Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 08, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
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 | 15,439,310 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 8,676 | $ 6,824 |
Restricted cash | 1,906 | 1,905 |
Accounts receivable, less allowance for doubtful accounts | 3,997 | 5,269 |
Settlement processing assets and funds | 50,215 | 52,116 |
Prepaid expenses and other current assets | 1,495 | 1,725 |
Current assets before funds held for clients | 66,289 | 67,839 |
Funds held for clients | 47,456 | 49,288 |
Total current assets | 113,745 | 117,127 |
Property and equipment, net | 5,419 | 3,970 |
Goodwill | 48,978 | 48,978 |
Identifiable intangible assets, net of accumulated amortization of $16,114 at June 30, 2018 and $14,418 at December 31, 2017 | 20,902 | 22,598 |
Other assets | 1,633 | 1,448 |
Total assets | 190,677 | 194,121 |
Current liabilities: | ||
Current portion of long-term debt and capital lease obligations | 3,299 | 3,364 |
Accounts payable and accrued expenses | 12,067 | 11,569 |
Settlement processing liabilities | 49,218 | 51,407 |
Deferred revenue | 70 | 1,033 |
Other current liabilities | 50 | 50 |
Current liabilities before client fund obligations | 64,704 | 67,423 |
Client fund obligations | 47,456 | 49,288 |
Total current liabilities | 112,160 | 116,711 |
Long-term debt and capital lease obligations, net of current portion and unamortized discounts and financing costs of $208 and $274 at June 30, 2018 and December 31, 2017, respectively | 12,023 | 12,700 |
Deferred income taxes | 1,431 | 845 |
Other liabilities | 607 | 1,452 |
Total liabilities | 126,221 | 131,708 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred stock, $0.001 par value Authorized 1,000,000 shares, none issued (which excludes 142,333 shares of Series A and Series A-1 redeemable convertible preferred stock at June 30, 2018 and December 31, 2017) | 0 | 0 |
Common stock, $0.001 par value Authorized 100,000,000 shares; 17,608,772 and 17,873,534 issued at June 30, 2018 and December 31, 2017, respectively (which includes 1,902,300 and 1,625,000 shares subject to possible redemption at June 30, 2018 and December 31, 2017, respectively) and 15,408,772 and 15,673,534 outstanding at June 30, 2018 and December 31, 2017, respectively | 18 | 18 |
Additional paid-in capital | 29,552 | 35,186 |
Treasury stock, 2,200,000 shares at cost | (4,950) | (4,950) |
Accumulated deficit | (29,904) | (31,045) |
Total Stockholders' Deficit | (5,284) | (791) |
Total Liabilities and Stockholders' Deficit | 190,677 | 194,121 |
Common Stock [Member] | ||
Redeemable Convertible Preferred Stock: | ||
Temporary Equity, Carrying Amount, Attributable to Parent | 4,086 | 3,520 |
Stockholders' Deficit | ||
Total Stockholders' Deficit | 18 | 18 |
Redeemable Convertible Preferred Stock [Member] | ||
Redeemable Convertible Preferred Stock: | ||
Temporary Equity, Carrying Amount, Attributable to Parent | $ 65,654 | $ 59,684 |
Consolidated Balance Sheets _Pa
Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Accumulated Amortization | $ 16,114 | $ 14,418 |
Debt Issuance Costs, Noncurrent, Net | $ 208 | $ 274 |
Temporary Equity, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary Equity, Shares Issued | 142,333 | 142,333 |
Temporary Equity, Shares Outstanding | 142,333 | 142,333 |
Temporary Equity, Liquidation Preference | $ 85,400 | |
Redeemable Noncontrolling Interest Number Of Shares Subject To Possible Redemption | 1,902,300 | 1,625,000 |
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 | 17,608,772 | 17,873,534 |
Common stock, shares outstanding | 15,408,772 | 15,673,534 |
Treasury Stock, Shares | 2,200,000 | 2,200,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 15,239 | $ 13,529 | $ 31,110 | $ 28,026 |
Cost of revenues | 8,481 | 7,816 | 16,619 | 15,256 |
Gross profit | 6,758 | 5,713 | 14,491 | 12,770 |
Selling, general and administrative expenses | 5,857 | 4,896 | 11,728 | 9,704 |
Settlement of legal matters | (2,175) | 747 | (1,725) | 747 |
Change in fair value of contingent consideration liability | (320) | (257) | (357) | (183) |
Amortization of intangibles | 848 | 875 | 1,696 | 1,749 |
Depreciation | 374 | 248 | 687 | 479 |
Operating income (loss) | 2,174 | (796) | 2,462 | 274 |
Other expenses (income) | ||||
Interest expense | 269 | 276 | 536 | 571 |
Non-cash interest costs | 32 | 33 | 66 | 67 |
Other income | (9) | (5) | (15) | (7) |
Income (loss) before income taxes | 1,882 | (1,100) | 1,875 | (357) |
Income tax expense | 370 | 81 | 734 | 143 |
Net income (loss) | 1,512 | (1,181) | 1,141 | (500) |
Accretion of convertible preferred stock | (3,025) | (2,652) | (5,970) | (4,775) |
Net loss applicable to common stockholders | $ (1,513) | $ (3,833) | $ (4,829) | $ (5,275) |
Basic and diluted loss per share applicable to common stockholders | $ (0.10) | $ (0.25) | $ (0.31) | $ (0.33) |
Weighted average shares outstanding: | ||||
Basic and diluted | 15,408,772 | 15,588,984 | 15,502,023 | 16,134,808 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Deficit - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2017 | $ (791) | $ 18 | $ 35,186 | $ (4,950) | $ (31,045) |
Balance (in shares) at Dec. 31, 2017 | 17,873,534 | ||||
Common stock issued under employee stock purchase plan | 51 | $ 0 | 51 | 0 | 0 |
Common stock issued under employee stock purchase plan (in shares) | 27,184 | ||||
Common stock cancelled from escrow (in shares) | (291,946) | ||||
Employee stock purchase plan expense | 19 | 19 | 0 | 0 | |
Stock-based compensation expense | 344 | $ 0 | 344 | 0 | 0 |
Reclassification of redeemable common stock | (322) | 0 | (322) | 0 | 0 |
Common stock released from escrow to satisfy contingent consideration obligation | 244 | 0 | 244 | 0 | 0 |
Accretion of convertible preferred stock to redemption value | (5,970) | 0 | (5,970) | 0 | 0 |
Net income | 1,141 | 0 | 0 | 0 | 1,141 |
Balance at Jun. 30, 2018 | $ (5,284) | $ 18 | $ 29,552 | $ (4,950) | $ (29,904) |
Balance (in Shares) at Jun. 30, 2018 | 17,608,772 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Activities | ||
Net income (loss) | $ 1,141 | $ (500) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 687 | 479 |
Stock-based compensation | 344 | 361 |
Employee stock purchase plan expense | 19 | 23 |
Amortization of intangibles | 1,696 | 1,749 |
Non-cash interest costs | 66 | 67 |
Change in fair value of contingent consideration liability | (357) | (183) |
Loss on disposal of fixed assets | 8 | 110 |
Deferred income taxes | 586 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | 1,272 | 1,341 |
Settlement processing assets, funds and obligations, net | (288) | (1,555) |
Prepaid expenses and other current assets | 230 | (325) |
Other assets | (185) | (317) |
Deferred revenue | (963) | (932) |
Accounts payable, accrued expenses and other liabilities | 498 | 1,714 |
Net cash provided by operating activities | 4,754 | 2,032 |
Investing Activities | ||
Net decrease in funds held to satisfy client fund obligations | 1,832 | 1,088 |
Purchase of property and equipment | (1,609) | (1,004) |
Net cash provided by investing activities | 223 | 84 |
Financing Activities | ||
Payments on long-term debt and capital lease obligations | (1,748) | (6,300) |
Proceeds from issuance of common stock pursuant to employee stock purchase plan | 51 | 104 |
Deferred financing fees associated with new borrowings | 0 | (76) |
Proceeds from notes payable | 405 | 400 |
Payment of deferred and contingent acquisition consideration | 0 | (314) |
Proceeds from the sale of preferred stock, net of issuance costs | 0 | 825 |
Net decrease in client funds obligations | (1,832) | (1,088) |
Net cash used in financing activities | (3,124) | (6,449) |
Net increase (decrease) in cash and restricted cash | 1,853 | (4,333) |
Cash and Restricted Cash, beginning | 8,729 | 14,713 |
Cash and Restricted Cash, ending | 10,582 | 10,380 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 532 | 703 |
Cash paid for taxes | 267 | 245 |
Supplemental disclosure of non-cash investing and financing activity: | ||
Acquisition of equipment under capital lease | 535 | 318 |
Treasury stock reclassification | 0 | 4,950 |
Issuance of warrants for settlement of legal matter | 0 | 373 |
Beneficial conversion feature on convertible preferred stock | 0 | 4,865 |
Accretion of convertible preferred stock | 5,970 | 4,775 |
Release of common stock held in escrow to satisfy contingent consideration obligation | $ 488 | $ 525 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018. The results of operations for the three and six months ended June 30, 2018 and 2017 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, 2017 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2018. |
Business Operations and Liquidi
Business Operations and Liquidity | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 2. Business Operations and Liquidity The Company currently operates in two business segments: (i) the Payment Services Segment and (ii) the HR & Payroll Services Segment. The Payment Services Segment is an end-to-end processor of credit and debit card and automated clearing house payment transactions that focuses on processing omni-channel (internet, mobile, and point-of-sale) transactions and recurring billings for traditional retailers, government and utility, and service providers. The HR & Payroll Services Segment provides human capital management (“HCM”) services, including full-service payroll and related payroll tax payment processing, time and attendance, HCM services, prepaid card services, and services under the Patient Protection and Affordable Care Act. The Company entered the payment processing and the payroll processing businesses upon consummation of the acquisitions of JetPay Payment Services, TX, LLC (f/k/a JetPay, LLC) (“JetPay Payments, TX”) and JetPay HR & Payroll Services, Inc. (f/k/a A. D. Computer Corporation) (“JetPay HR & Payroll Services”) on December 28, 2012. Additionally, on November 7, 2014, the Company acquired JetPay Payment Services, PA, LLC (f/k/a ACI Merchant Systems, LLC) (“JetPay Payments, PA”), an independent sales organization specializing in relationships with banks, credit unions and other financial institutions. The Company expects to fund its operating cash needs for the next fifteen months, including debt service requirements, capital expenditures and possible future acquisitions, with cash flow from its operating activities, potential sales of equity securities, and current and future borrowings. The Company believes that the investments made in its technology, infrastructure, and sales staff will help generate cash flows in the future sufficient to cover its working capital needs. As discussed below, the Company is currently exploring a variety of options with respect to the potential redemption of up to $24.3 million of shares of Series A and Series A-1 Preferred by Flexpoint and Wellington beginning on or after October 11, 2018 and through September 30, 2019. In the past, the Company has been successful in obtaining loans and selling its equity securities. To fund the Company’s current debt service needs, satisfy the potential redemption of shares of preferred stock, expand its technology platforms for new business initiatives, and pursue possible future acquisitions, the Company may need to raise additional capital through loans or additional sales of equity securities. The Company continues to investigate the capital markets for sources of funding, which could take the form of additional debt, the restructuring of our current debt, or additional equity financings. The Company cannot provide any assurance that it will be successful in securing new financing or restructuring its current debt or that it will secure such future financing with commercially acceptable terms. If the Company is unable to raise additional capital, it may need to delay certain technology capital improvements, limit its planned level of capital expenditures and future growth plans, or explore other alternatives, including the possible disposal of operating assets to generate cash to sustain operations and fund ongoing capital investments. As disclosed in Note 8. Redeemable Convertible Preferred Stock Note 7. Long-Term Debt, Notes Payable and Capital Lease Obligations The Company may from time to time determine that additional investments are prudent to maintain and increase stockholder value. In addition to funding ongoing working capital needs, the Company’s cash requirements for the next fifteen months ending September 30, 2019 include, but are not limited to, principal and interest payments on long-term debt and capital lease obligations of approximately $5.3 million and estimated capital expenditures of $2.8 million to $3.3 million, $1.0 million of which the Company expects to fund with existing available credit facilities. On or after October 11, 2018, the fifth anniversary of the initial preferred shares issuance, the holders of the shares of Series A Preferred have the right to require the Company to repurchase any or all of such shares of Series A Preferred issued in the initial closing at the contractual redemption price of $600 per share (or up to approximately $20.0 million). Also, on or after April 14, 2019, the fifth anniversary of the second preferred shares issuance, the holders of the Series A Preferred can require the Company to repurchase any or all of the 4,667 shares issued on April 11, 2014 at the contractual redemption price of $600 per share (or up to approximately $2.8 million). Should the holders of the shares of the Series A Preferred exercise their redemption rights as described above, the holders of the Series A-1 Preferred may also redeem a proportionate amount of their shares outstanding up to an aggregate value of approximately $1.54 million. The Company is exploring alternative financing opportunities should the Series A Preferred stockholders exercise their redemption rights, including exploring alternative equity or debt financing opportunities, or the possible sale of operating assets to generate sufficient liquidity. The Company believes that certain of its assets have sufficient value to meet this possible liquidity need and accordingly does not believe the potential liquidation event raises substantial doubt about the Company’s ability to continue as a going concern. |
Business Acquisition
Business Acquisition | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 3. Business Acquisition On June 2, 2016, JetPay completed its acquisition of CollectorSolutions, Inc. pursuant to the terms of the Agreement and Plan of Merger, dated February 22, 2016 (the “Merger Agreement”), by and among JetPay, CSI Acquisition Sub One, LLC, CSI Acquisition Sub Two, LLC, CollectorSolutions, Inc. and Gene M. Valentino, in his capacity as representative of the shareholders of CollectorSolutions, Inc. On October 21, 2016, the surviving entity of the merger changed its name to JetPay Payment Services, FL, LLC. The acquisition of JetPay Payments, FL provided the Company with additional expertise in selling debit and credit card processing services in the government and utilities channels through JetPay Payments, FL’s highly configurable payment gateway; added incremental debit, credit, and e-check processing volumes; and provided a base operation to sell the Company’s payroll, HCM, processing and prepaid card services to JetPay Payments, FL’s customer base. The consolidated financial statements include the accounts of JetPay Payments, FL since the acquisition date, June 2, 2016. As consideration for the acquisition, the Company initially issued 3.25 million shares of its common stock to the stockholders of CollectorSolutions, Inc. and assumed approximately $1.0 million of CollectorSolutions, Inc.’s indebtedness. The 3.25 million shares of common stock issued in connection with closing, valued at $8.3 million at the date of acquisition, included: (i) 587,500 shares placed in escrow at closing as partial security for the indemnification obligations of the former stockholders of CollectorSolutions, Inc. (the “Escrowed Shares”) and (ii) 500,000 shares placed in escrow at closing which would be released or cancelled if JetPay Payments, FL achieves certain gross profit performance targets in 2016 and 2017 (the “Earn-Out Shares”). In addition to the shares of its common stock issued at the date of acquisition, the Company issued an additional 54,601 shares on December 30, 2016 to the former stockholders of CollectorSolutions, Inc. in connection with a post-closing purchase price adjustment for working capital and debt levels as of the acquisition date pursuant to the Merger Agreement. JetPay Payments, FL’s former stockholders may also be entitled to receive warrants to purchase up to 500,000 shares of the Company’s common stock, each with a strike price of $4.00 per share and a 10-year term from its date of issuance, contingent upon JetPay Payments, FL achieving certain gross profit performance targets in 2018 and 2019. This contingent stock and warrant consideration, recorded as a liability, was valued at $1,975,000 at the date of acquisition utilizing a Monte Carlo simulation model. The fair value of the contingent consideration was $579,000 at June 30, 2018 (recorded within non-current other liabilities). See Note 4. Summary of Significant Accounting Policies. Based upon the level of gross profit performance of JetPay Payments, FL in 2016, on June 28, 2017, the Company released 250,000 Earn-Out Shares from escrow to the former shareholders of CollectorSolutions, Inc. Similarly, based upon the level of gross profit performance in 2017, on June 29, 2018, the Company released an additional 250,000 Earn-Out Shares from escrow pursuant to the earn-out provisions of the Merger Agreement. In addition, as per the Merger Agreement, on June 28, 2017, the Company released 587,500 Escrowed Shares held for indemnification purposes from escrow to the former shareholders of CollectorSolutions, Inc. The Company also granted to each former stockholder of CollectorSolutions, Inc. a right to require the Company to repurchase up to 50% of the shares of common stock issued in connection with the acquisition and continuously held by such stockholder for $4.00 per share if Flexpoint exercises its right to redeem all of its shares of Series A Preferred. The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 4. Summary of Significant Accounting Policies Significant 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 significant accounting policies are described below. Use of Estimates, Presentation and Consolidation The accompanying consolidated 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; estimates of allowances and reserves against accounts receivable; reserves for chargebacks; goodwill; intangible assets and other long-lived assets; legal contingencies; the fair value of equity instruments classified as liabilities; 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. These consolidated financial statements include our accounts and those of our wholly-owned subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which requires revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which is expected to be received in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, which provides guidance on other assets and deferred costs relating to contracts with customers, specifically costs an entity incurs to obtain and fulfill a contract. The FASB subsequently issued several amendments to ASU 2014-09, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent considerations (gross versus net presentation), as well as enhanced disclosure requirements about revenue and contract assets and liabilities. ASU 2014-09 was codified as Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers Other Assets and Deferred Costs – Contracts with Customers The Company adopted the requirements of ASC Topic 606 on January 1, 2018 using the full retrospective method, which required both the current and prior reporting periods to be presented under the same methodology. Under this method, the June 30, 2017 and December 31, 2017 financial statements and related disclosures, included herein, have been presented on an “As Adjusted” basis under ASC Topic 606, as opposed to what was previously reported under ASC Topic 605, Revenue Recognition Impact on Previously Reported Results The provisions of ASC Topic 606 had a material impact on the timing and amount of revenues recognized by the Company. The most significant impact of adopting ASC Topic 606 