | $ | 380 | $ | - | $ | - | $ | 380 | ||||||
Contingent consideration | $ | 850 | $ | - | $ | - | $ | 850 | ||||||
Totals | $ | 1,230 | $ | - | $ | - | $ | 1,230 | ||||||
Fair Value at December 31, 2012 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Derivative liabilities | $ | 2,110 | $ | - | $ | - | $ | 2,110 | ||||||
Contingent consideration | $ | 1,540 | $ | - | $ | - | $ | 1,540 | ||||||
Totals | $ | 3,650 | $ | - | $ | - | $ | 3,650 | ||||||
The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis (in thousands): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
Beginning balance | $ | 3,650 | ||||||||||||
Change in fair value of derivative liability | $ | -1,730 | ||||||||||||
Change in fair value of contingent cash consideration | $ | -690 | ||||||||||||
Totals | $ | 1,230 | ||||||||||||
The Level 3 financial liabilities of $3.65 million at January 1, 2013 are the result of recording the Completed Transactions and related debt instruments as more fully described below. | ||||||||||||||
In connection with the debt proceeds received under the $10 million secured convertible notes (the “Notes”), the Company recorded a derivative liability of $2.11 million on its consolidated balance sheet at December 28, 2012 related to the conversion feature embedded in the Notes. The fair value of the derivative liability is classified within Level 3 of the fair value hierarchy because it is valued using pricing models that incorporate management assumptions that cannot be corroborated with observable market data. The fair value at December 31, 2013 of $380,000 was determined using a binomial option pricing valuation model with the following assumptions: risk free interest rate: 0.13 %; dividend yield: 0%; expected life of the option to convert of 1.00 years; and volatility: 23.4%. The change in fair value of this derivative liability of $1.7 million for the year ended December 31, 2013, is recorded within other expenses (income) in the Company’s consolidated statements of operations. | ||||||||||||||
Additionally, in connection with a promissory note payable to Ten Lords, Ltd., assumed in the acquisition of JetPay, LLC, the Company recorded a short-term derivative liability of $320,000 which was included in the current portion of long-term debt and derivative liability in the accompanying balance sheets. The fair value of this derivative liability at December 31, 2013 was $0, which reflects the early payment of this debt on October 11, 2013. The change in fair value of this derivative liability of $320,000 for the year ended December 31, 2013, is recorded within other expenses (income) in the Company’s consolidated statements of operations. | ||||||||||||||
In addition to the consideration paid upon closing of the JetPay, LLC acquisition, WLES, through December 28, 2017, is entitled to receive 833,333 shares of Common Stock if the trading price of the Common Stock is at least $8.00 per share for any 20 trading days out of a 30 trading day period and $5,000,000 in cash if the trading price of the Common Stock is at least $9.50 per share for any 20 trading days out of a 30 trading day period. This contingent consideration was valued at $1.54 million at the date of acquisition based on utilization of option pricing models and is recorded as a non-current liability for $700,000 and as additional paid-in capital for $840,000 at December 31, 2012. The stock-based component value of $840,000 as recorded at December 28, 2012, the JetPay, LLC acquisition date, remains unchanged at December 31, 2013 as a result of this component being recorded as equity. The fair value at December 31, 2013 of the cash-based contingent consideration, valued at $10,000, was determined using a binomial option pricing model. The following assumptions were utilized in the December 2013 calculations: risk free interest rate: 1.27 %; dividend yield: 0%; term of contingency of 4.0 years; and volatility: 28.1 %. | ||||||||||||||
The fair value of the Common Stock was derived from the per share price of recent sales of the Company’s common stock at the valuation date. Management determined that the results of its valuation are reasonable. The expected life represents the remaining contractual term of the derivative. The volatility rate was developed based on analysis of the historical volatility rates of similarly situated companies (using a number of observations that was at least equal to or exceeded the number of observations in the life of the derivative financial instrument at issue). The risk free interest rates were obtained from publicly available US Treasury yield curve rates. The dividend yield is zero because the Company has not paid dividends and does not expect to pay dividends in the foreseeable future. | ||||||||||||||
Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the financial instrument. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the Chief Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department with support from the Company’s outside consultants and which are approved by the Chief Financial Officer. Level 3 financial liabilities consists of a derivative liability and contingent consideration related to the JetPay, LLC acquisition for which there are no current markets such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy will be analyzed each period based on changes in estimates or assumptions and recorded as appropriate. Level 3 fair value items disclosed above arose on December 28, 2012 with the consummation of the Completed Transactions. | ||||||||||||||
The Company uses either a binomial option pricing model or the Black-Scholes option valuation model to value Level 3 financial liabilities at inception and on subsequent valuation dates. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as volatility. | ||||||||||||||
A significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly lower fair value measurement. Changes in the values of derivative liabilities are recorded in change in fair value of derivative liabilities within other expense (income) on the Company’s consolidated statements of operations. | ||||||||||||||
As of December 31, 2013, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy. | ||||||||||||||
In accordance with the provisions of ASC Topic 815, Derivatives and Hedging Activities, the Company presented its derivative liability at fair value on its balance sheet, with the corresponding change in fair value recorded in the Company’s statement of operations for the applicable reporting periods. | ||||||||||||||
Income taxes | ||||||||||||||
The Company accounts for income taxes under ASC Topic 740, Income Taxes, (“ASC Topic 740”). ASC Topic 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryovers. Deferred income tax expense (benefit) represents the change during the period in the deferred income tax assets and deferred income tax liabilities. In establishing the provision for income taxes and determining deferred income tax assets and liabilities, the Company makes judgments and interpretations based on enacted laws, published tax guidance and estimates of future earnings. ASC Topic 740 additionally requires a valuation allowance to be established when, based on available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. | ||||||||||||||
ASC Topic 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company believes that its income tax positions and deductions would be sustained upon examination and does not anticipate any adjustments that would result in material changes to its financial position. | ||||||||||||||
The Company’s policy for recording interest and penalties associated with unrecognized tax benefits is to record such interest and penalties as interest expense and as a component of selling, general and administrative expense, respectively. There were no amounts accrued for penalties or interest as of or during the years ended December 31, 2013 and 2012. Management does not expect any significant changes in its unrecognized tax benefits in the next year. | ||||||||||||||
Subsequent Events | ||||||||||||||
Management evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, Management did not identify any recognized or non-recognized subsequent events, other than those discussed in Note 19 –Subsequent Events, which would have required an adjustment or disclosure in the financial statements. See Note 19 –Subsequent Events below. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In July 2012, the Financial Accounting Standards Board (“FASB”) issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This new accounting standard simplifies how entities test indefinite-lived intangible assets for impairment which improve consistency in impairment testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in the previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations. | ||||||||||||||
The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations. | ||||||||||||||
Cash_and_Cash_Equivalents_Held
Cash and Cash Equivalents Held in Trust Account | 12 Months Ended |
Dec. 31, 2013 | |
Cash and Cash Equivalents [Abstract] | ' |
Cash and Cash Equivalents Disclosure [Text Block] | ' |
Note 4. Cash and Cash Equivalents Held in Trust Account | |
Cash and cash equivalents in the trust account established upon consummation of the Company’s initial public offering consisted of $1.95 million in a “held as cash” account at December 31, 2012 and were disbursed to the redeeming stockholders on January 2, 2013. | |
Allowance_for_Doubtful_Account
Allowance for Doubtful Accounts | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Accounts Receivable, Net [Abstract] | ' | ||||||||||||||
Allowance for Credit Losses [Text Block] | ' | ||||||||||||||
Note 5. Allowance for Doubtful Accounts | |||||||||||||||
The changes in the allowance for doubtful accounts are summarized as follows (in thousands): | |||||||||||||||
For the Year | For the Three | For the Twelve | January 1, 2012 | ||||||||||||
Ended | Months Ended | Months Ended | to | ||||||||||||
December 31, | December 31, | September 30, | December 28, | ||||||||||||
2013 | 2012 | 2012 | 2012 | ||||||||||||
Successor | Successor | Successor | Predecessor | ||||||||||||
Balance at beginning of period | $ | - | $ | - | $ | - | $ | - | |||||||
Additions (charged to expense) | 27 | - | - | 348 | |||||||||||
Deductions | - | - | - | -245 | |||||||||||
Balance at end of period | $ | 27 | $ | - | $ | - | $ | 103 | |||||||
Property_and_Equipment_net_of_
Property and Equipment, net of Accumulated Depreciation | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||
Note 6. Property and Equipment, net of Accumulated Depreciation | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Leasehold improvements | $ | 327 | $ | 275 | ||||
Equipment | 507 | 442 | ||||||
Furniture and Fixtures | 195 | 176 | ||||||
Computer Software | 414 | 334 | ||||||
Vehicles | 197 | 155 | ||||||
Total property and equipment | 1,640 | 1,382 | ||||||
Less: Accumulated depreciation | -388 | - | ||||||
Property and equipment, net | $ | 1,252 | $ | 1,382 | ||||
Depreciation expense was $388,000, $22,000 and $90,000 for the year ending December 31, 2013, the three months ended December 31, 2012, and the twelve months ended September 30, 2012, respectively (Successor) and $140,000 for the period January 1, 2012 to December 28, 2012, (Predecessor). | ||||||||
Goodwill
Goodwill | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Goodwill [Abstract] | ' | ||||
Goodwill Disclosure [Text Block] | ' | ||||
Note 7. Goodwill | |||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013, is as follows (in thousands): | |||||
Balance at January 1, 2012 | $ | - | |||
Acquisition of JetPay | 22,679 | ||||
Acquisition of ADC | 8,265 | ||||
Balance at December 31, 2012 | 30,944 | ||||
Measurement period adjustment | 222 | ||||
Balance at December 31, 2013 | $ | 31,166 | |||
The measurement period adjustment of $222,000 in 2013 relates to the recording of an obligation to compensate a note holder for the estimated negative tax consequences resulting from the Company assuming a note, as part of the JetPay, LLC acquisition, which was not repaid until 2013. | |||||
Identifiable_Intangible_Assets
Identifiable Intangible Assets | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||
Intangible Assets Disclosure [Text Block] | ' | |||||||
Note 8. Identifiable Intangible Assets | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Amortized intangible assets: | ||||||||
Software | $ | 4,650 | $ | 4,650 | ||||
Customer relationships | 18,612 | 18,612 | ||||||
Tradename | 250 | 250 | ||||||
Total amortized intangible assets | 23,512 | 23,512 | ||||||
Less: Accumulated amortization | 2,241 | - | ||||||
Total amortized intangibles, net | 21,271 | 23,512 | ||||||
Non-Amortized intangible assets: | ||||||||
Tradenames | 1,540 | 1,540 | ||||||
Total identifiable intangible assets | $ | 22,811 | $ | 25,052 | ||||
Amortization expense was $2.24 million for the year ended December 31, 2013 (Successor). The following sets forth the estimated amortization expense on intangible assets for the years ending December 31, (in thousands): | ||||||||
2014 | $ | 2,241 | ||||||
2015 | $ | 2,241 | ||||||
2016 | $ | 2,157 | ||||||
2017 | $ | 2,157 | ||||||
2018 | $ | 2,157 | ||||||
Thereafter | $ | 10,318 | ||||||
The weighted average useful life of amortizing intangible assets was 9.9 years at December 31, 2013. | ||||||||
Deferred_Financing_Costs
Deferred Financing Costs | 12 Months Ended |
Dec. 31, 2013 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' |
Deferred Costs Capitalized Prepaid And Other Asset Disclosure [Text Block] | ' |
Note 9. Deferred Financing Costs | |
At December 28, 2012 in connection with securing certain debt financing to consummate the completed transactions, the Company incurred a total of $4.4 million in financing costs that have been capitalized and will be amortized over the life of the related debt instruments using the effective interest method beginning in 2013. Of the total deferred financing costs, $4.4 million relates to certain of our founding stockholders agreeing to transfer 832,698 shares of Common Stock that they personally acquired prior to the Initial Public Offering (the “Offering”) to certain of the Note Investors with respect to the Notes. In accordance with SEC Staff Accounting Bulletin (SAB) 79 amended by SAB 5T, Accounting for Expenses or Liabilities Paid by Principal Stockholders, the Company recorded a $4.4 million stock-based deferred financing cost with a credit to additional paid-in capital at December 28, 2012 for the fair value of the 832,698 shares transferred under this arrangement ($5.25 per share on December 28, 2012). Additionally, in connection with the $9 million term loan payable to Metro Bank, the Company incurred and recorded $23,000 of deferred financing costs. Amortization and accumulated amortization of deferred financing costs was $2.06 million as of and for the year ended December 31, 2013. Unamortized deferred financing costs were $2.3 million at December 31, 2013. | |
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ' | |||||||
Note 10. Accrued Expenses and Other Current Liabilities | ||||||||
Accrued expenses and other current liabilities consist of the following (in thousands): | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
Trade accounts payable | $ | 2,105 | $ | 2,852 | ||||
Contingency accrual | 2,811 | 2,136 | ||||||
ACH clearing liability | 1,554 | 529 | ||||||
Accrued compensation | 1,157 | 956 | ||||||
Accrued agent commissions | 728 | 344 | ||||||
Related party payables | 115 | 285 | ||||||
Other | 3,684 | 1,182 | ||||||
Total | $ | 12,154 | $ | 8,284 | ||||
Notes_Payable_to_Stockholders
Notes Payable to Stockholders | 12 Months Ended |
Dec. 31, 2013 | |
Notes Payable [Abstract] | ' |
Notes Payable To Stock holders [Text Block] | ' |
Note 11. Notes Payable to Stockholders | |
From December 2010 through December 2012, the Company issued a series of principal amount unsecured promissory notes to UBPS Services, LLC, an entity controlled by Mr. Shah, Chief Executive Officer and Chairman of the Company, totaling $425,880. These notes were non-interest bearing and, except for $15,000, were paid upon consummation of the Completed Transactions. The remaining note balance of $15,000 was paid on October 15, 2013 | |
LongTerm_Debt_and_Notes_Payabl
Long-Term Debt and Notes Payable | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Debt Disclosure [Text Block] | ' | |||||||
Note 12. Long-Term Debt and Notes Payable | ||||||||
Long-term debt and notes payable consist of the following: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Successor | Successor | |||||||
(in thousands) | ||||||||
Secured convertible notes payable to various note holders, interest rate of 12.0% payable quarterly, notes maturing December 31, 2014, collateralized by a first lien security interest in the equity interests of JetPay, LLC. Note amount excludes unamortized discount for conversion option and derivative liability of $1.12 million and $2.11 million at December 31, 2013 and 2012, respectively. | $ | 8,883 | $ | 7,890 | ||||
Promissory note payable to Ten Lords, Ltd., interest rate of 6.25% through December 28, 2012 (predecessor), 9.5% from December 29, 2012 through June 26, 2013 and 13.5% from June 26, 2013 to October 11, 2013 payable in monthly payments of principal and interest of $63,809 with a final principal payment of $5.87 million on October 11, 2013. Note amount included a fair value premium of $180,000 December 31, 2012, as well as an unamortized discount for conversion option and derivative liability of $320,000 at December 31, 2012. | - | 6,180 | ||||||
Term loan payable to Metro Bank, interest rate of 4.0% payable in monthly principal payments of $107,143 plus interest, maturing December 28, 2019, collateralized by the assets and equity interests of AD Computer Corporation and Payroll Tax Filing Services, Inc. | 7,714 | 9,000 | ||||||
Unsecured promissory note payable to WLES, interest rate of 5.0% payable quarterly, note principal due on December 31, 2017. Note amount excludes unamortized fair value discount of $705,770 and $845,900 at December 31, 2013 and 2012, respectively. | 1,626 | 1,486 | ||||||
Unsecured promissory notes payable to stockholders, interest rate of 4% payable at maturity, note principal due July 31, 2014. See Note 17. Related Party Transactions. | 492 | - | ||||||
