Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 11, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | JetPay Corp | |
Entity Central Index Key | 1,507,986 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | JTPY | |
Entity Common Stock, Shares Outstanding | 13,892,990 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - Class of Stock [Domain] - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 5,228 | $ 5,359 |
Restricted cash | 231 | 1,386 |
Accounts receivable, less allowance for doubtful accounts | 1,899 | 2,634 |
Settlement processing assets | 13,362 | 18,893 |
Prepaid expenses and other current assets | 601 | 828 |
Current assets before funds held for clients | 21,321 | 29,100 |
Funds held for clients | 34,366 | 40,833 |
Total current assets | 55,687 | 69,933 |
Property and equipment, net | 1,287 | 1,226 |
Goodwill | 41,760 | 41,760 |
Identifiable intangible assets, net of accumulated amortization of $6,155 at June 30, 2015 and $4,620 at December 31, 2014 | 25,357 | 26,892 |
Deferred financing costs, net of accumulated amortization of $4,396 at June 30, 2015 and $4,376 at December 31, 2014 | 113 | 89 |
Other assets | 4,547 | 4,502 |
Total assets | 128,751 | 144,402 |
Current liabilities: | ||
Current portion of long-term debt and capital lease obligations | 2,368 | 1,571 |
Accounts payable and accrued expenses | 8,532 | 9,153 |
Settlement processing liabilities | 12,408 | 18,024 |
Deferred revenue | 298 | 520 |
Other current liabilities | 1,400 | 3,250 |
Current liabilities before client fund obligations | 25,006 | 32,518 |
Client fund obligations | 34,366 | 40,833 |
Total current liabilities | 59,372 | 73,351 |
Long-term debt and capital lease obligations, net of current portion | 14,752 | 14,795 |
Deferred income taxes | 284 | 284 |
Other liabilities | 176 | 1,411 |
Total liabilities | $ 74,584 | $ 89,841 |
Commitments and Contingencies | ||
Redeemable Convertible Preferred Stock; | ||
Redeemable convertible Series A and Series A-1 preferred stock, $0.001 par value per share, 97,498 shares issued and outstanding at June 30, 2015 and December 31, 2014 (liquidation preference of $58,500 at June 30, 2015) | $ 32,244 | $ 29,779 |
Stockholders’ Equity | ||
Preferred stock, $0.001 par value Authorized 1,000,000 shares, none issued | 0 | 0 |
Common stock, $0.001 par value Authorized 100,000,000 shares; 13,892,990 and 13,863,823 issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 14 | 14 |
Additional paid-in capital | 41,698 | 43,942 |
Accumulated deficit | (19,789) | (19,174) |
Total Stockholders’ Equity | 21,923 | 24,782 |
Total Liabilities and Stockholders’ Equity | $ 128,751 | $ 144,402 |
Consolidated Balance Sheets _Pa
Consolidated Balance Sheets [Parenthetical] - Class of Stock [Domain] - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 6,155 | $ 4,620 |
Accumulated Amortization, Deferred Finance Costs | $ 4,396 | $ 4,376 |
Temporary Equity, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary Equity, Shares Issued | 97,498 | 97,498 |
Temporary Equity, Shares Outstanding | 97,498 | 97,498 |
Temporary Equity, Liquidation Preference | $ 58,500 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 13,892,990 | 13,863,823 |
Common stock, shares outstanding | 13,892,990 | 13,863,823 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Processing revenues | $ 10,566 | $ 7,726 | $ 21,410 | $ 15,895 |
Cost of processing revenues | 6,520 | 4,733 | 12,976 | 9,421 |
Gross profit | 4,046 | 2,993 | 8,434 | 6,474 |
Selling, general and administrative expenses | 3,194 | 3,408 | 6,576 | 6,183 |
Change in fair value of contingent consideration liability | 26 | (8) | 37 | (8) |
Amortization of intangibles | 767 | 560 | 1,535 | 1,120 |
Depreciation | 115 | 103 | 224 | 206 |
Operating income (loss) | (56) | (1,070) | 62 | (1,027) |
Other expenses (income) | ||||
Interest expense | 206 | 409 | 403 | 815 |
Amortization of deferred financing costs | 11 | 571 | 17 | 1,125 |
Amortization of debt discounts and conversion options | 81 | 381 | 159 | 750 |
Change in fair value of derivative liability | 0 | (110) | 0 | (60) |
Other income | (2) | (2) | (3) | (4) |
Loss before income taxes | (352) | (2,319) | (514) | (3,653) |
Income tax expense | 43 | 52 | 101 | 104 |
Net loss | (395) | (2,371) | (615) | (3,757) |
Accretion of convertible preferred stock | (1,249) | (538) | (2,465) | (1,047) |
Net loss applicable to common stockholders | $ (1,644) | $ (2,909) | $ (3,080) | $ (4,804) |
Basic and diluted loss per share applicable to common stockholders (in dollars per share) | $ (0.12) | $ (0.25) | $ (0.22) | $ (0.41) |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 13,867,990 | 11,852,834 | 13,865,918 | 11,692,329 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2014 | $ 24,782 | $ 14 | $ 43,942 | $ (19,174) |
Balance (in shares) at Dec. 31, 2014 | 13,863,823 | |||
Stock issued as compensation | 79 | $ 0 | 79 | 0 |
Stock issued as compensation (in shares) | 29,167 | |||
Stock-based compensation expense | 142 | $ 0 | 142 | 0 |
Accretion of convertible preferred stock to redemption value | (2,465) | 0 | (2,465) | 0 |
Net loss | (615) | 0 | 0 | (615) |
Balance at Jun. 30, 2015 | $ 21,923 | $ 14 | $ 41,698 | $ (19,789) |
Balance (in Shares) at Jun. 30, 2015 | 13,892,990 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating Activities | ||
Net loss | $ (615) | $ (3,757) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 224 | 206 |
Stock-based compensation | 142 | 168 |
Common stock issued as compensation | 79 | 6 |
Amortization of intangibles | 1,535 | 1,120 |
Amortization of deferred financing costs | 17 | 1,125 |
Amortization of debt discounts and conversion options | 159 | 750 |
Change in fair value of contingent consideration liability | 37 | (8) |
Change in fair value of derivative liability | 0 | (60) |
Loss on disposal of fixed assets | 0 | 237 |
Change in operating assets and liabilities: | ||
Restricted cash | 1,155 | (48) |
Accounts receivable | 735 | 769 |
Settlement processing assets and obligations, net | (85) | (134) |
Prepaid expenses and other current assets | 227 | (83) |
Other assets | (45) | 245 |
Deferred revenue | (222) | (211) |
Accounts payable and accrued expenses | (621) | (3,334) |
Net cash provided by (used in) operating activities | 2,722 | (3,009) |
Investing Activities | ||
Net decrease (increase) in restricted cash and cash equivalents held to satisfy client fund obligations | 6,467 | (15,591) |
Payment of deferred acquisition consideration | (2,850) | 0 |
Purchase of property and equipment | (293) | (142) |
Proceeds on sale of property and equipment | 8 | 0 |
Net cash provided by (used in) investing activities | 3,332 | (15,733) |
Financing Activities | ||
Payments on long-term debt | (678) | (657) |
Net (decrease) increase in client funds obligations | (6,467) | 15,591 |
Proceeds from notes payable | 1,000 | 0 |
Deferred financing fees associated with new borrowings | (40) | 0 |
Proceeds from issuance of common stock | 0 | 1,000 |
Proceeds from sale of preferred stock, net of issuance costs | 0 | 2,126 |
Net cash (used in) provided by financing activities | (6,185) | 18,060 |
Net decrease in cash and cash equivalents | (131) | (682) |
Cash and cash equivalents, beginning | 5,359 | 4,799 |
Cash and cash equivalents, ending | 5,228 | 4,117 |
Supplement disclosure of cash flow information: | ||
Cash paid for interest | 634 | 750 |
Cash paid for taxes | 160 | 229 |
Summary of non-cash investing and financing activities: | ||
Promissory note issued to satisfy deferred consideration | $ 350 | $ 0 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Note 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for fair presentation of the consolidated financial statements of JetPay Corporation and its subsidiaries (collectively, the “Company” or “JetPay”) as of June 30, 2015 and 2014. The results of operations for the six months ended June 30, 2015 and 2014 are not necessarily indicative of the operating results for the full year. It is recommended that these consolidated financial statements be read in conjunction with the consolidated financial statements and related disclosures for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 25, 2015. |
Organization and Business Opera
Organization and Business Operations | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 2. Organization and Business Operations 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. 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 Company currently operates in two business segments: the JetPay Payment Processing Segment, which is an end-to-end processor of credit and debit card and ACH payment transactions, with a focus on those processing internet transactions and recurring billings as well as traditional retailers and service providers; and the JetPay Payroll Segment, which is a full-service payroll and related payroll tax payment processor, and a provider of human resource, time and labor management, and other payroll related services. The Company also initiated operations of JetPay Card Services in the fourth quarter of 2013, a division focused on providing low-cost money management and payment services to un-banked and under-banked employees of its business customers and other consumers. The activity within the JetPay Card Services division was not material for the year ended December 31, 2014 and the six months ended June 30, 2015. The Company entered the payment processing and the payroll processing businesses upon consummation of the acquisitions of JetPay, LLC (“JetPay, LLC” or “JetPay Payment Services”), and AD Computer Corporation (“ADC” or “JetPay Payroll Services”) on December 28, 2012 (the “Completed Transactions”). Additionally, on November 7, 2014, the Company acquired ACI Merchant Systems, LLC (“ACI” or “JetPay Strategic Partners”), an independent sales organization specializing in relationships with banks, credit unions and other financial institutions. See Note 3. Business Acquisition The consolidated financial statements as of June 30, 2015 and December 31, 2014 and for the six months ended June 30, 2015 and the year ended December 31, 2014 include the accounts of JetPay and its wholly owned subsidiaries, JetPay Payment Services, JetPay Payroll Services and JetPay Strategic Partners. All significant inter-company transactions and balances have been eliminated in consolidation. The Company believes that the investments made by JetPay in its technology, infrastructure, and sales staff will help 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 ended June 30, 2016 include, but are not limited to: principal and interest payments on long-term debt of approximately $ 3.15 1.2 Note 8. Redeemable Convertible Preferred Stock 91,333 0.001 27.4 12.6 6,165 0.001 1.85 850,000 13.45 |