is the result of gross versus net presentation of certain fees in the Payment Services Segment. Under ASC Topic 606, the Company reflects revenues net of certain fees that the Company pays to third parties, including interchange, which is earned by the cardholder’s issuing bank, and dues and assessments, which are earned by the credit card associations. The Company previously reported certain of these items as revenues and cost of revenues under previous standards. This change in presentation will have no effect on the reported amount of operating income; however, the Company’s total revenues and cost of revenues for the three and six months ended June 30, 2017 is each lower by $5.2 million and $10.4 million, respectively. The most significant impact of adopting ASC Topic 606 in the HR & Payroll Services Segment relates to the timing of revenue recognized within the annual Form W-2, quarterly tax filing and annual tax filing revenue streams. To comply with the new standard, the timing of revenue recognized has changed from when delivery has occurred or services have been rendered to when a customer takes control of the good or service. This change in the timing of revenue recognition resulted in a decrease in revenues of $15,000 for the three months ended June 30, 2017 and an increase in revenues of $728,000 for the six months ended at June 30, 2017. Additionally, ASC Topic 606 had an impact on the manner in which we account for certain costs to obtain new contracts (i.e. commissions), which we had previously expensed as incurred in both operating segments. Under ASC Topic 606, incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid to inside sales professionals, are deferred and recognized ratably over the three-year and ten-year estimated terms of our customer relationships in the Payment Services and HR & Payroll Services Segments, respectively. The average terms of our customer relationships will be tested for impairment annually and whenever an indicator of impairment exists. We include deferred commissions within other non-current assets since the average life of the Company’s customer relationships is greater than one year. This change in the timing of commission recognition results in a reduction of commission expenses of $160,000 and $308,000 for the three and six months ended June 30, 2017, respectively. The following table presents a recast of selected unaudited consolidated balance sheet line items after giving effect to the adoption of ASC Topic 606 (in thousands): Year Ended December 31, 2017 As Previously Reported Adoption Adjustments As Adjusted Assets Deferred commissions (Other assets) $ 260 $ 1,188 $ 1,448 Liabilities Deferred revenue $ 492 $ 541 $ 1,033 Stockholder’s Deficit Accumulated deficit $ (31,692 ) $ 647 $ (31,045 ) The following table presents a recast of selected unaudited consolidated statement of operations line items after giving effect to the adoption of ASC Topic 606 (in thousands, except per share amounts): Three Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Revenues $ 18,777 $ (5,248 ) $ 13,529 Cost of revenues $ 13,049 $ (5,233 ) $ 7,816 Gross profit $ 5,728 $ (15 ) $ 5,713 Selling, general and administrative expenses $ 5,056 $ (160 ) $ 4,896 Operating (loss) income $ (941 ) $ 145 $ (796 ) (Loss) income before income taxes $ (1,245 ) $ 145 $ (1,100 ) Net (loss) income $ (1,326 ) $ 145 $ (1,181 ) Net (loss) income applicable to common stockholders $ (3,978 ) $ 145 $ (3,833 ) Basic and diluted (loss) income per share applicable to common stockholders $ (0.26 ) $ 0.01 $ (0.25 ) Six Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Revenues $ 37,719 $ (9,693 ) $ 28,026 Cost of revenues $ 25,634 $ (10,378 ) $ 15,256 Gross profit $ 12,085 $ 685 $ 12,770 Selling, general and administrative expenses $ 10,012 $ (308 ) $ 9,704 Operating (loss) income $ (719 ) $ 993 $ 274 (Loss) income before income taxes $ (1,350 ) $ 993 $ (357 ) Net (loss) income $ (1,493 ) $ 993 $ (500 ) Net (loss) income applicable to common stockholders $ (6,268 ) $ 993 $ (5,275 ) Basic and diluted (loss) income per share applicable to common stockholders $ (0.39 ) $ 0.06 $ (0.33 ) The following table presents a recast of selected unaudited consolidated statement of cash flow line items after giving effect to the adoption of ASC Topic 606 (in thousands): Six Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Operating activities Net (loss) income $ (1,493 ) $ 993 $ (500 ) Change in operating assets and liabilities: Other assets – deferred commissions $ (9 ) $ (308 ) $ (317 ) Deferred revenue $ (204 ) $ (728 ) $ (932 ) Accounts payable, accrued expenses and other liabilities $ 1,671 $ 43 $ 1,714 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which provides guidance that will require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted, including adoption in an interim period. The Company adopted this new standard as of January 1, 2018 and has modified the presentation of $1.9 million of restricted cash in the Company’s Consolidated Statement of Cash Flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted of this standard as of January 1, 2018 and it did not have a material impact on the Company’s consolidated financial statements and disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU clarifies an entity’s ability to modify the terms or conditions of a share-based payment award presented. An entity should account for the effects of a modification unless all the following are met: the fair value of the modified award has not changed from the fair value on the date of issuance; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and, the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted this new standard as of January 1, 2018 and it did not have a material impact on the Company’s consolidated financial statements and disclosures. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) . The ASU presents amendments to income taxes and income tax accounting implications of the Tax Cuts and Jobs Act ASC 740-10-S99-2A Recent Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception . This ASU clarifies the recognition, measurement, and effect on earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Revenue Recognition and Contract Assets and Liabilities The Company recognizes revenue when control of the promised goods or services is transferred to its customers in an amount that reflects the consideration it expects to be entitled for those goods or services. The Company currently operates and manages its business through two reportable segments, the Payment Services Segment and the HR & Payroll Services Segment, which coincide with the types of services the Company provides to its customers. The Company recognizes revenue for distinct performance obligations, wherein, a performance obligation is a promise in a contract to transfer a distinct product or service to the customer and is the unit of account in ASC Topic 606. Within each customer contract, transaction prices are allocated to each distinct performance obligation based upon relative standalone selling price and then recognized as revenue when, or as, the performance obligations are satisfied. The majority of the Company’s contracts have multiple performance obligations primarily related to the various types of services the Company provides within its two reportable segments. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price for each distinct good or service in the contract. Payment Services 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, or partners, include Independent Sales Organizations (“ISOs”), Value Added Resellers (“VARs”), Independent Software Vendors (“ISVs”) and financial institutions. The majority of the Company’s revenues within its credit and debit card processing business is comprised of transaction-based fees, which typically constitute a percentage of dollar volume processed, and/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 contracts pursuant to which the Company processes credit and debit card transactions for merchant customers, revenues are primarily comprised of transaction 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. With respect to many of the Company’s government and utility clients, as well as the Company’s JetX cash discount product, the cardholder is charged either a convenience fee (government and utilities) or transaction fee (JetX), instead of the merchant being charged for these fees. In all cases, the Company recognizes revenues net of interchange fees and assessments charged by the credit card associations. Interchange fees and credit card association fees are not controlled by the Company. The Company effectively functions as a clearing house collecting and remitting credit card association fees and interchange fee settlement on behalf of issuing banks, debit networks, credit card associations and their processing customers. The Company’s revenue streams within the Payment Services Segment include Financial Institutions revenues, Government Agency & Utility revenues, and Partners & e-Commerce revenues. Within the Payment Services Segment, the transaction price consists primarily of usage-based variable consideration, as the total consideration to be received is based on the number of transactions and dollar volume that will be processed by the Company for the merchant customer. The Company’s performance obligations in the Payment Services Segment are satisfied over time as customers receive and obtain control of the payment processing service. The Company has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the Company has the right to invoice each customer, which generally corresponds with the transactions processed on behalf of the merchant customers. Additionally, the Company’s direct merchant customers and certain third-party partners have the liability for any charges properly reversed by the cardholder. In the event, however, 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 in some instances 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. HR & Payroll Services Revenues from the Company’s JetPay HR & Payroll Services operations are recognized in the period products or services are delivered under arrangements with clients where fees are fixed or determinable and allocated to specific performance obligations. Certain processing services are provided under annual service arrangements with revenue recognized when the service is delivered to the customer. All revenues are deferred until the allocated performance obligation has been completed and control is transferred to the customer. The Company’s service revenues are 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 revenues earned from delivery service for the distribution of certain client payroll checks and reports is included in revenues, and the costs for delivery are included in selling, general, and administrative expenses on the Consolidated Statements of Operations. Within the HR & Payroll Services Segment, the transaction price consists primarily of fixed consideration which is the price negotiated at contract inception for the services to be provided. The Company’s performance obligations within the HR & Payroll Services Segment are satisfied at a point in time or over time depending upon the delivery of the product or service and how control is transferred to the customer. Payroll processing services are satisfied over time since the customer simultaneously receives and consumes the benefits as the Company performs. The Company utilizes the as-invoiced practical expedient to recognize revenue as the Company is paid a fixed amount based upon payroll processing frequency and the number of active employees paid during that payroll processing period. For all other revenue streams within the HR & Payroll Services Segment, performance obligations are satisfied at a point in in time, which is when the delivery of the service to the customer has occurred. 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 between one (1) and thirty (30) days after receipt, with some items extending to ninety (90) days. The interest earned on these funds is included in total revenues on the Consolidated Statements of Operations because the collecting, holding, and remitting of these funds are critical components of providing these services. Disaggregation of Revenues The Company disaggregates revenue from contracts with customers based upon the channel/industry of its customers. The Company determined that disaggregating revenues into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. A reconciliation of disaggregated revenues to segment revenues is provided in Note 13. Segments. Disaggregated revenues for the three months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 HR & Payroll Revenues $ 4,228 $ 3,773 Financial Institutions Revenues 2,053 2,013 Government Agency & Utility Revenues 2,868 2,613 Partners & e-Commerce Revenues 6,090 5,130 Total Revenues $ 15,239 $ 13,529 Disaggregated revenues for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 HR & Payroll Revenues $ 9,669 $ 9,155 Financial Institutions Revenues 3,748 3,778 Government Agency & Utility Revenues 5,774 5,117 Partners & e-Commerce Revenues 11,919 9,976 Total Revenues $ 31,110 $ 28,026 Contract Assets and Liabilities Deferred Revenue The Company recognizes contract liabilities in the form of deferred revenue in instances where a customer pays in advance of when they take control of the goods or services to be performed by the Company. The Company receives payments from its customers based on standard terms and conditions. Changes in deferred revenue for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 Balance, beginning of period $ 1,033 $ 1,566 Deferral of revenue 134 2,076 Recognition of deferred revenue (1,097 ) (3,008 ) Balance, end of period $ 70 $ 634 Deferred Commissions Our incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid to inside sales professionals, are deferred and recognized ratably over the three-year and ten-year estimated terms of our customer relationships in the Payment Services and HR & Payroll Services Segments, respectively. The average terms of our customer relationships will be tested for impairment annually and whenever an indicator of impairment exists. We include deferred commissions within other non-current assets since the average life of the Company’s customer relationships is greater than one year. Changes in deferred commissions, presented in other non-current assets, for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 Balance, beginning of period $ 1,188 $ 647 Deferral of commissions 368 404 Amortization (183 ) (96 ) Balance, end of period $ 1,373 $ 955 Practical Expedients Elected The Company has elected the following practical expedients in applying ASC Topic 606 across all reportable segments: As-Invoiced Within the Payment Services Segment, the Company bills a fixed fee and/or a percent of volume for each transaction processed. Within the HR & Payroll Services Segment, the Company bills a fixed amount based on payroll processing frequency and the number of active employees paid during that payroll processing period. In both segments, as the Company has a right to invoice the customer in the amount that corresponds directly with the value of its performance completed to date, it will utilize the as invoiced practical expedient to recognize revenue. Directly allocable variable consideration to wholly unsatisfied performance obligations exemption Within the Payment Services Segment, all consideration in the contract is considered variable, and no amount is treated as fixed consideration. Furthermore, the Company will recognize revenue over time using invoice as practical expedient. As such, it will not need to estimate and disclose the variable consideration in the transaction price allocated to the performance obligation as stipulated under the exemption. 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, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. The Company 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 $337,000 and $413,000 were recorded as of June 30, 2018 and December 31, 2017, respectively. Fair Value of Financial Instruments The carrying amounts of financial instruments, including cash, restricted cash, settlement processing assets and liabilities, accounts receivable, funds held for clients, accounts payable 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 of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash, accounts receivable, settlement processing assets and funds held for clients. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount. 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 but are typically collected via automated clearing house payments originated by us two (2) to three (3) days following month end. 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 receivable when they are deemed uncollectible. Settlement Processing Assets and Funds 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 Consolidated 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 Consolidated 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 automated clearing house 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 portion of settlement assets due from customers and 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. Settlement assets, funds and obligations resulting from JetPay Payments, FL’s processing services and associated settlement activities include settlement receivables due from credit card associations and debit networks and certain cash accounts to which JetPay Payments, FL does not have legal ownership but has the right to use the accounts to satisfy the related settlement obligations. JetPay Payments, FL’s corresponding settlement obligations are for amounts payable to customers, net of processing fees earned by JetPay Payments, FL. Settlement receivables and payables for credit and debit card transactions are recorded at the gross transaction amounts. The gross amounts are then processed through JetPay Payments, FL’s settlement accounts, and JetPay Payments, FL retains its fees for the transactions upon settlement. Settlement receivables for e-check transactions consist of only JetPay Payments, FL’s fees for the transactions. Settlement receivables are generally collected within four (4) business days. Settlement obligations are generally paid within three (3) business days, regardless of when the related settlement receivables are collected. Property and Equipment and Depreciation Property and equipment acquired in the Company’s 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 remaining term of the related lease; machinery and equipment – five (5) to fifteen (15) years; and furniture and fixtures – five (5) to ten (10) years. Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. Goodwill Goodwill represents the premium paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations. The Company performs a goodwill impairment test on at least an annual basis. Application of the goodwill impairment test requires significant judgments, including estimation of future cash flows, which are 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 the Company’s 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, inc |
Property and Equipment, net of
Property and Equipment, net of Accumulated Depreciation | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Note 5. Property and Equipment, net of Accumulated Depreciation June 30, 2018 December 31, 2017 (in thousands) Leasehold improvements $ 78 $ 433 Equipment 3,019 2,528 Furniture and fixtures 436 372 Software 2,957 1,272 Vehicles 245 245 Assets in progress 1,613 2,042 Total property and equipment 8,348 6,892 Less: accumulated depreciation (2,929 ) (2,922 ) Property and equipment, net $ 5,419 $ 3,970 Property and equipment included $1.2 million and $794,900 of computer equipment as of June 30, 2018 and December 31, 2017, respectively, net of accumulated depreciation of $696,000 and $521,600 as of June 30, 2018 and December 31, 2017, respectively, that is subject to capital lease obligations. Assets in progress consist primarily of computer software for internal use that will be placed into service upon completion. Computer software of $1.5 million was placed into service during the six months ended June 30, 2018 and accordingly reclassified from assets in progress to computer software. Depreciation expense was $374,000 and $248,000 for the three months ended June 30, 2018 and 2017, respectively, and $687,000 and $479,000 for the six months ended June 30, 2018 and 2017, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Note 6. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: June 30, 2018 December 31, 2017 (in thousands) Trade accounts payable $ 2,511 $ 3,381 ACH clearing liability 811 1,053 Accrued compensation 1,786 1,737 Accrued agent commissions 1,612 1,220 Related party payables 39 51 Other 5,308 4,127 Total $ 12,067 $ 11,569 |