Various other debt instruments related to equipment at JetPay, LLC and vehicles at ADC. | 30 | 13 | ||||||
18,745 | 24,569 | |||||||
Less current portion | -10,674 | -7,479 | ||||||
$ | 8,071 | $ | 17,090 | |||||
In order to finance a portion of the proceeds payable in the Completed Transactions, on December 28, 2012, we entered into a Note Agreement with Special Opportunities Fund, Inc., R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance Company, Inc., or collectively, the Note Investors pursuant to which, we issued $10 million in promissory notes secured by 50% of our ownership interest in JetPay, LLC. In connection with the Note Agreement, we entered into separate Notes with each of the Note Investors. Amounts outstanding under the Notes accrue interest at a rate of 12% per annum. The Notes mature on December 31, 2014. The Notes are not pre-payable. Pursuant to the Notes, the Note Investors will be entitled to convert all or any amounts outstanding under the Notes into shares of our common stock at a conversion price of $3.00 per share, adjusted from $5.15 per share as a result of the initial closing of the Series A Preferred to Flexpoint on October 11, 2013. The conversion price and/or the number of shares issuable upon conversion of such convertible notes may be further adjusted in certain circumstances, including upon the issuance of common stock below the Note’s current conversion price, certain subdivisions or combinations of the common stock, and the issuance of certain stock dividends. | ||||||||
On December 28, 2012, we entered into an Assumption Agreement with JetPay, LLC and Ten Lords Ltd. Pursuant to the Assumption Agreement assuming an $8.3 million note which was paid down to $6 million at the closing of the JetPay, LLC acquisition. Additionally, we agreed to guarantee JetPay, LLC’s obligations with respect to an existing loan agreement between JetPay, LLC, Ten Lords, Ltd. and Providence Interactive Capital, LLC. Amounts outstanding under the loan were repaid on October 11, 2013, as noted above, from the proceeds of the initial purchase of Series A Preferred purchased by Flexpoint Ford, LLC (“Flexpoint”). | ||||||||
On December 28, 2012, ADC and PTFS, as borrowers, entered into the Loan and Security Agreement with Metro Bank, (or “Metro”), as the lender for a term loan with a principal amount of $9 million. Amounts outstanding under the notes accrue interest at a rate of 4% per annum. The loan matures on December 28, 2019 and amortizes over the course of the loan in equal monthly installments of $107,143. Additional principal payments may be required at the end of each fiscal year based on a free cash flow calculation at ADC as defined in the Loan and Security Agreement. The loans are guaranteed by us and are secured by all assets of ADC and PTFS, as well as a pledge by us of our ownership interest in ADC. The Loan and Security Agreement contains affirmative and negative covenants, including limitations on the incurrence of indebtedness, liens, transactions with affiliates and other customary restrictions for loans of this type and size. The borrowers are also subject to certain annual financial covenants including a debt coverage ratio and a leverage ratio during the term of the loan. We are required to provide Metro with annual financial statements within 120 days of our fiscal year end and quarterly financial statements within 60 days after the end of each fiscal quarter. We are in compliance with the covenant requirements as of December 31, 2013. | ||||||||
Our ongoing ability to comply with the debt covenants under our credit arrangements and to refinance our debt depends largely on the achievement of adequate levels of cash flow. If our future cash flows are less than expected or our debt service, including interest expense, increases more than expected, causing us to default on any of the Metro covenants in the future, we will need to obtain amendments or waivers from Metro. In the event that non-compliance with the debt covenants should occur in the future, we would pursue various alternatives in an attempt to successfully resolve the non-compliance, which might include, among other things, seeking additional debt covenant waivers or amendments or refinancing debt with other financial institutions. There can be no assurance that debt covenant waivers or amendments would be obtained, if needed, or that the debt could be refinanced with other financial institutions on favorable terms. | ||||||||
In connection with the closing of the transactions contemplated by the JetPay, LLC Agreement, we entered into a Note and Indemnity Side Agreement with JP Merger Sub, LLC, WLES and Trent Voigt, dated as of December 28, 2012. Pursuant to the Note and Indemnity Side Agreement, we agreed to issue a promissory note in the amount of $2,331,369 in favor of WLES. Interest accrues on amounts due under the note at a rate of 5% per annum. The note is due in full on December 31, 2017. The note can be prepaid in full or in part at any time without penalty. As partial consideration for offering the note, we and JP Merger Sub, LLC agreed to waive certain specified indemnity claims against WLES and Mr. Voigt to the extent the losses under such claims do not exceed $2,331,369. | ||||||||
Maturities of long-term debt, excluding fair value and conversion option debt discounts, are as follows: 2014 – $11.8 million; 2015 – $1.3 million; 2016 – $1.3 million; 2017 – $3.6 million; 2018 – $1.3 million and $1.3 million thereafter. | ||||||||
Redeemable_Convertible_Preferr
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2013 | |
Convertible Preferred Stock [Abstract] | ' |
Convertible Preferred Stock [Text Block] | ' |
Note 13. Redeemable Convertible Preferred Stock | |
On October 11, 2013 the Company issued 33,333 shares of Series A Convertible Preferred Stock, par value $0.001 (“Series A Preferred”) to Flexpoint for an aggregate of $10 million less certain agreed-upon reimbursable expenses of Flexpoint (the “Initial Closing”) pursuant to a Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into on August 22, 2013. Under the Securities Purchase Agreement, the Company agreed to sell to Flexpoint, and Flexpoint agreed to purchase, upon satisfaction of certain conditions, up to 134,000 shares of Series A Preferred for an aggregate purchase price of up to $40 million. The proceeds of this initial $10 million investment was used to retire the Ten Lords, Ltd. note payable of $5.87 million maturing in December 2013 with the remainder to be used for general corporate purposes. | |
The Series A Preferred is convertible into shares of the Company’s common stock, par value $0.001. Any holder of Series A Preferred may at any time convert such holder’s shares of Series A Preferred into that number of shares of Common Stock equal to the number of shares of Series A Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, initially $3.00. The conversion price of the Series A Preferred is subject to downward adjustment upon the occurrence of certain events | |
The Company’s obligation to issue and sell, and Flexpoint’s obligation to purchase, the Preferred Stock is divided into three separate tranches: Tranche A, Tranche B and Tranche C. Tranche A consists of $10 million worth of shares of Preferred Stock that was issued on October 11, 2013. Tranche B consists of up to $10 million worth of shares of Preferred Stock, which Flexpoint will be obligated to purchase, subject to satisfaction of certain conditions, from the Company if the Company is able to consummate a redemption any time after December 1, 2014 and prior to December 29, 2014 of the secured convertible notes that were issued pursuant to a Secured Convertible Note Agreement, dated December 28, 2012, that the Company entered into with Special Opportunities Fund, Inc., R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance Company, Inc. Tranche C consists of up to $20 million worth of shares of Preferred Stock, plus any amounts not purchased under Tranche B, which Flexpoint has the option to purchase at any time until the third anniversary of the Initial Closing. The shares of Preferred Stock issuable with respect to Tranche A, Tranche B and Tranche C all have a purchase price of $300 per share. | |
The Preferred Stock will have an initial liquidation preference of $600 per share (subject to adjustment for any stock split, stock dividend or other similar proportionate reduction or increase of the authorized number of shares of Common Stock) and will rank senior to the Company’s Common Stock with respect to distributions of assets upon the Company’s liquidation, dissolution or winding up. Holders of Preferred Stock will have the right to request redemption of any shares of Preferred Stock issued at least five years prior to the date of such request by delivering written notice to the Company at the then applicable liquidation value per share, unless holders of a majority of the outstanding Preferred Stock elect to waive such redemption request on behalf of all holders of Preferred Stock. | |
The Company considered the guidance of ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815, Derivatives, in determining the accounting treatment for the convertible preferred stock instrument. The Company considered the economic characteristics and the risks of the host contract based on the stated and implied substantive terms and features of the instrument; including, but not limited to, its redemption features, voting rights, and conversions rights; and determined that the terms of the preferred stock were more akin to an equity instrument than a debt instrument. The Series A Preferred shares are subject to redemption, at the option of the holder, on or after the fifth anniversary of their original purchase. Accordingly, the convertible preferred shares have been classified as temporary equity in the Company’s consolidated balance sheets. Upon issuance of the 33,333 shares of the Series A Preferred, the Company recorded as a reduction to the Redeemable Convertible Preferred Stock and as Additional Paid-In Capital a beneficial conversion feature of $1.5 million. The beneficial conversion feature represents the difference between the effective conversion price and the fair value of the Company’s Redeemable Convertible Series A Preferred Stock at the committed date. The Company accounts for the beneficial conversion feature, the liquidation preference, and the issuance costs related to the Convertible Preferred Stock using the effective interest method by accreting such amounts to its Convertible Preferred Stock from the date of issuance to the earliest date of redemption as a reduction to its total permanent equity within the Company’s consolidated statement of changes in stockholders’ equity as a charge to Additional Paid-In Capital. Any accretion recorded during the periods presented are also shown as a reduction to the income available to common stockholders in the Company’s consolidated statements of operations when presenting basic and dilutive per share information. Total accretion from October 11, 2013, the date of issuance, to December 31, 2013 was $360,000. | |
Upon the occurrence of an Event of Noncompliance, the holders of a majority of the Preferred Stock may demand immediate redemption of all or a portion of the Preferred Stock at the then-applicable liquidation value. Such holders may also exercise a right to have the holders of the Preferred Stock elect a majority of the Board by increasing the size of the Board and filling such vacancies. Such right to control a minimum majority of the Board would exist for so long as the Event of Noncompliance was continuing. An “Event of Noncompliance” shall have occurred if: i) the Company fails to make any required redemption payment with respect to the Preferred Stock; ii) the Company breaches the Securities Purchase Agreement after the Initial Closing, and such breach has not been cured with thirty days after receipt of notice thereof; iii) the Company or any subsidiary makes an assignment for the benefit of creditors, admits its insolvency or is the subject of an order, judgment or decree adjudicating such entity as insolvent, among other similar actions; iv) a final judgment in excess of $5,000,000 is rendered against the Company or any subsidiary that is not discharged within 60 days thereafter; or v) an event of default has occurred under either the Secured Convertible Note Agreement or the Loan and Security Agreement, dated as of December 28, 2012 by and among ADC, PTFS and Metro Bank, and such event of default has not been cured within thirty days after receipt of notice thereof. | |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||||||||||||||||||||
Note 14. Shareholders’ Equity | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
On April 26, 2013, the Company issued 10,000 shares of common stock, with a fair value of approximately $37,400, as compensation to a consultant for services rendered. | |||||||||||||||||||||
On December 28, 2012, certain of the Company’s initial stockholders personally granted options to purchase up to 386,811 shares of the Company’s common stock that they own at an option price of $.005 per share to affiliates of Wellington Capital Management Company, LLP. Such options were issued pursuant to an Option Issuance Agreement with the Company and Wolf Creek Investors (Bermuda) L.P. and an Option Issuance Agreement with the Company and Wolf Creek Partners, L.P, each dated as of December 17, 2012 as an accommodation to the investors so that the Company could retain the necessary funding for the Completed Transactions. In accordance with SEC Staff Accounting Bulletin (SAB) 79 amended by SAB 5T, Accounting for Expenses or Liabilities Paid by Principal Stockholder, the Company recorded a $2,030,000 stock based compensation charge as a transaction cost in the accompanying consolidated statement of operations for the three months ended December 31, 2012. The transaction expense is recorded at the fair value of the options to purchase 386,811 shares of our common stock granted under these arrangements ($5.25 per share on December 28, 2012). | |||||||||||||||||||||
In connection with the consummation of the Company’s initial business combination and the Warrant Termination Agreement dated as of December 28, 2012 with Continental Stock Transfer & Trust Company, the Company converted all of its issued and outstanding warrants into shares of its common stock. As a result of such conversion, 18,960,000 warrants were converted into 2,527,359 shares of its common stock on December 28, 2012. | |||||||||||||||||||||
As partial consideration to the selling stockholders of JetPay, LLC and ADC, in connection with the consummation of the Company’s initial business combination, the Company issued 4,666,667 shares of its common stock in a private placement on December 28, 2012. | |||||||||||||||||||||
Also in connection with our initial business combination, we issued Secured Convertible Promissory Notes pursuant to a Secured Convertible Note Agreement, dated as of December 28, 2012 with Special Opportunities Fund, Inc., R8 Capital Partners, LLC, Bulldog Investors General Partnership, Ira Lubert, Mendota Insurance Company and American Services Insurance Company, Inc. Pursuant to the Secured Convertible Promissory Notes, such investors can convert amounts outstanding under the notes into an aggregate of 1,941,748 shares, subject to certain adjustments. In addition, on December 28, 2012, the Company assumed a $6 million convertible note in favor of Ten Lords Ltd., the terms of which allow the holder to convert the amounts outstanding under the note into an aggregate of 1,000,000 shares of our common stock based upon a conversion price of $6.00 per share. | |||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||
The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. | |||||||||||||||||||||
As of December 31, 2013 and December 31, 2012, respectively, there were no shares of preferred stock issued or outstanding other than the Series A convertible preferred stock issued to Flexpoint described above. | |||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||
ASC Topic 718, Compensation-Stock Compensation, requires compensation expense for the grant-date fair value of share-based payments to be recognized over the requisite service period. | |||||||||||||||||||||
At a meeting of the Company’s stockholders held on July 31, 2013 (the “Meeting”), the Company’s stockholders approved the adoption of the Company’s 2013 Stock Incentive Plan (the “Plan”). The Company granted 325,000 stock options under the Plan during the three months ended September 30, 2013 all at an exercise price of $3.10 per share and 675,000 stock options on December 12, 2013 all at an exercise price of $3.00 per share. The grant date fair value of the options was determined to be approximately $979,000 using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 5.75 to 6.25 years, expected volatility of 38.23% to 45.17%, risk free interest rate of 1.75% to 2.10%, and expected dividend yield of 0%. Aggregated stock-based compensation expense for the year ended December 31, 2013 was $194,000. Unrecognized compensation expense as of December 31, 2013, relating to non-vested common stock options is approximately $785,000 and is expected to be recognized through 2017. At December 31, 2013, no options have been exercised or forfeited. | |||||||||||||||||||||
Expected term: The Company’s expected term is based on the period the options are expected to remain outstanding. The Company estimated this amount utilizing the “Simplified Method” in that the Company does not have sufficient historical experience to provide a reasonable basis to estimate an expected term. | |||||||||||||||||||||
Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar term on the date of the grant. | |||||||||||||||||||||
Volatility: The Company calculates the volatility of the stock price based on historical value and corresponding volatility of the Company’s peer group stock price for a period consistent with the stock option expected term. | |||||||||||||||||||||
Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future. | |||||||||||||||||||||