Business Acquisition
Business Acquisition | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 3. Business Acquisition On November 7, 2014, the Company entered into a Unit Purchase Agreement (the “Unit Purchase Agreement”) with ACI and Michael Collester and Cathy Smith, pursuant to which the Company acquired all of the outstanding equity interests of ACI from Michael Collester and Cathy Smith. In connection with the closing, the Company paid an aggregate of $ 11.0 2.0 3.7 1.2 1.2 2.4 2.17 16 500,000 400,000 436,000 Note 4 Summary of Critical Accounting Policies The fair value of the identifiable assets acquired and liabilities assumed in the ACI acquisition as of the acquisition date include: (i) $250,000 cash, (ii) $521,000 for accounts receivable; (iii) $46,000 for prepaid expenses and other assets; (iv) $27,000 for fixed assets; (v) the assumption of $601,000 of liabilities; and (vi) the remainder, or approximately $ 17.1 10.6 6.3 100,000 60,000 8.5 2 3 Assets acquired and liabilities assumed in the ACI acquisition were recorded on the Company’s Consolidated Balance Sheets as of the acquisition date based upon their estimated fair values at such date. The results of operations of the business acquired by the Company have been included in the Statements of Operations since the date of acquisition. The excess of the purchase price over the estimated fair values of the underlying identifiable assets acquired and liabilities assumed were allocated to goodwill. Cash $ 250 Accounts receivable 521 Prepaid expenses and other assets 46 Property and equipment, net 27 Goodwill 10,594 Identifiable intangible assets 6,460 Total assets acquired 17,898 Accounts payable and accrued expenses 601 Total liabilities assumed 601 Net assets acquired $ 17,297 Unaudited pro forma results of operations for the three and six months ended June 30, 2014 as if the Company and ACI had been combined on January 1, 2014 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 combination had been in effect on the date indicated, or which may result in the future. Unaudited Pro Forma Results of Operations For the Three Months For the Six Months Ended June 30, 2014 Ended June 30, 2014 (in thousands, except per share information) Revenues $ 9,521 $ 19,100 Operating loss $ (734) $ (406) Net loss $ (2,196) $ (3,454) Net loss applicable to common stockholders $ (2,953) $ (4,932) Net loss per share applicable to common stockholders $ (0.21) $ (0.36) |
Summary of Critical Accounting
Summary of Critical Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 4. Summary of Critical 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. The accompanying financial statements have been prepared in accordance with U.S. GAAP and pursuant to the accounting and disclosure rules and regulations of the 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. 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 Third Party clients. Third Party clients include Independent Sales Organizations (“ISOs”), Value Added Resellers (“VARs”), Independent Software Vendors (“ISVs”), and Financial Institutions (“FIs”). 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 Third Parties for whom it processes credit and debit card transactions for the Third Parties’ 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. Under the majority of the Company’s sales arrangements, 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. 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 from certain merchants to minimize any such contingent liability, and it also utilizes a number of systems and procedures to manage merchant risk. Revenues from the Company’s payroll processing operations 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. 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 $ 320,000 306,000 The carrying amounts of financial instruments, including cash and cash equivalents, restricted cash, settlement processing assets and liabilities, accounts receivable, prepaid expenses and other current assets, funds held for clients, other assets, accounts payable and accrued expenses, deferred revenue, other current liabilities and client fund obligations, approximated fair value as of the balance sheet dates 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 dates presented, because interest rates on these instruments approximate market interest rates after consideration of stated interest rates, anti-dilution protection and associated warrants. Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, settlement processing assets and funds held for clients. 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. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company’s accounts receivable are due from its merchant credit card and its payroll customers. Credit is extended based on the 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. 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 pay 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 assets 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 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 15 5 10 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 conducts 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, 2014. There can be no assurance that future tests of goodwill impairment will not result in impairment charges. 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 basis over their respective assigned estimated useful lives. 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, 2014. 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. The Company expenses employee share-based payments under ASC Topic 718, Compensation-Stock Compensation 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 Flexpoint Series A Preferred and the Wellington Series A-1 Preferred of 9,133,300 616,500 537,908 10 3,333,333 3,800,000 256,500 231,249 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 expenses (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 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 June 30, 2015 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,277 $ - $ - $ 1,277 Fair Value at December 31, 2014 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,240 $ - $ - $ 1,240 For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Beginning balance $ 1,251 $ 1,280 $ 1,240 $ 1,230 Change in fair value of derivative liability - $ (110) - $ (60) Change in fair value of contingent cash consideration 26 $ (8) 37 $ (8) Totals $ 1,277 $ 1,162 $ 1,277 $ 1,162 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 which are approved by the Chief Financial Officer. Level 3 financial liabilities consist 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. The Level 3 financial liabilities are the result of recording the Completed Transactions, the ACI acquisition and related debt instruments as more fully described below. In connection with the debt proceeds received under the Notes, the Company recorded a derivative liability of $ 2.1 0 (110,000) (60,000) In addition to the consideration paid upon closing of the JetPay, LLC acquisition, WLES, L.P. (“WLES”), through December 28, 2017, is entitled to receive 833,333 8.00 5.0 9.50 1.54 700,000 840,000 840,000 1,000 0.82 0 2.51 22.6 The fair value of the common stock was derived from the per share price of recent sales of the common stock at the valuation date. Management determined that the results of its valuation were 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 U.S. 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. In addition to the consideration paid upon closing of the ACI acquisition, the previous unitholders are entitled to receive up to an additional $ 500,000 400,000 436,000 16.0 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. As of June 30, 2015, 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 accounts for income taxes under ASC Topic 740, Income Taxes 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 de-recognition, 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 three and six months ended June 30, 2015 and 2014. Management does not expect any significant changes in its unrecognized tax benefits in the next year. 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 which would have required an adjustment or disclosure in the financial statements, other than those disclosed in Note 14. Subsequent Events Note 14. Subsequent Events On February 18, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-02 Consolidation (Topic 810): Amendments to the Consolidation Analysis On April 7, 2015, the FASB issued ASU No. 2015-03 Simplifying the Presentation of Debt Issuance Costs |
Property and Equipment, net of
Property and Equipment, net of Accumulated Depreciation | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Note 5. Property and Equipment, net of Accumulated Depreciation June 30, December 31, 2015 2014 (in thousands) Leasehold improvements $ 399 $ 384 Equipment 885 811 Furniture and fixtures 270 252 Computer software 144 121 Vehicles 223 182 Assets in progress 266 152 Total property and equipment 2,187 1,902 Less: accumulated depreciation (900) (676) Property and equipment, net $ 1,287 $ 1,226 Property and equipment included $138,400 and $157,900 of computer equipment as of June 30, 2015 and December 31, 2014, respectively, net of accumulated depreciation of $33,100 and $13,600 as of June 30, 2015 and December 31, 2014, respectively, that is subject to capital lease obligations. Depreciation expense was $115,000 and $103,000 for the three months ended June 30, 2015 and 2014, respectively, and $224,000 and $206,000 for the six months ended June 30, 2015 and 2014, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Note 6. Accounts Payable and Accrued Expenses June 30, December 31, Accounts payable and accrued expenses consist of the following (in thousands): 2015 2014 Trade accounts payable $ 1,532 $ 1,828 ACH clearing liability 1,728 2,146 Accrued compensation 1,314 1,233 Accrued agent commissions 1,103 758 Related party payables 80 70 Other 2,775 3,118 Total $ 8,532 $ 9,153 |