Long-Term Debt, Notes Payable a
Long-Term Debt, Notes Payable and Capital Lease Obligations | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 7. Long-Term Debt, Notes Payable and Capital Lease Obligations Long-term debt, notes payable and capital lease obligations consist of the following: June 30, 2018 December 31, 2017 (in thousands) Term loan payable to LHLJ, Inc., interest rate of 8.00% payable in monthly payments of $128,677, including principal and interest, beginning on October 18, 2016, maturing on October 31, 2021, collateralized by the assets and equity interests of JetPay HR & Payroll Services and JetPay Payments, FL. See Note 12. Related Party Transactions. $ 8,122 $ 8,557 Term loan payable to First National Bank of Pennsylvania, interest rate of 5.25% payable in monthly principal payments of $104,167 plus interest beginning on November 30, 2015, maturing November 6, 2021, collateralized by the assets and equity interests of JetPay Payments, PA. 4,167 4,792 Term note payable to Fifth Third Bank, interest rate of 4.00% payable in monthly payments of $27,317, including principal and interest, beginning on July 1, 2016, maturing November 30, 2019, collateralized by the assets and equity interests of JetPay Payments, FL. 477 630 Credit agreement payable to Fifth Third Bank providing for a 12-month draw period through September 30, 2018 for up to $1.6 million, converting into a 36-month amortizing term note maturing September 30, 2021. The credit agreement bears interest at LIBOR plus 3.00% (5.00% at June 30, 2018), collateralized by the assets and equity interests of JetPay Payments, FL. 1,490 1,085 Master equipment capital lease agreement payable to Fifth Third Bank for up to $1.5 million of lease financing to JetPay Payments, FL for an 18-month draw period through December 31, 2018. Interim draws will have a term of up to 48 months and will bear interest at LIBOR plus 3.00% (5.00% at June 30, 2018), until termed at a fixed rate set forth in the lease agreement (5.85% at June 30, 2018), collateralized by equipment. 592 303 Amended and restated revolving promissory note payable to Fifth Third Bank, interest rate of LIBOR plus 2.00% (4.00% at June 30, 2018), maturing on June 1, 2019. - 360 Unsecured promissory note payable to stockholder, interest rate of 4.00% payable at maturity, note principal due September 30, 2017, as extended. See Note 12. Related Party Transactions. 54 57 Capital lease obligations related to computer equipment and software at JetPay Payments, TX and JetPay HR & Payroll Services, interest rates of 5.91% to 8.30%, due in monthly lease payments of $44,521 in the aggregate maturing from August 2018 through March 2023 collateralized by equipment. 628 554 15,530 16,338 Less current portion (3,299 ) (3,364 ) Less unamortized deferred financing costs (208 ) (274 ) $ 12,023 $ 12,700 The First National Bank term loan agreement requires the Company to provide First National Bank 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 First National Bank agreement also contains certain financial covenants with which the Company was in compliance as of June 30, 2018. On June 2, 2016, in connection with the closing of the Company’s acquisition of JetPay Payments, FL, JetPay Payments, FL entered into a credit agreement with Fifth Third Bank to obtain a $1,068,960 term loan and a revolving line of credit facility of $500,000, in each case secured by all of JetPay Payments, FL’s assets. The term note issued to Fifth Third Bank matures on November 30, 2019 and bears interest at 4.00%. The revolving note issued to Fifth Third Bank, was amended on June 22, 2017 to increase the availability to $1,000,000 and further amended and restated on June 1, 2018 (as discussed below), to extended the maturity date of the revolving note to June 1, 2019. The Amended and Restated Revolving Note bears interest at a rate of LIBOR plus 2.00% for the applicable interest period. The term note and the revolving note are guaranteed by the Company. The underlying credit agreement with Fifth Third Bank contains certain customary covenants, including a financial covenant related to JetPay Payments, FL’s fixed charge coverage ratio, with which the Company was in compliance as of June 30, 2018. On June 22, 2017, JetPay Payments, FL entered into a new Credit Agreement with Fifth Third Bank, which provides a $1.6 million Draw/Term Note to finance software integration costs; an Amended and Restated Revolving Promissory Note for $1.0 million (as noted above); and a Second Modification of Credit Agreement. Additionally, on June 1, 2018, JetPay Payments, FL, entered into (i) an Amended and Restated Promissory Note (the “Amended and Restated Draw/Term Note”) for $1,600,000 in favor of Fifth Third Bank, (ii) a related Modification of Credit Agreement and Other Loan Documents (the “Draw/Term Modification Agreement”), (iii) a further Amended and Restated Revolving Promissory Note (the “Amended and Restated Revolving Note”) for $1,000,000, and (iv) a related Third Modification of Credit Agreement and Other Loan Documents (the “Revolver Modification Agreement”). The Draw/Term Modification Agreement, as amended on June 1, 2018, provides for a three month extension of the original draw period to September 30, 2018 (“the Conversion Date”), at which time the loan converts to a 36 month amortizing term loan which matures on September 30, 2021. The Draw/Term Note, as modified, bears interest at the applicable LIBOR plus 3.00% (or, in the event the LIBOR Rate is unavailable, at the Prime Rate plus 1%). The Draw/Term Note is payable in monthly installments beginning on the Conversion Date and can be prepaid without penalty or premium at any time. At June 30, 2018, $1.5 million was outstanding against the $1.6 million Draw/Term Note. The Amended and Restated Revolving Note replaced and superseded the previously extended Revolving Promissory Note payable to Fifth Third Bank, extending its maturity to June 1, 2019. It bears interest at a rate of LIBOR plus 2.00% (or, in the event the LIBOR Rate is unavailable, at the Prime Rate plus 1%), for the applicable interest period and is expected to be used to extend temporary credit to cover JetPay Payments, FL’s customers’ processing return items. The Third Modification and the Amended and Restated Draw/Term Note, dated June 1, 2018, further amended and restated an original term loan to JetPay Payments, FL dated June 2, 2016, as previously amended and restated on June 22, 2017, in the original amount of $1,068,960 to incorporate certain new terms, including incorporating revised debt covenants, financial reporting requirements, collateral requirements, modifications to parent guarantees, and representations and warranties of JetPay Payments, FL. Additionally, on June 22, 2017, JetPay Payments, FL entered into a Master Equipment Lease Agreement and related Interim Lease Funding Schedule with Fifth Third Bank to provide up to $1.5 million of lease financing for point-of-sale equipment related to certain JetPay Payments, FL customer contracts and other computer equipment. The Interim Lease Funding Schedule provides the details of the allowable equipment to finance and provides for an interim draw periods through June 30, 2018. On June 20, 2018, JetPay Payments, FL entered into an amendment to the Master Lease Interim Funding Schedule with Fifth Third Bank to extend the interim draw period from June 30, 2018 to December 31, 2018. Additionally, on June 20, 2018, the initial equipment purchase draws under the Interim Lease Financing Schedule totaling $592,000 were converted into an amortizing lease with a base lease term of 48 months maturing July 1, 2022 at a monthly payment of $13,891, at a converted fixed interest rate of 5.85%. Upon completion of subsequent interim draws, the Equipment Schedules under the Master Lease Agreement will have terms not exceeding 48 months at a fixed interest rate set forth in the applicable schedule. At June 30, 2018, $907,853 was remains available under the $1.5 million master lease facility. Maturities of long-term debt and capital lease obligations, excluding unamortized financing costs, are as follows for the years ending June 30: 2019 – $3.3 million; 2020 – $3.2 million; 2021 – $3.1 million; 2022 – $5.9 million; 2023 – $0.0 million; and $0 thereafter. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2018 | |
Convertible Preferred Stock [Abstract] | |
Convertible Preferred Stock [Text Block] | Note 8. Redeemable Convertible Preferred Stock Under a Securities Purchase Agreement entered into on August 22, 2013 (as amended, the “Series A Purchase Agreement”), the Company agreed to sell to Flexpoint, and Flexpoint agreed to purchase from the Company, upon satisfaction of certain conditions, up to 133,333 shares of Series A Preferred a purchase price of $300 per share for an aggregate purchase price of up to $40.0 million in three tranches. On October 11, 2013, the Company issued 33,333 shares of Series A Preferred to Flexpoint for an aggregate of $10.0 million less certain agreed-upon reimbursable expenses of Flexpoint pursuant to the Series A Purchase Agreement. Additionally, the Company issued 4,667 shares of Series A Preferred to Flexpoint on April 14, 2014 for an aggregate of $1.4 million; 20,000 shares on November 7, 2014 for $6.0 million; 33,333 shares on December 28, 2014 for $10.0 million; and 8,333 shares on August 9, 2016 for $2.5 million. On October 18, 2016, the Company amended and restated the Series A Purchase Agreement in part to facilitate the Company’s issuance and sale to Sundara of the 33,667 shares of Series A Preferred that had not yet been purchased by Flexpoint. Sundara purchased the remaining 33,667 shares of Series A Preferred in a single transaction for a purchase price of $10,100,100 ($300 per share) on October 18, 2016. The shares of Series A Preferred are convertible into shares of common stock. Any holder of Series A Preferred may at any time convert such holder’s shares of Series A Preferred into that number of shares of common stock equal to the number of shares of Series A Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, which was initially $3.00. Under the Series A Purchase Agreement, Flexpoint and Sundara Investment Partners, LLC are provided with certain indemnification rights in the event of the incurrence of certain losses and expenses by the Company. On March 23, 2017, the conversion price of Series A Preferred was $2.36. Pursuant to an agreement by and among the Company, Flexpoint and Sundara, the Series A Preferred conversion price may be adjusted upward with the successful recovery of funds by the Company in the Company’s lawsuit against Valley National Bank. On July 11, 2018, the conversion price of Series A Preferred was adjusted upward to $2.50. The conversion price of the Series A Preferred continues to be subject to downward adjustment upon the occurrence of certain events. Share of Series A Preferred have a liquidation value of $600 per share (subject to adjustment for any stock split, stock dividend or other similar proportionate reduction or increase of the authorized number of shares of common stock) and will rank senior to the common stock with respect to distributions of assets upon the Company’s liquidation, dissolution or winding up. Holders of Series A Preferred have the right to request redemption of any shares of Series A Preferred issued at least five (5) years prior to the date of such request by delivering written notice to the Company at the then applicable liquidation value per share, unless holders of a majority of the outstanding Series A Preferred elect to waive such redemption request on behalf of all holders of Series A Preferred, subject to certain exceptions. In addition to the foregoing, pursuant to a Securities Purchase Agreement (the “Series A-1 Purchase Agreement”) with Wellington dated May 1, 2014, the Company agreed to sell to Wellington, upon the satisfaction of certain conditions, up to 9,000 shares of Series A-1 Preferred at a purchase price of $300 per share for an aggregate purchase price of up to $2.7 million. On May 5, 2014, the Company issued 2,565 shares of Series A-1 Preferred to Wellington for an aggregate of $769,500, less certain agreed-upon reimbursable expenses of Wellington. Additionally, the Company issued to Wellington 1,350 shares of Series A-1 Preferred on November 20, 2014 for $405,000; 2,250 shares of Series A-1 Preferred on December 31, 2014 for $675,000; and 2,835 shares of Series A-1 Preferred on April 13, 2017 for $850,500. The proceeds of the total investment of $2.7 million by Wellington have been used for general corporate purposes. Shares of Series A-1 Preferred are 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 (the “Series A-2 Preferred”). Shares of Series A-1 Preferred have an initial liquidation value of $600 per share (subject to adjustment for any stock split, stock dividend or other similar proportionate reduction or increase of the authorized number of shares of common stock) and rank senior to the Company’s common stock and pari passu The Company considered the guidance of ASC Topic 480, Distinguishing Liabilities from Equity Derivatives Upon issuance of the 33,333 shares of the Series A Preferred, the Company recorded as a reduction to the Series A Preferred and as Additional Paid-In Capital a beneficial conversion feature of $1.5 million. The beneficial conversion feature represents the difference between the effective conversion price and the fair value of the Series A Preferred as of the commitment date. An additional beneficial conversion feature of $396,600 was recorded in August 2015 as a result of the change in conversion price per share of Series A Preferred from $3.00 to $2.90. Similarly, additional beneficial conversion features of $2.7 million and $2.2 million were recorded in March 2017 with respect to the shares of Series A Preferred issued and sold to Flexpoint in 2013 and the shares of Series A Preferred issued and sold to Sundara in 2016 as a result of the further change in conversion price per share of Series A Preferred from $2.90 to $2.36. There was no beneficial conversion feature related to the 2014, 2015 or the 2016 issuances and sales of shares of Series A Preferred to Flexpoint and shares of Series A-1 Preferred to Wellington as a result of the price of the Company’s common stock at the dates of the closings being below the effective adjusted conversion price of the preferred stock. The Company accounts for the beneficial conversion feature, the liquidation preference, and the issuance costs related to the Series A Preferred and Series A-1 Preferred using the effective interest method by accreting such amounts to its Series A Preferred and Series A-1 Preferred from the date of issuance to the earliest date of redemption as a reduction to its total permanent equity within the Company’s Consolidated Statement of Changes in Stockholders’ Deficit as a charge to Additional Paid-In Capital. Any accretion recorded during the periods presented are also shown as a reduction to the income available to common stockholders in the Company’s Consolidated Statements of Operations when presenting basic and dilutive per share information. Accretion was $3.0 million and $2.7 million for the three months ended June 30, 2018 and 2017, respectively, and $6.0 million and $4.8 million for the six months ended June 30, 2018 and 2017, respectively. 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 shares of 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 continues. 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 Series A Purchase Agreement and such breach has not been cured within 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 a former JetPay HR & Payroll Services credit facility, and such event of default has not been cured within thirty days after receipt of notice thereof. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 9. Stockholders’ Deficit Common Stock On August 3, 2017, the Company issued 44,240 shares of the Company’s common stock with a fair market value of approximately $97,000, as bonus compensation to the Chief Executive Officer pursuant to the Company’s 2013 Stock Incentive Plan. On February 28, 2018, the Company cancelled 291,946 shares of common stock that were being held in an escrow account at the Company’s transfer agent that were previously issued to certain initial shareholders of the Company. The shares were cancelled pursuant to the Stock Escrow Agreement dated May 13, 2011 among the Company, its transfer agent, and certain initial shareholders in that certain warrants related to the initial formation of the Company were not exercised by December 28, 2017. Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.001 per share with such designations, rights and preferences as may be determined from time to time by the Company’s Board of Directors. As of June 30, 2018 and December 31, 2017, there were no shares of preferred stock issued or outstanding other than the Series A Preferred issued to Flexpoint and Sundara and the Series A-1 Preferred issued to Wellington described above. Stock-Based Compensation ASC Topic 718, Compensation-Stock Compensation On July 5, 2017, the Board approved, subject to stockholder approval, the First Amendment to the 2013 Stock Incentive Plan, to issue up to an additional 1,000,000 shares of its common stock as awards for a total of 4,000,000 shares of common stock available under the Plan. The First Amendment was subsequently approved by the Company’s stockholders at the Company’s 2017 Annual Meeting of Stockholders held on August 15, 2017. The Company had available 1,235,762 shares of common stock for the grant of awards under the 2013 Stock Incentive Plan as of June 30, 2018. The Company granted 380,000 shares of common stock under the Amended and Restated 2013 Stock Incentive Plan for the six months ended June 30, 2017, all at an exercise price of $3.00. There were no options granted during the three and six months ended June 30, 2018. The grant date fair value of the options granted during the six months ended June 30, 2017 was determined to be approximately $399,000, using the Black-Scholes option pricing model. Aggregated stock-based compensation expense was $159,000 and $190,000 for the three months ended June 30, 2018 and 2017, respectively, and $344,000 and $361,000 for the six months ended June 30, 2018 and 2017, respectively. Unrecognized compensation expense as of June 30, 2018 relating to non-vested common stock options was approximately $748,000 and is expected to be recognized through 2021. During the six months ended June 30, 2018 and 2017, no options were exercised and 20,000 options were forfeited in each period. 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 June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Expected term (years) - 6.25 - 6.25 Risk-free interest rate - 19.3% - 1.93% to 2.10% Volatility - 65.6% - 62.3% to 65.6% Dividend yield - 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 using a weighted average of both the Company’s stock price and the stock prices of comparable companies for a period consistent with the stock option expected term. Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future. A summary of stock option activity for the six months ended June 30, 2018 is presented below: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 2,739,998 $ 2.91 Granted - - Forfeited (20,000 ) 3.00 Exercised - - Outstanding at June 30, 2018 2,719,998 $ 2.91 Exercisable at June 30, 2018 1,958,941 $ 2.91 The weighted average remaining life of options outstanding at June 30, 2018 was 7.21 years. The aggregate intrinsic value of the exercisable options at June 30, 2018 was $0. Employee Stock Purchase Plan On June 29, 2015, the Board of Directors adopted the JetPay Corporation Employee Stock Purchase Plan (the "Purchase Plan"), which was subsequently approved by the Company’s stockholders at the Company’s 2015 Annual Meeting of Stockholders. The Purchase Plan allows employees to contribute a percentage of their cash earnings, subject to certain maximum amounts, to be used to purchase shares of the Company’s common stock on each of two (2) semi-annual purchase dates. The purchase price is equal to 90% of the market value per share on either: (a) the date of grant of a purchase right under the Purchase Plan; or (b) the date on which such purchase right is deemed exercised, whichever is lower. As of June 30, 2018, an aggregate of 158,150 shares of common stock remained reserved for issuance under the Purchase Plan, with 51,480 shares of common stock issued on January 5, 2017, 40,310 shares of common stock issued on July 12, 2017, 27,184 shares of common stock issued on January 23, 2018, and 30,538 shares of common stock issued on July 16, 2018. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 10. Income Taxes The Company recorded income tax expense of $370,000 and $81,000 for the three months ended June 30, 2018 and 2017, respectively, and $734,000 and $143,000 for the six months ended June 30, 2018 and 2017, respectively. Income tax expense reflects the recording of federal and state income taxes. The effective tax rates were approximately 19.7% and (7.4)% for the three months ended June 30, 2018 and 2017, respectively, and 39.1% and (40.1)% for the six months ended June 30, 2018 and 2017, respectively. The effective rate differs from the federal statutory rate for each period, primarily due to state and local income taxes and changes to the valuation allowance. JetPay Payments, TX 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, 2017, the Company had U.S. federal net operating loss carryovers (“NOLs”) of approximately $30.0 million and state NOLs of approximately $9.2 million available to offset future taxable income. These NOLs, if not utilized, expire at various times through 2036. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change in control. The Company has not conducted a Code Section 382 NOL study in 2017 or 2018. In December 2017, the federal government enacted numerous amendments to the Internal Revenue Code of 1986 pursuant to an act known by the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act will impact the Company’s income tax (benefit) from continuing operations in future periods. The Tax Act resulted in the following impacts to the Company: (i) the federal statutory income tax rate was reduced from 34% to 21% for 2018 and tax years following; and (ii) a one-time net expense of $3.4 million was recorded in the three months ended December 31, 2017 as a result of re-measuring our deferred tax balances at the new statutory rate. Upon completion of the Company’s 2017 U.S. income tax return in 2018, additional re-measurement adjustments may be identified to the recorded deferred tax liabilities and the one-time transition tax. Management will continue to assess the provision for income taxes as future guidance is issued, but do not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118. 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 a total valuation allowance of approximately $6.8 million at June 30, 2018 is appropriate, representing the amount of its deferred income tax assets in excess of certain of the Company’s deferred income tax liabilities. The deferred tax liability related to goodwill that is amortizable for tax purposes (“Intangibles”) will not reverse until such time, if any, that the goodwill, which is considered to be an asset with an indefinite life for financial reporting purposes, becomes impaired or sold. Due to the uncertain timing of this reversal, the temporary difference cannot be considered as future taxable income for purposes of determining a valuation allowance. Therefore, the deferred tax liability related to tax deductible Intangibles cannot be considered when determining the ultimate realization of deferred tax assets. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 11. Commitments and Contingencies At the time of the acquisition of JetPay, LLC, the Company entered into an Amendment, Guarantee, and Waiver Agreement, dated December 28, 2012, between the Company, Ten Lords, Ltd. (“Ten Lords”) and JetPay, LLC (n/k/a JetPay Payment Services, TX, LLC). Under the agreement, Ten Lords agreed to extend payment of a $6.0 million note remaining outstanding at the date of acquisition for up to twelve months. The terms of the agreement required that the Company provide the owners of Ten Lords and Providence Interactive Capital, LLC (together with Ten Lords, the “Plaintiffs”) with a “true up” payment meant to put them in the same after-tax economic position as they would have been had the note been paid in full on December 28, 2012. The Company calculated this true-up payment to be $222,310 and paid such amount in August 2015. In addition to the $222,310 paid in 2015, the Company recorded an additional loss accrual of $125,500 relating to this matter. Subsequent to the Company’s payment, the Company received notice on October 5, 2015 that Plaintiffs filed a lawsuit against JetPay, LLC and the Company disputing the true up payment. Since 2015, the Company and JetPay, LLC have been defendants in the lawsuit in the 429th Judicial District Court of Collin County, Texas (the “Court”) styled Ten Lords, Ltd. and Providence Interactive Capital, LLC, Cause No. 429-04140-2015. The lawsuit was tried in the Court on May 2, 2017 and the Court granted a judgment to Plaintiffs in the amount of $793,000 plus attorneys’ fees of $134,075, which judgment was entered by the Court on May 15, 2017. On July 3, 2017, the Company and JetPay, LLC successfully settled the lawsuit by entering into a Compromise Settlement Agreement and Mutual Release (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company paid to Plaintiffs the sum of $872,500 on July 3, 2017 and the parties released one another and their respective affiliates from all claims arising out of the matters described in the Lawsuit and the Judgment. In connection with this settlement, the Company recorded an additional loss of $747,000 during the year ended December 31, 2017. In December 2015, Harmony Press Inc. (“Harmony”), a customer of ADC and Payroll Tax Filing Services, a wholly-owned subsidiary of JetPay HR & Payroll Service, Inc. (“PTFS”), filed a suit against an employee of Harmony for theft by that employee of over $628,000. JetPay, ADC, and PTFS as well as several financial institution service providers to Harmony were also named in that suit for alleged negligence. The Company believes that the allegations in the suit regarding JetPay, ADC, and PTFS are groundless and has turned the matter over to the Company’s insurance carrier who is defending the suit. The Company is subject to a $50,000 deductible under its insurance policy. The Company has not recorded an accrual for any potential loss related to this matter as of June 30, 2018 and has incurred legal expense of $50,000 applied against its deductible, through June 30, 2018. On June 12, 2017, JetPay Payment Services, TX LLC (“JetPay Payments, TX”) filed suit against J.T. Holdings, LTD (“J.T. Holdings”) and Trent Voigt with respect to a lease entered into by JetPay Payments, TX with J.T. Holdings’ property in Sunnyvale, TX. JetPay Payments, TX retains a computer backup center in the Sunnyvale, Texas location owned by J.T. Holdings, an entity controlled by Trent Voigt, the previous Chief Executive Officer of JetPay Payments, TX. The previous lease expired on January 31, 2016. While a new lease Agreement had not been signed, a dispute arose regarding the amount of rent to be paid, as well as the rights of the parties to access the property. Prior to filing the suit against J.T. Holdings, the Company’s access to the property was restored through a writ of reentry obtained from the Justice Court on June 8, 2017. On June 26, 2017, the Parties entered into an agreement whereby JetPay Payments, TX was granted an extension on the lease until June 30, 2018 at a rate of $6,000 per month and agreed to place into an escrow account $230,000 until all claims between the parties were adjudicated. On December 12, 2017, Trent Voigt and J.T. Holdings filed counterclaims against JetPay. The Company settled the matter with J.T. Holdings and Trent Voigt for $450,000, together with a release of all claims, on May 7, 2018. The Company recorded a loss of $450,000 at March 31, 2018 which was paid as of June 30, 2018. On April 30, 2018, JetPay Payments, TX entered into a settlement agreement with Valley National Bank, settling JetPay Payments, TX’s litigation against Valley National Bank before trial. Pursuant to the settlement agreement, Valley National Bank paid JetPay Payments, TX $2,175,000, and the parties agreed to a mutual release of claims with no admission of liability. 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. At June 30, 2018, a letter of credit was outstanding for $100,000 as collateral with respect to a front-end processing relationship with a credit card company. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 12. Related Party Transactions Until February 28, 2018, JetPay HR & Payroll Services’ headquarters were located in Center Valley, Pennsylvania and consisted of approximately 22,500 square feet leased from C. Nicholas Antich, the former president of JetPay HR & Payroll Services, and Carol A. Antich. The office lease, expired on February 28, 2018. Rent expense under this lease was $0 and $135,500 for each of the three months ended June 30, 2018 and 2017, and $135,500 and $271,000 for the six months ended June 30, 2018 and 2017, respectively. On August 22, 2013, JetPay Payments, TX entered into a Master Service Agreement with JetPay Solutions, LTD, a United Kingdom based entity 75% owned by WLES, an entity owned by Trent Voigt, a former 10% owner and employee of the Company. The Company initiated transaction business under this agreement beginning in April 2014 with revenue earned from JetPay Solutions, LTD of $500 and $9,000 for the three months ended June 30, 2018 and 2017, respectively, and $1,000 and $35,000 for the six months ended June 30, 2018 and 2017, respectively. On June 7, 2013, the Company issued an unsecured promissory note to Trent Voigt, the then Chief Executive Officer of JetPay Payments, TX, in the amount of $491,693. The note matured on December 31, 2017, as extended by the WLES Settlement Agreement dated July 26, 2016, see Note 11. Commitments and Contingencies Note 7. Long-Term Debt, Notes Payable and Capital Lease Obligations. On October 18, 2016, the Company entered into a loan and security agreement with JetPay HR & Payroll Services and PTFS, as borrowers, the Company and JetPay Payments, FL, as guarantors, and LHLJ, Inc., an entity controlled and majority-owned by Laurence L. Stone, as lender. Pursuant to the loan and security agreement, LHLJ, Inc., LHLJ, Inc. provided JetPay HR & Payroll Services and PTFS a term loan of $9.5 million. The loan carries an interest rate of 8% and matures on October 18, 2021. Interest expense related to this promissory note was $167,000 and $184,000 for the three months ended June 30, 2018 and 2017, respectively, and $337,000 and $370,000 for the six months ended June 30, 2018 and 2017, respectively. Additionally, in March 2018, Mr. Stone was granted a special bonus of $75,000 for his extraordinary efforts and involvement in assisting management with several strategic initiatives. Finally, on June 12, 2017, JetPay Payments, TX filed suit against J.T. Holdings and Trent Voigt, the previous Chief Executive Officer of JetPay Payments, TX, with respect to the lease entered into by JetPay Payments, TX with J.T. Holdings’ property in Sunnyvale, TX. The previous lease expired on January 31, 2016. While a new lease Agreement had not been signed, a dispute arose regarding the amount of rent to be paid, as well as the rights of the parties to access the property. On June 26, 2017, the Parties entered into an agreement whereby JetPay Payments, TX was granted an extension on the lease until June 30, 2018 at a rate of $6,000 per month and agreed to place into an escrow account $230,000 until all claims between the parties were adjudicated. On December 12, 2017, Trent Voigt and J.T. Holdings filed counterclaims against JetPay. The Company settled the matter with J.T. Holdings and Trent Voigt for $450,000, together with a release of all claims, on May 7, 2018. The Company recorded a loss of $450,000 at March 31, 2018 which was paid as of June 30, 2018. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 13. Segments The Company currently operates in two business segments, the Payment Services Segment, which is an end-to-end processor of credit and debit card and automated clearing house payment transactions to businesses with a focus on those processing internet transactions and recurring billings, and the HR & Payroll Services Segment, which is a full-service payroll and related payroll tax payment processor. As noted in Note 4. Summary of Significant Accounting Policies, The results reflect revenues and expenses directly related to each segment. For the Three Months Ended June 30, 2018 Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 4,228 $ - $ 4,228 Financial Institutions Revenues 2,053 - - 2,053 Government Agency & Utility Revenues 2,868 - - 2,868 Partners & e-Commerce Revenues 6,090 - - 6,090 Total Revenues $ 11,011 $ 4,228 $ - $ 15,239 Cost of revenues 6,384 2,097 - 8,481 Selling, general and administrative expenses 3,078 1,848 931 5,857 Settlement of legal matters - - (2,175 ) (2,175 ) Change in fair value of contingent consideration liability - - (320 ) (320 ) Amortization of intangibles and depreciation 862 359 1 1,222 Other expenses 94 193 5 292 Income (loss) before income taxes $ 593 $ (269 ) $ 1,558 $ 1,882 For the Three Months Ended June 30, 2017 (As Adjusted) Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 3,773 $ - $ 3,773 Financial Institutions Revenues 2,013 - - 2,013 Government Agency & Utility Revenues 2,613 - - 2,613 Partners & e-Commerce Revenues 5,130 - - 5,130 Total Revenues $ 9,756 $ 3,773 $ - $ 13,529 Cost of revenues 5,641 2,175 - 7,816 Selling, general and administrative expenses 2,927 1,467 502 4,896 Settlement of legal matters - - 747 747 Change in fair value of contingent consideration liability - - (257 ) (257 ) Amortization of intangibles and depreciation 795 327 1 1,123 Other expenses 88 212 4 304 Income (loss) before income taxes $ 305 $ (408 ) $ (997 ) $ (1,100 ) For the Six Months Ended June 30, 2018 Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 9,669 $ - $ 9,669 Financial Institutions Revenues 3,748 - - 3,748 Government Agency & Utility Revenues 5,774 - - 5,774 Partners & e-Commerce Revenues 11,919 - - 11,919 Total Revenues $ 21,441 $ 9,669 $ - $ 31,110 Cost of revenues 12,207 4,412 - 16,619 Selling, general and administrative expenses 5,942 3,452 2,334 11,728 Settlement of legal matters 450 - (2,175 ) (1,725 ) Change in fair value of contingent consideration liability - - (357 ) (357 ) Amortization of intangibles and depreciation 1,701 681 1 2,383 Other expenses 192 385 10 587 Income before income taxes $ 949 $ 739 $ 187 $ 1,875 Total property and equipment, net $ 4,362 $ 1,028 $ 29 $ 5,419 Property and equipment additions $ 1,369 $ 775 $ - $ 2,144 Intangible assets and goodwill $ 54,741 $ 15,139 $ - $ 69,880 Total segment assets $ 120,593 $ 67,604 $ 2,480 $ 190,677 For the Six Months Ended June 30, 2017 (As Adjusted) Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 9,155 $ - $ 9,155 Financial Institutions Revenues 3,778 - - 3,778 Government Agency & Utility Revenues 5,117 - - 5,117 Partners & e-Commerce Revenues 9,976 - - 9,976 Total Revenues $ 18,871 $ 9,155 $ - $ 28,026 Cost of revenues 10,795 4,461 - 15,256 Selling, general and administrative expenses 5,474 2,894 1,336 9,704 Settlement of legal matters - - 747 747 Change in fair value of contingent consideration liability - - (183 ) (183 ) Amortization of intangibles and depreciation 1,578 648 2 2,228 Other expenses 179 426 26 631 Income (loss) before income taxes $ 845 $ 726 $ (1,928 ) $ (357 ) Total property and equipment, net $ 2,314 $ 514 $ 30 $ 2,858 Property and equipment additions $ 1,213 $ 106 $ 3 $ 1,322 Intangible assets and goodwill $ 57,143 $ 16,176 $ - $ 73,319 Total segment assets $ 122,445 $ 69,375 $ 2,672 $ 194,492 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 14. Subsequent Events On July 11, 2018, as a result of the successful recovery of funds by the Company in the lawsuit against Valley National Bank, see Note 11. Commitments and Contingencies, On July 16, 2018, 30,538 shares of common stock were issued under the Company’s Employee Stock Purchase Plan. On August 6, 2018, JetPay Corporation and its wholly owned subsidiaries, JetPay Payment Services, TX, LLC and JetPay Payment Services, PA, LLC, collectively, entered into bank sponsorship agreements with BMO Harris Bank, N.A. as Sponsor Bank and Worldpay Payments, Inc. as the BMO Harris’ agent managing the sponsorship relationship. The bank sponsorship agreements support sponsorship of the Company with the credit card associations and performs certain functions in connection with the settlement and clearing of credit and debit card transaction processed by the Company. JetPay Corporation is a guarantor to the agreements. The Agreements has a five-year term with services expected to commence on August 31, 2018. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates, Presentation and Consolidation The accompanying consolidated 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; estimates of allowances and reserves against accounts receivable; reserves for chargebacks; goodwill; intangible assets and other long-lived assets; legal contingencies; the fair value of equity instruments classified as liabilities; 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. These consolidated financial statements include our accounts and those of our wholly-owned subsidiaries and all intercompany balances and transactions have been eliminated in consolidation. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which requires revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration which is expected to be received in exchange for those goods or services. ASU 2014-09 also includes Subtopic 340-40, which provides guidance on other assets and deferred costs relating to contracts with customers, specifically costs an entity incurs to obtain and fulfill a contract. The FASB subsequently issued several amendments to ASU 2014-09, including clarification on accounting for licenses, identifying performance obligations, and principal versus agent considerations (gross versus net presentation), as well as enhanced disclosure requirements about revenue and contract assets and liabilities. ASU 2014-09 was codified as Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers Other Assets and Deferred Costs – Contracts with Customers The Company adopted the requirements of ASC Topic 606 on January 1, 2018 using the full retrospective method, which required both the current and prior reporting periods to be presented under the same methodology. Under this method, the June 30, 2017 and December 31, 2017 financial statements and related disclosures, included herein, have been presented on an “As Adjusted” basis under ASC Topic 606, as opposed to what was previously reported under ASC Topic 605, Revenue Recognition Impact on Previously Reported Results The provisions of ASC Topic 606 had a material impact on the timing and amount of revenues recognized by the Company. The most significant impact of adopting ASC Topic 606 is the result of gross versus net presentation of certain fees in the Payment Services Segment. Under ASC Topic 606, the Company reflects revenues net of certain fees that the Company pays to third parties, including interchange, which is earned by the cardholder’s issuing bank, and dues and assessments, which are earned by the credit card associations. The Company previously reported certain of these items as revenues and cost of revenues under previous standards. This change in presentation will have no effect on the reported amount of operating income; however, the Company’s total revenues and cost of revenues for the three and six months ended June 30, 2017 is each lower by $5.2 million and $10.4 million, respectively. The most significant impact of adopting ASC Topic 606 in the HR & Payroll Services Segment relates to the timing of revenue recognized within the annual Form W-2, quarterly tax filing and annual tax filing revenue streams. To comply with the new standard, the timing of revenue recognized has changed from when delivery has occurred or services have been rendered to when a customer takes control of the good or service. This change in the timing of revenue recognition resulted in a decrease in revenues of $15,000 for the three months ended June 30, 2017 and an increase in revenues of $728,000 for the six months ended at June 30, 2017. Additionally, ASC Topic 606 had an impact on the manner in which we account for certain costs to obtain new contracts (i.e. commissions), which we had previously expensed as incurred in both operating segments. Under ASC Topic 606, incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid to inside sales professionals, are deferred and recognized ratably over the three-year and ten-year estimated terms of our customer relationships in the Payment Services and HR & Payroll Services Segments, respectively. The average terms of our customer relationships will be tested for impairment annually and whenever an indicator of impairment exists. We include deferred commissions within other non-current assets since the average life of the Company’s customer relationships is greater than one year. This change in the timing of commission recognition results in a reduction of commission expenses of $160,000 and $308,000 for the three and six months ended June 30, 2017, respectively. The following table presents a recast of selected unaudited consolidated balance sheet line items after giving effect to the adoption of ASC Topic 606 (in thousands): Year Ended December 31, 2017 As Previously Reported Adoption Adjustments As Adjusted Assets Deferred commissions (Other assets) $ 260 $ 1,188 $ 1,448 Liabilities Deferred revenue $ 492 $ 541 $ 1,033 Stockholder’s Deficit Accumulated deficit $ (31,692 ) $ 647 $ (31,045 ) The following table presents a recast of selected unaudited consolidated statement of operations line items after giving effect to the adoption of ASC Topic 606 (in thousands, except per share amounts): Three Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Revenues $ 18,777 $ (5,248 ) $ 13,529 Cost of revenues $ 13,049 $ (5,233 ) $ 7,816 Gross profit $ 5,728 $ (15 ) $ 5,713 Selling, general and administrative expenses $ 5,056 $ (160 ) $ 4,896 Operating (loss) income $ (941 ) $ 145 $ (796 ) (Loss) income before income taxes $ (1,245 ) $ 145 $ (1,100 ) Net (loss) income $ (1,326 ) $ 145 $ (1,181 ) Net (loss) income applicable to common stockholders $ (3,978 ) $ 145 $ (3,833 ) Basic and diluted (loss) income per share applicable to common stockholders $ (0.26 ) $ 0.01 $ (0.25 ) Six Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Revenues $ 37,719 $ (9,693 ) $ 28,026 Cost of revenues $ 25,634 $ (10,378 ) $ 15,256 Gross profit $ 12,085 $ 685 $ 12,770 Selling, general and administrative expenses $ 10,012 $ (308 ) $ 9,704 Operating (loss) income $ (719 ) $ 993 $ 274 (Loss) income before income taxes $ (1,350 ) $ 993 $ (357 ) Net (loss) income $ (1,493 ) $ 993 $ (500 ) Net (loss) income applicable to common stockholders $ (6,268 ) $ 993 $ (5,275 ) Basic and diluted (loss) income per share applicable to common stockholders $ (0.39 ) $ 0.06 $ (0.33 ) The following table presents a recast of selected unaudited consolidated statement of cash flow line items after giving effect to the adoption of ASC Topic 606 (in thousands): Six Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Operating activities Net (loss) income $ (1,493 ) $ 993 $ (500 ) Change in operating assets and liabilities: Other assets – deferred commissions $ (9 ) $ (308 ) $ (317 ) Deferred revenue $ (204 ) $ (728 ) $ (932 ) Accounts payable, accrued expenses and other liabilities $ 1,671 $ 43 $ 1,714 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which provides guidance that will require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted, including adoption in an interim period. The Company adopted this new standard as of January 1, 2018 and has modified the presentation of $1.9 million of restricted cash in the Company’s Consolidated Statement of Cash Flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted of this standard as of January 1, 2018 and it did not have a material impact on the Company’s consolidated financial statements and disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. This ASU clarifies an entity’s ability to modify the terms or conditions of a share-based payment award presented. An entity should account for the effects of a modification unless all the following are met: the fair value of the modified award has not changed from the fair value on the date of issuance; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and, the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted this new standard as of January 1, 2018 and it did not have a material impact on the Company’s consolidated financial statements and disclosures. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) . The ASU presents amendments to income taxes and income tax accounting implications of the Tax Cuts and Jobs Act ASC 740-10-S99-2A Recent Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception . This ASU clarifies the recognition, measurement, and effect on earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260, Earnings Per Share In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Revenue Recognition, Completed-Contract Method [Policy Text Block] | Revenue Recognition and Contract Assets and Liabilities The Company recognizes revenue when control of the promised goods or services is transferred to its customers in an amount that reflects the consideration it expects to be entitled for those goods or services. The Company currently operates and manages its business through two reportable segments, the Payment Services Segment and the HR & Payroll Services Segment, which coincide with the types of services the Company provides to its customers. The Company recognizes revenue for distinct performance obligations, wherein, a performance obligation is a promise in a contract to transfer a distinct product or service to the customer and is the unit of account in ASC Topic 606. Within each customer contract, transaction prices are allocated to each distinct performance obligation based upon relative standalone selling price and then recognized as revenue when, or as, the performance obligations are satisfied. The majority of the Company’s contracts have multiple performance obligations primarily related to the various types of services the Company provides within its two reportable segments. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price for each distinct good or service in the contract. Payment Services 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, or partners, include Independent Sales Organizations (“ISOs”), Value Added Resellers (“VARs”), Independent Software Vendors (“ISVs”) and financial institutions. The majority of the Company’s revenues within its credit and debit card processing business is comprised of transaction-based fees, which typically constitute a percentage of dollar volume processed, and/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 contracts pursuant to which the Company processes credit and debit card transactions for merchant customers, revenues are primarily comprised of transaction 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. With respect to many of the Company’s government and utility clients, as well as the Company’s JetX cash discount product, the cardholder is charged either a convenience fee (government and utilities) or transaction fee (JetX), instead of the merchant being charged for these fees. In all cases, the Company recognizes revenues net of interchange fees and assessments charged by the credit card associations. Interchange fees and credit card association fees are not controlled by the Company. The Company effectively functions as a clearing house collecting and remitting credit card association fees and interchange fee settlement on behalf of issuing banks, debit networks, credit card associations and their processing customers. The Company’s revenue streams within the Payment Services Segment include Financial Institutions revenues, Government Agency & Utility revenues, and Partners & e-Commerce revenues. Within the Payment Services Segment, the transaction price consists primarily of usage-based variable consideration, as the total consideration to be received is based on the number of transactions and dollar volume that will be processed by the Company for the merchant customer. The Company’s performance obligations in the Payment Services Segment are satisfied over time as customers receive and obtain control of the payment processing service. The Company has elected to apply the practical expedient for measuring progress towards the completion of a performance obligation and recognizes revenue as the Company has the right to invoice each customer, which generally corresponds with the transactions processed on behalf of the merchant customers. Additionally, the Company’s direct merchant customers and certain third-party partners have the liability for any charges properly reversed by the cardholder. In the event, however, 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 in some instances 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. HR & Payroll Services Revenues from the Company’s JetPay HR & Payroll Services operations are recognized in the period products or services are delivered under arrangements with clients where fees are fixed or determinable and allocated to specific performance obligations. Certain processing services are provided under annual service arrangements with revenue recognized when the service is delivered to the customer. All revenues are deferred until the allocated performance obligation has been completed and control is transferred to the customer. The Company’s service revenues are 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 revenues earned from delivery service for the distribution of certain client payroll checks and reports is included in revenues, and the costs for delivery are included in selling, general, and administrative expenses on the Consolidated Statements of Operations. Within the HR & Payroll Services Segment, the transaction price consists primarily of fixed consideration which is the price negotiated at contract inception for the services to be provided. The Company’s performance obligations within the HR & Payroll Services Segment are satisfied at a point in time or over time depending upon the delivery of the product or service and how control is transferred to the customer. Payroll processing services are satisfied over time since the customer simultaneously receives and consumes the benefits as the Company performs. The Company utilizes the as-invoiced practical expedient to recognize revenue as the Company is paid a fixed amount based upon payroll processing frequency and the number of active employees paid during that payroll processing period. For all other revenue streams within the HR & Payroll Services Segment, performance obligations are satisfied at a point in in time, which is when the delivery of the service to the customer has occurred. 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 between one (1) and thirty (30) days after receipt, with some items extending to ninety (90) days. The interest earned on these funds is included in total revenues on the Consolidated Statements of Operations because the collecting, holding, and remitting of these funds are critical components of providing these services. |
Revenue Recognition, Policy [Policy Text Block] | Disaggregation of Revenues The Company disaggregates revenue from contracts with customers based upon the channel/industry of its customers. The Company determined that disaggregating revenues into these categories achieves the disclosure objective to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. A reconciliation of disaggregated revenues to segment revenues is provided in Note 13. Segments. Disaggregated revenues for the three months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 HR & Payroll Revenues $ 4,228 $ 3,773 Financial Institutions Revenues 2,053 2,013 Government Agency & Utility Revenues 2,868 2,613 Partners & e-Commerce Revenues 6,090 5,130 Total Revenues $ 15,239 $ 13,529 Disaggregated revenues for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 HR & Payroll Revenues $ 9,669 $ 9,155 Financial Institutions Revenues 3,748 3,778 Government Agency & Utility Revenues 5,774 5,117 Partners & e-Commerce Revenues 11,919 9,976 Total Revenues $ 31,110 $ 28,026 |
Contract Assets and Liabilities [Policy Text Block] | Contract Assets and Liabilities Deferred Revenue The Company recognizes contract liabilities in the form of deferred revenue in instances where a customer pays in advance of when they take control of the goods or services to be performed by the Company. The Company receives payments from its customers based on standard terms and conditions. Changes in deferred revenue for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 Balance, beginning of period $ 1,033 $ 1,566 Deferral of revenue 134 2,076 Recognition of deferred revenue (1,097 ) (3,008 ) Balance, end of period $ 70 $ 634 Deferred Commissions Our incremental direct costs of obtaining a contract, which primarily consist of sales commissions paid to inside sales professionals, are deferred and recognized ratably over the three-year and ten-year estimated terms of our customer relationships in the Payment Services and HR & Payroll Services Segments, respectively. The average terms of our customer relationships will be tested for impairment annually and whenever an indicator of impairment exists. We include deferred commissions within other non-current assets since the average life of the Company’s customer relationships is greater than one year. Changes in deferred commissions, presented in other non-current assets, for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 Balance, beginning of period $ 1,188 $ 647 Deferral of commissions 368 404 Amortization (183 ) (96 ) Balance, end of period $ 1,373 $ 955 |
Practical Expedients Elected [Policy Text Block] | Practical Expedients Elected The Company has elected the following practical expedients in applying ASC Topic 606 across all reportable segments: As-Invoiced Within the Payment Services Segment, the Company bills a fixed fee and/or a percent of volume for each transaction processed. Within the HR & Payroll Services Segment, the Company bills a fixed amount based on payroll processing frequency and the number of active employees paid during that payroll processing period. In both segments, as the Company has a right to invoice the customer in the amount that corresponds directly with the value of its performance completed to date, it will utilize the as invoiced practical expedient to recognize revenue. Directly allocable variable consideration to wholly unsatisfied performance obligations exemption Within the Payment Services Segment, all consideration in the contract is considered variable, and no amount is treated as fixed consideration. Furthermore, the Company will recognize revenue over time using invoice as practical expedient. As such, it will not need to estimate and disclose the variable consideration in the transaction price allocated to the performance obligation as stipulated under the exemption. |
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, the Company must bear the credit risk for the full amount of the transaction. The Company evaluates the risk for such transactions and estimates the potential loss for chargebacks based primarily on historical experience and records a loss reserve accordingly. The Company 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 $337,000 and $413,000 were recorded as of June 30, 2018 and December 31, 2017, respectively. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The carrying amounts of financial instruments, including cash, restricted cash, settlement processing assets and liabilities, accounts receivable, funds held for clients, accounts payable 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, accounts receivable, settlement processing assets and funds held for clients. The Company’s cash is deposited with major financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insurable amount. |
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 but are typically collected via automated clearing house payments originated by us two (2) to three (3) days following month end. 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 receivable when they are deemed uncollectible. |
Unsettled Merchant Accounts [Policy Text Block] | Settlement Processing Assets and Funds 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 Consolidated 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 Consolidated 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 automated clearing house 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 portion of settlement assets due from customers and 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. Settlement assets, funds and obligations resulting from JetPay Payments, FL’s processing services and associated settlement activities include settlement receivables due from credit card associations and debit networks and certain cash accounts to which JetPay Payments, FL does not have legal ownership but has the right to use the accounts to satisfy the related settlement obligations. JetPay Payments, FL’s corresponding settlement obligations are for amounts payable to customers, net of processing fees earned by JetPay Payments, FL. Settlement receivables and payables for credit and debit card transactions are recorded at the gross transaction amounts. The gross amounts are then processed through JetPay Payments, FL’s settlement accounts, and JetPay Payments, FL retains its fees for the transactions upon settlement. Settlement receivables for e-check transactions consist of only JetPay Payments, FL’s fees for the transactions. Settlement receivables are generally collected within four (4) business days. Settlement obligations are generally paid within three (3) business days, regardless of when the related settlement receivables are collected. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment and Depreciation Property and equipment acquired in the Company’s 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 remaining term of the related lease; machinery and equipment – five (5) to fifteen (15) years; and furniture and fixtures – five (5) to ten (10) years. Significant additions or improvements extending assets’ useful lives are capitalized; normal maintenance and repair costs are expensed as incurred. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill Goodwill represents the premium paid over the fair value of the net tangible and identifiable intangible assets acquired in the Company’s business combinations. The Company performs a goodwill impairment test on at least an annual basis. Application of the goodwill impairment test requires significant judgments, including estimation of future cash flows, which are 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 the Company’s 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 quantitative goodwill impairment testing indicated there was no impairment as of December 31, 2017. Additionally, no indicators of impairment occurred in the six months ended June 30, 2018. 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. Identifiable intangible assets are amortized on a straight-line basis over their respective assigned estimated lives; customer relationships use eight (8) to fifteen (15) years; tradenames use one (1) to three (3) years; and software costs use one (1) to eight (8) years. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long–Lived Assets The Company periodically reviews the carrying value of its long-lived assets held and used at least annually or when events and circumstances warrant such a review. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. Cash flow projections are sometimes based on a group of assets, rather than a single asset. If cash flows cannot be separately and independently identified for a single asset, the Company determines whether impairment has occurred for the group of assets for which it can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, it measures any impairment by comparing the fair value of the asset group to its carrying value. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, impairment in the amount of the difference is recorded. The Company’s annual qualitative impairment testing indicated there was no impairment as of December 31, 2017. Additionally, no indicators of impairment occurred in the six months ended June 30, 2018. There can be no assurance that future tests of impairment will not result in impairment charges. |