A summary of stock option activity for the year ended December 31, 2013 is presented below: | |||||||||||||||||||||
Weighted Average | |||||||||||||||||||||
Number of Options | Exercise Price | ||||||||||||||||||||
Outstanding at December 31, 2012 | - | $ | - | ||||||||||||||||||
Granted | 1,000,000 | 3.03 | |||||||||||||||||||
Forfeited | - | - | |||||||||||||||||||
Exercised | - | - | |||||||||||||||||||
Outstanding at December 31, 2013 | 1,000,000 | $ | 3.03 | ||||||||||||||||||
Exercisable at December 31, 2013 | 104,167 | ||||||||||||||||||||
Shares available for granting of options | 1,000,000 | ||||||||||||||||||||
The weighted average remaining life of options outstanding at December 31, 2013 was 9.8 years. The aggregate intrinsic value of the exercisable options at December 31, 2013 was $0. | |||||||||||||||||||||
Stock options outstanding at December 31, 2013 are summarized as follows: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Avg. | Weighted | Number | Weighted Avg. | Weighted | |||||||||||||||
Exercise Prices | Outstanding | Remaining | Avg. Exercise | Exercisable | Remaining | Avg. Exercise | |||||||||||||||
Contractual Life | Price | Contractual Life | Price | ||||||||||||||||||
$ | 3 | 675,000 | 9.9 | $ | 3 | - | - | - | |||||||||||||
$ | 3.1 | 325,000 | 9.7 | $ | 3.1 | 104,167 | 9.7 | $ | 3.1 | ||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||
Income Tax Disclosure [Text Block] | ' | ||||||||||||||
Note 15. Income Taxes | |||||||||||||||
The components of income tax expense (benefit) consists of the following (in thousands): | |||||||||||||||
For the Year | For the Three | For the Twelve | January 1, | ||||||||||||
Ended | Months Ended | Months Ended | 2012 to | ||||||||||||
December 31, | December 31, | September 30, | December 28, | ||||||||||||
2013 | 2012 | 2012 | 2012 | ||||||||||||
Successor | Successor | Successor | Predecessor | ||||||||||||
Current: | |||||||||||||||
Federal | $ | - | $ | - | $ | - | $ | - | |||||||
State | 323 | - | - | 108 | |||||||||||
Deferred: | |||||||||||||||
Federal | -2,058 | -2,146 | -181 | - | |||||||||||
State | 66 | -92 | -32 | ||||||||||||
Change in valuation allowance | 1,708 | 2,238 | 213 | - | |||||||||||
Total income tax expense | $ | 39 | $ | - | $ | - | $ | 108 | |||||||
No provision for federal income taxes has been made for Predecessor since these taxes are the responsibility of the individual members of the Predecessor. However, Predecessor is subject to and pays the Texas Margin Tax which is considered to be an income tax in accordance with the provisions of the Income Taxes Topic in FASB, ASC and the associated interpretations. There are no significant temporary differences associated with the Texas Margin Tax, and therefore, Predecessor has not recognized deferred taxes in the period January 1, 2012 to December 28, 2012. | |||||||||||||||
A reconciliation of income tax expense (benefit) computed at the U.S. federal statutory tax rate to the Company’s effective tax rate is summarized as follows (in thousands): | |||||||||||||||
For the Year Ended | For the Three | For the Twelve | January 1, | ||||||||||||
December 31, | Months Ended | Months Ended | 2012 to | ||||||||||||
2013 | December 31, | September 30, | December 28, | ||||||||||||
2012 | 2012 | 2012 | |||||||||||||
Successor | Successor | Successor | Predecessor | ||||||||||||
Tax at U.S. Federal statutory rate | $ | -1,673 | $ | -2,262 | $ | -209 | $ | 148 | |||||||
Federal non-taxable entity | - | - | - | -148 | |||||||||||
State taxes, net of federal benefit | 295 | -92 | -37 | 108 | |||||||||||
Nondeductible costs and other acquisition **accounting adjustments | -291 | 116 | 33 | - | |||||||||||
Valuation allowance for deferred tax assets | 1,708 | 2,238 | 213 | - | |||||||||||
Total income tax expense | $ | 39 | $ | - | $ | - | $ | 108 | |||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): | |||||||||||||||
December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Deferred tax assets: | |||||||||||||||
Accounts Receivable | $ | 133 | $ | - | |||||||||||
Prepaid Expenses | - | 218 | |||||||||||||
Accrued Expenses | 571 | - | |||||||||||||
Intangibles | 4,327 | 1,932 | |||||||||||||
Stock Options | 771 | - | |||||||||||||
Debt | 806 | 10 | |||||||||||||
Net operating and capital loss carryforwards | 1,860 | 800 | |||||||||||||
Transaction Costs and Other | 764 | - | |||||||||||||
Total deferred tax assets | 9,232 | 2,960 | |||||||||||||
Valuation allowance for deferred tax assets | -4,196 | -2,487 | |||||||||||||
Deferred tax assets after valuation allowance | 5,036 | 473 | |||||||||||||
Deferred tax liabilities: | |||||||||||||||
Accounts Receivable | - | -416 | |||||||||||||
Prepaid Expenses | -135 | - | |||||||||||||
Property, equipment | -43 | -57 | |||||||||||||
Intangibles | -4,602 | -524 | |||||||||||||
Contingent Consideration | -239 | - | |||||||||||||
Debt | -256 | - | |||||||||||||
Net deferred tax liabilities | $ | -239 | $ | -524 | |||||||||||
As of December 31, 2013 and 2012, the Company had U.S. federal and state net operating loss carryovers (“NOLs”) of approximately $5.33 million and $734,000, available to offset future taxable income, respectively. These NOLs, if not utilized, expire at various times through 2033. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change in control. | |||||||||||||||
In assessing the realization of deferred tax assets, Management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets, and has, therefore, increased its valuation allowance against deferred tax assets by $1.71 million in the year ended December 31, 2013, with a total valuation allowance of $4.20 million at December 31, 2013, representing the amount of its deferred income tax assets in excess of the Company’s deferred income tax liabilities. The deferred tax liability related to goodwill that is amortizable for tax purpose (“Intangibles”) will not reverse until such time, if any, that the goodwill, which is considered to be an asset with an indefinite life for financial reporting purposes, becomes impaired or sold. Due to the uncertain timing of this reversal, the temporary difference cannot be considered as future taxable income for purposes of determining a valuation allowance. Therefore, the deferred tax liability related to tax deductible goodwill Intangibles cannot be considered when determining the ultimate realization of deferred tax assets. | |||||||||||||||
The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions and is subject to examination by the various taxing authorities. The Company considers Pennsylvania to be a significant state tax jurisdiction. The Company’s federal, state and local income tax for the years beginning in 2010 remain subject to examination. | |||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
Note 16. Commitments and Contingencies | |||||
On January 16, 2013, we received notice that EarlyBirdCapital, Inc. (“EBC”) had commenced arbitration proceedings (the “Claim”) against the Company with the International Centre for Dispute Resolution (the “ICDR”). The Claim alleges that the Company breached a Letter Agreement, dated as of May 9, 2011, with EBC by failing to pay EBC a cash fee of $2,070,000 and reimbursing EBC for certain expenses upon the closing of the Company’s initial business combination, which was consummated on December 28, 2012. As a result of such breach, EBC sought damages plus interest and attorney’s fees and expenses. In November 2013, the ICDR held arbitration proceedings with respect to the Claim. On March 3, 2014, the ICDR rendered its decision and ordered the Company to pay damages of $2,070,000 plus interest, attorney’s fees and expenses of approximately $740,000 within 30 days of the decision. As previously reported in the Company’s December 31, 2012 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q filed in 2013, the Company accrued $2,136,000 relating to this matter as of December 31, 2012. During the fourth quarter of 2013, the Company recorded an additional accrual to SG&A expenses of $675,000 for legal fees and interest costs awarded to EBC as part of the ICDR’s award to EBC. | |||||
On August 23, 2013, the Company received notice that JetPay Merchant Services, LLC (“JPMS”) was a party in a lawsuit brought by MSC Cruises, a former customer. Merrick Bank Corporation (“Merrick”) is a co-defendant in the lawsuit. MSC Cruises is claiming approximately $2 million in damages and alleges that JPMS breached its agreement with MSC by charging fees not specified in the agreement. The Company believes that the basis of the suit regarding JetPay Merchant Services, LLC is groundless and intends to defend it vigorously. Accordingly, we have not recorded an accrual for any potential loss related to this matter as of December 31, 2013. | |||||
On or about March 13, 2012, a merchant of JetPay, LLC, Direct Air, abruptly ceased operations. As a result, Merrick, JetPay, LLC’s sponsor with respect to this particular merchant, has incurred chargebacks in excess $25 million. Chargebacks related to Direct Air were minimal during the year ended December 31, 2013. Under an agreement between Merrick and JetPay, LLC, JetPay, LLC may be obligated to indemnify Merrick for any realized losses from such chargebacks. JetPay, LLC has recorded a loss for all chargebacks in excess of the $25 million, a $250,000 deductible on a related insurance policy and legal fees charged to JetPay, LLC by Merrick all totaling $1,947,000 in 2012. Additionally, legal fees totaling approximately $597,000 were charged against JetPay, LLC’s cash reserve account by Merrick through June 30, 2013. JetPay, LLC has received correspondence from Merrick of its intention to seek recovery for all unrecovered chargebacks, but JetPay, LLC is currently not a party to any litigation from Merrick regarding this matter. The loss is insured through a Chartis Insurance Policy for chargeback loss that names Merrick as the primary insured. The policy has a limit of $25 million. The deductible for the policy is $250,000. Merrick has sued Chartis Insurance for payment under the claim. The insurance costs described above were to cover Merrick’s legal costs in their lawsuit. Merrick has sued Chartis Insurance for payment under the claim. The insurance costs described above were to cover Merrick’s legal costs in the lawsuit. Merrick and JetPay, LLC have entered into a Forbearance Agreement pertaining to the Direct Air chargeback issue. The Direct Air situation has also caused other unexpected expenses, such as higher professional fees and fees for chargeback processing. Currently all chargebacks up to $25 million are being absorbed by Merrick and therefore are not charged to JetPay, LLC balance sheet; however, JetPay, LLC may be liable to Merrick under the terms of the agreement between the parties for these chargebacks. Also pursuant to the terms of such agreement, Merrick has forced JetPay, LLC to maintain increased cash reserves in order to provide additional security for its obligations arising from the Direct Air situation. Merrick continues to hold approximately $5.04 million of total reserves related to the Direct Air matter as of December 31, 2013. These reserves are recorded in Other Assets. On August 7, 2013, JPMS, a wholly owned subsidiary of JetPay, LLC and indirect wholly owned subsidiary of the Company, together with WLES, L.P., (collectively, the “Plaintiffs”), filed suit in the U.S. District Court for the Northern District of Texas, Dallas Division, against Merrick, Royal Group Services, LTD, LLC and Gregory Richmond (collectively, the “Defendants”). The suit alleges that Merrick and Gregory Richmond (an agent of Royal Group Services) represented to JPMS that insurance coverage was arranged through Chartis Specialty Insurance Company (“Chartis”) to provide coverage for JPMS against potential chargeback losses related to certain of JPMS’s merchant customers, including Southern Sky Air Tours, d/b/a Direct Air. The complaint alleges that JPMS paid commission/premiums to Merrick relating to the Chartis insurance policy as well as several causes of action against the Defendants, including violation of state insurance codes, negligence, fraud, breach of duty and breach of contract. Also, in August 2013, JPMS, JetPay, LLC, and JetPay ISO filed the second amendment to a previously filed complaint against Merrick in the United States District Court for the District of Utah, adding to its initial complaint several causes of action related to actions Merrick allegedly took during the transitioning to a new sponsoring bank in June 2013. Additionally, subsequent to transitioning of JetPay, LLC’s processing in June 2013 to a new sponsoring bank as an alternative to Merrick, Merrick invoiced the Company for legal fees incurred totaling approximately $1.3 million. The Company does not believe it has responsibility to reimburse Merrick for these legal fees and intends to vigorously dispute these charges. Accordingly, the Company has not recorded an accrual for these legal fees as of December 31, 2013. | |||||
In December, 2013 we settled a lawsuit with M&A Ventures in which we agreed to pay $400,000, with $100,000 to be paid in 2013 and the reminder in installments throughout 2014. We recorded the $400,000 settlement within SG&A expense in the three months ended December 31, 2013. | |||||
In January 2014, Chartis Insurance (“Chartis”) settled a lawsuit in favor of JetPay, LLC and WLES on a prior claim for $1.9 million. In that lawsuit, JetPay Merchant Services, a division of JetPay, LLC, had filed a suit against Chartis related to Chartis’ refusal to pay out a claim on chargeback insurance related to a $1.9 million loss that occurred in 2011, prior to the Company’s acquisition of JetPay, LLC. The Company and WLES agreed that the cost of the lawsuit and any proceeds resulting from the lawsuit were to accrue to the benefit of WLES, as the loss related to the suit had occurred prior to the acquisition. Under the terms of the settlement, JetPay, LLC agreed to remove Gregory Richmond from the Texas Direct Air lawsuit referred above. | |||||
As partial protection against any potential losses, the Company required that, upon closing of the Completed Transactions, 3,333,333 shares of Common Stock that was to be paid to WLES as part of the JetPay, LLC purchase price be placed into an escrow account with JPMorgan Chase (“Chase”) as the trustee. The Escrow Agreement for the account names Merrick, the Company, and WLES as parties, If JetPay, LLC suffers any liability to Merrick as a result of the Direct Air matter, these shares are to be used in partial or full payment for any such liability, with any remaining shares delivered to WLES. If JetPay, LLC is found to have any liability to Merrick because of this issue, and these shares do not have sufficient value to fully cover such liability, the Company may be responsible for this JetPay, LLC liability. On February 3, 2014, we received notice that Merrick had requested Chase to release the 3,333,333 shares in the Escrow Account. Both JetPay and WLES informed Chase that they did not agree to the release, and the shares remain in escrow. | |||||
The Company is a party to various other legal proceedings related to its ordinary business activities. In the opinion of the Company’s management, none of these proceedings are material in relation to our results of operations, liquidity, cash flows, or financial condition. | |||||
Leases | |||||
The Company is obligated under various operating leases, primarily for office space and certain equipment related to its operations. Certain of these leases contain purchase options, renewal provisions, and contingent rentals for its proportionate share of taxes, utilities, insurance, and annual cost of living increases. | |||||
Future minimum lease payments under non-cancelable operating leases as of December 31, 2013 are as follows (in thousands): | |||||
2014 | $ | 801 | |||
2015 | $ | 793 | |||
2016 | $ | 402 | |||
2017 | $ | 146 | |||
2018 | $ | 147 | |||
Total | $ | 2,289 | |||
Rent expense under these operating leases was $842,500 and $196,700 for the year ended December 31, 2013 (Successor) and the period January 1, 2012 to December 28, 2012 (Predecessor), respectively. The future minimum lease payments above include a related party lease with respect to the ADC operations with the previous shareholders of ADC. This lease provides for current monthly lease payments of $41,756. | |||||
Additionally, at December 31, 2013, a letter of credit was outstanding for $100,000 as collateral with respect to a front-end processing relationship with a credit card company. Additionally, on August 21, 2013, a letter of credit for $1.9 million was issued and remains outstanding at December 31, 2013 as a reserve with respect to JetPay, LLC’s processing relationship with Wells Fargo Bank, N.A. | |||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
Note 17. Related Party Transactions | |
From December 2010 through December 2012, the Company issued a series of principal amount unsecured promissory notes to UBPS Services, LLC (“UBPS Services”), an entity controlled by Mr. Shah, CEO and Chairman of the Company, totaling $425,880. These notes were non-interest bearing and, except for $15,000, were paid upon consummation of the Completed Transactions on December 28, 2012. Additionally, in February 2013 and June 2013, the Company issued unsecured promissory notes to UBPS Services for $72,000 and $60,000, respectively. Total outstanding notes to UBPS Services of $147,000 were repaid on October 15, 2013. The June 7, 2013 promissory note earned interest at an annual rate of 4% with interest expense of $855 recorded in 2013. The February 2013 promissory note is non-interest bearing. All such transactions were approved upon resolution and review by the Company’s Audit Committee of the terms of the notes to ensure that such terms were no less favorable to the Company than those that would be available with respect to such transactions from unaffiliated third parties. | |
On June 7, 2013, the Company issued an unsecured promissory note to Trent Voigt, Chief Executive Officer of JetPay, LLC, in the amount of $491,693. The note matures on July 31, 2014 and bears interest at an annual rate of 4% with interest expense of $11,318 recorded in 2013. The transaction was approved upon resolution and review by the Company’s Audit Committee of the terms of the note to ensure that such terms were no less favorable to the Company than those that would be available with respect to such transactions from unaffiliated third parties. | |