Long-Term Debt, Notes Payable a
Long-Term Debt, Notes Payable and Capital Lease Obligations | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 7. Long-Term Debt, Notes Payable and Capital Lease Obligations June 30, December 31, 2015 2014 (in thousands) Term loan payable to Metro Bank (or “Metro”), 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. $ 5,782 $ 6,425 Term loan payable to Metro, interest rate of 5.25% payable in monthly principal payments of $104,167 plus interest beginning in December 2015, maturing November 7, 2021, collateralized by the assets and equity interests of ACI Merchant Systems, LLC. 7,500 7,500 Revolving note payable to Metro, interest rate of Wall Street Journal Prime rate plus 1.00% (4.25% as June 30, 2015), interest payable monthly, collateralized by all assets of ADC, PTFS, and ACI, a pledge by the Company of its ownership interest in ADC and ACI, as well as a $1.0 million negative pledge on the stock of JetPay, LLC, maturing on May 6, 2017. 1,000 - 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 $470,408 and $552,424 at June 30, 2015 and December 31, 2014, respectively. See Note 12. Related Party Transactions. 1,861 1,779 Unsecured promissory note payable to stockholder, interest rate of 4% payable at maturity, note principal due September 30, 2016. See Note 12. Related Party Transactions. 492 492 Unsecured promissory note payable to stockholder, interest rate of 4% payable quarterly, note principal due in two installments of $175,000 on May 6, 2016 and 2017. See Note 12. Related Party Transactions. 350 - Capital lease obligations related to computer equipment at JetPay, LLC, interest rate of 5.55%, due in monthly lease payments of $4,114, maturing in May 2017, collateralized by equipment. 125 154 Various other debt instruments related to vehicles at ADC. 10 16 17,120 16,366 Less current portion (2,368) (1,571) $ 14,752 $ 14,795 The Metro term loan agreements and the revolving note agreement require the Company to provide Metro with annual financial statements within 120 days of the Company’s year-end and quarterly financial statements within 60 days after the end of each quarter. The Metro agreements also contain certain annual financial covenants with which the Company was in compliance as of June 30, 2015. Maturities of long-term debt and capital lease obligations, excluding fair value and conversion option debt discounts, are as follows for the twelve months ending June 30: 2016 $ 2.4 4.2 4.9 2.5 1.9 1.7 |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2015 | |
Convertible Preferred Stock [Abstract] | |
Convertible Preferred Stock [Text Block] | Note 8. Redeemable Convertible Preferred Stock On October 11, 2013, the Company issued 33,333 10.0 4,667 1.4 20,000 6.0 33,333 10.0 10.0 5.9 1.4 Note 11 Commitments and Contingencies 1.4 6.0 10.0 300 Note 14. Subsequent Events Under the Securities Purchase Agreement, the Company agreed to sell to Flexpoint, and Flexpoint agreed to purchase, upon satisfaction of certain conditions, up to 133,333 40.0 10.0 10.0 20.0 12.6 The Series A Preferred has an initial liquidation preference of $ 600 On May 5, 2014, the Company issued 2,565 769,500 1,350 405,000 2,250 675,000 9,000 2.7 1.85 The Series A-1 Preferred will be convertible into shares of the Company’s common stock or, in certain circumstances, Series A-2 Convertible Preferred Stock, par value $0.001 per share (“Series A-2 Preferred”). The Series A-1 Preferred can be converted into that number of shares of common stock equal to the number of shares of Series A-1 Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, which initially will be $3.00. 6.75 The Series A-1 Preferred will have an initial liquidation preference of $600 per share and will rank senior to the Company’s common stock and pari passu 9.9 The Company considered the guidance of ASC Topic 480, Distinguishing Liabilities from Equity Derivatives Upon issuance of the 33,333 1.5 1.25 538,000 2.47 1.05 Upon the occurrence of an Event of Noncompliance, the holders of a majority of the Series A Preferred may demand immediate redemption of all or a portion of the Series A Preferred at the then-applicable liquidation value. Such holders may also exercise a right to have the holders of the Series A Preferred 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 Series A Preferred; 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 $5.0 million 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 the Loan and Security Agreement, dated as of December 28, 2012, as amended, by and among ADC, PTFS and Metro Bank, or the Loan and Security Agreement dated as of November 7, 2014 by and among ACI and Metro Bank, and such event of default has not been cured within thirty days after receipt of notice thereof. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 9. Stockholders’ Equity Common Stock On January 30, 2014, the Company issued 1,396 6,000 On March 28, 2014, the Company entered into a Securities Purchase Agreement (the “Common Stock SPA”) with each of Bipin C. Shah, its Chairman and Chief Executive Officer, and C. Nicholas Antich, the President of JetPay Payroll Services. Pursuant to the Common Stock SPA, on April 4, 2014, the Company received gross aggregate proceeds of $ 1.0 25,000 333,333 On November 7, 2014, the Company issued 2,000,000 Note 3. Business Acquisition On June 18, 2015, the Company issued 29,167 79,000 Preferred Stock The Company is authorized to issue 1,000,000 0.001 As of June 30, 2015 and December 31, 2014, there were no shares of preferred stock issued or outstanding other than the Series A Preferred issued to Flexpoint and Series A-1 Preferred issued to Wellington described above. Stock-Based Compensation ASC Topic 718, Compensation-Stock Compensation 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 options to purchase 200,000 65,000 3.00 232,000 145,000 64,000 88,000 142,000 168,000 624,000 193,334 For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Expected term (years) 6.25 6.25 6.25 6.25 Risk-free interest rate 1.56% 2.03% to 2.10% 1.56% 2.03% to 2.10% Volatility 44.8% 44.93% 44.8% 44.93% Dividend yield 0% 0% 0% 0% 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 Weighted Average Number of Options Exercise Price Outstanding at December 31, 2013 1,000,000 $ 3.03 Granted 445,000 $ 3.00 Forfeited (43,750) $ 3.04 Exercised - $ - Outstanding at December 31, 2014 1,401,250 $ 3.02 Granted 200,000 $ 3.00 Forfeited (193,334) $ 3.00 Exercised - $ - Outstanding at June 30, 2015 1,407,916 $ 3.02 Exercisable at June 30, 2015 537,908 $ 3.05 The weighted average remaining life of options outstanding at June 30, 2015 was 8.73 0 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 10. Income Taxes The Company recorded income tax expense of $ 43,000 52,000 101,000 104,000 (12.22) (2.24) (19.65) (2.85) JetPay, LLC 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. As of December 31, 2014, the Company had cumulative U.S. federal and state net operating loss carryovers (“NOLs”) of approximately $ 12.8 2034 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 $ 205,000 1.5 7.8 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 11. Commitments and Contingencies On or about March 13, 2012, a merchant of JetPay, LLC, Direct Air, a charter travel company, abruptly ceased operations and filed for bankruptcy. Under United States Department of Transportation requirements, all charter travel company customer charges for travel are to be deposited into an escrow account in a bank under a United States Department of Transportation escrow program, and not released to the charter travel company until the travel has been completed. In the case of Direct Air, such funds had historically been deposited into such United States Department of Transportation escrow account at Valley National Bank in New Jersey, and continued to be deposited through the date Direct Air ceased operations. At the time Direct Air ceased operations, according to Direct Air’s bankruptcy trustee, there should have been in excess of $ 31.0 1.0 25.0 25.0 250,000 487,000 1.9 597,000 4.4 600,000 On August 7, 2013, JetPay Merchant Services, LLC (“JPMS”), a wholly owned subsidiary of JetPay, LLC and indirect wholly owned subsidiary of the Company, together with WLES, (collectively, the “Plaintiffs”), filed suit in the United States 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 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 several other 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 Services, LLC 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 JetPay, LLC’s transition to a new sponsoring bank in June 2013. Additionally, subsequent to this transition, Merrick invoiced the Company for legal fees incurred by Merrick totaling approximately $3.2 million. The Company does not believe it has a 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 June 30, 2015. As partial protection against any potential losses related to Direct Air, the Company required that, upon closing of the Completed Transactions, 3,333,333 3,333,333 On January 16, 2013, the Company 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 $ 2.07 740,000 2,136,000 675 1.0 333,333 4,667 1.4 Note 8. Redeemable Convertible Preferred Stock 411,000 On August 23, 2013, the Company received notice that JPMS was a party in a lawsuit brought by MSC Cruise Lines, a former customer. Merrick was a co-defendant in the lawsuit. MSC Cruise Lines claimed approximately $ 2.0 600,000 In December 2013, the Company settled a lawsuit with M&A Ventures in which it agreed to pay $ 400,000 100,000 400,000 At the time of the acquisition of JetPay, LLC, the Company entered into an Amendment, Guarantee, and Waiver Agreement (the “Agreement”) dated December 28, 2012 between the Company, Ten Lords and Interactive Capital and JetPay, LLC. Under this Agreement, Ten Lords and Interactive Capital agreed to extend payment of a $ 6.0 Note 8. Redeemable Convertible Preferred Stock 340,000 340,000 In December 2012, BCC Merchant Solutions, a former customer of JetPay, LLC filed a suit against JetPay, LLC, Merrick Bank, and Trent Voigt in the Northern District of Texas, Dallas Division, for $ 1.9 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. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 12. Related Party Transactions JetPay Payroll Services’ headquarters are located in Center Valley, Pennsylvania and consist of approximately 22,500 43,426 4 10 129,140 258,280 JetPay Payment Services retains a backup center in Sunnyvale, Texas consisting of 1,600 3,000 9,000 18,000 The above transactions with respect to JetPay Payroll Services and JetPay Payment Services were approved prior to the Completed Transactions. 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. 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 September 30, 2016 4 4,900 9,750 On May 6, 2015, the Company issued an unsecured promissory note to C. Nicholas Antich, Chief Executive Officer and President of ADC, and Carol A. Antich in the amount of $ 350,000 2.0 4 May 6, 2017 175,000 2,200 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 5 29,500 58,600 2,331,369 On August 22, 2013, JetPay, LLC entered into a Master Service Agreement with JetPay Solutions, LTD, a United Kingdom based entity 75 118,446 68,712 223,272 68,712 On March 28, 2014, the Company entered into the Common Stock SPA with each of Bipin C. Shah, its Chairman and Chief Executive Officer, and C. Nicholas Antich, the President of JetPay Payroll Services. Pursuant to the Common Stock SPA, on April 4, 2014, the Company received aggregate proceeds of $ 1.0 333,333 On October 31, 2014, following the unanimous consent of the Company’s Audit Committee, the Company entered into a letter agreement with WLES, an entity owned by Trent Voigt, that governs the distribution of any proceeds received in connection with the Direct Air matter. The Letter Agreement provides that subject to certain exceptions, after each of the Company and WLES receive out-of-pocket expenses and chargeback losses incurred subsequent to the consummation of the Completed Transactions and prior to the consummation of the Completed Transactions, respectively, each of the parties will share in any proceeds received pro rata. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 13. Segments The Company currently operates in two business segments, the JetPay Payment Processing Segment, consisting of JetPay Payment Services and JetPay Strategic Partners, an end-to-end processor of credit and debit card and ACH payment transactions for both businesses with a focus on those processing internet transactions and recurring billings, as well as traditional retailers and service providers, and the JetPay Payroll Segment, consisting of JetPay Payroll Services, 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 activity within the JetPay Card Services division was not material through June 30, 2015 and 2014, and accordingly was included in Corporate in the tables below. For the Three Months Ended June 30, 2015 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 7,445 $ 3,108 $ 13 $ 10,566 Cost of processing revenues 4,757 1,733 30 6,520 Selling, general and administrative expenses 1,807 1,144 243 3,194 Change in fair value of contingent consideration liability - - 26 26 Amortization of intangibles and depreciation 534 346 2 882 Other expenses 100 76 120 296 Income (loss) before income taxes $ 247 $ (191) $ (408) $ (352) Property and equipment additions $ 99 $ 79 $ - $ 178 For the Three Months Ended June 30, 2014 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 4,687 $ 3,038 $ 1 $ 7,726 Cost of processing revenues 2,941 1,781 11 4,733 Selling, general and administrative expenses 1,832 1,029 547 3,408 Change in fair value of contingent consideration liability - - (8) (8) Amortization of intangibles and depreciation 321 341 1 663 Other (income) expenses (2) 75 1,176 1,249 Loss before income taxes $ (405) $ (188) $ (1,726) $ (2,319) Property and equipment additions $ 16 $ 29 $ 13 $ 58 For the Six Months Ended June 30, 2015 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 14,533 $ 6,855 $ 22 $ 21,410 Cost of processing revenues 9,286 3,630 60 12,976 Selling, general and administrative expenses 3,559 2,291 726 6,576 Change in fair value of contingent consideration liability - - 37 37 Amortization of intangibles and depreciation 1,065 691 3 1,759 Other expenses 199 139 238 576 Income (loss) before income taxes $ 424 $ 104 $ (1,042) $ (514) Total property and equipment, net $ 691 $ 560 $ 36 $ 1,287 Property and equipment additions $ 174 $ 118 $ 1 $ 293 Intangible assets and goodwill, net $ 48,823 $ 18,294 $ - $ 67,117 Total segment assets $ 72,264 $ 55,536 $ 951 $ 128,751 For the Six Months Ended June 30, 2014 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 9,290 $ 6,604 $ 1 $ 15,895 Cost of processing revenues 5,886 3,521 14 9,421 Selling, general and administrative expenses 2,828 2,030 1,325 6,183 Change in fair value of contingent consideration liability - - (8) (8) Amortization of intangibles and depreciation 641 684 1 1,326 Other expenses 1 149 2,476 2,626 (Loss) income before income taxes $ (66) $ 220 $ (3,807) $ (3,653) Total property and equipment, net $ 458 $ 614 $ 14 $ 1,086 Property and equipment additions $ 56 $ 73 $ 13 $ 142 Intangible assets and goodwill, net $ 33,442 $ 19,415 $ - $ 52,857 Total segment assets $ 54,828 $ 70,662 $ 2,155 $ 127,645 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 14. Subsequent Events Under the Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into on August 22, 2013 between the Company and Flexpoint Ford, Flexpoint is provided certain indemnification rights based upon certain subsequent losses and expenses of the Company. On April 24, 2015, Flexpoint tendered to the Company a Claim Letter regarding an indemnification claim relative to the EarlyBirdCapital matter. See Note 11. Commitments and Contingencies. the Company entered into a Letter Agreement to resolve the matter, whereby the conversion price of any of the Series A-1 Preferred Stock held by Flexpoint is reduced from $3.00 per share to $2.90 per share. On August 4, 2015, the Company held its 2015 Annual Stockholders’ Meeting (the “Meeting”). At the Meeting, the Company’s stockholders elected two directors for three-year terms, ratified the Audit Committee’s appointment of Marcum LLP as the Company’s registered public accounting firm for fiscal year 2015, and approved the adoption of the JetPay Corporation Employee Stock Purchase Plan. |
Summary of Critical Accountin21
Summary of Critical Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The accompanying financial statements have been prepared in accordance with U.S. GAAP and pursuant to the accounting and disclosure rules and regulations of the 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 Third Party clients. Third Party clients include Independent Sales Organizations (“ISOs”), Value Added Resellers (“VARs”), Independent Software Vendors (“ISVs”), and Financial Institutions (“FIs”). 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 Third Parties for whom it processes credit and debit card transactions for the Third Parties’ 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. Under the majority of the Company’s sales arrangements, 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. 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 from certain merchants to minimize any such contingent liability, and it also utilizes a number of systems and procedures to manage merchant risk. Revenues from the Company’s payroll processing operations 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 $ 320,000 306,000 |
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, accounts receivable, prepaid expenses and other current assets, funds held for clients, other assets, accounts payable and accrued expenses, deferred revenue, other current liabilities and client fund obligations, approximated fair value as of the balance sheet dates 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 dates 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, accounts receivable, settlement processing assets and funds held for clients. 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 the 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 pay 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 assets 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 15 5 10 |
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 conducts 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, 2014. 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 basis over their respective assigned estimated useful lives. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of LongLived 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, 2014. |
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 |
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 Flexpoint Series A Preferred and the Wellington Series A-1 Preferred of 9,133,300 616,500 537,908 10 3,333,333 3,800,000 256,500 231,249 |
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 expenses (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 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). Fair Value at June 30, 2015 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,277 $ - $ - $ 1,277 Fair Value at December 31, 2014 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,240 $ - $ - $ 1,240 For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Beginning balance $ 1,251 $ 1,280 $ 1,240 $ 1,230 Change in fair value of derivative liability - $ (110) - $ (60) Change in fair value of contingent cash consideration 26 $ (8) 37 $ (8) Totals $ 1,277 $ 1,162 $ 1,277 $ 1,162 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 which are approved by the Chief Financial Officer. Level 3 financial liabilities consist 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. The Level 3 financial liabilities are the result of recording the Completed Transactions, the ACI acquisition and related debt instruments as more fully described below. In connection with the debt proceeds received under the Notes, the Company recorded a derivative liability of $ 2.1 0 (110,000) (60,000) In addition to the consideration paid upon closing of the JetPay, LLC acquisition, WLES, L.P. (“WLES”), through December 28, 2017, is entitled to receive 833,333 8.00 5.0 9.50 1.54 700,000 840,000 840,000 1,000 0.82 0 2.51 22.6 The fair value of the common stock was derived from the per share price of recent sales of the common stock at the valuation date. Management determined that the results of its valuation were 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 U.S. 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. In addition to the consideration paid upon closing of the ACI acquisition, the previous unitholders are entitled to receive up to an additional $ 500,000 400,000 436,000 16.0 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. As of June 30, 2015, 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 |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company accounts for income taxes under ASC Topic 740, Income Taxes 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 de-recognition, 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 three and six months ended June 30, 2015 and 2014. 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 which would have required an adjustment or disclosure in the financial statements, other than those disclosed in Note 14. Subsequent Events Note 14. Subsequent Events |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements On February 18, 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-02 Consolidation (Topic 810): Amendments to the Consolidation Analysis On April 7, 2015, the FASB issued ASU No. 2015-03 Simplifying the Presentation of Debt Issuance Costs |