Convertible Preferred Stock [Policy Text Block] | Convertible Preferred Stock The Company accounts for the redemption premium, beneficial conversion feature and issuance costs on or of 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] | Earnings (Loss) Per Share Basic earnings (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 right of our preferred stockholders to convert outstanding shares of Series A Preferred and Series A-1 Preferred into 16,949,110 and 1,102,041 shares of common stock, respectively, at June 30, 2018; the effect of 1,958,941 exercisable stock options granted under the Company’s Amended and Restated 2013 Stock Incentive Plan (the “2013 Stock Incentive Plan”) at June 30, 2018; and the effect of 266,667 exercisable warrants issued in connection with the Company’s purchase of treasury shares in February 2017 have been excluded from the loss per share calculation for the three and six months ended June 30, 2018 in that the assumed conversion of these options would be anti-dilutive. For the three and six months ended June 30, 2017, the dilutive effect of the right of our preferred stockholders to convert outstanding shares of Series A Preferred and Series A-1 Preferred into 16,949,110 and 1,102,041 shares of common stock, respectively; the effect of 1,353,953 exercisable stock options granted under the Company’s 2013 Stock Incentive Plan at June 30, 2017; and the effect of 266,667 exercisable warrants issued in connection with the Company’s purchase of treasury shares in February 2017 have been excluded from the loss per share calculation in that the assumed conversion of these options would be anti-dilutive. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company does review the terms of debt instruments it enters into 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 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, 2018 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,419 $ - $ - $ 1,419 Fair Value at December 31, 2017 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 2,264 $ - $ - $ 2,264 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 June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Beginning balance $ 2,227 $ 2,742 $ 2,264 $ 2,982 Change in fair value of JetPay Payments, TX contingent consideration - (19 ) - (54 ) Change in fair value of JetPay Payments, FL contingent consideration (320 ) (238 ) (357 ) (129 ) JetPay Payments, FL contingent consideration shares released from escrow (488 ) (525 ) (488 ) (525 ) Payment of JetPay Payments, PA contingent consideration - - - (314 ) Totals $ 1,419 $ 1,960 $ 1,419 $ 1,960 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 for the relevant periods consist of contingent consideration related to the JetPay Payments, TX, JetPay Payments, PA and JetPay Payments, FL acquisitions 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. In addition to the consideration paid upon closing of the JetPay Payments, TX acquisition, WLES, L.P. (“WLES”), through December 28, 2017, was entitled to receive 833,333 shares of common stock if the trading price of the common stock is at least $8.00 per share for any 20 trading days out of a 30 trading day period and $5.0 million in cash if the trading price of the common stock is at least $9.50 per share for any 20 trading days out of a 30 trading day period. This contingent consideration was valued at $1.54 million at the date of acquisition based on utilization of option pricing models and was recorded as a non-current other liability for $700,000 and as additional paid-in capital for $840,000 at December 31, 2012. The stock-based component value of $840,000 recorded at December 28, 2012 (the JetPay Payments, TX acquisition date) remains unchanged at June 30, 2018 as a result of this component being recorded as equity. The fair value of the common stock was derived from the per share price 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 JetPay Payments, FL acquisition, the former shareholders of JetPay Payments, FL were entitled to have released from escrow previously issued shares up to an additional 500,000 shares of common stock upon JetPay Payments, FL achieving certain gross profit performance targets in 2016 and 2017. The former shareholders are also able to receive up to 500,000 warrants to purchase shares of common stock, each with a strike price of $4.00 per share and a 10-year term from its date of issuance, upon JetPay Payments, FL achieving certain gross profit performance targets in 2018 and 2019. See Note 3. Business Acquisition The Company uses either a binomial option-pricing model with a Monte Carlo simulation 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, 2018, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy. |
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, 2018 and 2017. 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 and through the date 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, except as described in Note 14. Subsequent Events |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | The following table presents a recast of selected unaudited consolidated balance sheet line items after giving effect to the adoption of ASC Topic 606 (in thousands): Year Ended December 31, 2017 As Previously Reported Adoption Adjustments As Adjusted Assets Deferred commissions (Other assets) $ 260 $ 1,188 $ 1,448 Liabilities Deferred revenue $ 492 $ 541 $ 1,033 Stockholder’s Deficit Accumulated deficit $ (31,692 ) $ 647 $ (31,045 ) The following table presents a recast of selected unaudited consolidated statement of operations line items after giving effect to the adoption of ASC Topic 606 (in thousands, except per share amounts): Three Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Revenues $ 18,777 $ (5,248 ) $ 13,529 Cost of revenues $ 13,049 $ (5,233 ) $ 7,816 Gross profit $ 5,728 $ (15 ) $ 5,713 Selling, general and administrative expenses $ 5,056 $ (160 ) $ 4,896 Operating (loss) income $ (941 ) $ 145 $ (796 ) (Loss) income before income taxes $ (1,245 ) $ 145 $ (1,100 ) Net (loss) income $ (1,326 ) $ 145 $ (1,181 ) Net (loss) income applicable to common stockholders $ (3,978 ) $ 145 $ (3,833 ) Basic and diluted (loss) income per share applicable to common stockholders $ (0.26 ) $ 0.01 $ (0.25 ) Six Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Revenues $ 37,719 $ (9,693 ) $ 28,026 Cost of revenues $ 25,634 $ (10,378 ) $ 15,256 Gross profit $ 12,085 $ 685 $ 12,770 Selling, general and administrative expenses $ 10,012 $ (308 ) $ 9,704 Operating (loss) income $ (719 ) $ 993 $ 274 (Loss) income before income taxes $ (1,350 ) $ 993 $ (357 ) Net (loss) income $ (1,493 ) $ 993 $ (500 ) Net (loss) income applicable to common stockholders $ (6,268 ) $ 993 $ (5,275 ) Basic and diluted (loss) income per share applicable to common stockholders $ (0.39 ) $ 0.06 $ (0.33 ) The following table presents a recast of selected unaudited consolidated statement of cash flow line items after giving effect to the adoption of ASC Topic 606 (in thousands): Six Months Ended June 30, 2017 As Previously Reported Adoption Adjustments As Adjusted Operating activities Net (loss) income $ (1,493 ) $ 993 $ (500 ) Change in operating assets and liabilities: Other assets – deferred commissions $ (9 ) $ (308 ) $ (317 ) Deferred revenue $ (204 ) $ (728 ) $ (932 ) Accounts payable, accrued expenses and other liabilities $ 1,671 $ 43 $ 1,714 |
Disaggregation of Revenue [Table Text Block] | Disaggregated revenues for the three months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 HR & Payroll Revenues $ 4,228 $ 3,773 Financial Institutions Revenues 2,053 2,013 Government Agency & Utility Revenues 2,868 2,613 Partners & e-Commerce Revenues 6,090 5,130 Total Revenues $ 15,239 $ 13,529 Disaggregated revenues for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 HR & Payroll Revenues $ 9,669 $ 9,155 Financial Institutions Revenues 3,748 3,778 Government Agency & Utility Revenues 5,774 5,117 Partners & e-Commerce Revenues 11,919 9,976 Total Revenues $ 31,110 $ 28,026 |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Changes in deferred revenue for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 Balance, beginning of period $ 1,033 $ 1,566 Deferral of revenue 134 2,076 Recognition of deferred revenue (1,097 ) (3,008 ) Balance, end of period $ 70 $ 634 |
Schedule of Other Assets, Noncurrent [Table Text Block] | Changes in deferred commissions, presented in other non-current assets, for the six months ended June 30, 2018 and 2017, were as follows (in thousands): June 30, June 30, 2018 2017 Balance, beginning of period $ 1,188 $ 647 Deferral of commissions 368 404 Amortization (183 ) (96 ) Balance, end of period $ 1,373 $ 955 |
Fair Value, Liabilities Measured On Recurring Basis [Table Text Block] | The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by ASC Topic 820, assets and liabilities are classified in their entirety based on the level of input that is significant to the fair value measurement. Fair Value at June 30, 2018 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 1,419 $ - $ - $ 1,419 Fair Value at December 31, 2017 Total Level 1 Level 2 Level 3 (in thousands) Contingent consideration $ 2,264 $ - $ - $ 2,264 |
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 June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Beginning balance $ 2,227 $ 2,742 $ 2,264 $ 2,982 Change in fair value of JetPay Payments, TX contingent consideration - (19 ) - (54 ) Change in fair value of JetPay Payments, FL contingent consideration (320 ) (238 ) (357 ) (129 ) JetPay Payments, FL contingent consideration shares released from escrow (488 ) (525 ) (488 ) (525 ) Payment of JetPay Payments, PA contingent consideration - - - (314 ) Totals $ 1,419 $ 1,960 $ 1,419 $ 1,960 |
Property and Equipment, net o23
Property and Equipment, net of Accumulated Depreciation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | June 30, 2018 December 31, 2017 (in thousands) Leasehold improvements $ 78 $ 433 Equipment 3,019 2,528 Furniture and fixtures 436 372 Software 2,957 1,272 Vehicles 245 245 Assets in progress 1,613 2,042 Total property and equipment 8,348 6,892 Less: accumulated depreciation (2,929 ) (2,922 ) Property and equipment, net $ 5,419 $ 3,970 |
Accounts Payable and Accrued 24
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities [Table Text Block] | Accounts payable and accrued expenses consist of the following: June 30, 2018 December 31, 2017 (in thousands) Trade accounts payable $ 2,511 $ 3,381 ACH clearing liability 811 1,053 Accrued compensation 1,786 1,737 Accrued agent commissions 1,612 1,220 Related party payables 39 51 Other 5,308 4,127 Total $ 12,067 $ 11,569 |
Long-Term Debt, Notes Payable25
Long-Term Debt, Notes Payable and Capital Lease Obligations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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, 2018 December 31, 2017 (in thousands) Term loan payable to LHLJ, Inc., interest rate of 8.00% payable in monthly payments of $128,677, including principal and interest, beginning on October 18, 2016, maturing on October 31, 2021, collateralized by the assets and equity interests of JetPay HR & Payroll Services and JetPay Payments, FL. See Note 12. Related Party Transactions. $ 8,122 $ 8,557 Term loan payable to First National Bank of Pennsylvania, interest rate of 5.25% payable in monthly principal payments of $104,167 plus interest beginning on November 30, 2015, maturing November 6, 2021, collateralized by the assets and equity interests of JetPay Payments, PA. 4,167 4,792 Term note payable to Fifth Third Bank, interest rate of 4.00% payable in monthly payments of $27,317, including principal and interest, beginning on July 1, 2016, maturing November 30, 2019, collateralized by the assets and equity interests of JetPay Payments, FL. 477 630 Credit agreement payable to Fifth Third Bank providing for a 12-month draw period through September 30, 2018 for up to $1.6 million, converting into a 36-month amortizing term note maturing September 30, 2021. The credit agreement bears interest at LIBOR plus 3.00% (5.00% at June 30, 2018), collateralized by the assets and equity interests of JetPay Payments, FL. 1,490 1,085 Master equipment capital lease agreement payable to Fifth Third Bank for up to $1.5 million of lease financing to JetPay Payments, FL for an 18-month draw period through December 31, 2018. Interim draws will have a term of up to 48 months and will bear interest at LIBOR plus 3.00% (5.00% at June 30, 2018), until termed at a fixed rate set forth in the lease agreement (5.85% at June 30, 2018), collateralized by equipment. 592 303 Amended and restated revolving promissory note payable to Fifth Third Bank, interest rate of LIBOR plus 2.00% (4.00% at June 30, 2018), maturing on June 1, 2019. - 360 Unsecured promissory note payable to stockholder, interest rate of 4.00% payable at maturity, note principal due September 30, 2017, as extended. See Note 12. Related Party Transactions. 54 57 Capital lease obligations related to computer equipment and software at JetPay Payments, TX and JetPay HR & Payroll Services, interest rates of 5.91% to 8.30%, due in monthly lease payments of $44,521 in the aggregate maturing from August 2018 through March 2023 collateralized by equipment. 628 554 15,530 16,338 Less current portion (3,299 ) (3,364 ) Less unamortized deferred financing costs (208 ) (274 ) $ 12,023 $ 12,700 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, For the Six Months Ended June 30, 2018 2017 2018 2017 Expected term (years) - 6.25 - 6.25 Risk-free interest rate - 19.3% - 1.93% to 2.10% Volatility - 65.6% - 62.3% to 65.6% Dividend yield - 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, 2018 is presented below: Number of Options Weighted Average Exercise Price Outstanding at December 31, 2017 2,739,998 $ 2.91 Granted - - Forfeited (20,000 ) 3.00 Exercised - - Outstanding at June 30, 2018 2,719,998 $ 2.91 Exercisable at June 30, 2018 1,958,941 $ 2.91 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The results reflect revenues and expenses directly related to each segment. For the Three Months Ended June 30, 2018 Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 4,228 $ - $ 4,228 Financial Institutions Revenues 2,053 - - 2,053 Government Agency & Utility Revenues 2,868 - - 2,868 Partners & e-Commerce Revenues 6,090 - - 6,090 Total Revenues $ 11,011 $ 4,228 $ - $ 15,239 Cost of revenues 6,384 2,097 - 8,481 Selling, general and administrative expenses 3,078 1,848 931 5,857 Settlement of legal matters - - (2,175 ) (2,175 ) Change in fair value of contingent consideration liability - - (320 ) (320 ) Amortization of intangibles and depreciation 862 359 1 1,222 Other expenses 94 193 5 292 Income (loss) before income taxes $ 593 $ (269 ) $ 1,558 $ 1,882 For the Three Months Ended June 30, 2017 (As Adjusted) Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 3,773 $ - $ 3,773 Financial Institutions Revenues 2,013 - - 2,013 Government Agency & Utility Revenues 2,613 - - 2,613 Partners & e-Commerce Revenues 5,130 - - 5,130 Total Revenues $ 9,756 $ 3,773 $ - $ 13,529 Cost of revenues 5,641 2,175 - 7,816 Selling, general and administrative expenses 2,927 1,467 502 4,896 Settlement of legal matters - - 747 747 Change in fair value of contingent consideration liability - - (257 ) (257 ) Amortization of intangibles and depreciation 795 327 1 1,123 Other expenses 88 212 4 304 Income (loss) before income taxes $ 305 $ (408 ) $ (997 ) $ (1,100 ) For the Six Months Ended June 30, 2018 Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 9,669 $ - $ 9,669 Financial Institutions Revenues 3,748 - - 3,748 Government Agency & Utility Revenues 5,774 - - 5,774 Partners & e-Commerce Revenues 11,919 - - 11,919 Total Revenues $ 21,441 $ 9,669 $ - $ 31,110 Cost of revenues 12,207 4,412 - 16,619 Selling, general and administrative expenses 5,942 3,452 2,334 11,728 Settlement of legal matters 450 - (2,175 ) (1,725 ) Change in fair value of contingent consideration liability - - (357 ) (357 ) Amortization of intangibles and depreciation 1,701 681 1 2,383 Other expenses 192 385 10 587 Income before income taxes $ 949 $ 739 $ 187 $ 1,875 Total property and equipment, net $ 4,362 $ 1,028 $ 29 $ 5,419 Property and equipment additions $ 1,369 $ 775 $ - $ 2,144 Intangible assets and goodwill $ 54,741 $ 15,139 $ - $ 69,880 Total segment assets $ 120,593 $ 67,604 $ 2,480 $ 190,677 For the Six Months Ended June 30, 2017 (As Adjusted) Payment Services HR & Payroll Services General/ Corporate Total HR & Payroll Revenues $ - $ 9,155 $ - $ 9,155 Financial Institutions Revenues 3,778 - - 3,778 Government Agency & Utility Revenues 5,117 - - 5,117 Partners & e-Commerce Revenues 9,976 - - 9,976 Total Revenues $ 18,871 $ 9,155 $ - $ 28,026 Cost of revenues 10,795 4,461 - 15,256 Selling, general and administrative expenses 5,474 2,894 1,336 9,704 Settlement of legal matters - - 747 747 Change in fair value of contingent consideration liability - - (183 ) (183 ) Amortization of intangibles and depreciation 1,578 648 2 2,228 Other expenses 179 426 26 631 Income (loss) before income taxes $ 845 $ 726 $ (1,928 ) $ (357 ) Total property and equipment, net $ 2,314 $ 514 $ 30 $ 2,858 Property and equipment additions $ 1,213 $ 106 $ 3 $ 1,322 Intangible assets and goodwill $ 57,143 $ 16,176 $ - $ 73,319 Total segment assets $ 122,445 $ 69,375 $ 2,672 $ 194,492 |
Business Operations and Liqui28
Business Operations and Liquidity (Details Textual) - USD ($) | Oct. 11, 2018 | Aug. 03, 2017 | Aug. 09, 2016 | Nov. 07, 2014 | May 05, 2014 | Apr. 14, 2014 | Apr. 11, 2014 | Oct. 11, 2013 | Jul. 16, 2018 | Jan. 23, 2018 | Jul. 12, 2017 | Jan. 05, 2017 | Oct. 18, 2016 | Jun. 30, 2018 | Dec. 31, 2017 | Apr. 13, 2017 | Mar. 23, 2017 | Aug. 31, 2015 | Dec. 28, 2014 |
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Issued | 0 | 0 | |||||||||||||||||
Preferred Stock, Value, Issued | $ 29,900,000 | $ 1,400,000 | $ 0 | $ 0 | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 2.90 | ||||||||||||||||
Stock Issued During Period, Shares, New Issues | 44,240 | 8,333 | 20,000 | 4,667 | 30,538 | 27,184 | 40,310 | 51,480 | 250,000 | ||||||||||
Long-term Debt and Capital Lease Obligations, Repayments of Principal in Next Twelve Months | $ 5,175,000 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 5,300,000 | ||||||||||||||||||
Estimated Capital Expenditure | $ 1,000,000 | ||||||||||||||||||
Preferred Stock, Redemption Price Per Share | $ 600 | ||||||||||||||||||
Series A Preferred Stock Subject to Mandatory Redemption [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 4,667 | ||||||||||||||||||
Preferred Stock, Redemption Price Per Share | $ 600 | ||||||||||||||||||
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Maximum Amount | $ 1,540,000 | ||||||||||||||||||
Series A-1 Preferred stock [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Issued | 2,835 | ||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Issued | 33,333 | ||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 2.36 | ||||||||||||||||||
Minimum [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 3 | ||||||||||||||||||
Estimated Capital Expenditure | $ 2,800,000 | ||||||||||||||||||
Maximum [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Estimated Capital Expenditure | $ 3,300,000 | ||||||||||||||||||
Maximum [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 3 | $ 3 | |||||||||||||||||
Flexpoint [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 33,333 | ||||||||||||||||||
Flexpoint [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Issued | 99,666 | ||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | ||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 33,333 | 33,667 | |||||||||||||||||
Flexpoint [Member] | Series A Preferred Stock [Member] | Scenario, Plan [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Proceeds from Sale of Trading Securities Held-for-investment | $ 24,300,000 | ||||||||||||||||||
Wellington [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock Value Reserved for Future Issuance | $ 2,700,000 | ||||||||||||||||||
Wellington [Member] | Series A-1 Preferred stock [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Issued | 9,000 | ||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||||||||||||