JetPay Payroll Services’ headquarters are located in Center Valley, Pennsylvania and consist of approximately 22,500 square feet leased from C. Nicholas Antich and Carol A. Antich. Mr. Antich is the President of ADC. The rent is approximately $41,750 per month with annual 4% increases, on a net basis. The office lease has an initial 10-year term expiring May 31, 2016. Rent expense under this lease was $516,500 and $474,000 for the years ended December 31, 2013 and 2012, respectively. | |
JetPay Payroll Services shares office space and related facilities with Serfass & Cremia, LLC, the accounting firm of which Joel E. Serfass, a previous shareholder of PTFS, is a member. Such office space consists of 4,300 square feet, located on one floor of a multi-tenant building in Bethlehem, Pennsylvania. Pursuant to a cost sharing agreement among PTFS, Joel E. Serfass and Serfass & Cremia, LLC, PTFS pays an 85% share of the total expenses of operating such facilities (which total expenses include office rental, equipment rental, telephone, utilities, maintenance, repairs and other operating costs and a 15% administrative fee payable to Joel E. Serfass), which amounted to $107,400 and $99,530 for the years ended December 31, 2013 and 2012, respectively. The cost sharing agreement is terminable by any party with a 90 day notice. | |
JetPay Payment Processing retains a backup center in Sunnyvale, Texas consisting of 1,600 square feet, rented for approximately $3,000 per month from JT Holdings, an entity controlled by Trent Voigt, Chief Executive Officer of JetPay, LLC. The terms of the lease are commercial. Rent expense was $36,000 for both the years ended December 31, 2013 and 2012, respectively. | |
The above transactions with respect to JetPay Payroll Services and JetPay Payment Processing were approved prior to the acquisition of ADC, PTFS and JetPay, LLC. Going forward, all related party transactions with respect to such entities will be reviewed and approved by the Company’s Audit Committee to ensure that the terms of such transactions are no less favorable to the Company than those that would be available with respect to such transactions from unaffiliated third parties. | |
At the closing of the acquisition of ADC, funds were paid to the ADC stockholders as a result of a preliminary working capital calculation. Prepaid expenses at December 31, 2012 included a receivable from the stockholders of ADC of $450,776 for an overpayment related to this preliminary calculation. The funds were repaid to the Company in February 2013. | |
In connection with the closing of the JetPay, LLC acquisition, the Company entered into a Note and Indemnity Side Agreement with JP Merger Sub, LLC, WLES and Trent Voigt (the “Note and Indemnity Side Agreement”) dated as of December 28, 2012. Pursuant to the Note and Indemnity Side Agreement, the Company agreed to issue a promissory note in the amount of $2,331,369 in favor of WLES. Interest accrues on amounts due under the note at a rate of 5% per annum, and is payable quarterly. Interest expense of $117,864 was recorded in 2013. The note is due in full on December 31, 2017. The note can be prepaid in full or in part at any time without penalty. As partial consideration for offering the note, the Company and JP Merger Sub, LLC agreed to waive certain specified indemnity claims against WLES and Mr. Voigt to the extent the losses under such claims do not exceed $2,331,369. | |
Segment
Segment | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Segment Reporting Disclosure [Text Block] | ' | |||||||||||||
Note 18. Segment | ||||||||||||||
The Company currently operates in two business segment, the Payment Processing Segment, which is an end-to-end processor of credit and debit card and ACH payment transactions to businesses with a focus on those processing internet transactions and recurring billings and Payroll Processing Segment, which is a full-service payroll and related payroll tax payment processor. | ||||||||||||||
Segment operating results are presented below (in thousands). The results reflect revenues and expenses directly related to each segment. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented. | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||
General | ||||||||||||||
Payment Service | Payroll Service | Corporate/Other | Total | |||||||||||
Processing revenue | $ | 17,587 | $ | 13,318 | $ | - | $ | 30,905 | ||||||
Cost of processing revenue | 11,513 | 6,904 | - | 18,417 | ||||||||||
Selling, general and administrative expense | 4,717 | 3,830 | 2,508 | 11,055 | ||||||||||
Segment profit (loss) | $ | 1,357 | $ | 2,584 | $ | -2,508 | $ | 1,433 | ||||||
Total property and equipment | $ | 584 | $ | 665 | $ | 3 | $ | 1,252 | ||||||
Property and equipment additions | $ | 114 | $ | 141 | $ | 3 | $ | 258 | ||||||
Intangible assets and goodwill | $ | 34,002 | $ | 19,975 | $ | - | $ | 53,977 | ||||||
Intangible assets and goodwill additions | $ | 222 | $ | - | $ | - | $ | 222 | ||||||
Total segment assets | $ | 61,511 | $ | 55,792 | $ | 4,432 | $ | 121,735 | ||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
Note 19. Subsequent Events | |
On January 16, 2013, we received notice that EarlyBirdCapital, Inc. (“EBC”) had commenced arbitration proceedings (the “Claim”) against the Company with the International Centre for Dispute Resolution (the “ICDR”). The Claim alleged that the Company breached a Letter Agreement, dated as of May 9, 2011, with EBC by failing to pay EBC a cash fee of $2,070,000 and reimbursing EBC for certain expenses upon the closing of the Company’s initial business combination, which was consummated on December 28, 2012. As a result of such breach, EBC sought damages plus interest and attorney’s fees and expenses. In November 2013, the ICDR held arbitration proceedings with respect to the Claim. On March 3, 2014, the ICDR rendered its decision and ordered the Company to pay damages of $2,070,000 plus interest, attorney’s fees and expenses of approximately $740,000 within 30 days of the decision. As previously reported in the Company’s December 31, 2012 Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q filed in 2013, the Company accrued $2,136,000 relating to this matter as of December 31, 2012. The Company recorded an additional accrual to SG&A expenses of $675,000 for legal fees and interest costs awarded to EBC as part of the ICDR’s award to EBC. The Company is evaluating its options with respect to payment of the judgment. | |
The Company is currently evaluating its options to satisfy the liability to EBC; including, but not limited to, using a portion of its current cash and cash equivalents; issuing its common stock at a price of $3.00 per share to Bipin C. Shah, the Company’s Chairman and Chief Executive Officer, and C. Nicholas Antich, the President of its payroll services operation, in a private placement, which Mr. Shah and Mr. Antich would be obligated to purchase up to an aggregate of $1.0 million of the Company’s common stock at such price upon its demand; and the sale of up to $1.4 million of Series A Preferred to Flexpoint under the Securities Purchase Agreement. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | |||||||||||||
Use of Estimates | ||||||||||||||
The accompanying financial statements have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“US GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities at the date of the Company’s financial statements. Such estimates include, but are not limited to, the value of purchase consideration of acquisitions; valuation of accounts receivable, reserves for chargebacks, goodwill, intangible assets, and other long-lived assets; legal contingencies; and assumptions used in the calculation of stock-based compensation and in the calculation of income taxes. Actual results may differ from these estimates under different assumptions or conditions. | ||||||||||||||
Revenue Recognition, Deferred Revenue [Policy Text Block] | ' | |||||||||||||
Revenue Recognition and Deferred Revenue | ||||||||||||||
The Company recognizes revenue in general when the following criteria have been met: persuasive evidence of an arrangement exists, a customer contract or purchase order exists and the fees are fixed and determinable, no significant obligations remain and collection of the related receivable is reasonably assured. Allowances for chargebacks, discounts and other allowances are estimated and recorded concurrent with the recognition of revenue and are primarily based on historic rates. | ||||||||||||||
Revenues from the Company’s credit and debit card processing operations are recognized in the period services are rendered as the Company processes credit and debit card transactions for its merchant customers or for merchant customers of its Independent Sales Organization (“ISO”) clients. The majority of the Company’s revenue within its credit and debit card processing business is comprised of transaction-based fees, which typically constitute a percentage of dollar volume processed, or a fee per transaction processed. In the case where the Company is only the processor of transactions, it charges transaction fees only and records these fees as revenues. In the case of merchant contracts or contracts with ISOs for whom it processes credit and debit card transactions for the ISO’s merchant customers, revenue is primarily comprised of fees charged to the merchant, as well as a percentage of the processed sale transaction. The Company’s contracts in most instances involve three parties: the Company, the merchant, and the sponsoring bank. Under certain of these sales arrangements, the Company’s sponsoring bank collects the gross revenue from the merchants, pays the interchange fees and assessments to the credit card associations, collects their fees and pays the Company a net residual payment representing the Company’s fee for the services provided. Accordingly, under these arrangements, the Company records the revenue net of interchange, credit card association assessments and fees and the sponsoring bank’s fees. Effective June 1, 2013, a majority of the Company’s merchant contract and ISO merchant customer credit and debit card transactions business was transferred to a new sponsoring bank whereby the Company is billed directly for certain fees by the credit card associations and the processing bank. In this instance, revenues and cost of revenues include the credit card association fees and assessments and the sponsoring bank’s fees which are billed to the Company and for which it assumes credit risk. The impact of this change resulted in an increase in revenues and cost of revenues of approximately $1.9 million in the year ended December 31, 2013. In all instances, the Company recognizes processing revenues net of interchange fees, which are assessed to its merchant and ISO merchant customers on all processed transactions. Interchange rates and fees are not controlled by the Company. The Company effectively functions as a clearing house collecting and remitting interchange fee settlement on behalf of issuing banks, debit networks, credit card associations and their processing customers. Additionally, the Company’s direct merchant customers have the liability for any charges properly reversed by the cardholder. In the event, however, that the Company is not able to collect such amount from the merchants due to merchant fraud, insolvency, bankruptcy or any other reason, it may be liable for any such reversed charges. The Company requires cash deposits, guarantees, letters of credit and other types of collateral by certain merchants to minimize any such contingent liability, and it also utilizes a number of systems and procedures to manage merchant risk. The Company has historically experienced losses due to chargebacks resulting from merchant defaults. | ||||||||||||||
Revenues from the Company’s payroll processing operation are recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. Certain processing services are provided under annual service arrangements with revenue recognized over the service period based on when the efforts and costs are expended. The Company’s service revenue is largely attributable to payroll-related processing services where the fees are based on a fixed amount per processing period or a fixed amount per processing period plus a fee per employee or transaction processed. The revenue earned from delivery service for the distribution of certain client payroll checks and reports is included in processing revenue, and the costs for delivery are included in selling, general, and administrative expenses on the Consolidated Statements of Operations. | ||||||||||||||
Interest on funds held for clients is earned primarily on funds that are collected from clients before due dates for payroll tax administration services and for employee payment services, and invested until remittance to the applicable tax or regulatory agencies or client employee. These collections from clients are typically remitted from 1 to 30 days after receipt, with some items extending to 90 days. The interest earned on these funds is included in total revenue on the Consolidated Statements of Operations because the collecting, holding, and remitting of these funds are critical components of providing these services. | ||||||||||||||
Contingent Liability Reserve Estimate, Policy [Policy Text Block] | ' | |||||||||||||
Reserve for Chargeback Losses | ||||||||||||||
Disputes between a cardholder and a merchant periodically arise as a result of, among other things, cardholder dissatisfaction with merchandise quality or merchant services. Such disputes may not be resolved in the merchant’s favor. In these cases, the transaction is “charged back” to the merchant, which means the purchase price is refunded to the customer through the merchant’s bank and charged to the merchant. If the merchant has inadequate funds, JetPay, LLC must bear the credit risk for the full amount of the transaction. JetPay, LLC evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. JetPay, LLC believes its reserve for chargeback losses is adequate to cover both the known probable losses and the incurred but not yet reported losses at the balance sheet dates. Chargeback reserves totaling $262,000 and $200,000 were recorded as of December 31, 2013 and 2012, respectively. | ||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
The carrying amounts of financial instruments, including cash and cash equivalents, restricted cash, settlement processing assets and liabilities, receivables, prepaid expenses, accounts payable, accrued expenses and deferred revenue, approximated fair value as of the balance sheet date presented, because of the relatively short maturity dates on these instruments. The carrying amounts of the financing arrangements approximate fair value as of the balance sheet date presented, because interest rates on these instruments approximate market interest rates after consideration of stated interest rates, anti-dilution protection and associated warrants. | ||||||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | |||||||||||||
Concentration of Credit Risk | ||||||||||||||
Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount. | ||||||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. | ||||||||||||||
Receivables, Policy [Policy Text Block] | ' | |||||||||||||
Accounts Receivable | ||||||||||||||
The Company’s accounts receivable are due from its merchant credit card and its payroll customers. Credit is extended based on evaluation of customers’ financial condition and, generally, collateral is not required. Payment terms vary and amounts due from customers are stated in the financial statements net of an allowance for doubtful accounts. Accounts which are outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivables when they are deemed uncollectible. | ||||||||||||||
Unsettled Merchant Accounts [Policy Text Block] | ' | |||||||||||||
Settlement Processing Assets and Obligations | ||||||||||||||
Funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants. Depending on the type of transaction, either the credit card interchange system or the debit network is used to transfer the information and funds between the sponsoring bank and card issuing bank to complete the link between merchants and card issuers. In certain of our processing arrangements, merchant funding primarily occurs after the sponsoring bank receives the funds from the card issuer through the card networks creating a net settlement obligation on the Company’s balance sheet. In a limited number of other arrangements, the sponsoring bank funds the merchants before it receives the net settlement funds from the card networks, creating a net settlement asset on the Company’s balance sheet. Additionally, certain of the Company’s sponsoring banks collect the gross revenue from the merchants, pay the interchange fees and assessments to the credit card associations, collect their fees for processing and pays the Company a net residual payment representing the Company’s fees for the services. In these instances, the Company does not reflect the related settlement processing assets and obligations in its consolidated balance sheet. | ||||||||||||||
Timing differences in processing credit and debit card and ACH transactions, as described above, interchange expense collection, merchant reserves, sponsoring bank reserves, and exception items result in settlement processing asset and obligations. Settlement processing assets consist primarily of our receivable from merchants for the portion of the discount fee related to reimbursement of the interchange expense, our receivable from the processing bank for transactions we have funded merchants in advance of receipt of card association funding, merchant reserves held, sponsoring bank reserves and exception items, such as customer chargeback amounts receivable from merchants. Settlement processing obligations consist primarily of merchant reserves, our liability to the processing bank for transactions for which we have received funding from the members but have not funded merchants and exception items. | ||||||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | |||||||||||||