Business Acquisition (Tables)
Business Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The allocation of the ACI purchase price and the estimated fair market values of the ACI assets acquired and liabilities assumed are shown below (in thousands): Cash $ 250 Accounts receivable 521 Prepaid expenses and other assets 46 Property and equipment, net 27 Goodwill 10,594 Identifiable intangible assets 6,460 Total assets acquired 17,898 Accounts payable and accrued expenses 601 Total liabilities assumed 601 Net assets acquired $ 17,297 |
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 combination had been in effect on the date indicated, or which may result in the future. Unaudited Pro Forma Results of Operations For the Three Months For the Six Months Ended June 30, 2014 Ended June 30, 2014 (in thousands, except per share information) Revenues $ 9,521 $ 19,100 Operating loss $ (734) $ (406) Net loss $ (2,196) $ (3,454) Net loss applicable to common stockholders $ (2,953) $ (4,932) Net loss per share applicable to common stockholders $ (0.21) $ (0.36) |
Summary of Critical Accountin23
Summary of Critical Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Fair Value, Liabilities Measured On Recurring Basis [Table Text Block] | Fair Value at June 30, 2015 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,277 $ - $ - $ 1,277 Fair Value at December 31, 2014 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,240 $ - $ - $ 1,240 |
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): For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Beginning balance $ 1,251 $ 1,280 $ 1,240 $ 1,230 Change in fair value of derivative liability - $ (110) - $ (60) Change in fair value of contingent cash consideration 26 $ (8) 37 $ (8) Totals $ 1,277 $ 1,162 $ 1,277 $ 1,162 |
Property and Equipment, net o24
Property and Equipment, net of Accumulated Depreciation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | June 30, December 31, 2015 2014 (in thousands) Leasehold improvements $ 399 $ 384 Equipment 885 811 Furniture and fixtures 270 252 Computer software 144 121 Vehicles 223 182 Assets in progress 266 152 Total property and equipment 2,187 1,902 Less: accumulated depreciation (900) (676) Property and equipment, net $ 1,287 $ 1,226 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities [Table Text Block] | June 30, December 31, Accounts payable and accrued expenses consist of the following (in thousands): 2015 2014 Trade accounts payable $ 1,532 $ 1,828 ACH clearing liability 1,728 2,146 Accrued compensation 1,314 1,233 Accrued agent commissions 1,103 758 Related party payables 80 70 Other 2,775 3,118 Total $ 8,532 $ 9,153 |
Long-Term Debt, Notes Payable26
Long-Term Debt, Notes Payable and Capital Lease Obligations (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt, notes payable and capital lease obligations consist of the following: June 30, December 31, 2015 2014 (in thousands) Term loan payable to Metro Bank (or “Metro”), 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. $ 5,782 $ 6,425 Term loan payable to Metro, interest rate of 5.25% payable in monthly principal payments of $104,167 plus interest beginning in December 2015, maturing November 7, 2021, collateralized by the assets and equity interests of ACI Merchant Systems, LLC. 7,500 7,500 Revolving note payable to Metro, interest rate of Wall Street Journal Prime rate plus 1.00% (4.25% as June 30, 2015), interest payable monthly, collateralized by all assets of ADC, PTFS, and ACI, a pledge by the Company of its ownership interest in ADC and ACI, as well as a $1.0 million negative pledge on the stock of JetPay, LLC, maturing on May 6, 2017. 1,000 - 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 $470,408 and $552,424 at June 30, 2015 and December 31, 2014, respectively. See Note 12. Related Party Transactions. 1,861 1,779 Unsecured promissory note payable to stockholder, interest rate of 4% payable at maturity, note principal due September 30, 2016. See Note 12. Related Party Transactions. 492 492 Unsecured promissory note payable to stockholder, interest rate of 4% payable quarterly, note principal due in two installments of $175,000 on May 6, 2016 and 2017. See Note 12. Related Party Transactions. 350 - Capital lease obligations related to computer equipment at JetPay, LLC, interest rate of 5.55%, due in monthly lease payments of $4,114, maturing in May 2017, collateralized by equipment. 125 154 Various other debt instruments related to vehicles at ADC. 10 16 17,120 16,366 Less current portion (2,368) (1,571) $ 14,752 $ 14,795 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair values of the Company’s options were estimated at the dates of grant using a Black-Scholes option pricing model with the following weighted average assumptions: For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Expected term (years) 6.25 6.25 6.25 6.25 Risk-free interest rate 1.56% 2.03% to 2.10% 1.56% 2.03% to 2.10% Volatility 44.8% 44.93% 44.8% 44.93% Dividend yield 0% 0% 0% 0% |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of stock option activity for the six months ended June 30, 2015 and the year ended December 31, 2014 are presented below: Weighted Average Number of Options Exercise Price Outstanding at December 31, 2013 1,000,000 $ 3.03 Granted 445,000 $ 3.00 Forfeited (43,750) $ 3.04 Exercised - $ - Outstanding at December 31, 2014 1,401,250 $ 3.02 Granted 200,000 $ 3.00 Forfeited (193,334) $ 3.00 Exercised - $ - Outstanding at June 30, 2015 1,407,916 $ 3.02 Exercisable at June 30, 2015 537,908 $ 3.05 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The Company does not evaluate performance or allocate resources based on segment asset data, and therefore, such information is not presented. For the Three Months Ended June 30, 2015 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 7,445 $ 3,108 $ 13 $ 10,566 Cost of processing revenues 4,757 1,733 30 6,520 Selling, general and administrative expenses 1,807 1,144 243 3,194 Change in fair value of contingent consideration liability - - 26 26 Amortization of intangibles and depreciation 534 346 2 882 Other expenses 100 76 120 296 Income (loss) before income taxes $ 247 $ (191) $ (408) $ (352) Property and equipment additions $ 99 $ 79 $ - $ 178 For the Three Months Ended June 30, 2014 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 4,687 $ 3,038 $ 1 $ 7,726 Cost of processing revenues 2,941 1,781 11 4,733 Selling, general and administrative expenses 1,832 1,029 547 3,408 Change in fair value of contingent consideration liability - - (8) (8) Amortization of intangibles and depreciation 321 341 1 663 Other (income) expenses (2) 75 1,176 1,249 Loss before income taxes $ (405) $ (188) $ (1,726) $ (2,319) Property and equipment additions $ 16 $ 29 $ 13 $ 58 For the Six Months Ended June 30, 2015 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 14,533 $ 6,855 $ 22 $ 21,410 Cost of processing revenues 9,286 3,630 60 12,976 Selling, general and administrative expenses 3,559 2,291 726 6,576 Change in fair value of contingent consideration liability - - 37 37 Amortization of intangibles and depreciation 1,065 691 3 1,759 Other expenses 199 139 238 576 Income (loss) before income taxes $ 424 $ 104 $ (1,042) $ (514) Total property and equipment, net $ 691 $ 560 $ 36 $ 1,287 Property and equipment additions $ 174 $ 118 $ 1 $ 293 Intangible assets and goodwill, net $ 48,823 $ 18,294 $ - $ 67,117 Total segment assets $ 72,264 $ 55,536 $ 951 $ 128,751 For the Six Months Ended June 30, 2014 JetPay Payment JetPay General/ Processing Payroll Corporate Total Processing revenues $ 9,290 $ 6,604 $ 1 $ 15,895 Cost of processing revenues 5,886 3,521 14 9,421 Selling, general and administrative expenses 2,828 2,030 1,325 6,183 Change in fair value of contingent consideration liability - - (8) (8) Amortization of intangibles and depreciation 641 684 1 1,326 Other expenses 1 149 2,476 2,626 (Loss) income before income taxes $ (66) $ 220 $ (3,807) $ (3,653) Total property and equipment, net $ 458 $ 614 $ 14 $ 1,086 Property and equipment additions $ 56 $ 73 $ 13 $ 142 Intangible assets and goodwill, net $ 33,442 $ 19,415 $ - $ 52,857 Total segment assets $ 54,828 $ 70,662 $ 2,155 $ 127,645 |
Organization and Business Ope29
Organization and Business Operations (Details Textual) - Auction Market Preferred Securities, Stock Series, Title [Domain] - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 28, 2014 | Nov. 07, 2014 | May. 05, 2014 | Apr. 14, 2014 |
Organization and Business Operations [Line Items] | ||||||
Preferred Stock, Shares Issued | 0 | 0 | ||||
Preferred Stock, Value, Issued | $ 0 | $ 0 | $ 10,000,000 | $ 6,000,000 | $ 1,400,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | ||||
Payment Of Principal And Interest Of Long Term Debt For The Next Twelve Months | $ 3,150,000 | |||||
Series A Preferred Stock [Member] | ||||||
Organization and Business Operations [Line Items] | ||||||
Preferred Stock, Shares Issued | 33,333 | |||||
Preferred Stock, Value, Issued | $ 1,400,000 | |||||
Convertible Preferred Stock [Member] | Acquisition-related Costs [Member] | ||||||
Organization and Business Operations [Line Items] | ||||||
Preferred Stock, Value, Issued | $ 13,450,000 | |||||
Flexpoint [Member] | Series A Preferred Stock [Member] | ||||||