Stock Issued During Period, Shares, New Issues | 1,350 | ||||||||||||||||||
Sundara Investment Partners Llc [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Value, Issued | $ 10,100,100 | ||||||||||||||||||
Net Working Capital | 14,000,000 | ||||||||||||||||||
Debt Instrument, Periodic Payment | $ 9,500,000 | ||||||||||||||||||
Sundara Investment Partners Llc [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||
Organization and Business Operations [Line Items] | |||||||||||||||||||
Preferred Stock, Shares Issued | 33,667 |
Business Acquisition (Details T
Business Acquisition (Details Textual) - USD ($) | Aug. 03, 2017 | Aug. 09, 2016 | Nov. 07, 2014 | Apr. 14, 2014 | Jul. 16, 2018 | Jan. 23, 2018 | Jul. 12, 2017 | Jun. 28, 2017 | Jan. 05, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||||||||
Stock Issued During Period, Shares, New Issues | 44,240 | 8,333 | 20,000 | 4,667 | 30,538 | 27,184 | 40,310 | 51,480 | 250,000 | ||
JetPay Payments, PA [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Business Combination, Consideration Transferred | $ 3,250,000 | $ 1,975,000 | |||||||||
Business Combination Consideration Transferred Equity Interests Shares Issued And Issuable | 3,250,000 | ||||||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 1,000,000 | ||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 8,300,000 | ||||||||||
Stock Issued During Period, Shares, New Issues | 579,000 | ||||||||||
Warrants Term | 10 years | ||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 54,601 | ||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 500,000 | ||||||||||
Shares Issued, Price Per Share | $ 4 | ||||||||||
Rights To Acquire Common Stock Maximum Percentage | 50.00% | ||||||||||
Percentage of Estimated Fair Value of Common Stock issued In Connection With Acquisition | 50.00% | ||||||||||
Shares Issued In Buyback Price Per Share | $ 4 | ||||||||||
Temporary Equity, Stock Issued During Period, Value, New Issues | $ 4,100,000 | ||||||||||
Business Acquisition, Effective Date of Acquisition | Jun. 2, 2016 | ||||||||||
JetPay Payments, PA [Member] | Escrow Deposit One [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Stock Issued During Period, Shares, New Issues | 250,000 | 587,500 | |||||||||
JetPay Payments, PA [Member] | Escrow Deposit Two [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Stock Issued During Period, Shares, New Issues | 587,500 | 500,000 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Deferred commissions (Other assets) | $ 1,633 | $ 1,448 |
Liabilities: | ||
Deferred revenue | 70 | 1,033 |
Stockholder's Deficit | ||
Accumulated deficit | $ (29,904) | (31,045) |
Previously Reported [Member] | ||
Assets | ||
Deferred commissions (Other assets) | 260 | |
Liabilities: | ||
Deferred revenue | 492 | |
Stockholder's Deficit | ||
Accumulated deficit | (31,692) | |
Restatement Adjustment [Member] | ||
Assets | ||
Deferred commissions (Other assets) | 1,188 | |
Liabilities: | ||
Deferred revenue | 541 | |
Stockholder's Deficit | ||
Accumulated deficit | $ 647 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Revenues | $ 15,239 | $ 13,529 | $ 31,110 | $ 28,026 | |
Cost of revenues | 8,481 | 7,816 | 16,619 | 15,256 | |
Gross profit | 6,758 | 5,713 | 14,491 | 12,770 | |
Selling, general and administrative expenses | 5,857 | 4,896 | 11,728 | 9,704 | |
Operating (loss) income | 2,174 | (796) | 2,462 | 274 | |
(Loss) income before income taxes | 1,882 | (1,100) | 1,875 | (357) | |
Net (loss) income | 1,512 | (1,181) | 1,141 | (500) | |
Net (loss) income applicable to common stockholders | $ (1,513) | $ (3,833) | $ (4,829) | $ (5,275) | $ 1,000 |
Basic and diluted (loss) income per share applicable to common stockholders | $ (0.10) | $ (0.25) | $ (0.31) | $ (0.33) | |
Previously Reported [Member] | |||||
Revenues | $ 18,777 | $ 37,719 | |||
Cost of revenues | 13,049 | 25,634 | |||
Gross profit | 5,728 | 12,085 | |||
Selling, general and administrative expenses | 5,056 | 10,012 | |||
Operating (loss) income | (941) | (719) | |||
(Loss) income before income taxes | (1,245) | (1,350) | |||
Net (loss) income | (1,326) | (1,493) | |||
Net (loss) income applicable to common stockholders | $ (3,978) | $ (6,268) | |||
Basic and diluted (loss) income per share applicable to common stockholders | $ (0.26) | $ (0.39) | |||
Restatement Adjustment [Member] | |||||
Revenues | $ (5,248) | $ (9,693) | |||
Cost of revenues | (5,233) | (10,378) | |||
Gross profit | (15) | 685 | |||
Selling, general and administrative expenses | (160) | (308) | |||
Operating (loss) income | 145 | 993 | |||
(Loss) income before income taxes | 145 | 993 | |||
Net (loss) income | 145 | 993 | |||
Net (loss) income applicable to common stockholders | $ 145 | $ 993 | |||
Basic and diluted (loss) income per share applicable to common stockholders | $ 0.01 | $ 0.06 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities | ||||
Net (loss) income | $ 1,512 | $ (1,181) | $ 1,141 | $ (500) |
Change in operating assets and liabilities: | ||||
Other assets - deferred commissions | 185 | 317 | ||
Deferred revenue | (963) | (932) | ||
Accounts payable, accrued expenses and other liabilities | $ 498 | 1,714 | ||
Previously Reported [Member] | ||||
Operating activities | ||||
Net (loss) income | (1,326) | (1,493) | ||
Change in operating assets and liabilities: | ||||
Other assets - deferred commissions | (9) | |||
Deferred revenue | (204) | |||
Accounts payable, accrued expenses and other liabilities | 1,671 | |||
Restatement Adjustment [Member] | ||||
Operating activities | ||||
Net (loss) income | 145 | 993 | ||
Change in operating assets and liabilities: | ||||
Other assets - deferred commissions | (308) | |||
Deferred revenue | $ 15 | (728) | ||
Accounts payable, accrued expenses and other liabilities | $ 43 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total Revenues | $ 15,239 | $ 13,529 | $ 31,110 | $ 28,026 |
HR & Payroll Revenues [Member] | ||||
Total Revenues | 4,228 | 3,773 | 9,669 | 9,155 |
Financial Institutions Revenues [Member] | ||||
Total Revenues | 2,053 | 2,013 | 3,748 | 3,778 |
Government Agency & Utility Revenues [Member] | ||||
Total Revenues | 2,868 | 2,613 | 5,774 | 5,117 |
Partners & e-Commerce Revenues [Member] | ||||
Total Revenues | $ 6,090 | $ 5,130 | $ 11,919 | $ 9,976 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Balance, beginning of period | $ 1,033 | $ 1,566 |
Deferral of revenue | 134 | 2,076 |
Recognition of deferred revenue | (1,097) | (3,008) |
Balance, end of period | $ 70 | $ 634 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Details 5) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Balance, beginning of period | $ 1,188 | $ 647 |
Deferral of commissions | 368 | 404 |
Amortization | (183) | (96) |
Balance, end of period | $ 1,373 | $ 955 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details 6) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 1,419 | $ 2,264 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 1,419 | $ 2,264 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Details 7) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Beginning balance | $ 2,227 | $ 2,742 | $ 2,264 | $ 2,982 |
Change in fair value of contingent cash consideration | (320) | (257) | (357) | (183) |
Payment of JetPay Payments, PA contingent consideration | 0 | 0 | 0 | (314) |
Totals | 1,419 | 1,960 | 1,419 | 1,960 |
FL [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Change in fair value of contingent cash consideration | (320) | (238) | (357) | (129) |
TX [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Change in fair value of contingent cash consideration | 0 | (19) | 0 | (54) |
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
JetPay Payments, FL contingent consideration shares released from escrow | $ (488) | $ (525) | $ (488) | $ (525) |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 28, 2017 | Dec. 31, 2016 | 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 | $ 337,000 | $ 337,000 | $ 413,000 | ||||||
Contingent consideration | $ 1,419,000 | $ 1,419,000 | $ 2,264,000 | ||||||
Share Price | $ 9.50 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 1,958,941 | 1,958,941 | |||||||
Business Combination, Contingent Consideration, Liability, Current | $ 525,000 | $ 525,000 | |||||||
Retained Earnings (Accumulated Deficit) | (29,904,000) | (29,904,000) | $ (31,045,000) | ||||||
Net Income (Loss) Available to Common Stockholders, Basic, Total | (1,513,000) | $ (3,833,000) | (4,829,000) | $ (5,275,000) | 1,000,000 | ||||
Cost of Revenue | 8,481,000 | 7,816,000 | 16,619,000 | 15,256,000 | |||||
Increase (Decrease) In Deferred Revenue | (963,000) | (932,000) | |||||||
Selling, General and Administrative Expense | 5,857,000 | 4,896,000 | $ 11,728,000 | 9,704,000 | |||||
Weighted Average Number of Shares, Contingently Issuable | 250,000 | ||||||||
Restatement Adjustment [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Retained Earnings (Accumulated Deficit) | 647,000 | ||||||||
Net Income (Loss) Available to Common Stockholders, Basic, Total | 145,000 | 993,000 | |||||||
Cost of Revenue | (5,233,000) | (10,378,000) | |||||||
Increase (Decrease) In Deferred Revenue | 15,000 | (728,000) | |||||||
Selling, General and Administrative Expense | (160,000) | (308,000) | |||||||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Retained Earnings (Accumulated Deficit) | 647,000 | $ 374,000 | |||||||
Selling, General and Administrative Expense | $ 160,000 | $ 308,000 | |||||||
JetPay Payments, PA [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Common stock issued for acquisitions (in shares) | 250,000 | ||||||||
Business Acquisition Contingent Consideration Potential Cash Receipt | $ 579,000 | $ 579,000 | 1,400,000 | ||||||
Business Combination, Consideration Transferred | 3,250,000 | $ 1,975,000 | |||||||
Maximum Amount Of Consideration Right On Net Revenue | $ 500,000 | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 500,000 | 500,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 4 | $ 4 | |||||||
Class Of Warrant Or Right Warrants Term | 10 years | ||||||||
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 | 16,949,110 | 16,949,110 | |||||||
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 | 1,102,041 | 1,102,041 | |||||||
Employee Stock Option [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,958,941 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 1,353,953 | ||||||||
Warrant [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 266,667 | 266,667 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 266,667 | ||||||||
Maximum [Member] | Customer Relationships [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Property, Plant and Equipment, Useful Life | 15 years | ||||||||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||||||||
Maximum [Member] | Trade Names [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Property, Plant and Equipment, Useful Life | 3 years | ||||||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||||||
Maximum [Member] | Software Costs [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Property, Plant and Equipment, Useful Life | 8 years | ||||||||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||||||||
Minimum [Member] | Customer Relationships [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Property, Plant and Equipment, Useful Life | 8 years | ||||||||
Finite-Lived Intangible Asset, Useful Life | 8 years | ||||||||
Minimum [Member] | Trade Names [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Property, Plant and Equipment, Useful Life | 1 year | ||||||||
Finite-Lived Intangible Asset, Useful Life | 1 year | ||||||||
Minimum [Member] | Software Costs [Member] | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Property, Plant and Equipment, Useful Life | 1 year | ||||||||
Finite-Lived Intangible Asset, Useful Life | 1 year | ||||||||
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] | |||||||||
Common stock issued for acquisitions (in shares) | 833,333 | ||||||||
Contingent consideration | $ 1,540,000 | ||||||||
Business Combination, Contingent Consideration, Liability, Noncurrent | 840,000 | $ 840,000 | |||||||
Share Price | $ 8 | ||||||||
Stock Issued During Period, Value, Acquisitions | $ 5,000,000 | ||||||||
Business Acquisition Contingent Consideration Potential Cash Receipt | $ 700,000 |
Property and Equipment, net o39
Property and Equipment, net of Accumulated Depreciation (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 8,348 | $ 6,892 | |
Less: Accumulated depreciation | (2,929) | (2,922) | |
Property and equipment, net | 5,419 | 3,970 | $ 2,858 |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 78 | 433 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 3,019 | 2,528 | |
Furniture and fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 436 | 372 | |
Computer software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 2,957 | 1,272 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 245 | 245 | |
Assets in progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 1,613 | $ 2,042 |
Property and Equipment, net o40
Property and Equipment, net of Accumulated Depreciation (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||||
Depreciation expenses | $ 374,000 | $ 248,000 | $ 687,000 | $ 479,000 | |
Property, Plant and Equipment, Net, Total | 5,419,000 | $ 2,858,000 | 5,419,000 | $ 2,858,000 | $ 3,970,000 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 2,929,000 | 2,929,000 | 2,922,000 | ||
Assets In Progress To Computer Software | 1,500,000 | 1,500,000 | |||
Computer Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, Plant and Equipment, Net, Total | 1,200,000 | 1,200,000 | 794,900 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 696,000 | $ 696,000 | $ 521,600 |
Accounts Payable and Accrued 41
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Payables And Accruals [Line Items] | ||
Trade accounts payable | $ 2,511 | $ 3,381 |
ACH clearing liability | 811 | 1,053 |
Accrued compensation | 1,786 | 1,737 |
Accrued agent commissions | 1,612 | 1,220 |
Related party payables | 39 | 51 |
Other | 5,308 | 4,127 |
Total | $ 12,067 | $ 11,569 |
Long-Term Debt, Notes Payable42
Long-Term Debt, Notes Payable and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 15,530 | $ 16,338 |
Less current portion | (3,299) | (3,364) |
Less unamortized deferred financing costs | (208) | (274) |
Long-term Debt and Capital Lease Obligations | 12,023 | 12,700 |
Term Loan Payable To FNB [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 4,167 | 4,792 |
Term Loan Payable To LHLJ [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 8,122 | 8,557 |
Term Note Payable To Fifth Third Bank [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 477 | 630 |
Revolving Promissory Note Payable To Fifth Third Bank [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 0 | 360 |
Unsecured Promissory Note Payable To WLES [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 54 | 57 |
Capital Lease Obligations To JetPay Payments [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 628 | 554 |
Capital Lease Agreement Fifth Third Bank [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | 592 | 303 |
Credit Agreement Payable Fifth Third Bank [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 1,490 | $ 1,085 |
Long-Term Debt, Notes Payable43
Long-Term Debt, Notes Payable and Capital Lease Obligations (Details Textual) - USD ($) | Jun. 02, 2016 | Jun. 20, 2018 | Jun. 30, 2018 | Jun. 01, 2018 | Dec. 31, 2017 | Jun. 22, 2017 |
Debt Instrument [Line Items] | ||||||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 3,300,000 | |||||
Long-term Debt, Maturities, Repayments of Principal in Year Two | 3,200,000 | |||||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 3,100,000 | |||||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 5,900,000 | |||||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 0 | |||||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 0 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 15,530,000 | $ 16,338,000 | ||||
Term Loan Payable To FNB [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Nov. 6, 2021 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 5.25% | |||||
Equal Monthly Installments | $ 104,167 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 4,167,000 | 4,792,000 | ||||
Term Loan Payable To LHLJ [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Oct. 31, 2021 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | |||||
Equal Monthly Installments | $ 128,677 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 8,122,000 | 8,557,000 | ||||
Term Note Payable To Fifth Third Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Nov. 30, 2019 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |||||
Equal Monthly Installments | $ 27,317 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 477,000 | 630,000 | ||||
Revolving Promissory Note Payable To Fifth Third Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Jun. 1, 2019 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 0 | 360,000 | ||||
Unsecured Promissory Note Payable To Stockholder [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Sep. 30, 2017 | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |||||
Capital Lease Obligations To JetPay Payments [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Equal Monthly Installments | $ 44,521 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 628,000 | 554,000 | ||||
Credit Agreement To Fifth Third Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.00% | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 3.00% | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,600,000 | $ 1,600,000 | ||||
Line of Credit Facility, Expiration Date | Sep. 30, 2021 | |||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 907,853 | |||||
Capital Lease Agreement Fifth Third Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.00% | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 3.00% | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 592,000 | $ 303,000 | ||||
Capital Lease Obligations | $ 592,000 | |||||
Lessee, Operating Lease, Term of Contract | 48 months | |||||
Lease Expiration Date | Jul. 1, 2022 | |||||
Capital Leases, Income Statement, Amortization Expense | $ 13,891 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.85% | |||||
Minimum [Member] | Capital Lease Obligations To JetPay Payments [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 5.91% | |||||
Maximum [Member] | Capital Lease Obligations To JetPay Payments [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.30% | |||||
Amended and Restated DrawTerm Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Face Amount | $ 1,600,000 | |||||
Restated Revolving Promissory Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | |||||
Jet pay Payments Fl Customer [Member] | Credit Agreement To Fifth Third Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | |||||
Fifth Third Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 2.00% | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000 | |||||
Fifth Third Bank [Member] | Revolving Promissory Note [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Maturity Date | Jun. 1, 2018 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | |||||
Line of Credit Facility, Expiration Date | Jun. 1, 2019 | |||||
Debt Instrument, Face Amount | $ 1,000,000 | |||||
Fifth Third Bank [Member] | Revolving Note Payable To Metro Bank [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,068,960 | |||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 1,068,960 |
Redeemable Convertible Prefer44
Redeemable Convertible Preferred Stock (Details Textual) - USD ($) | Oct. 11, 2018 | Aug. 03, 2017 | Aug. 09, 2016 | Nov. 07, 2014 | May 05, 2014 | Apr. 14, 2014 | Oct. 11, 2013 | Jul. 16, 2018 | Jan. 23, 2018 | Jul. 12, 2017 | Jan. 05, 2017 | Oct. 18, 2016 | Dec. 31, 2014 | Dec. 28, 2014 | Nov. 20, 2014 | May 05, 2014 | May 01, 2014 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jul. 11, 2018 | Dec. 31, 2017 | Apr. 13, 2017 | Mar. 31, 2017 | Mar. 23, 2017 | Aug. 31, 2015 |
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 44,240 | 8,333 | 20,000 | 4,667 | 30,538 | 27,184 | 40,310 | 51,480 | 250,000 | ||||||||||||||||||
Preferred Stock, Value, Issued | $ 29,900,000 | $ 1,400,000 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||
Preferred Stock, Shares Issued | 0 | 0 | 0 | ||||||||||||||||||||||||