Property and Equipment | ||||||||||||||
Property and equipment acquired in the Company’s recent business acquisitions have been recorded at estimated fair value. The Company records all other property and equipment acquired in the normal course of business at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, which are generally as follows: leasehold improvements – shorter of economic life or initial term of the related lease; machinery and equipment – 5 to 15 years; and furniture and fixtures – 5 to 10 years. Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. | ||||||||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | ' | |||||||||||||
Goodwill | ||||||||||||||
Goodwill represents the premium paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations. The Company performs a goodwill impairment test on at least an annual basis. Application of the goodwill impairment test requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the useful life over which cash flows will occur and determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit. The Company will conduct its annual goodwill impairment test as of December 31 of each year or more frequently if indicators of impairment exist. The Company periodically analyzes whether any such indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a sustained significant decline in our stock price and market capitalization, a significant adverse change in legal factors or in the business climate, unanticipated competition and/or slower expected growth rates, adverse actions or assessments by a regulator, among others. The Company compares the fair value of its reporting unit to its respective carrying value, including related goodwill. Future changes in the industry could impact the results of future annual impairment tests. The Company’s annual goodwill impairment testing indicated there was no impairment as of December 31, 2013. There can be no assurance that future tests of goodwill impairment will not result in impairment charges. | ||||||||||||||
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | ' | |||||||||||||
Identifiable Intangible Assets | ||||||||||||||
Identifiable intangible assets consist primarily of customer relationships, software costs, and tradenames. Certain tradenames are considered to have indefinite lives, and as such, are not subject to amortization. These assets are tested for impairment using undiscounted cash flow methodology annually and whenever there is an impairment indicator. Estimating future cash flows requires significant judgment and projections may vary from cash flows eventually realized. Several impairment indicators are beyond the Company’s control, and determining whether or not they will occur cannot be predicted with any certainty. Customer relationships, tradenames, and software costs are amortized on a straight-line or accelerated basis over their respective assigned estimated useful lives. | ||||||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' | |||||||||||||
Impairment of Long–Lived Assets | ||||||||||||||
The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. The Company’s annual testing indicated there was no impairment as of December 31, 2013. | ||||||||||||||
Convertible Preferred Stock [Policy Text Block] | ' | |||||||||||||
Convertible Preferred Stock | ||||||||||||||
The Company accounts for the redemption premium, beneficial conversion feature and issuance costs on its Convertible Preferred Stock using the effective interest method, accreting such amounts to its Convertible Preferred Stock from the date of issuance to the earliest date of redemption | ||||||||||||||
Share-Based Compensation [Policy Text Block] | ' | |||||||||||||
Share-Based Compensation | ||||||||||||||
The Company expenses employee share-based payments under ASC Topic 718, Compensation-Stock Compensation, which requires compensation cost for the grant-date fair value of share-based payments to be recognized over the requisite service period. The Company estimates the grant date fair value of the share-based awards issued in the form of options using the Black-Scholes option pricing model. | ||||||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||||||
Loss per share | ||||||||||||||
Basic loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. The dilutive effect of the conversion option in the $10 million Secured Convertible Promissory Notes Payable (the “Notes”) of 3,333,333 shares, the effect of the conversion option in the Flexpoint Preferred Stock of 3,333,333 at December 31, 2013, and the effect of 104,167 exercisable stock options granted under the Company’s Stock Incentive Plan have been excluded from the loss per share calculation for the year ended December 31, 2013 in that the assumed conversion of the options would be anti-dilutive. At December 31, 2012 and September 30, 2012, 320,486 shares of common stock pending redemption and 10,494,067 shares of common stock subject to possible redemption, respectively, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the earnings on the Trust Account. Loss per share assuming dilution would give effective to dilutive options, warrants and other potential common shares outstanding during the period. The Company did not considered the effect of warrants to purchase 18,960,000 shares of common stock or the effect of the unit purchase option in the calculation of diluted loss per share at September 30, 2012, since the exercise of the warrants and the unit purchase would be anti-dilutive. Additionally, at December 31, 2012, the potential dilutive effect of the conversion option related to the Notes of 1,941,748 shares and potential issuable shares related to the conversion option within the Ten Lords, Ltd. note of 1,000,000 shares, a total of 2,941,748 shares, have been excluded from the per share calculation loss as they would also be anti-dilutive. | ||||||||||||||
Derivatives, Policy [Policy Text Block] | ' | |||||||||||||
Derivative Financial Instruments | ||||||||||||||
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company does review the terms of the convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options, which are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including the conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. | ||||||||||||||
Bifurcated embedded derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges recorded within other expense (income), using the effective interest method. | ||||||||||||||
Fair Value Measurement, Policy [Policy Text Block] | ' | |||||||||||||
Fair value measurements | ||||||||||||||
The Company accounts for fair value measurements in accordance with ASC Topic No. 820, Fair Value Measurements and Disclosures, (“ASC Topic 820”) which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. | ||||||||||||||
ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC Topic 820 are described below: | ||||||||||||||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. | |||||||||||||
Level 2 | Applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | |||||||||||||
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | |||||||||||||
The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by ASC Topic 820, assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement. | ||||||||||||||
Fair Value at December 31, 2013 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Derivative liabilities | $ | 380 | $ | - | $ | - | $ | 380 | ||||||
Contingent consideration | $ | 850 | $ | - | $ | - | $ | 850 | ||||||
Totals | $ | 1,230 | $ | - | $ | - | $ | 1,230 | ||||||
Fair Value at December 31, 2012 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Derivative liabilities | $ | 2,110 | $ | - | $ | - | $ | 2,110 | ||||||
Contingent consideration | $ | 1,540 | $ | - | $ | - | $ | 1,540 | ||||||
Totals | $ | 3,650 | $ | - | $ | - | $ | 3,650 | ||||||
The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis (in thousands): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
Beginning balance | $ | 3,650 | ||||||||||||
Change in fair value of derivative liability | $ | -1,730 | ||||||||||||
Change in fair value of contingent cash consideration | $ | -690 | ||||||||||||
Totals | $ | 1,230 | ||||||||||||
The Level 3 financial liabilities of $3.65 million at January 1, 2013 are the result of recording the Completed Transactions and related debt instruments as more fully described below. | ||||||||||||||
In connection with the debt proceeds received under the $10 million secured convertible notes (the “Notes”), the Company recorded a derivative liability of $2.11 million on its consolidated balance sheet at December 28, 2012 related to the conversion feature embedded in the Notes. The fair value of the derivative liability is classified within Level 3 of the fair value hierarchy because it is valued using pricing models that incorporate management assumptions that cannot be corroborated with observable market data. The fair value at December 31, 2013 of $380,000 was determined using a binomial option pricing valuation model with the following assumptions: risk free interest rate: 0.13 %; dividend yield: 0%; expected life of the option to convert of 1.00 years; and volatility: 23.4%. The change in fair value of this derivative liability of $1.7 million for the year ended December 31, 2013, is recorded within other expenses (income) in the Company’s consolidated statements of operations. | ||||||||||||||
Additionally, in connection with a promissory note payable to Ten Lords, Ltd., assumed in the acquisition of JetPay, LLC, the Company recorded a short-term derivative liability of $320,000 which was included in the current portion of long-term debt and derivative liability in the accompanying balance sheets. The fair value of this derivative liability at December 31, 2013 was $0, which reflects the early payment of this debt on October 11, 2013. The change in fair value of this derivative liability of $320,000 for the year ended December 31, 2013, is recorded within other expenses (income) in the Company’s consolidated statements of operations. | ||||||||||||||
In addition to the consideration paid upon closing of the JetPay, LLC acquisition, WLES, through December 28, 2017, is entitled to receive 833,333 shares of Common Stock if the trading price of the Common Stock is at least $8.00 per share for any 20 trading days out of a 30 trading day period and $5,000,000 in cash if the trading price of the Common Stock is at least $9.50 per share for any 20 trading days out of a 30 trading day period. This contingent consideration was valued at $1.54 million at the date of acquisition based on utilization of option pricing models and is recorded as a non-current liability for $700,000 and as additional paid-in capital for $840,000 at December 31, 2012. The stock-based component value of $840,000 as recorded at December 28, 2012, the JetPay, LLC acquisition date, remains unchanged at December 31, 2013 as a result of this component being recorded as equity. The fair value at December 31, 2013 of the cash-based contingent consideration, valued at $10,000, was determined using a binomial option pricing model. The following assumptions were utilized in the December 2013 calculations: risk free interest rate: 1.27 %; dividend yield: 0%; term of contingency of 4.0 years; and volatility: 28.1 %. | ||||||||||||||
The fair value of the Common Stock was derived from the per share price of recent sales of the Company’s common stock at the valuation date. Management determined that the results of its valuation are reasonable. The expected life represents the remaining contractual term of the derivative. The volatility rate was developed based on analysis of the historical volatility rates of similarly situated companies (using a number of observations that was at least equal to or exceeded the number of observations in the life of the derivative financial instrument at issue). The risk free interest rates were obtained from publicly available US Treasury yield curve rates. The dividend yield is zero because the Company has not paid dividends and does not expect to pay dividends in the foreseeable future. | ||||||||||||||
Level 3 liabilities are valued using unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the financial instrument. For fair value measurements categorized within Level 3 of the fair value hierarchy, the Company’s accounting and finance department, which reports to the Chief Financial Officer, determines its valuation policies and procedures. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s accounting and finance department with support from the Company’s outside consultants and which are approved by the Chief Financial Officer. Level 3 financial liabilities consists of a derivative liability and contingent consideration related to the JetPay, LLC acquisition for which there are no current markets such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy will be analyzed each period based on changes in estimates or assumptions and recorded as appropriate. Level 3 fair value items disclosed above arose on December 28, 2012 with the consummation of the Completed Transactions. | ||||||||||||||
The Company uses either a binomial option pricing model or the Black-Scholes option valuation model to value Level 3 financial liabilities at inception and on subsequent valuation dates. These models incorporate transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as volatility. | ||||||||||||||
A significant decrease in the volatility or a significant decrease in the Company’s stock price, in isolation, would result in a significantly lower fair value measurement. Changes in the values of derivative liabilities are recorded in change in fair value of derivative liabilities within other expense (income) on the Company’s consolidated statements of operations. | ||||||||||||||
As of December 31, 2013, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy. | ||||||||||||||
In accordance with the provisions of ASC Topic 815, Derivatives and Hedging Activities, the Company presented its derivative liability at fair value on its balance sheet, with the corresponding change in fair value recorded in the Company’s statement of operations for the applicable reporting periods. | ||||||||||||||
Income Tax, Policy [Policy Text Block] | ' | |||||||||||||
Income taxes | ||||||||||||||
The Company accounts for income taxes under ASC Topic 740, Income Taxes, (“ASC Topic 740”). ASC Topic 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryovers. Deferred income tax expense (benefit) represents the change during the period in the deferred income tax assets and deferred income tax liabilities. In establishing the provision for income taxes and determining deferred income tax assets and liabilities, the Company makes judgments and interpretations based on enacted laws, published tax guidance and estimates of future earnings. ASC Topic 740 additionally requires a valuation allowance to be established when, based on available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. | ||||||||||||||
ASC Topic 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company believes that its income tax positions and deductions would be sustained upon examination and does not anticipate any adjustments that would result in material changes to its financial position. | ||||||||||||||
The Company’s policy for recording interest and penalties associated with unrecognized tax benefits is to record such interest and penalties as interest expense and as a component of selling, general and administrative expense, respectively. There were no amounts accrued for penalties or interest as of or during the years ended December 31, 2013 and 2012. Management does not expect any significant changes in its unrecognized tax benefits in the next year. | ||||||||||||||
Subsequent Events, Policy [Policy Text Block] | ' | |||||||||||||
Subsequent Events | ||||||||||||||
Management evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the review, Management did not identify any recognized or non-recognized subsequent events, other than those discussed in Note 19 –Subsequent Events, which would have required an adjustment or disclosure in the financial statements. See Note 19 –Subsequent Events below. | ||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
In July 2012, the Financial Accounting Standards Board (“FASB”) issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This new accounting standard simplifies how entities test indefinite-lived intangible assets for impairment which improve consistency in impairment testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in the previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations. | ||||||||||||||
The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations. | ||||||||||||||
Business_Acquisitions_Tables
Business Acquisitions (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Schedule of Purchase Price Allocation [Table Text Block] | ' | ||||
The allocation of the purchase price and the estimated fair market values of the assets acquired and liabilities assumed are shown below (in thousands): | |||||
Cash | $ | 1,151 | |||
Accounts receivable | 3,069 | ||||
Prepaid expenses and other assets | 4,763 | ||||
Property and equipment, net | 1,382 | ||||
Funds held for clients | 44,213 | ||||
Goodwill | 30,944 | ||||
Identifiable intangible assets | 25,052 | ||||
Total assets acquired | 110,574 | ||||
Accounts payable and accrued expenses | 4,969 | ||||
Client fund obligations | 44,213 | ||||
Deferred tax liability | 524 | ||||
Promissory notes | 8,663 | ||||
Total liabilities assumed | 58,369 | ||||
Net assets acquired | $ | 52,205 | |||
Schedule of Condensed Income Statement [Table Text Block] | ' | ||||
The pro forma results do not include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combinations had been in effect on the dates indicated, or which may result in the future. | |||||
Unaudited Pro Forma | |||||
Results of Operations | |||||
Year Ended | |||||
December 31, 2012 | |||||
(in thousands) | |||||
Revenues | $ | 31,093 | |||
Operating income | $ | 624 | |||
Net Loss | $ | -2,381 | |||
Net Loss per share (Basic and Diluted) | $ | -0.21 | |||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Table Text Block] | ' | |||||||||||||