Organization and Business Operations [Line Items] | ||||||
Preferred Stock Value Reserved for Future Issuance | $ 12,600,000 | |||||
Flexpoint [Member] | Series A Convertible Preferred Stock [Member] | ||||||
Organization and Business Operations [Line Items] | ||||||
Preferred Stock, Shares Issued | 91,333 | |||||
Preferred Stock, Value, Issued | $ 27,400,000 | |||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |||||
Wellington [Member] | Series A-1 Preferred stock [Member] | ||||||
Organization and Business Operations [Line Items] | ||||||
Preferred Stock, Shares Issued | 6,165 | |||||
Preferred Stock, Value, Issued | $ 1,850,000 | $ 1,850,000 | ||||
Preferred Stock Value Reserved for Future Issuance | $ 850,000 | |||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |||||
ACI Merchant Systems, LLC [Member] | ||||||
Organization and Business Operations [Line Items] | ||||||
Deferred Consideration Due In Next Twelve Months | $ 1,200,000 |
Business Acquisition (Details)
Business Acquisition (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 250 |
Accounts receivable | 521 |
Prepaid expenses and other assets | 46 |
Property and equipment, net | 27 |
Goodwill | 10,594 |
Identifiable intangible assets | 6,460 |
Total assets acquired | 17,898 |
Accounts payable and accrued expenses | 601 |
Total liabilities assumed | 601 |
Net assets acquired | $ 17,297 |
Business Acquisition (Details 1
Business Acquisition (Details 1) - Jun. 30, 2014 - Consolidated Entities [Member] - USD ($) $ / shares in Units, $ in Thousands | Total | Total |
Business Acquisition [Line Items] | ||
Revenues | $ 9,521 | $ 19,100 |
Operating loss | (734) | (406) |
Net loss | (2,196) | (3,454) |
Net loss applicable to common stockholders | $ (2,953) | $ (4,932) |
Net loss per share applicable to common stockholders | $ (0.21) | $ (0.36) |
Business Acquisition (Details T
Business Acquisition (Details Textual) - USD ($) shares in Millions | Apr. 10, 2016 | Apr. 10, 2015 | Nov. 07, 2014 | Jun. 30, 2015 |
Business Acquisition [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 6,000,000 | $ 11,000,000 | ||
ACI [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisition Contingent Consideration Potential Cash Receipt | 436,000 | |||
Payments to Acquire Businesses, Gross | $ 1,200,000 | $ 2,400,000 | ||
Stock Issued During Period, Shares, Acquisitions | 2 | |||
Stock Issued During Period, Value, Acquisitions | $ 3,700,000 | |||
Business Acquisitions Purchase Price Allocation Goodwill Amount | 17,100,000 | |||
Business Acquisitions Purchase Price Allocation Amortizable Intangible Assets | $ 10,600,000 | |||
Rate Of Discount On Fair Value Of Future Payments | 16.00% | |||
Maximum Amount Of Consideration Right On Net Revenue | $ 500,000 | |||
Business Combination, Consideration Transferred | 400,000 | |||
Deferred Consideration Or To Be Paid To Acquire Business | 2,170,000 | |||
ACI [Member] | Scenario, Forecast [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to Acquire Businesses, Gross | $ 1,200,000 | |||
ACI [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisitions Purchase Price Allocation Amortizable Intangible Assets | $ 6,300,000 | |||
Business Acquisitions Purchase Price Allocation Assigned Life | 8 years 6 months | |||
ACI [Member] | Trade Names [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisitions Purchase Price Allocation Amortizable Intangible Assets | $ 60,000 | |||
Business Acquisitions Purchase Price Allocation Assigned Life | 3 years | |||
ACI [Member] | Software [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Acquisitions Purchase Price Allocation Amortizable Intangible Assets | $ 100,000 | |||
Business Acquisitions Purchase Price Allocation Assigned Life | 2 years |
Summary of Critical Accountin33
Summary of Critical Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Liabilities: | ||
Contingent consideration | $ 1,277 | $ 1,240 |
Fair Value, Inputs, Level 1 [Member] | ||
Liabilities: | ||
Contingent consideration | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Liabilities: | ||
Contingent consideration | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Liabilities: | ||
Contingent consideration | $ 1,277 | $ 1,240 |
Summary of Critical Accountin34
Summary of Critical Accounting Policies (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Change in fair value of derivative liability | $ 0 | $ (110) | $ 0 | $ (60) |
Change in fair value of contingent cash consideration | 26 | (8) | 37 | (8) |
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning balance | 1,251 | 1,280 | 1,240 | 1,230 |
Change in fair value of derivative liability | 0 | (110) | 0 | (60) |
Change in fair value of contingent cash consideration | 26 | (8) | 37 | (8) |
Totals | $ 1,277 | $ 1,162 | $ 1,277 | $ 1,162 |
Summary of Critical Accountin35
Summary of Critical Accounting Policies (Details Textual) - Fair Value, Measurements, Fair Value Hierarchy [Domain] - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Nov. 07, 2014 | Dec. 31, 2012 | Dec. 28, 2012 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Reserve for Losses and Loss Adjustment Expenses | $ 320,000 | $ 320,000 | $ 306,000 | |||||
Derivative Liability, Fair Value, Net | $ 2,100,000 | |||||||
Contingent consideration | 1,277,000 | 1,277,000 | 1,240,000 | |||||
Change in fair value of derivative liability | $ 0 | $ (110,000) | $ 0 | $ (60,000) | ||||
Share Price | $ 9.50 | $ 9.50 | ||||||
Business Acquisition Contingent Consideration Potential Cash Receipt | $ 0 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 537,908 | 537,908 | ||||||
Secured Convertible Promissory Notes Payable [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Conversion of Stock, Shares Converted | 3,333,333 | 3,333,333 | ||||||
Conversion of Stock, Amount Converted | $ 10,000,000 | $ 10,000,000 | ||||||
Series A Preferred Stock [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 9,133,300 | 3,800,000 | ||||||
Series A-1 Preferred stock [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 616,500 | 256,500 | ||||||
Employee Stock Option [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 537,908 | 231,249 | 537,908 | 231,249 | ||||
Machinery and Equipment [Member] | Maximum [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 15 years | |||||||
Machinery and Equipment [Member] | Minimum [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||||
Furniture and Fixtures [Member] | Maximum [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 10 years | |||||||
Furniture and Fixtures [Member] | Minimum [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Property, Plant and Equipment, Useful Life | 5 years | |||||||
Wles [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value Assumptions, Risk Free Interest Rate | 0.82% | |||||||
Fair Value Assumptions, Expected Dividend Rate | 0.00% | |||||||
Fair Value Assumptions, Expected Term | 2 years 6 months 4 days | |||||||
Fair Value Assumptions, Expected Volatility Rate | 22.60% | |||||||
Common stock issued for acquisitions (in shares) | 833,333 | |||||||
Contingent consideration | $ 1,000 | $ 1,000 | $ 1,540,000 | |||||
Business Combination, Contingent Consideration, Liability, Noncurrent | 840,000 | $ 840,000 | ||||||
Share Price | $ 8 | $ 8 | ||||||
Stock Issued During Period, Value, Acquisitions | $ 5,000,000 | |||||||
Business Acquisition Contingent Consideration Potential Cash Receipt | $ 700,000 | |||||||
ACI [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Common stock issued for acquisitions (in shares) | 2,000,000 | |||||||
Contingent consideration | $ 436,000 | $ 436,000 | $ 400,000 | |||||
Stock Issued During Period, Value, Acquisitions | $ 3,700,000 | |||||||
Rate Of Discount On Fair Value Of Future Payments | 16.00% | |||||||
Maximum Amount Of Consideration Right On Net Revenue | $ 500,000 |
Property and Equipment, net o36
Property and Equipment, net of Accumulated Depreciation (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 2,187 | $ 1,902 | |
Less: Accumulated depreciation | (900) | (676) | |
Property and equipment, net | 1,287 | 1,226 | $ 1,086 |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 399 | 384 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 885 | 811 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 270 | 252 | |
Computer Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 144 | 121 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 223 | 182 | |
Assets in progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 266 | $ 152 |
Property and Equipment, net o37
Property and Equipment, net of Accumulated Depreciation (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expenses | $ 115 | $ 103 | $ 224 | $ 206 | |
Property, Plant and Equipment, Net, Total | 1,287 | $ 1,086 | 1,287 | $ 1,086 | $ 1,226 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 900 | 900 | 676 | ||
Computer Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Net, Total | 138 | 138 | 157 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 33 | $ 33 | $ 13 |
Accounts Payable and Accrued 38
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Payables And Accruals [Line Items] | ||
Trade accounts payable | $ 1,532 | $ 1,828 |
ACH clearing liability | 1,728 | 2,146 |
Accrued compensation | 1,314 | 1,233 |
Accrued agent commissions | 1,103 | 758 |
Related party payables | 80 | 70 |
Other | 2,775 | 3,118 |
Total | $ 8,532 | $ 9,153 |
Long-Term Debt, Notes Payable39
Long-Term Debt, Notes Payable and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 17,120 | $ 16,366 |
Less current portion | (2,368) | (1,571) |
Long-term Debt and Capital Lease Obligations | 14,752 | 14,795 |
Revolving Note Payable To Metro Bank [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 1,000 | 0 |
Revolving Note Payable To Metro Bank [Member] | AD Computer [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 5,782 | 6,425 |
Revolving Note Payable To Metro Bank [Member] | ACI Merchant Systems [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 7,500 | 7,500 |
WLES [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 1,861 | 1,779 |
StockHolders [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 492 | 492 |
Stockholders One [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 350 | 0 |
JetPay, LLC, [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 125 | 154 |