Preferred Stock, Par Or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | $ 2.90 | |||||||||||||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | $ 0 | $ 4,865,000 | |||||||||||||||||||||||||
Adjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred Stock | $ 1,500,000 | ||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 97,000 | ||||||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Par Or Stated Value Per Share | 3 | $ 3 | |||||||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Convertible Preferred Stock,Conversion Price | $ 2.50 | ||||||||||||||||||||||||||
Flexpoint [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 33,333 | ||||||||||||||||||||||||||
Sale of Stock, Price Per Share | 300 | $ 300 | |||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 10,000,000 | ||||||||||||||||||||||||||
Sundara Investment Partners Llc [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Value, Issued | $ 10,100,100 | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Conversion Basis | The shares of Series A Preferred are convertible into shares of common stock. Any holder of Series A Preferred may at any time convert such holder’s shares of Series A Preferred into that number of shares of common stock equal to the number of shares of Series A Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, which was initially $3.00. Under the Series A Purchase Agreement, Flexpoint and Sundara Investment Partners, LLC are provided with certain indemnification rights in the event of the incurrence of certain losses and expenses by the Company. On March 23, 2017, the conversion price of Series A Preferred was $2.36. Pursuant to an agreement by and among the Company, Flexpoint and Sundara, the Series A Preferred conversion price may be adjusted upward with the successful recovery of funds by the Company in the Company’s lawsuit against Valley National Bank. On July 11, 2018, the conversion price of Series A Preferred was adjusted upward to $2.50. The conversion price of the Series A Preferred continues to be subject to downward adjustment upon the occurrence of certain events. | ||||||||||||||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 600 | $ 600 | |||||||||||||||||||||||||
Preferred Stock, Shares Issued | 33,333 | ||||||||||||||||||||||||||
Preferred Stock, Par Or Stated Value Per Share | $ 2.36 | ||||||||||||||||||||||||||
Percentage Of Beneficially Own | 9.90% | 9.90% | |||||||||||||||||||||||||
Adjustments To Additional Paid In Capital Convertible Preferred Stock | $ 396,600 | ||||||||||||||||||||||||||
Convertible Preferred Stock,Conversion Price | $ 2.36 | $ 2.36 | |||||||||||||||||||||||||
Stockholders' Equity Note, Stock Split | all shares of Series A-1 Preferred shall automatically convert into shares of Series A-2 Preferred at a 1:1 ratio. | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Maximum [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Par Or Stated Value Per Share | $ 3 | $ 3 | $ 3 | ||||||||||||||||||||||||
Series A Preferred Stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Convertible Preferred Stock,Conversion Price | 2.50 | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Flexpoint [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 33,333 | 33,667 | |||||||||||||||||||||||||
Preferred Stock, Shares Issued | 99,666 | ||||||||||||||||||||||||||
Preferred Stock, Par Or Stated Value Per Share | $ 0.001 | ||||||||||||||||||||||||||
Adjustments To Additional Paid In Capital Convertible Preferred Stock | $ 2,700,000 | ||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 6,000,000 | $ 3,000,000 | $ 2,700,000 | $ 6,000,000 | $ 4,800,000 | ||||||||||||||||||||||
Series A Preferred Stock [Member] | Flexpoint [Member] | Maximum [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Adjustments To Additional Paid In Capital Convertible Preferred Stock | $ 2,700,000 | $ 2,700,000 | $ 2,200,000 | ||||||||||||||||||||||||
Series A Preferred Stock [Member] | Wellington [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Conversion Basis | shares of Series A Preferred being converted multiplied by $300 and divided by the then-applicable conversion price, which was initially $3.00. | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Wellington [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Conversion Basis | Series A-1 Preferred at a purchase price of $300 per share | ||||||||||||||||||||||||||
Preferred Stock, Shares Issued | 9,000 | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Sundara Investment Partners Llc [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Shares Issued | 33,667 | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Flexpoint Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Insider Common Stock Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 5,000,000 | ||||||||||||||||||||||||||
Series A-1 Preferred stock [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ 600 | $ 600 | |||||||||||||||||||||||||
Preferred Stock, Shares Issued | 2,835 | ||||||||||||||||||||||||||
Convertible Preferred Stock,Conversion Price | 2.45 | 2.45 | |||||||||||||||||||||||||
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 | $ 405,000 | ||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 2,700,000 | ||||||||||||||||||||||||||
Series A-1 Preferred stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Convertible Preferred Stock,Conversion Price | $ 2.60 | ||||||||||||||||||||||||||
Series A-1 Preferred stock [Member] | Wellington [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 1,350 | ||||||||||||||||||||||||||
Preferred Stock, Shares Issued | 9,000 | ||||||||||||||||||||||||||
Preferred Stock, Par Or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||
Series A-1 Preferred stock [Member] | Wellington [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||
Convertible Preferred Stock [Line Items] | |||||||||||||||||||||||||||
Preferred Stock, Shares Issued | 2,565 | 2,565 | |||||||||||||||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | $ 7,695,000 | ||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 675,000 | ||||||||||||||||||||||||||
Preferred Stock, Liquidation Preference, Value | $ 850,500 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stockholders Equity Note [Line Items] | ||||
Expected term (years) | 0 days | 6 years 3 months | 0 days | 6 years 3 months |
Risk-free interest rate | 0.00% | 19.30% | 0.00% | |
Volatility | 0.00% | 65.60% | 0.00% | |
Dividend Yield | 0.00% | 0.00% | 0.00% | 0.00% |
Maximum [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Risk-free interest rate | 2.10% | |||
Volatility | 65.60% | |||
Minimum [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Risk-free interest rate | 1.93% | |||
Volatility | 62.30% |
Stockholders' Deficit (Details
Stockholders' Deficit (Details 1) - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stockholders Equity Note [Line Items] | ||
Outstanding Opening - Number of Options (in shares) | 2,739,998 | |
Granted - Number of Options (in shares) | 0 | 380,000 |
Forfeited - Number of Options (in shares) | (20,000) | |
Exercised - Number of Options (in shares) | 0 | |
Outstanding Ending - Number of Options (in shares) | 2,719,998 | |
Exercisable - Number of Options (in shares) | 1,958,941 | |
Outstanding Opending - Weighted Average Exercise Price (in dollars per share) | $ 2.91 | |
Granted - Weighted Average Exercise Price (in dollars per share) | 0 | |
Forfeited - Weighted Average Exercise Price (in dollars per share) | 3 | |
Exercised - Weighted Average Exercise Price (in dollars per share) | 0 | |
Outstanding Ending - Weighted Average Exercise Price (in dollars per share) | 2.91 | |
Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 2.91 | $ 3 |
Stockholders' Deficit (Detail47
Stockholders' Deficit (Details Textual) - USD ($) | Aug. 03, 2017 | Aug. 09, 2016 | Nov. 07, 2014 | Apr. 14, 2014 | Jul. 16, 2018 | Feb. 28, 2018 | Jan. 23, 2018 | Jul. 12, 2017 | Jul. 05, 2017 | Jan. 05, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Aug. 31, 2015 |
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 | $ 2.90 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 380,000 | ||||||||||||||
Stock Issued During Period, Value, Stock Options Exercised | $ 399,000 | |||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Valuation Method, Expected Dividend Rate | 0.00% | |||||||||||||||
Allocated Share-based Compensation Expense | $ 159,000 | $ 190,000 | $ 344,000 | $ 361,000 | ||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 748,000 | $ 748,000 | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ 97,000 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 2.91 | $ 3 | $ 2.91 | $ 3 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 2 months 16 days | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 0 | $ 0 | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 44,240 | 8,333 | 20,000 | 4,667 | 30,538 | 27,184 | 40,310 | 51,480 | 250,000 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 90.00% | |||||||||||||||
Number of Share Cancelled Being in Held Escrow Account | 291,946 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 20,000 | |||||||||||||||
Stock Incentive Plan 2013 [Member] | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 1,235,762 | 1,235,762 | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 4,000,000 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 | |||||||||||||||
Stock Incentive Plan [Member] | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | 20,000 | 20,000 | ||||||||||||||
Common Stock [Member] | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Stock Issued During Period, Shares, New Issues | 158,150 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Expense (Benefit) | $ 370 | $ 81 | $ 734 | $ 143 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% | ||||
Operating Loss Carryforward Expiration Date | 2,036 | |||||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 3,400 | |||||
Deferred Tax Assets, Valuation Allowance | $ 6,800 | $ 6,800 | ||||
Effective Income Tax Rate Reconciliation, Percent | 19.70% | 7.40% | 39.10% | 40.10% | ||
Domestic Tax Authority [Member] | ||||||
Operating Loss Carryforwards | 30,000 | $ 30,000 | ||||
State and Local Jurisdiction [Member] | ||||||
Operating Loss Carryforwards | $ 9,200 | $ 9,200 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) | May 07, 2018 | Jul. 03, 2017 | Jun. 12, 2017 | May 15, 2017 | Apr. 30, 2018 | Jul. 12, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2015 | Dec. 28, 2012 |
Commitments and Contingencies [Line Items] | ||||||||||||||
Loss Contingency, Damages Sought, Value | $ 628,000 | |||||||||||||
Legal Fees | $ 50,000 | |||||||||||||
Payments for Legal Settlements | $ 872,500 | 450,000 | 222,310 | |||||||||||
Litigation Settlement, Expense | $ 6,190,000 | $ (2,175,000) | $ 450,000 | $ 747,000 | (1,725,000) | $ 747,000 | ||||||||
Loss Contingency Accrual | $ 125,500 | |||||||||||||
Other Commitment | $ 6,000,000 | |||||||||||||
Malpractice Insurance, Maximum Coverage Per Incident | 50,000 | |||||||||||||
Escrow Deposit Disbursements Related to Property Acquisition | $ 230,000 | $ 230,000 | ||||||||||||
Loss Contingency Accrual, Provision | $ 747,000 | |||||||||||||
Operating Lease, Payments | $ 6,000 | $ 6,000 | ||||||||||||
Credit Card Company [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Long-term Line of Credit | $ 100,000 | $ 100,000 | ||||||||||||
J.T. Holdings and Trent Voight [Member] | Credit Card Company [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Payments for Legal Settlements | $ 450,000 | |||||||||||||
Valley National Bank [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Litigation Settlement, Amount Awarded from Other Party | $ 2,175,000 | |||||||||||||
Ten Lords And Interactive Capital [Member] | ||||||||||||||
Commitments and Contingencies [Line Items] | ||||||||||||||
Legal Fees | $ 134,075 | |||||||||||||
Loss Contingency, Damages Awarded, Value | $ 793,000 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) | May 07, 2018USD ($) | Jul. 03, 2017USD ($) | Jun. 12, 2017USD ($) | Apr. 30, 2018USD ($) | Aug. 31, 2017USD ($) | Jul. 12, 2017USD ($) | Oct. 18, 2016USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2015USD ($) | Feb. 28, 2018a | Aug. 22, 2013 | Jun. 07, 2013USD ($) |
Related Party Transaction [Line Items] | ||||||||||||||||
Revenues | $ 15,239,000 | $ 13,529,000 | $ 31,110,000 | $ 28,026,000 | ||||||||||||
Operating Lease, Payments | $ 6,000 | $ 6,000 | ||||||||||||||
Escrow Deposit Disbursements Related to Property Acquisition | $ 230,000 | $ 230,000 | ||||||||||||||
Payments for Legal Settlements | $ 872,500 | 450,000 | $ 222,310 | |||||||||||||
Litigation Settlement, Expense | $ 6,190,000 | (2,175,000) | $ 450,000 | 747,000 | (1,725,000) | 747,000 | ||||||||||
J.T. Holdings and Trent Voight [Member] | Credit Card Company [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Payments for Legal Settlements | $ 450,000 | |||||||||||||||
Promissory Note [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Interest Expense, Debt | 167,000 | 184,000 | 337,000 | 370,000 | ||||||||||||
Jet Pay Solutions Ltd [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Operating Leases, Rent Expense | 12,000 | 12,000 | 30,000 | 47,000 | ||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 75.00% | |||||||||||||||
Trent Voigt [Member] | Promissory Note [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | $ 491,693 | |||||||||||||||
Interest Expense, Related Party | 0 | 0 | 0 | 0 | ||||||||||||
Repayments of Notes Payable | $ 57,000 | |||||||||||||||
Jetpay [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Revenues | 500 | 9,000 | 1,000 | 35,000 | ||||||||||||
JetPay Payroll Service [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Area of Land | a | 22,500 | |||||||||||||||
Operating Leases, Rent Expense | $ 0 | $ 135,500 | $ 135,500 | $ 271,000 | ||||||||||||
Debt Instrument, Maturity Date | Feb. 28, 2018 | |||||||||||||||
Sundara Investment Partners Llc [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | $ 9,500,000 | |||||||||||||||
Sundara Investment Partners Llc [Member] | Term Loan [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | $ 9,500,000 | |||||||||||||||
Debt Instrument, Maturity Date | Oct. 18, 2021 | |||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | |||||||||||||||
Mr. Stone [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Special Bonus Granted | $ 75,000 | |||||||||||||||
Former Owner [Member] | Jet Pay Solutions Ltd [Member] | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Equity Method Investment, Ownership Percentage | 10.00% |
Segments (Details)
Segments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||
Revenues | $ 15,239 | $ 13,529 | $ 31,110 | $ 28,026 | |||
Cost of revenues | 8,481 | 7,816 | 16,619 | 15,256 | |||
Selling, general and administrative expenses | 5,857 | 4,896 | 11,728 | 9,704 | |||
Settlement of legal matter | $ 6,190 | (2,175) | $ 450 | 747 | (1,725) | 747 | |
Change in fair value of contingent consideration liability | (320) | (257) | (357) | (183) | |||
Amortization of intangibles and depreciation | 1,222 | 1,123 | 2,383 | 2,228 | |||
Other expenses | 292 | 304 | 587 | 631 | |||
Income (loss) before income taxes | 1,882 | (1,100) | 1,875 | (357) | |||
Total property and equipment, net | 5,419 | 2,858 | 5,419 | 2,858 | $ 3,970 | ||
Property and equipment additions | 2,144 | 1,322 | |||||
Intangible assets and goodwill | 69,880 | 73,319 | 69,880 | 73,319 | |||
Total segment assets | 190,677 | 194,492 | 190,677 | 194,492 | $ 194,121 | ||
HR & Payroll Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 4,228 | 3,773 | 9,669 | 9,155 | |||
Financial Institutions Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 2,053 | 2,013 | 3,748 | 3,778 | |||
Government Agency & Utility Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 2,868 | 2,613 | 5,774 | 5,117 | |||
Partners & e-Commerce Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 6,090 | 5,130 | 11,919 | 9,976 | |||
Payment Processing [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 11,011 | 9,756 | 21,441 | 18,871 | |||
Cost of revenues | 6,384 | 5,641 | 12,207 | 10,795 | |||
Selling, general and administrative expenses | 3,078 | 2,927 | 5,942 | 5,474 | |||
Settlement of legal matter | 0 | 0 | 450 | 0 | |||
Change in fair value of contingent consideration liability | 0 | 0 | 0 | 0 | |||
Amortization of intangibles and depreciation | 862 | 795 | 1,701 | 1,578 | |||
Other expenses | 94 | 88 | 192 | 179 | |||
Income (loss) before income taxes | 593 | 305 | 949 | 845 | |||
Total property and equipment, net | 4,362 | 2,314 | 4,362 | 2,314 | |||
Property and equipment additions | 1,369 | 1,213 | |||||
Intangible assets and goodwill | 54,741 | 57,143 | 54,741 | 57,143 | |||
Total segment assets | 120,593 | 122,445 | 120,593 | 122,445 | |||
Payment Processing [Member] | HR & Payroll Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Payment Processing [Member] | Financial Institutions Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 2,053 | 2,013 | 3,748 | 3,778 | |||
Payment Processing [Member] | Government Agency & Utility Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 2,868 | 2,613 | 5,774 | 5,117 | |||
Payment Processing [Member] | Partners & e-Commerce Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 6,090 | 5,130 | 11,919 | 9,976 | |||
Payroll Service [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 4,228 | 3,773 | 9,669 | 9,155 | |||
Cost of revenues | 2,097 | 2,175 | 4,412 | 4,461 | |||
Selling, general and administrative expenses | 1,848 | 1,467 | 3,452 | 2,894 | |||
Settlement of legal matter | 0 | 0 | 0 | 0 | |||
Change in fair value of contingent consideration liability | 0 | 0 | 0 | 0 | |||
Amortization of intangibles and depreciation | 359 | 327 | 681 | 648 | |||
Other expenses | 193 | 212 | 385 | 426 | |||
Income (loss) before income taxes | (269) | (408) | 739 | 726 | |||
Total property and equipment, net | 1,028 | 514 | 1,028 | 514 | |||
Property and equipment additions | 775 | 106 | |||||
Intangible assets and goodwill | 15,139 | 16,176 | 15,139 | 16,176 | |||
Total segment assets | 67,604 | 69,375 | 67,604 | 69,375 | |||
Payroll Service [Member] | HR & Payroll Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 4,228 | 3,773 | 9,669 | 9,155 | |||
Payroll Service [Member] | Financial Institutions Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Payroll Service [Member] | Government Agency & Utility Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Payroll Service [Member] | Partners & e-Commerce Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
General/Corporate [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
Cost of revenues | 0 | 0 | 0 | 0 | |||
Selling, general and administrative expenses | 931 | 502 | 2,334 | 1,336 | |||
Settlement of legal matter | (2,175) | 747 | (2,175) | 747 | |||
Change in fair value of contingent consideration liability | (320) | (257) | (357) | (183) | |||
Amortization of intangibles and depreciation | 1 | 1 | 1 | 2 | |||
Other expenses | 5 | 4 | 10 | 26 | |||
Income (loss) before income taxes | 1,558 | (997) | 187 | (1,928) | |||
Total property and equipment, net | 29 | 30 | 29 | 30 | |||
Property and equipment additions | 0 | 3 | |||||
Intangible assets and goodwill | 0 | 0 | 0 | 0 | |||
Total segment assets | 2,480 | 2,672 | 2,480 | 2,672 | |||
General/Corporate [Member] | HR & Payroll Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
General/Corporate [Member] | Financial Institutions Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
General/Corporate [Member] | Government Agency & Utility Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | 0 | 0 | 0 | 0 | |||
General/Corporate [Member] | Partners & e-Commerce Revenues [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) - $ / shares | 1 Months Ended | ||
Jul. 16, 2018 | Jul. 11, 2018 | Jun. 30, 2018 | |
Series A Preferred Stock [Member] | |||
Subsequent Event [Line Items] | |||
Convertible Preferred Stock,Conversion Price | $ 2.36 | ||
Series A-1 Preferred stock [Member] | |||
Subsequent Event [Line Items] | |||
Convertible Preferred Stock,Conversion Price | $ 2.45 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 30,538 | ||
Convertible Preferred Stock,Conversion Price | $ 2.50 | ||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||
Subsequent Event [Line Items] | |||
Convertible Preferred Stock,Conversion Price | 2.50 | ||
Subsequent Event [Member] | Series A-1 Preferred stock [Member] | |||
Subsequent Event [Line Items] | |||
Convertible Preferred Stock,Conversion Price | $ 2.60 |