The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by ASC Topic 820, assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement. | ||||||||||||||
Fair Value at December 31, 2013 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Derivative liabilities | $ | 380 | $ | - | $ | - | $ | 380 | ||||||
Contingent consideration | $ | 850 | $ | - | $ | - | $ | 850 | ||||||
Totals | $ | 1,230 | $ | - | $ | - | $ | 1,230 | ||||||
Fair Value at December 31, 2012 | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
(in thousands) | ||||||||||||||
Derivative liabilities | $ | 2,110 | $ | - | $ | - | $ | 2,110 | ||||||
Contingent consideration | $ | 1,540 | $ | - | $ | - | $ | 1,540 | ||||||
Totals | $ | 3,650 | $ | - | $ | - | $ | 3,650 | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | ' | |||||||||||||
The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis (in thousands): | ||||||||||||||
Year Ended | ||||||||||||||
December 31, | ||||||||||||||
2013 | ||||||||||||||
Beginning balance | $ | 3,650 | ||||||||||||
Change in fair value of derivative liability | $ | -1,730 | ||||||||||||
Change in fair value of contingent cash consideration | $ | -690 | ||||||||||||
Totals | $ | 1,230 | ||||||||||||
Allowance_for_Doubtful_Account1
Allowance for Doubtful Accounts (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Accounts Receivable, Net [Abstract] | ' | ||||||||||||||
Allowance for Credit Losses on Financing Receivables [Table Text Block] | ' | ||||||||||||||
The changes in the allowance for doubtful accounts are summarized as follows (in thousands): | |||||||||||||||
For the Year | For the Three | For the Twelve | January 1, 2012 | ||||||||||||
Ended | Months Ended | Months Ended | to | ||||||||||||
December 31, | December 31, | September 30, | December 28, | ||||||||||||
2013 | 2012 | 2012 | 2012 | ||||||||||||
Successor | Successor | Successor | Predecessor | ||||||||||||
Balance at beginning of period | $ | - | $ | - | $ | - | $ | - | |||||||
Additions (charged to expense) | 27 | - | - | 348 | |||||||||||
Deductions | - | - | - | -245 | |||||||||||
Balance at end of period | $ | 27 | $ | - | $ | - | $ | 103 | |||||||
Property_and_Equipment_net_of_1
Property and Equipment, net of Accumulated Depreciation (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Leasehold improvements | $ | 327 | $ | 275 | ||||
Equipment | 507 | 442 | ||||||
Furniture and Fixtures | 195 | 176 | ||||||
Computer Software | 414 | 334 | ||||||
Vehicles | 197 | 155 | ||||||
Total property and equipment | 1,640 | 1,382 | ||||||
Less: Accumulated depreciation | -388 | - | ||||||
Property and equipment, net | $ | 1,252 | $ | 1,382 | ||||
Goodwill_Tables
Goodwill (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Goodwill [Abstract] | ' | ||||
Schedule of Goodwill [Table Text Block] | ' | ||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013, is as follows (in thousands): | |||||
Balance at January 1, 2012 | $ | - | |||
Acquisition of JetPay | 22,679 | ||||
Acquisition of ADC | 8,265 | ||||
Balance at December 31, 2012 | 30,944 | ||||
Measurement period adjustment | 222 | ||||
Balance at December 31, 2013 | $ | 31,166 | |||
Identifiable_Intangible_Assets1
Identifiable Intangible Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ' | |||||||
Schedule of Impaired Intangible Assets [Table Text Block] | ' | |||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Amortized intangible assets: | ||||||||
Software | $ | 4,650 | $ | 4,650 | ||||
Customer relationships | 18,612 | 18,612 | ||||||
Tradename | 250 | 250 | ||||||
Total amortized intangible assets | 23,512 | 23,512 | ||||||
Less: Accumulated amortization | 2,241 | - | ||||||
Total amortized intangibles, net | 21,271 | 23,512 | ||||||
Non-Amortized intangible assets: | ||||||||
Tradenames | 1,540 | 1,540 | ||||||
Total identifiable intangible assets | $ | 22,811 | $ | 25,052 | ||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | |||||||
The following sets forth the estimated amortization expense on intangible assets for the years ending December 31, (in thousands): | ||||||||
2014 | $ | 2,241 | ||||||
2015 | $ | 2,241 | ||||||
2016 | $ | 2,157 | ||||||
2017 | $ | 2,157 | ||||||
2018 | $ | 2,157 | ||||||
Thereafter | $ | 10,318 | ||||||
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Expenses and Other Current Liabilities [Table Text Block] | ' | |||||||
Accrued expenses and other current liabilities consist of the following (in thousands): | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
Trade accounts payable | $ | 2,105 | $ | 2,852 | ||||
Contingency accrual | 2,811 | 2,136 | ||||||
ACH clearing liability | 1,554 | 529 | ||||||
Accrued compensation | 1,157 | 956 | ||||||
Accrued agent commissions | 728 | 344 | ||||||
Related party payables | 115 | 285 | ||||||
Other | 3,684 | 1,182 | ||||||
Total | $ | 12,154 | $ | 8,284 | ||||
LongTerm_Debt_and_Notes_Payabl1
Long-Term Debt and Notes Payable (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Debt Disclosure [Abstract] | ' | |||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||
Long-term debt and notes payable consist of the following: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Successor | Successor | |||||||
(in thousands) | ||||||||
Secured convertible notes payable to various note holders, interest rate of 12.0% payable quarterly, notes maturing December 31, 2014, collateralized by a first lien security interest in the equity interests of JetPay, LLC. Note amount excludes unamortized discount for conversion option and derivative liability of $1.12 million and $2.11 million at December 31, 2013 and 2012, respectively. | $ | 8,883 | $ | 7,890 | ||||
Promissory note payable to Ten Lords, Ltd., interest rate of 6.25% through December 28, 2012 (predecessor), 9.5% from December 29, 2012 through June 26, 2013 and 13.5% from June 26, 2013 to October 11, 2013 payable in monthly payments of principal and interest of $63,809 with a final principal payment of $5.87 million on October 11, 2013. Note amount included a fair value premium of $180,000 December 31, 2012, as well as an unamortized discount for conversion option and derivative liability of $320,000 at December 31, 2012. | - | 6,180 | ||||||
Term loan payable to Metro Bank, interest rate of 4.0% payable in monthly principal payments of $107,143 plus interest, maturing December 28, 2019, collateralized by the assets and equity interests of AD Computer Corporation and Payroll Tax Filing Services, Inc. | 7,714 | 9,000 | ||||||
Unsecured promissory note payable to WLES, interest rate of 5.0% payable quarterly, note principal due on December 31, 2017. Note amount excludes unamortized fair value discount of $705,770 and $845,900 at December 31, 2013 and 2012, respectively. | 1,626 | 1,486 | ||||||
Unsecured promissory notes payable to stockholders, interest rate of 4% payable at maturity, note principal due July 31, 2014. See Note 17. Related Party Transactions. | 492 | - | ||||||
Various other debt instruments related to equipment at JetPay, LLC and vehicles at ADC. | 30 | 13 | ||||||
18,745 | 24,569 | |||||||
Less current portion | -10,674 | -7,479 | ||||||
$ | 8,071 | $ | 17,090 | |||||
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | ||||||||||||||||||||
A summary of stock option activity for the year ended December 31, 2013 is presented below: | |||||||||||||||||||||
Weighted Average | |||||||||||||||||||||
Number of Options | Exercise Price | ||||||||||||||||||||
Outstanding at December 31, 2012 | - | $ | - | ||||||||||||||||||
Granted | 1,000,000 | 3.03 | |||||||||||||||||||
Forfeited | - | - | |||||||||||||||||||
Exercised | - | - | |||||||||||||||||||
Outstanding at December 31, 2013 | 1,000,000 | $ | 3.03 | ||||||||||||||||||
Exercisable at December 31, 2013 | 104,167 | ||||||||||||||||||||
Shares available for granting of options | 1,000,000 | ||||||||||||||||||||
Schedule Of Share Based Compensation Stock Options Outstanding [Table Text Block] | ' | ||||||||||||||||||||
Stock options outstanding at December 31, 2013 are summarized as follows: | |||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||
Range of | Number | Weighted Avg. | Weighted | Number | Weighted Avg. | Weighted | |||||||||||||||
Exercise Prices | Outstanding | Remaining | Avg. Exercise | Exercisable | Remaining | Avg. Exercise | |||||||||||||||
Contractual Life | Price | Contractual Life | Price | ||||||||||||||||||
$ | 3 | 675,000 | 9.9 | $ | 3 | - | - | - | |||||||||||||
$ | 3.1 | 325,000 | 9.7 | $ | 3.1 | 104,167 | 9.7 | $ | 3.1 | ||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | ||||||||||||||
The components of income tax expense (benefit) consists of the following (in thousands): | |||||||||||||||
For the Year | For the Three | For the Twelve | January 1, | ||||||||||||
Ended | Months Ended | Months Ended | 2012 to | ||||||||||||
December 31, | December 31, | September 30, | December 28, | ||||||||||||
2013 | 2012 | 2012 | 2012 | ||||||||||||
Successor | Successor | Successor | Predecessor | ||||||||||||
Current: | |||||||||||||||
Federal | $ | - | $ | - | $ | - | $ | - | |||||||
State | 323 | - | - | 108 | |||||||||||
Deferred: | |||||||||||||||
Federal | -2,058 | -2,146 | -181 | - | |||||||||||
State | 66 | -92 | -32 | ||||||||||||
Change in valuation allowance | 1,708 | 2,238 | 213 | - | |||||||||||
Total income tax expense | $ | 39 | $ | - | $ | - | $ | 108 | |||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | ' | ||||||||||||||
A reconciliation of income tax expense (benefit) computed at the U.S. federal statutory tax rate to the Company’s effective tax rate is summarized as follows (in thousands): | |||||||||||||||
For the Year Ended | For the Three | For the Twelve | January 1, | ||||||||||||
December 31, | Months Ended | Months Ended | 2012 to | ||||||||||||
2013 | December 31, | September 30, | December 28, | ||||||||||||
2012 | 2012 | 2012 | |||||||||||||
Successor | Successor | Successor | Predecessor | ||||||||||||
Tax at U.S. Federal statutory rate | $ | -1,673 | $ | -2,262 | $ | -209 | $ | 148 | |||||||
Federal non-taxable entity | - | - | - | -148 | |||||||||||
State taxes, net of federal benefit | 295 | -92 | -37 | 108 | |||||||||||
Nondeductible costs and other acquisition **accounting adjustments | -291 | 116 | 33 | - | |||||||||||
Valuation allowance for deferred tax assets | 1,708 | 2,238 | 213 | - | |||||||||||
Total income tax expense | $ | 39 | $ | - | $ | - | $ | 108 | |||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | ||||||||||||||
Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): | |||||||||||||||
December 31, | |||||||||||||||
2013 | 2012 | ||||||||||||||
Deferred tax assets: | |||||||||||||||
Accounts Receivable | $ | 133 | $ | - | |||||||||||
Prepaid Expenses | - | 218 | |||||||||||||
Accrued Expenses | 571 | - | |||||||||||||
Intangibles | 4,327 | 1,932 | |||||||||||||
Stock Options | 771 | - | |||||||||||||
Debt | 806 | 10 | |||||||||||||
Net operating and capital loss carryforwards | 1,860 | 800 | |||||||||||||
Transaction Costs and Other | 764 | - | |||||||||||||
Total deferred tax assets | 9,232 | 2,960 | |||||||||||||
Valuation allowance for deferred tax assets | -4,196 | -2,487 | |||||||||||||
Deferred tax assets after valuation allowance | 5,036 | 473 | |||||||||||||
Deferred tax liabilities: | |||||||||||||||
Accounts Receivable | - | -416 | |||||||||||||
Prepaid Expenses | -135 | - | |||||||||||||
Property, equipment | -43 | -57 | |||||||||||||
Intangibles | -4,602 | -524 | |||||||||||||
Contingent Consideration | -239 | - | |||||||||||||
Debt | -256 | - | |||||||||||||
Net deferred tax liabilities | $ | -239 | $ | -524 | |||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
Future minimum lease payments under non-cancelable operating leases as of December 31, 2013 are as follows (in thousands): | |||||
2014 | $ | 801 | |||
2015 | $ | 793 | |||
2016 | $ | 402 | |||
2017 | $ | 146 | |||
2018 | $ | 147 | |||
Total | $ | 2,289 | |||
Segment_Tables
Segment (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | |||||||||||||
Segment operating results are presented below (in thousands). The results reflect revenues and expenses directly related to each segment. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not presented. | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||
General | ||||||||||||||
Payment Service | Payroll Service | Corporate/Other | Total | |||||||||||
Processing revenue | $ | 17,587 | $ | 13,318 | $ | - | $ | 30,905 | ||||||
Cost of processing revenue | 11,513 | 6,904 | - | 18,417 | ||||||||||
Selling, general and administrative expense | 4,717 | 3,830 | 2,508 | 11,055 | ||||||||||
Segment profit (loss) | $ | 1,357 | $ | 2,584 | $ | -2,508 | $ | 1,433 | ||||||
Total property and equipment | $ | 584 | $ | 665 | $ | 3 | $ | 1,252 | ||||||
Property and equipment additions | $ | 114 | $ | 141 | $ | 3 | $ | 258 | ||||||
Intangible assets and goodwill | $ | 34,002 | $ | 19,975 | $ | - | $ | 53,977 | ||||||
Intangible assets and goodwill additions | $ | 222 | $ | - | $ | - | $ | 222 | ||||||
Total segment assets | $ | 61,511 | $ | 55,792 | $ | 4,432 | $ | 121,735 | ||||||
Organization_and_Business_Oper1
Organization and Business Operations (Details Textual) (USD $) | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||||
Feb. 28, 2013 | 13-May-11 | Sep. 30, 2012 | 31-May-11 | Dec. 31, 2012 | Dec. 31, 2013 | Oct. 15, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-11 | 31-May-11 | Dec. 31, 2013 | 31-May-11 | |
Redeemable Convertible Series A Preferred Stock [Member] | Redeemable Convertible Series A Preferred Stock [Member] | Flexpoint [Member] | Flexpoint [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Share Repurchase Plan [Member] | Insider Warrants [Member] | Early Bird Capital Inc [Member] | Early Bird Capital Inc [Member] | Private Placement [Member] | ||||||||
Series A [Member] | Redeemable Convertible Series A Preferred Stock [Member] | CEO and President [Member] | Minimum [Member] | Maximum [Member] | Adc [Member] | Flexpoint [Member] | Trust Account [Member] | Subsequent Event [Member] | ||||||||||||||
Series A [Member] | ||||||||||||||||||||||
Business Acquisition, Planned Restructuring Activities, Description | 'redeem 100% of its public shares of common stock for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account including interest, less taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Issue Price | ' | $6 | ' | $6.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.50 |
Warrants Issued | ' | 12,000,000 | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 720,000 | ' | 6,240,000 |
Common stock, par value (in dollars per share) | ' | $0.00 | ' | ' | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment Warrants, Exercise Price | ' | ' | ' | $6.90 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Redemption Terms | ' | ' | ' | 'We had the ability to redeem the warrants at a price of $0.01 per warrant upon 30 days prior notice after the warrants become exercisable, only in the event that the last sale price of the common stock is at least $9.50 per share for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Warrants | ' | ' | ' | $100 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $72,720,000 | $360,000 | ' | $3,120,000 |
Units Issued During Period Value New Issues | ' | 69,366,994 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,480,000 | ' | ' | ' |
Adjustments to Additional Paid in Capital, Warrant Issued | ' | 3,480,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum Per Share Trading Value Of Common Stock On Failure To Consummate Business Combination | ' | ' | ' | $5.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Authorized Amount Per Month | ' | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of Public Offerings Shares Authorized for Repurchase | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased Per Month | ' | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments for Repurchase of Common Stock | ' | ' | ' | ' | 58,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,925,000 | ' | ' | ' | ' |
Stock Repurchased During Period, Shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 680,307 | ' | ' | ' | ' |
Minimum Percentage of Stockholders Exercising Redemption Rights for Cancellation of Business Combination | ' | ' | ' | ' | 93.10% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum Adjusted Percentage of Stockholders Exercising Redemption Rights for Cancellation of Business Combination | ' | ' | 87.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase or Decrease in Cash Held in Trust Account | ' | ' | ' | 8,050,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Redeemed or Called During Period, Shares | ' | ' | ' | 9,674,139 | 320,486 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted Cash and Cash Equivalents, Noncurrent | ' | ' | ' | ' | 1,948,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured Convertible Debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred Consideration Due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' |
Planned Capital Expenditures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | 300,000 | ' | ' | ' | ' | ' | ' | ' |
Secured Convertible Debt Repayable, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Obligation to Purchase Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-Term Debt, Current Maturities | ' | ' | ' | ' | 7,479,000 | 10,674,000 | ' | ' | ' | ' | ' | 3,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Related Parties, Current | ' | ' | ' | ' | 15,000 | ' | 147,000 | ' | ' | ' | ' | 492,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Damages Paid, Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,800,000 | ' |
Preferred Stock, Shares Issued | ' | ' | ' | ' | 0 | 0 | ' | 33,333 | 33,333 | ' | 33,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Value, Issued | ' | ' | ' | ' | 0 | 0 | ' | 8,221,000 | 0 | 30,000,000 | 10,000,000 | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' |
Common Stock, Value, Issued | ' | ' | ' | ' | $12,000 | $12,000 | ' | ' | ' | ' | ' | ' | $2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price | ' | ' | ' | ' | ' | $9.50 | ' | ' | ' | ' | ' | ' | $3 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business_Acquisitions_Details