AD Computer Corporation and Payroll Tax Filing Services, Inc. [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 10 | $ 16 |
Long-Term Debt, Notes Payable40
Long-Term Debt, Notes Payable and Capital Lease Obligations (Details Textual) - Subsequent Event Type [Domain] - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 2,400,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 4,200,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Three | 4,900,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Four | 2,500,000 | |
Long-term Debt, Maturities, Repayments of Principal in Year Five | 1,900,000 | |
Long-term Debt, Maturities, Repayments of Principal after Year Five | $ 1,700,000 | |
Revolving Note Payable To Metro Bank [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | May 6, 2017 | |
Long-term Debt, Gross | $ 1,000,000 | |
Debt Instrument, Description of Variable Rate Basis | Wall Street Journal Prime rate plus 1.00% (4.25% as June 30, 2015), interest payable monthly | |
Wles [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2017 | |
Debt Instrument, Unamortized Discount | $ 470,408 | $ 552,424 |
Debt Instrument, Interest Rate, Effective Percentage | 5.00% | |
StockHolders [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Sep. 30, 2016 | |
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |
Stockholders One [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |
Unsecured Debt Instrument Principal Payment, First Installment | $ 175,000 | |
Unsecured Debt Instrument Principal Payment Second Installment | $ 175,000 | |
AD Computer Corporation and Payroll Tax Filing Services, Inc. [Member] | Metro Banks [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 28, 2019 | |
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |
Equal Monthly Installments | $ 107,143 | |
ACI Merchant Systems, LLC [Member] | Metro Banks [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Nov. 7, 2021 | |
Debt Instrument, Interest Rate, Effective Percentage | 5.25% | |
Equal Monthly Installments | $ 104,167 | |
JetPay, LLC, [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | May 30, 2017 | |
Debt Instrument On Unamortized Discount and Derivative Liability | $ 4,114 | |
Debt Instrument, Interest Rate, Effective Percentage | 5.55% |
Redeemable Convertible Prefer41
Redeemable Convertible Preferred Stock (Details Textual) - USD ($) | Nov. 07, 2014 | Apr. 14, 2014 | Oct. 11, 2013 | Dec. 31, 2014 | Dec. 28, 2014 | Nov. 20, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | May. 05, 2014 | May. 01, 2014 |
Convertible Preferred Stock [Line Items] | |||||||||||||
Stock Issued During Period, Shares, New Issues | 20,000 | 4,667 | 33,333 | ||||||||||
Preferred Stock, Value, Issued | $ 6,000,000 | $ 1,400,000 | $ 0 | $ 10,000,000 | $ 0 | $ 0 | |||||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | ||||||||||
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 Series A Preferred; 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 $5.0 million 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 the Loan and Security Agreement, dated as of December 28, 2012, as amended,by and among ADC, PTFS and Metro Bank, or the Loan and Security Agreement dated as of November 7, 2014 by and among ACI and Metro Bank, and such event of default has not been cured within thirty days after receipt of notice thereof. | ||||||||||||
Adjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred Stock | $ 1,500,000 | ||||||||||||
Stock Issued During Period, Value, New Issues | 1,400,000 | ||||||||||||
Payments to Acquire Businesses, Gross | $ 6,000,000 | $ 11,000,000 | |||||||||||
Repayments of Convertible Debt | $ 10,000,000 | ||||||||||||
Ten Lords Ltd [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Repayments of Notes Payable | $ 5,900,000 | ||||||||||||
Wellington [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Conversion Basis | The Series A-1 Preferred will be convertible into shares of the Companys common stock or, in certain circumstances, Series A-2 Convertible Preferred Stock, par value $0.001 per share (Series A-2 Preferred). The Series A-1 Preferred can be converted into that number of shares of common stock equal to the number of shares of Series A-1 Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, which initially will be $3.00. | ||||||||||||
Flexpoint Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Sale of Stock, Price Per Share | $ 300 | ||||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Conversion Basis | The Series A Preferred is convertible into shares of common stock. Any holder of Series A Preferred may at any time convert such holders 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. See Note 14. Subsequent Events. | ||||||||||||
Preferred Stock, Value, Issued | $ 1,400,000 | ||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 600 | $ 600 | |||||||||||
Preferred Stock, Shares Issued | 33,333 | 33,333 | |||||||||||
Percentage Of Beneficially Own | 9.90% | 9.90% | |||||||||||
Adjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred Stock | $ 1,250,000 | $ 538,000 | $ 2,470,000 | $ 1,050,000 | |||||||||
Series A Preferred Stock [Member] | Flexpoint Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Stock Issued During Period, Shares, New Issues | 33,333 | ||||||||||||
Maximum Number Of Shares To Be Sold | 133,333 | 133,333 | |||||||||||
Maximum Number Of Shares To Be Sold Value | $ 40,000,000 | $ 40,000,000 | |||||||||||
Initial Proceeds From Sale Of Trading Securities | $ 10,000,000 | ||||||||||||
Tranche A [Member] | Flexpoint Securities Purchase Agreement [Member] | Ten Lords Ltd [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Value, Issued | 10,000,000 | ||||||||||||
Tranche B [Member] | Flexpoint Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Value, Issued | 10,000,000 | 10,000,000 | |||||||||||
Tranche C [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Value, Issued | 12,600,000 | 12,600,000 | |||||||||||
Tranche C [Member] | Flexpoint Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Value, Issued | $ 20,000,000 | ||||||||||||
Series A-1 Preferred stock [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Stock Issued During Period, Shares, New Issues | 2,250 | ||||||||||||
Stock Issued During Period, Value, New Issues | $ 675,000 | $ 405,000 | |||||||||||
Series A-1 Preferred stock [Member] | Flexpoint [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Percentage Of Cumulative Number Of Shares | 6.75% | ||||||||||||
Series A-1 Preferred stock [Member] | Wellington [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Stock Issued During Period, Shares, New Issues | 1,350 | ||||||||||||
Preferred Stock, Value, Issued | $ 1,850,000 | $ 1,850,000 | $ 1,850,000 | ||||||||||
Preferred Stock, Shares Issued | 6,165 | 6,165 | |||||||||||
Series A-1 Preferred stock [Member] | Wellington [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||
Preferred Stock, Value, Issued | $ 769,500 | $ 2,700,000 | |||||||||||
Preferred Stock, Shares Issued | 2,565 | 9,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stockholders Equity Note [Line Items] | ||||
Expected term (years) | 6 years 3 months | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Risk-free interest rate | 1.56% | 1.56% | ||
Volatility | 44.80% | 44.93% | 44.80% | 44.93% |
Dividend Yield | 0.00% | 0.00% | 0.00% | 0.00% |
Minimum [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Risk-free interest rate | 2.03% | 2.03% | ||
Maximum [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Risk-free interest rate | 2.10% | 2.10% |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Stockholders Equity Note [Line Items] | ||
Outstanding Opening - Number of Options (in shares) | 1,401,250 | 1,000,000 |
Granted - Number of Options (in shares) | 200,000 | 445,000 |
Forfeited - Number of Options (in shares) | (193,334) | (43,750) |
Exercised - Number of Options (in shares) | 0 | 0 |
Outstanding Ending - Number of Options (in shares) | 1,407,916 | 1,401,250 |
Exercisable - Number of Options (in shares) | 537,908 | |
Outstanding Opending - Weighted Average Exercise Price (in dollars per share) | $ 3.02 | $ 3.03 |
Granted - Weighted Average Exercise Price (in dollars per share) | 3 | 3 |
Forfeited - Weighted Average Exercise Price (in dollars per share) | 3 | 3.04 |
Exercised - Weighted Average Exercise Price (in dollars per share) | 0 | 0 |
Outstanding Ending - Weighted Average Exercise Price (in dollars per share) | 3.02 | $ 3.02 |
Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 3.05 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Nov. 07, 2014 | Apr. 14, 2014 | Apr. 04, 2014 | Jun. 18, 2015 | Jan. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Stockholders Equity Note [Line Items] | ||||||||||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Common stock, shares issued | 13,892,990 | 13,892,990 | 13,863,823 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000 | 445,000 | ||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | |||||||||
Stock Issued During Period, Value, New Issues | $ 1,400,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 3.05 | $ 3.05 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | 193,334 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 8 months 23 days | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | $ 0 | ||||||||
Proceeds from Issuance of Common Stock | $ 0 | $ 1,000,000 | ||||||||
Common Stock SPA [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common stock, shares issued | 333,333 | |||||||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ 25,000 | |||||||||
Proceeds from Issuance of Common Stock | $ 1,000,000 | |||||||||
ACI [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Stock Issued During Period, Shares, Acquisitions | 2,000,000 | |||||||||
Employee Stock [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common stock, shares issued | 29,167 | |||||||||
Stock Issued During Period, Value, New Issues | $ 79,000 | |||||||||
Consultant Service [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common stock, shares issued | 1,396 | |||||||||
Stock Issued During Period, Value, New Issues | $ 6,000 | |||||||||
Stock Incentive Plan [Member] | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 200,000 | 65,000 | ||||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 232,000 | $ 145,000 | ||||||||
Allocated Share-based Compensation Expense | 64,000 | $ 88,000 | 142,000 | $ 168,000 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 624,000 | $ 624,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 3 | $ 3 | $ 3 | $ 3 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Income Tax Expense (Benefit) | $ 43,000 | $ 52,000 | $ 101,000 | $ 104,000 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | (12.22%) | (2.24%) | (19.65%) | (2.85%) | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $ 12,800,000 | ||||
Operating Loss Carryforward Expiration Date | 2,034 | ||||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 205,000 | $ 1,500,000 | |||
Deferred Tax Assets, Valuation Allowance | $ 7,800,000 | $ 7,800,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) | Apr. 04, 2014 | Mar. 03, 2014 | Feb. 03, 2014 | Aug. 23, 2013 | Jun. 30, 2013 | Dec. 28, 2012 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2012 | Apr. 14, 2014 |
Commitments and Contingencies [Line Items] | ||||||||||||||
Escrow Amount Before Direct Air Bankruptcy Filing | $ 31,000,000 | |||||||||||||
Escrow Amount After Direct Air Bankruptcy Filing | 1,000,000 | |||||||||||||
Proceeds from Issuance of Common Stock | $ 0 | $ 1,000,000 | ||||||||||||
Stock Issued During Period, Shares, Issued for Services | 333,333 | |||||||||||||
Selling, General and Administrative Expense | $ 3,194,000 | $ 3,408,000 | 6,576,000 | $ 6,183,000 | ||||||||||
Common Stock SPA [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Proceeds from Issuance of Common Stock | $ 1,000,000 | |||||||||||||
MSC Cruine Lines [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Loss Contingency, Damages Sought, Value | $ 2,000,000 | |||||||||||||
Litigation Settlement, Expense | $ 600,000 | |||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Other Commitment | $ 6,000,000 | |||||||||||||
Loss Contingency, Estimate of Possible Loss | 340,000 | |||||||||||||
Series A Preferred Stock [Member] | Flexpoint [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Additional Issuance Of Preferred Stock Shares | 4,667 | |||||||||||||
Additional Issuance Of Preferred Stock Amount | $ 1,400,000 | |||||||||||||
Early Bird Capital Inc [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Payments for Legal Settlements | $ 411,000 | |||||||||||||
Fees and Commissions | $ 2,070,000 | |||||||||||||
Interest Expense, Other | $ 740,000 | |||||||||||||
Accrued Liabilities, Current | 2,136,000 | |||||||||||||
Selling, General and Administrative Expense | $ 675,000 | |||||||||||||
Merrick Bank [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Loss Contingency, Loss in Period | 25,000,000 | |||||||||||||
Legal Fees | $ 597,000 | 1,900,000 | ||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 3,333,333 | |||||||||||||
Legal Fees and Interest Costs | 3,200,000 | 487,000 | ||||||||||||
Increase (Decrease) in Restructuring Reserve | $ 600,000 | |||||||||||||
Cash Reserve Deposit Required and Made | 4,400,000 | 4,400,000 | ||||||||||||
Jetpay [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Litigation Settlement, Amount | 1,900,000 | |||||||||||||
Jetpay [Member] | Series A Preferred Stock [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Loss Contingency Accrual | $ 340,000 | $ 340,000 | ||||||||||||
Jp Morgan Chase [Member] | Common Stock [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 3,333,333 | |||||||||||||
M and A Ventures [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Litigation Settlement, Amount | 400,000 | |||||||||||||
Payments for Legal Settlements | 100,000 | |||||||||||||
Litigation Settlement, Expense | $ 400,000 | |||||||||||||
Chartis Insurance [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Deductible Policy Amount | $ 250,000 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) | Apr. 04, 2014USD ($)shares | Jun. 07, 2013USD ($) | Jun. 30, 2015USD ($)ashares | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)ashares | Jun. 30, 2014USD ($) | May. 06, 2017USD ($) | May. 06, 2016USD ($) | May. 06, 2015USD ($) | Dec. 31, 2014shares | Aug. 22, 2013 | Dec. 28, 2012USD ($) |
Related Party Transaction [Line Items] | ||||||||||||
Common Stock, Shares, Issued | shares | 13,892,990 | 13,892,990 | 13,863,823 | |||||||||
Proceeds from Issuance of Common Stock | $ 0 | $ 1,000,000 | ||||||||||
Revenues | $ 10,566,000 | $ 7,726,000 | $ 21,410,000 | 15,895,000 | ||||||||
Unsecured Debt [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Other Deferred Compensation Arrangements, Liability, Current | $ 2,000,000 | |||||||||||
Unsecured Promissory Note [Member] | Unsecured Debt [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt Instrument, Face Amount | $ 350,000 | |||||||||||
Promissory Note [Member] | Unsecured Debt [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | 4.00% | ||||||||||
Interest Expense, Debt | $ 2,200 | $ 2,200 | ||||||||||
Promissory Note [Member] | Scenario, Forecast [Member] | Unsecured Debt [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Unsecured Debt | $ 175,000 | $ 175,000 | ||||||||||
Note and Indemnity Side Agreement [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | |||||||||||
Debt Instrument, Face Amount | $ 2,331,369 | |||||||||||
Interest Expense, Related Party | 29,500 | 29,500 | 58,600 | 58,600 | ||||||||
Indemnity Claim Loss Waived Amount | $ 2,331,369 | |||||||||||
Jet Pay Solutions Ltd [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 75.00% | |||||||||||
Subsequent Event [Member] | Promissory Note [Member] | Unsecured Debt [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt Instrument, Maturity Date | May 6, 2017 | |||||||||||
Jt Holdings [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments for Rent | $ 9,000 | 9,000 | $ 18,000 | 18,000 | ||||||||
Trent Voigt [Member] | Promissory Note [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ||||||||||
Debt Instrument, Face Amount | $ 491,693 | |||||||||||
Interest Expense, Related Party | $ 4,900 | 4,900 | $ 9,750 | 9,750 | ||||||||
Debt Instrument, Maturity Date | Sep. 30, 2016 | |||||||||||
Jetpay [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Revenues | $ 118,446 | 68,712 | $ 223,272 | 68,712 | ||||||||
Common Stock SPA [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Common Stock, Shares, Issued | shares | 333,333 | |||||||||||
Proceeds from Issuance of Common Stock | $ 1,000,000 | |||||||||||
JetPay Payroll Service [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Area of Land | a | 22,500 | 22,500 | ||||||||||
Operating Leases, Rent Expense | $ 129,140 | $ 129,140 | $ 258,280 | $ 258,280 | ||||||||
Monthly Rent Expense | $ 43,426 | |||||||||||
Lease Rent Annual Increase Percentage | 4.00% | |||||||||||
Lease Term | 10 years | |||||||||||
Debt Instrument, Maturity Date | May 31, 2016 | |||||||||||
JetPay Payment Services [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Area of Land | a | 1,600 | 1,600 | ||||||||||
Monthly Rent Expense | $ 3,000 |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Processing revenues | $ 10,566 | $ 7,726 | $ 21,410 | $ 15,895 | |
Cost of processing revenues | 6,520 | 4,733 | 12,976 | 9,421 | |
Selling, general and administrative expenses | 3,194 | 3,408 | 6,576 | 6,183 | |
Change in fair value of contingent consideration liability | 26 | (8) | 37 | (8) | |
Amortization of intangibles and depreciation | 882 | 663 | 1,759 | 1,326 | |
Other expenses (income) | 296 | 1,249 | 576 | 2,626 | |
Income (loss) before income taxes | (352) | (2,319) | (514) | (3,653) | |
Total property and equipment, net | 1,287 | 1,086 | 1,287 | 1,086 | $ 1,226 |
Property and equipment additions | 178 | 58 | 293 | 142 | |
Intangible assets and goodwill | 67,117 | 52,857 | 67,117 | 52,857 | |
Total segment assets | 128,751 | 127,645 | 128,751 | 127,645 | $ 144,402 |
Payment Processing [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Processing revenues | 7,445 | 4,687 | 14,533 | 9,290 | |
Cost of processing revenues | 4,757 | 2,941 | 9,286 | 5,886 | |
Selling, general and administrative expenses | 1,807 | 1,832 | 3,559 | 2,828 | |
Change in fair value of contingent consideration liability | 0 | 0 | 0 | 0 | |
Amortization of intangibles and depreciation | 534 | 321 | 1,065 | 641 | |
Other expenses (income) | 100 | (2) | 199 | 1 | |
Income (loss) before income taxes | 247 | (405) | 424 | (66) | |
Total property and equipment, net | 691 | 458 | 691 | 458 | |
Property and equipment additions | 99 | 16 | 174 | 56 | |
Intangible assets and goodwill | 48,823 | 33,442 | 48,823 | 33,442 | |
Total segment assets | 72,264 | 54,828 | 72,264 | 54,828 | |
Payroll Service [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Processing revenues | 3,108 | 3,038 | 6,855 | 6,604 | |
Cost of processing revenues | 1,733 | 1,781 | 3,630 | 3,521 | |
Selling, general and administrative expenses | 1,144 | 1,029 | 2,291 | 2,030 | |
Change in fair value of contingent consideration liability | 0 | 0 | 0 | 0 | |
Amortization of intangibles and depreciation | 346 | 341 | 691 | 684 | |
Other expenses (income) | 76 | 75 | 139 | 149 | |
Income (loss) before income taxes | (191) | (188) | 104 | 220 | |
Total property and equipment, net | 560 | 614 | 560 | 614 | |
Property and equipment additions | 79 | 29 | 118 | 73 | |
Intangible assets and goodwill | 18,294 | 19,415 | 18,294 | 19,415 | |
Total segment assets | 55,536 | 70,662 | 55,536 | 70,662 | |
General/Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Processing revenues | 13 | 1 | 22 | 1 | |
Cost of processing revenues | 30 | 11 | 60 | 14 | |
Selling, general and administrative expenses | 243 | 547 | 726 | 1,325 | |
Change in fair value of contingent consideration liability | 26 | (8) | 37 | (8) | |
Amortization of intangibles and depreciation | 2 | 1 | 3 | 1 | |
Other expenses (income) | 120 | 1,176 | 238 | 2,476 | |
Income (loss) before income taxes | (408) | (1,726) | (1,042) | (3,807) | |
Total property and equipment, net | 36 | 14 | 36 | 14 | |
Property and equipment additions | 0 | 13 | 1 | 13 | |
Intangible assets and goodwill | 0 | 0 | 0 | 0 | |
Total segment assets | $ 951 | $ 2,155 | $ 951 | $ 2,155 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) | Aug. 06, 2015 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Loss Contingency, Settlement Agreement, Report Classification | the Company entered into a Letter Agreement to resolve the matter, whereby the conversion price of any of the Series A-1 Preferred Stock held by Flexpoint is reduced from $3.00 per share to $2.90 per share. |