Business Acquisitions (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Cash | $1,151 |
Accounts receivable | 3,069 |
Prepaid expenses and other assets | 4,763 |
Property and equipment, net | 1,382 |
Funds held for clients | 44,213 |
Goodwill | 30,944 |
Identifiable intangible assets | 25,052 |
Total assets acquired | 110,574 |
Accounts payable and accrued expenses | 4,969 |
Client fund obligations | 44,213 |
Deferred tax liability | 524 |
Promissory notes | 8,663 |
Total liabilities assumed | 58,369 |
Net assets acquired | $52,205 |
Business_Acquisitions_Details_
Business Acquisitions (Details 1) (Consolidated Entities [Member], USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2012 |
Consolidated Entities [Member] | ' |
Revenues | $31,093 |
Operating income | 624 |
Net Loss | ($2,381) |
Net Loss per share (Basic and Diluted) (in dollars per share) | ($0.21) |
Business_Acquisitions_Details_1
Business Acquisitions (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2012 | Dec. 31, 2013 | Dec. 28, 2012 | 13-May-11 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Trade Names [Member] | Customer Relationships [Member] | Adc [Member] | Adc [Member] | Adc [Member] | Wles [Member] | Wles [Member] | Wles [Member] | |||||
Customer Relationships [Member] | ||||||||||||
Business Acquisition, Cost of Acquired Entity, Cash Paid | ' | ' | ' | ' | ' | ' | $16,000,000 | ' | ' | $6,900,000 | ' | ' |
Business Acquisition Contingent Consideration Potential Cash Receipt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' |
Common stock issued for acquisitions (in shares) | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | 3,666,667 | 833,333 | ' |
Business Acquisition Common Share Price (in dollars per share) | ' | $9.50 | ' | ' | ' | ' | ' | ' | ' | ' | $8 | ' |
Common stock issued for acquisitions | 24,500,000 | ' | ' | ' | ' | ' | 5,250,000 | ' | ' | 19,250,000 | 5,000,000 | ' |
Business Acquisition, Purchase Price Allocation, Working Capital | ' | ' | ' | ' | ' | ' | 324,000 | ' | ' | ' | ' | ' |
Business Acquisition, Purchase Price Allocation, Additional, Cash Consideration | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' |
Business Acquisition, Purchase Price Allocation, Noncurrent Liabilities | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | 3,333,333 | ' | ' |
Business Acquisition, Contingent Consideration, At Fair Value, Noncurrent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 700,000 |
Fair Value Inputs, Discount Rate | ' | ' | ' | ' | ' | ' | 16.00% | ' | ' | ' | ' | ' |
Business Acquisition, Cost of Acquired Entity, Notes Issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,300,000 | ' | ' |
Business Acquisition, Cost of Acquired Entity Notes Issued Fair Value | ' | ' | ' | ' | ' | ' | 1,490,000 | ' | ' | 1,490,000 | ' | ' |
Contingent Consideration Classified As Equity, Fair Value Disclosure | 1,540,000 | 850,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,540,000 |
Business Acquisition Contingent Consideration Share Component Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | 840,000 | ' | 840,000 |
Common Stock, Par Or Stated Value Per Share | $0.00 | $0.00 | ' | $0.00 | ' | ' | ' | ' | ' | $0.00 | ' | ' |
Business Acquisitions Purchase Price Allocation Current Assets Cash and Cash Equivalents | ' | ' | ' | ' | ' | ' | 51,000 | ' | ' | 1,100,000 | ' | ' |
Business Acquisitions Purchase Price Allocation Current Assets Receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,540,000 | ' | ' |
Business Acquisitions Purchase Price Allocation Current Assets Prepaid Expense and Other Assets | ' | ' | ' | ' | ' | ' | 946,000 | ' | ' | 3,800,000 | ' | ' |
Business Acquisitions Purchase Price Allocation Noncurrent Assets | ' | ' | ' | ' | ' | ' | 735,000 | ' | ' | 647,000 | ' | ' |
Business Acquisitions Purchase Price Allocation Noncurrent Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,900,000 | ' | ' |
Business Acquisitions Purchase Price Allocation Intangible Assets Not Amortizable | ' | ' | 2,100,000 | ' | 1,500,000 | 8,600,000 | ' | ' | ' | 34,900,000 | ' | ' |
Business Acquisitions Purchase Price Allocation Goodwill Amount | ' | ' | ' | ' | ' | ' | 21,100,000 | ' | ' | 22,700,000 | ' | ' |
Business Acquisition Purchase Price Allocation Goodwill Amount Deferred Tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | 524,000 | ' | ' |
Business Combination Purchase Price Allocation Current Liabilities | ' | ' | ' | ' | ' | ' | ' | 1,720,000 | ' | ' | ' | ' |
Accounts Receivable, Net, Current | 3,069,000 | 2,089,000 | ' | ' | ' | ' | 1,530,000 | ' | ' | ' | ' | ' |
Business Acquisition, Purchase Price Allocation, Funds | ' | ' | ' | ' | ' | ' | 44,200,000 | ' | ' | ' | ' | ' |
Liabilities, Noncurrent | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' |
Business Acquisitions Purchase Price Allocation Amortizable Intangible Assets | ' | ' | $2,600,000 | ' | $250,000 | ' | $8,270,000 | ' | $9,950,000 | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative liabilities | $380,000 | $2,110,000 |
Contingent consideration | 850,000 | 1,540,000 |
Totals | 1,230,000 | 3,650,000 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Derivative liabilities | 0 | 0 |
Contingent consideration | 0 | 0 |
Totals | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Derivative liabilities | 0 | 0 |
Contingent consideration | 0 | 0 |
Totals | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Derivative liabilities | 380,000 | 2,110,000 |
Contingent consideration | 850,000 | 1,540,000 |
Totals | $1,230,000 | $3,650,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Fair Value, Inputs, Level 3 [Member] | ' |
Beginning balance | $3,650 |
Change in fair value of derivative liability | -1,730 |
Change in fair value of contingent cash consideration | -690 |
Totals | $1,230 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | |||
Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jan. 31, 2013 | |
Reserve for Losses and Loss Adjustment Expenses | ' | $262,000 | $200,000 | ' | ' |
Shares Issuable Upon Conversion Debt Instrument 1 | ' | 3,333,333 | ' | ' | ' |
Weighted Average Number of Shares, Contingently Issuable | ' | ' | 2,941,748 | ' | ' |
Fair Value Assumptions, Risk Free Interest Rate | ' | 0.13% | ' | ' | ' |
Fair Value Assumptions, Expected Dividend Rate | ' | 0.00% | ' | ' | ' |
Fair Value Assumptions, Expected Term | ' | '1 year | ' | ' | ' |
Fair Value Assumptions, Expected Volatility Rate | ' | 23.40% | ' | ' | ' |
Derivative Liability, Fair Value, Net | ' | 380,000 | ' | ' | ' |
Contingent consideration | ' | 850,000 | 1,540,000 | ' | ' |
Proceeds from Convertible Debt | 10,000,000 | ' | ' | ' | ' |
Liabilities, Fair Value Disclosure | ' | 1,230,000 | 3,650,000 | ' | ' |
Increase In Revenues And Cost Of Revenues | ' | 1,900,000 | ' | ' | ' |
Share Price | ' | $9.50 | ' | ' | ' |
Stock Issued During Period, Value, Acquisitions | ' | ' | 24,500,000 | ' | ' |
Business Acquisition Contingent Consideration Potential Cash Receipt | ' | 10,000 | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | ' | ' | 18,960,000 | ' |
Temporary equity, shares outstanding | ' | ' | 320,486 | ' | ' |
Financial Liabilities Fair Value Disclosure | ' | ' | ' | ' | 3,650,000 |
Stock Issued During Period, Value, Conversion of Convertible Securities | ' | 10,000,000 | ' | ' | ' |
Convertible Preferred Stock [Member] | ' | ' | ' | ' | ' |
Dilutive Securities Effect On Basic Earnings Per Share Secured Convertible Notes | ' | 3,333,333 | ' | ' | ' |
Employee Stock Option [Member] | ' | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | 104,167 | ' | ' | ' |
Common Stock [Member] | Pending Redemption [Member] | ' | ' | ' | ' | ' |
Temporary equity, shares outstanding | ' | ' | 320,486 | ' | ' |
Common Stock [Member] | Possible Redemption [Member] | ' | ' | ' | ' | ' |
Temporary equity, shares outstanding | ' | ' | ' | 10,494,067 | ' |
Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | ' | ' |
Contingent consideration | ' | 850,000 | 1,540,000 | ' | ' |
Liabilities, Fair Value Disclosure | ' | 1,230,000 | 3,650,000 | ' | ' |
Change in fair value of derivative liability | ' | 1,730,000 | ' | ' | ' |
Machinery and Equipment [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | '15 years | ' | ' | ' |
Machinery and Equipment [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | '5 years | ' | ' | ' |
Furniture and Fixtures [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | '10 years | ' | ' | ' |
Furniture and Fixtures [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | '5 years | ' | ' | ' |
Ten Lords Ltd [Member] | ' | ' | ' | ' | ' |
Shares Issuable Upon Conversion Debt Instrument | ' | ' | 1,941,748 | ' | ' |
Shares Issuable Upon Conversion Debt Instrument 1 | ' | ' | 1,000,000 | ' | ' |
Ten Lords Ltd [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' | ' | ' | ' |
Liabilities, Fair Value Disclosure | ' | 0 | 320,000 | ' | ' |
Change in fair value of derivative liability | ' | 320,000,000 | ' | ' | ' |
Wles [Member] | ' | ' | ' | ' | ' |
Fair Value Assumptions, Risk Free Interest Rate | ' | 1.27% | ' | ' | ' |
Fair Value Assumptions, Expected Dividend Rate | ' | 0.00% | ' | ' | ' |
Fair Value Assumptions, Expected Term | ' | '4 years | ' | ' | ' |
Fair Value Assumptions, Expected Volatility Rate | ' | 28.10% | ' | ' | ' |
Common stock issued for acquisitions (in shares) | 3,666,667 | 833,333 | ' | ' | ' |
Contingent consideration | ' | ' | 1,540,000 | ' | ' |
Business Acquisition Contingent Consideration Share Component Value | 840,000 | ' | 840,000 | ' | ' |
Business Acquisition, Contingent Consideration, At Fair Value, Noncurrent | ' | ' | 700,000 | ' | ' |
Share Price | ' | $8 | ' | ' | ' |
Stock Issued During Period, Value, Acquisitions | $19,250,000 | $5,000,000 | ' | ' | ' |
Cash_and_Cash_Equivalents_Held1
Cash and Cash Equivalents Held in Trust Account (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Cash and cash equivalents held in Trust | $0 | $1,948 |
Allowance_for_Doubtful_Account2
Allowance for Doubtful Accounts (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 28, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | |
Accounts Receivable, Net [Line Items] | ' | ' | ' | ' |
Balance at beginning of period | $0 | $0 | $0 | $0 |
Additions (charged to expense) | 0 | 27 | 0 | 348 |
Deductions | 0 | 0 | 0 | -245 |
Balance at end of period | $0 | $27 | $0 | $103 |
Property_and_Equipment_net_of_2
Property and Equipment, net of Accumulated Depreciation (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Total property and equipment | $1,640 | $1,382 |
Less: Accumulated depreciation | -388 | 0 |
Property and equipment, net | 1,252 | 1,382 |
Leasehold Improvements [Member] | ' | ' |
Total property and equipment | 327 | 275 |
Equipment [Member] | ' | ' |
Total property and equipment | 507 | 442 |
Furniture and Fixtures [Member] | ' | ' |
Total property and equipment | 195 | 176 |
Computer Software [Member] | ' | ' |
Total property and equipment | 414 | 334 |
Vehicles [Member] | ' | ' |
Total property and equipment | $197 | $155 |
Property_and_Equipment_net_of_3
Property and Equipment, net of Accumulated Depreciation (Details Textual) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 28, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 |
Predecessor [Member] | Successor [Member] | Successor [Member] | Successor [Member] | |
Depreciation expenses | $140 | $0 | $388 | $0 |
Goodwill_Details
Goodwill (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Line Items] | ' | ' |
Beginning Balance | $30,944 | $0 |
Acquisition | ' | 0 |
Measurement period adjustment | 222 | ' |
Ending Balance | 31,166 | 30,944 |
Jetpay [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Acquisition | ' | 22,679 |
Adc [Member] | ' | ' |
Goodwill [Line Items] | ' | ' |
Acquisition | ' | $8,265 |
Goodwill_Details_Textual
Goodwill (Details Textual) (USD $) | Dec. 31, 2013 |
Business Acquisition Purchase Price Allocation For Note Payable | $222,000 |
Identifiable_Intangible_Assets2
Identifiable Intangible Assets (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Amortized intangible assets: | ' | ' |
Total amortized intangible assets | $23,512 | $23,512 |
Less: Accumulated amortization | 2,241 | 0 |
Total amortized intangibles, net | 21,271 | 23,512 |
Non-Amortized intangible assets: | ' | ' |
Tradenames | 1,540 | 1,540 |
Total identifiable intangible assets | 22,811 | 25,052 |
Computer Software, Intangible Asset [Member] | ' | ' |
Amortized intangible assets: | ' | ' |
Total amortized intangible assets | 4,650 | 4,650 |
Customer Relationships [Member] | ' | ' |
Amortized intangible assets: | ' | ' |
Total amortized intangible assets | 18,612 | 18,612 |
Trade Names [Member] | ' | ' |
Amortized intangible assets: | ' | ' |
Total amortized intangible assets | $250 | $250 |
Identifiable_Intangible_Assets3
Identifiable Intangible Assets (Details 1) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets [Line Items] | ' |
2014 | $2,241 |
2015 | 2,241 |
2016 | 2,157 |
2017 | 2,157 |
2018 | 2,157 |
Thereafter | $10,318 |
Identifiable_Intangible_Assets4
Identifiable Intangible Assets (Details Textual) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 |
Indefinite-lived Intangible Assets [Line Items] | ' | ' | ' |
Finite-Lived Intangible Asset, Weighted Average Period before Next Renewal or Extension | ' | '9 years 10 months 24 days | ' |
Successor [Member] | ' | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' | ' |
Amortization Of Intangible Assets | $0 | $2,241 | $0 |
Deferred_Financing_Costs_Detai
Deferred Financing Costs (Details Textual) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2012 | |
Deferred Financing Costs [Line Items] | ' | ' | ' |
Deferred Finance Costs, Net | $23,000 | $4,400,000 | ' |
Payments of Financing Costs | ' | 4,400,000 | ' |
Shares Of Common Stock On Deferred Finance Costs | ' | 832,698 | ' |
Price Per Share On Deferred Finance Costs | ' | $5.25 | ' |
Loans Payable | 9,000,000 | ' | ' |
Accumulated Amortization, Deferred Finance Costs | 2,058,000 | ' | 0 |
Amortization Of Financing Costs | 2,060,000 | ' | ' |
Unamortized Deferred Financing Costs | $2,300,000 | ' | ' |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Trade accounts payable | $2,105 | $2,852 |
Contingency accrual | 2,811 | 2,136 |
ACH clearing liability | 1,554 | 529 |
Accrued compensation | 1,157 | 956 |
Accrued agent commissions | 728 | 344 |
Related party payables | 115 | 285 |
Other | 3,684 | 1,182 |
Total | $12,154 | $8,284 |
Notes_Payable_to_Stockholders_
Notes Payable to Stockholders (Details Textual) (USD $) | Dec. 31, 2013 | Oct. 15, 2013 |
Notes Payable to Stockholders [Line Items] | ' | ' |
Noninterest-bearing Deposit Liabilities | $15,000 | ' |
Repayment Of Notes Payable | ' | 15,000 |
Chief Executive Officer [Member] | ' | ' |
Notes Payable to Stockholders [Line Items] | ' | ' |
Notes Payable To Stockholders | $425,880 | ' |
LongTerm_Debt_and_Notes_Payabl2
Long-Term Debt and Notes Payable (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ' | ' |
Less current portion | ($10,674) | ($7,479) |
Long-term Debt, Excluding Current Maturities | 8,071 | 17,090 |
Successor [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 18,745 | 24,569 |
Less current portion | -10,674 | -7,479 |
Long-term Debt, Excluding Current Maturities | 8,071 | 17,090 |
Successor [Member] | Note Holders [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 8,883 | 7,890 |
Successor [Member] | Ten Lords Ltd [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 0 | 6,180 |
Successor [Member] | Metro Bank [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 7,714 | 9,000 |
Successor [Member] | Wles [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 1,626 | 1,486 |
Successor [Member] | StockHolders [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | 492 | 0 |
Successor [Member] | JetPay And ADC [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Long-term Debt | $30 | $13 |
LongTerm_Debt_and_Notes_Payabl3
Long-Term Debt and Notes Payable (Details Textual) (USD $) | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 28, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2012 |
Stockholders [Member] | Note Holders [Member] | Note Holders [Member] | Ten Lords Ltd [Member] | Ten Lords Ltd [Member] | Ten Lords Ltd [Member] | Ten Lords Ltd [Member] | Metro Bank [Member] | Metro Bank [Member] | Wles [Member] | Wles [Member] | Wles [Member] | Convertible Note Agreement [Member] | Convertible Note Agreement [Member] | Loan and Security Agreement [Member] | Loan and Security Agreement [Member] | Note and Indemnity Side Agreement [Member] | Jetpay [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Predecessor [Member] | Predecessor [Member] | Predecessor [Member] | Ten Lords Ltd [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate During Period | ' | ' | 4.00% | 12.00% | ' | ' | ' | ' | 6.25% | 4.00% | 4.00% | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Maturity Date | ' | ' | 31-Jul-14 | 31-Dec-14 | ' | ' | ' | ' | ' | 28-Dec-19 | ' | 31-Dec-17 | ' | ' | 31-Dec-14 | ' | 28-Dec-19 | ' | ' | ' | ' |
Debt Instrument On Unamortized Discount and Derivative Liability | ' | ' | ' | $1,120,000 | $2,110,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate Terms | ' | ' | ' | ' | ' | '9.5% from December 29, 2012 through June 26, 2013 and 13.5% from June 26, 2013 to October 11, 2013 payable in monthly payments of principal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Periodic Payment, Interest | ' | ' | ' | ' | ' | ' | 63,809 | ' | ' | 107,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Annual Principal Payment | ' | ' | ' | ' | ' | ' | 5,870,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Unamortized Premium | ' | ' | ' | ' | ' | ' | 180,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Unamortized Discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 705,770 | 845,900 | ' | ' | ' | ' | ' | ' | 320,000 |
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | 11,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Maturities, Repayments of Principal after Year Five | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Total | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate at Period End | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | 4.00% | 5.00% | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | $6 | ' | ' | ' | ' | ' | ' | ' | $5.15 | ' | ' | ' | ' | ' |
Debt Instrument Reduced Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3 | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | 2,331,369 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | ' | ' | ' |
Equal Monthly Installments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 107,143 | ' | ' | ' | ' |
Proceeds from Notes Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,331,369 | ' | ' |
Debt Instrument Amount Outstanding | ' | $8,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $6,000,000 | ' |
Redeemable_Convertible_Preferr1
Redeemable Convertible Preferred Stock (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||
Dec. 31, 2013 | Dec. 31, 2012 | Oct. 31, 2013 | Oct. 11, 2013 | Dec. 31, 2013 | Oct. 31, 2013 | Oct. 13, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | |
Ten Lords Ltd [Member] | Flexpoint Securities Purchase Agreement [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member] | Tranche A [Member] | Tranche B [Member] | Tranche C [Member] | |||
Flexpoint Securities Purchase Agreement [Member] | Flexpoint Securities Purchase Agreement [Member] | Flexpoint Securities Purchase Agreement [Member] | Flexpoint Securities Purchase Agreement [Member] | Flexpoint Securities Purchase Agreement [Member] | ||||||
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | 33,333 | ' | ' | ' | ' |
Preferred Stock, Par Or Stated Value Per Share | $0.00 | $0.00 | ' | ' | ' | ' | $0.00 | ' | ' | ' |
Stock Issued During Period, Value, New Issues | ' | ' | ' | ' | ' | $10,000,000 | ' | ' | ' | ' |
Maximum Number Of Shares To Be Sold | ' | ' | ' | ' | ' | ' | 134,000 | ' | ' | ' |
Maximum Number Of Shares To Be Sold Value | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' |
Initial Proceeds From Sale Of Trading Securities | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' |
Repayments of Notes Payable | ' | ' | 5,870,000 | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Conversion Basis | ' | ' | ' | ' | 'The Series A Preferred is convertible into shares of the Company’s common stock, par value $0.001. Any holder of Series A Preferred may at any time convert such holder’s shares of Series A Preferred into that number of shares of Common Stock equal to the number of shares of Series A Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, initially $3.00. The conversion price of the Series A Preferred is subject to downward adjustment upon the occurrence of certain events | ' | ' | ' | ' | ' |
Preferred Stock, Value, Issued | 0 | 0 | ' | ' | ' | ' | ' | 10,000,000 | 10,000,000 | 20,000,000 |
Sale of Stock, Price Per Share | ' | ' | ' | $300 | ' | ' | ' | ' | ' | ' |
Preferred Stock, Liquidation Preference Per Share | ' | ' | ' | $600 | ' | ' | ' | ' | ' | ' |
Preferred Stock, Shares Issued | 0 | 0 | ' | ' | 33,333 | ' | ' | ' | ' | ' |
Adjustments To Additional Paid In Capital Convertible Preferred Stock | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' |
Adjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred Stock | ' | ' | ' | ' | $360,000 | ' | ' | ' | ' | ' |
Noncompliance Event Description | 'An “Event of Noncompliance” shall have occurred if: i) the Company fails to make any required redemption payment with respect to the Preferred Stock; ii) the Company breaches the Securities Purchase Agreement after the Initial Closing, and such breach has not been cured with thirty days after receipt of notice thereof; iii) the Company or any subsidiary makes an assignment for the benefit of creditors, admits its insolvency or is the subject of an order, judgment or decree adjudicating such entity as insolvent, among other similar actions; iv) a final judgment in excess of $5,000,000 is rendered against the Company or any subsidiary that is not discharged within 60 days thereafter; or v) an event of default has occurred under either the Secured Convertible Note Agreement or the Loan and Security Agreement, dated as of December 28, 2012 by and among ADC, PTFS and Metro Bank, and such event of default has not been cured within thirty days after receipt of notice thereof. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Options outstanding at December 31, 2012 - Number of Options (in shares) | 0 |
Granted - Number of Options (in shares) | 1,000,000 |
Forfeited - Number of Options (in shares) | 0 |
Exercised - Number of Options (in shares) | 0 |
Options outstanding at December 31, 2013 - Number of Options (in shares) | 1,000,000 |
Options exercisable at December 31, 2013 - Number of Options (in shares) | 104,167 |
Shares available for granting of options | 1,000,000 |
Options outstanding - at December 31, 2012 Weighted Average Exercise Price (in dollars per share) | $0 |
Granted - Weighted Average Exercise Price (in dollars per share) | $3.03 |
Forfeited - Weighted Average Exercise Price (in dollars per share) | $0 |
Exercised - Weighted Average Exercise Price (in dollars per share) | $0 |
Options outstanding at December 31, 2013 - Weighted Average Exercise Price (in dollars per share) | $3.03 |
Shareholder_Equity_Details_1
Shareholder' Equity (Details 1) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum Exercise Price [Member] | ' |
Shareholders Equity Note [Line Items] | ' |
Range of Exercise Prices | $3 |
Number Of Options Outstanding | 675,000 |
Options Outstanding, Weighted Average Remaining Remaining Contractual Life | '9 years 10 months 24 days |
Options Outstanding, Weighted Average Exercise Price | $3 |
Number Of Exercisable Outstanding | 0 |
Options Exercisable, Weighted Average Remaining Contractual Life | '0 years |
Options Exercisable, Weighted Average Exercise Price | $0 |
Maximum Exercise Price [Member] | ' |
Shareholders Equity Note [Line Items] | ' |
Number Of Options Outstanding | 325,000 |
Options Outstanding, Weighted Average Remaining Remaining Contractual Life | '9 years 8 months 12 days |
Options Outstanding, Weighted Average Exercise Price | $3.10 |
Range of Exercise Prices | $3.10 |
Number Of Exercisable Outstanding | 104,167 |
Options Exercisable, Weighted Average Remaining Contractual Life | '9 years 8 months 12 days |
Options Exercisable, Weighted Average Exercise Price | $3.10 |
Shareholders_Equity_Details_Te
Shareholders' Equity (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 28, 2012 | Apr. 26, 2013 | Dec. 31, 2012 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 28, 2012 | Dec. 28, 2012 | Apr. 26, 2013 | Dec. 28, 2012 | Dec. 12, 2013 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Private Placement [Member] | Wellington Capital Management Companys Llp [Member] | Wellington Capital Management Companys Llp [Member] | Ten Lords Ltd [Member] | Consultant Service [Member] | Warrant [Member] | Stock Incentive Plan [Member] | Stock Incentive Plan [Member] | Stock Incentive Plan [Member] | Stock Incentive Plan [Member] | Stock Incentive Plan [Member] | |||||
Maximum [Member] | Minimum [Member] | ||||||||||||||
Preferred Stock, Shares Authorized | 1,000,000 | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Par or Stated Value Per Share | $0.00 | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 11,529,094 | ' | 10,000 | 11,519,094 | 4,666,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | '9 years 9 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,000,000 | ' | ' | ' | ' | ' | 386,811 | ' | ' | ' | 675,000 | 325,000 | ' | ' | ' |
ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePrice | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | $3 | $3.10 | ' | ' | ' |
Stock Issued During Period, Value, Stock Options Exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $979,000 | ' | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Exercisable Options, Weighted Average Remaining Contractual Term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years 3 months | '5 years 9 months |
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Volatility Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45.17% | 38.23% |
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Risk Free Interest Rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.10% | 1.75% |
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | ' | ' |
Allocated Share-based Compensation Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 194,000 | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 785,000 | ' | ' |
Stock Issued During Period, Value, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | 37,400 | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | 2,030,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | ' | ' | ' | ' | ' | ' | $5.25 | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of Stock, Shares Converted | ' | 2,527,359 | ' | ' | ' | ' | ' | 1,000,000 | ' | 18,960,000 | ' | ' | ' | ' | ' |
Common Stock Shares Subject To Forfeiture | 1,941,748 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Debt | ' | ' | ' | ' | ' | ' | ' | $6,000,000 | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | $6 | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 28, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | |
Current: | ' | ' | ' | ' |
Federal | $0 | $0 | $0 | $0 |
State | 0 | 323 | 0 | 108 |
Deferred: | ' | ' | ' | ' |
Federal | -2,146 | -2,058 | -181 | 0 |
State | -92 | 66 | -32 | ' |
Change in valuation allowance | 2,238 | 1,708 | 213 | 0 |
Total income tax expense | $0 | $39 | $0 | $108 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Sep. 30, 2012 | Dec. 28, 2012 |
Successor [Member] | Successor [Member] | Successor [Member] | Predecessor [Member] | |
Reconciliation Of Income Tax Benefit Computation [Line Items] | ' | ' | ' | ' |
Tax at U.S. Federal statutory rate | ($2,262) | ($1,673) | ($209) | $148 |
Federal non-taxable entity | 0 | 0 | 0 | -148 |
State taxes, net of federal benefit | -92 | 295 | -37 | 108 |
Nondeductible costs and other acquisition **accounting adjustments | 116 | -291 | 33 | 0 |
Valuation allowance for deferred tax assets | 2,238 | 1,708 | 213 | 0 |
Total income tax expense | $0 | $39 | $0 | $108 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Accounts Receivable | $133 | $0 |
Prepaid Expenses | 0 | 218 |
Accrued Expenses | 571 | 0 |
Intangibles | 4,327 | 1,932 |
Stock Options | 771 | 0 |
Debt | 806 | 10 |
Net operating and capital loss carryforwards | 1,860 | 800 |
Transaction Costs and Other | 764 | 0 |
Total deferred tax assets | 9,232 | 2,960 |
Valuation allowance for deferred tax assets | -4,196 | -2,487 |
Deferred tax assets after valuation allowance | 5,036 | 473 |
Deferred tax liabilities: | ' | ' |
Accounts Receivable | 0 | -416 |
Prepaid Expenses | -135 | 0 |
Property, equipment | -43 | -57 |
Intangibles | -4,602 | -524 |
Contingent Consideration | -239 | 0 |
Debt | -256 | 0 |
Net deferred tax liabilities | ($239) | ($524) |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred Tax Assets, Valuation Allowance | $4,196,000 | $2,487,000 |
Successor [Member] | ' | ' |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 5,330,000 | 734,000 |
Income Tax Reconciliation, Change in Deferred Tax Assets Valuation Allowance | 1,710,000 | ' |
Deferred Tax Assets, Valuation Allowance | $4,200,000 | ' |
Operating Loss Carryforward Expiration Date | '2033 | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Future Minimum Lease Payments Operating Leases [Line Items] | ' |
2014 | $801 |
2015 | 793 |
2016 | 402 |
2017 | 146 |
2018 | 147 |
Total | $2,289 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||
Aug. 23, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 21, 2013 | Mar. 03, 2014 | Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 28, 2012 | Mar. 03, 2014 | Feb. 03, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 31, 2014 | |
Subsequent Event [Member] | Predecessor [Member] | Predecessor [Member] | Successor [Member] | Early Bird Capital Inc [Member] | Early Bird Capital Inc [Member] | Early Bird Capital Inc [Member] | Merrick Bank [Member] | Merrick Bank [Member] | Merrick Bank [Member] | Merrick Bank [Member] | Jp Morgan Chase [Member] | M and A Ventures [Member] | M and A Ventures [Member] | Chartis Insurance [Member] | |||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||||||||||||
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fees and Commissions | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,070,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Damages Sought, Value | 2,000,000 | ' | ' | ' | 740,000 | ' | ' | ' | ' | ' | 2,070,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts Payable and Accrued Liabilities | ' | ' | 2,136,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Merchant Chargeback's | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' |
Cash Reserves | ' | 5,040,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss Contingency, Loss in Period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' |
Legal Fees | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 597,000 | 597,000 | 1,947,000 | ' | ' | ' | ' |
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,333,333 | ' | ' | ' | 3,333,333 | ' | ' | ' |
Letters of Credit Outstanding, Amount | ' | 100,000 | ' | 1,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal Fees and Interest Costs | ' | ' | ' | ' | ' | ' | ' | ' | 675,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | ' | 516,500 | 474,000 | ' | ' | 41,756 | 196,700 | 842,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Litigation Settlement, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | 1,900,000 |
Payments for Legal Settlements | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' |
Litigation Settlement, Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400,000 | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
Jun. 30, 2013 | Feb. 28, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 15, 2013 | Dec. 28, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 07, 2013 | Jul. 31, 2014 | Dec. 31, 2013 | |
sqft | Subsequent Event [Member] | Jt Holdings [Member] | Adc Stockholders [Member] | PTFS [Member] | PTFS [Member] | Trent Voigt [Member] | Trent Voigt [Member] | Trent Voigt [Member] | Jetpay [Member] | ||||||
sqft | sqft | Subsequent Event [Member] | |||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan advances received prior to repayments | ' | ' | ' | $425,880 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes Payable, Related Parties, Current | ' | ' | ' | 15,000 | 147,000 | ' | 492,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Area of Land | ' | ' | 22,500 | ' | ' | ' | ' | 1,600 | ' | 4,300 | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | ' | ' | 516,500 | 474,000 | ' | ' | ' | ' | ' | 107,400 | 99,530 | ' | ' | ' | ' |
Receivable from Stockholders Towards Overpayment | ' | ' | ' | ' | ' | ' | ' | ' | 450,776 | ' | ' | ' | ' | ' | ' |
Payments for Rent | ' | ' | 36,000 | 36,000 | ' | ' | ' | 3,000 | ' | ' | ' | ' | ' | ' | ' |
Notes Issued | 60,000 | 72,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Monthly Rent Expense | ' | ' | 41,750 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease Rent Annual Increase Percentage | ' | ' | 4.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease Term | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Of Share Of Total Expenses Payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% | ' | ' | ' | ' | ' |
Administrative Fee Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | 4.00% | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | 4.00% | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | 2,331,369 | ' | ' | ' | ' | ' | ' | 491,693 | ' | ' |
Interest Expense, Related Party | ' | ' | $855 | ' | ' | ' | ' | ' | ' | ' | ' | $11,318 | ' | ' | $117,864 |
Segment_Details
Segment (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | ' | ' |
Processing revenue | $30,905 | ' |
Cost of processing revenue | 18,417 | ' |
Selling, general and administrative expense | 11,055 | ' |
Segment profit (loss) | 1,433 | ' |
Total property and equipment | 1,252 | 1,382 |
Property and equipment additions | 258 | ' |
Intangible assets and goodwill | 53,977 | ' |
Intangible assets and goodwill additions | 22,811 | 25,052 |
Total segment assets | 121,735 | 117,047 |
Payment Service [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Processing revenue | 17,587 | ' |
Cost of processing revenue | 11,513 | ' |
Selling, general and administrative expense | 4,717 | ' |
Segment profit (loss) | 1,357 | ' |
Total property and equipment | 584 | ' |
Property and equipment additions | 114 | ' |
Intangible assets and goodwill | 34,002 | ' |
Intangible assets and goodwill additions | 222 | ' |
Total segment assets | 61,511 | ' |
Payroll Service [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Processing revenue | 13,318 | ' |
Cost of processing revenue | 6,904 | ' |
Selling, general and administrative expense | 3,830 | ' |
Segment profit (loss) | 2,584 | ' |
Total property and equipment | 665 | ' |
Property and equipment additions | 141 | ' |
Intangible assets and goodwill | 19,975 | ' |
Intangible assets and goodwill additions | 0 | ' |
Total segment assets | 55,792 | ' |
General Corporate Other [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Processing revenue | 0 | ' |
Cost of processing revenue | 0 | ' |
Selling, general and administrative expense | 2,508 | ' |
Segment profit (loss) | -2,508 | ' |
Total property and equipment | 3 | ' |
Property and equipment additions | 3 | ' |
Intangible assets and goodwill | 0 | ' |
Intangible assets and goodwill additions | 0 | ' |
Total segment assets | $4,432 | ' |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 28, 2012 | Dec. 31, 2012 | Mar. 03, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |
Subsequent Event [Member] | Ebc [Member] | Series A Preferred Stock [Member] | ||||
Ebc [Member] | ||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Litigation Claim Cash Fee | ' | $2,070,000 | ' | ' | ' | ' |
Loss Contingency, Damages Awarded, Value | ' | ' | ' | 2,070,000 | ' | ' |
Loss Contingency Accrual, Beginning Balance | ' | ' | 2,136,000 | ' | ' | ' |
Legal Fees | 1,300,000 | ' | ' | ' | 675,000 | ' |
Interest, attorney's fees and expenses | ' | ' | ' | 740,000 | ' | ' |
Proceeds from Issuance of Convertible Preferred Stock | ' | ' | ' | ' | ' | 1,400,000 |
Proceeds from Issuance of Common Stock | ' | ' | ' | ' | $1,000,000 | ' |
Common Stock Price Per Share | ' | ' | ' | ' | $3 | ' |