Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 28, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | CardConnect Corp. | ||
Entity Central Index Key | 1,614,818 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 29,136,783 | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 63.5 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 9,385,361 | $ 3,574,661 |
Restricted cash | 5,748,822 | 1,603,783 |
Accounts receivable | 26,028,467 | 15,670,324 |
Processing assets | 12,904,861 | 6,929,522 |
Other receivables | 2,045,353 | 1,659,588 |
Related-party receivables | 89,645 | 145,367 |
Prepaid income taxes | 2,752,578 | 168,522 |
Other prepaid expenses | 1,259,399 | 542,827 |
Other current assets | 2,462,116 | 1,248,805 |
Total current assets | 62,676,602 | 31,543,399 |
Property and equipment, net | 5,591,262 | 6,109,009 |
Other assets: | ||
Long-term restricted cash | 2,145,833 | 0 |
Long-term related-party receivables | 225,000 | 4,140,000 |
Long-term other receivables | 265,804 | 621,844 |
Goodwill | 40,241,161 | 40,241,161 |
Intangible assets, net | 56,015,516 | 63,013,832 |
Long-term other assets | 687,345 | 242,373 |
Total assets | 167,848,523 | 145,911,618 |
Current liabilities: | ||
Accounts payable | 3,550,868 | 2,897,056 |
Residuals payable | 7,509,824 | 5,642,386 |
Processing liabilities | 14,901,323 | 8,533,305 |
Settlement obligation | 2,566,997 | 2,691,569 |
Accrued expenses | 3,448,839 | 2,247,030 |
Current portion of long-term debt | 4,250,000 | 0 |
Deferred revenue | 1,735,673 | 1,382,099 |
Total current liabilities | 37,963,524 | 23,393,445 |
Long-term liabilities: | ||
Accrued expenses | 1,833,572 | 2,059,011 |
Long-term debt, net of issuance costs | 128,180,814 | 59,964,989 |
Deferred tax liability | 2,576,843 | 1,787,216 |
Total long-term liabilities | 132,591,229 | 63,811,216 |
Total liabilities | 170,554,753 | 87,204,661 |
Commitments and contingencies (Note 14) | ||
Redeemable Series A Preferred Stock, par value $0.001, 1,500,000 shares issued and outstanding; liquidation value of $37,729,737 at December 31, 2016, net of offering costs | 37,159,339 | 0 |
Stockholders’ (deficit) equity: | ||
Preferred stock, par value $0.001, 10,000,000 shares authorized; no shares issued and outstanding (which excludes 1,500,000 shares of Series A Preferred Stock at December 31, 2016) | 0 | 0 |
Common stock, par value $0.001; 200,000,000 shares authorized; 29,051,348 and 15,145,708 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively | 29,051 | 15,828 |
Additional paid-in capital | 3,163,222 | 88,688,671 |
Accumulated deficit | (43,057,842) | (26,914,073) |
Treasury stock of 681,538 common shares at December 31, 2015, at cost | 0 | (3,083,469) |
Total stockholders’ (deficit) equity | (39,865,569) | 58,706,957 |
Total liabilities and stockholders’ (deficit) equity | $ 167,848,523 | $ 145,911,618 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 29,051,348 | 15,145,708 |
Common stock, shares outstanding | 29,051,348 | 15,145,708 |
Treasury stock, shares | 0 | 681,538 |
Redeemable Series A Preferred Stock [Member] | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0 |
Temporary equity, shares authorized | 0 | 0 |
Temporary equity, shares issued | 1,500,000 | 0 |
Temporary equity, shares outstanding | 1,500,000 | 0 |
Temporary equity, liquidation value | $ 37,729,737 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Revenue | $ 589,319,903 | $ 458,647,940 | $ 389,984,773 |
Cost of services (exclusive of depreciation and amortization shown separately below): | |||
Interchange and pass-through | 432,817,621 | 338,005,409 | 283,669,202 |
Other cost of services | 90,920,796 | 71,072,379 | 62,273,307 |
Total cost of services | 523,738,417 | 409,077,788 | 345,942,509 |
General and administrative | 55,303,090 | 25,320,506 | 25,936,403 |
Depreciation | 1,745,160 | 1,187,567 | 870,136 |
Amortization of intangibles | 20,578,530 | 19,174,968 | 18,544,472 |
Change in contingent earnout obligations | 0 | 0 | 770,854 |
Total expenses | 601,365,197 | 454,760,829 | 392,064,374 |
(Loss) income from operations | (12,045,294) | 3,887,111 | (2,079,601) |
Other expense: | |||
Interest expense, net | (5,124,657) | (1,249,526) | (1,187,103) |
Other, net | (364,485) | (81,324) | (145,702) |
Total other expense | (5,489,142) | (1,330,850) | (1,332,805) |
(Loss) income before income tax provision | (17,534,436) | 2,556,261 | (3,412,406) |
Benefit (provision) for income taxes | 1,390,667 | (1,383,777) | (8,598,495) |
Net (loss) income | (16,143,769) | 1,172,484 | (12,010,901) |
Dividends on preferred stock | (1,833,903) | 0 | 0 |
Net (loss) income available for common stockholders | $ (17,977,672) | $ 1,172,484 | $ (12,010,901) |
(Loss) earnings per share available for common stockholders: | |||
Basic (in dollars per share) | $ (0.86) | $ 0.08 | $ (0.78) |
Diluted (in dollars per share) | $ (0.86) | $ 0.07 | $ (0.78) |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 20,906,638 | 15,189,788 | 15,425,903 |
Diluted (in shares) | 20,906,638 | 16,774,075 | 15,425,903 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock |
Balance at Dec. 31, 2013 | $ 68,411,305 | $ 15,824 | $ 84,854,606 | $ (16,075,656) | $ (383,469) |
Balance, shares at Dec. 31, 2013 | 15,423,680 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Common stock issued | 39,844 | $ 4 | 39,840 | ||
Common stock issued, shares | 4,294 | ||||
Stock-based compensation | 1,907,702 | 1,907,702 | |||
Net income (loss) | (12,010,901) | (12,010,901) | |||
Balance at Dec. 31, 2014 | 58,347,950 | $ 15,828 | 86,802,148 | (28,086,557) | (383,469) |
Balances, shares at Dec. 31, 2014 | 15,427,974 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,886,523 | 1,886,523 | |||
Repurchase of common stock | (2,700,000) | (2,700,000) | |||
Repurchase of common stock, shares | (282,266) | ||||
Net income (loss) | 1,172,484 | 1,172,484 | |||
Balance at Dec. 31, 2015 | 58,706,957 | $ 15,828 | 88,688,671 | (26,914,073) | (3,083,469) |
Balances, shares at Dec. 31, 2015 | 15,145,708 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cancellation of 681,538 treasury shares in connection with reverse merger | $ (682) | (3,082,787) | 3,083,469 | ||
Distribution to former stockholders in connection with reverse merger | (179,412,830) | (179,412,830) | |||
Shares issued in reverse merger | 88,798,302 | $ 13,095 | 88,785,207 | ||
Shares issued in reverse acquisition, shares | 13,094,826 | ||||
Sale of common stock in private placement, net of offering costs | 4,400,959 | $ 468 | 4,400,491 | ||
Sale of common stock in private placement, net of offering costs, shares | 467,647 | ||||
Stock-based compensation | 5,036,345 | $ 233 | 5,036,112 | ||
Stock-based compensation, shares | 233,966 | ||||
Exercise of stock options | $ 582,370 | $ 109 | 582,261 | ||
Exercise of stock options, shares | 124,470 | 109,201 | |||
Preferred stock dividend | $ (1,833,903) | (1,833,903) | |||
Net income (loss) | (16,143,769) | (16,143,769) | |||
Balance at Dec. 31, 2016 | $ (39,865,569) | $ 29,051 | $ 3,163,222 | $ (43,057,842) | $ 0 |
Balances, shares at Dec. 31, 2016 | 29,051,348 |
Consolidated Statement of Stoc6
Consolidated Statement of Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2016shares | |
Statement of Stockholders' Equity [Abstract] | |
Treasury shares canceled | 681,538 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Operating activities | |||
Net (loss) income | $ (16,143,769) | $ 1,172,484 | $ (12,010,901) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||
Change in fair value of contingent consideration, net | 0 | 0 | 770,854 |
Depreciation and amortization | 22,323,690 | 20,362,535 | 19,414,608 |
Stock-based compensation expense | 5,036,345 | 1,886,523 | 1,907,702 |
Related-party loan forgiveness | 237,155 | 152,583 | 331,550 |
Agent advance forgiveness | 337,888 | 0 | 153,479 |
Deferred taxes | 789,627 | (301,157) | 7,888,807 |
Amortization of debt issuance costs | 477,955 | 0 | 0 |
Loss on disposal of assets | 50,507 | 26,835 | 279,854 |
Common stock issued for services | 0 | 0 | 28,750 |
Changes in operating assets and liabilities: | |||
Restricted cash | (395,039) | (1,413,068) | 0 |
Accounts receivable | (10,358,143) | (5,497,739) | (182,365) |
Processing assets | (5,975,339) | (6,929,522) | 0 |
Other receivables | (470,403) | (1,334,172) | (183,086) |
Other prepaid expenses | (716,572) | (26,679) | (124,653) |
Other current assets | (1,658,283) | (714,642) | (125,910) |
Accounts payable | 653,812 | 2,115,350 | 506 |
Residuals payable | 1,867,438 | 997,820 | 456,764 |
Processing liabilities | 6,368,018 | 6,971,979 | 0 |
Prepaid income taxes | (2,584,056) | 1,276,442 | 755,433 |
Contingent consideration paid in excess of acquisition date fair value | 0 | 0 | (255,518) |
Accrued expenses | 976,370 | 800,639 | 727,182 |
Deferred revenue | 353,574 | 525,059 | (150,387) |
Net cash provided by operating activities | 1,170,775 | 20,071,270 | 19,682,669 |
Investing activities | |||
Change ISO advances | (52,210) | 293,248 | (264,573) |
Purchases of property and equipment | (1,235,675) | (4,765,355) | (1,114,498) |
Proceeds from sale of property and equipment | 1,560 | 0 | 0 |
Purchases of merchant portfolios and residual buyouts | (9,528,500) | (6,779,396) | (4,792,843) |
Acquisitions, net of – , $1,345,370 and – cash acquired | 0 | (22,654,630) | 0 |
Consideration paid for service contracts | 0 | (200,000) | (100,000) |
Advances to related parties | (320,000) | (437,480) | (706,000) |
Repayment of related party loans | 4,053,567 | 0 | 0 |
Additions to internally developed software | (3,940,519) | (2,627,132) | (3,019,956) |
Net cash used in investing activities | (11,021,777) | (37,170,745) | (9,997,870) |
Financing activities | |||
Proceeds from redeemable preferred stock, net of offering costs | 36,929,603 | 0 | 0 |
Deposits held in escrow | (7,500,000) | 0 | 0 |
Release of deposits held in escrow | 1,604,167 | 0 | 0 |
Cash received in connection with reverse merger | 88,798,302 | 0 | 0 |
Proceeds from private placement of common stock, net of offering costs | 4,400,959 | 0 | 0 |
Distribution to former stockholders in connection with reverse merger | (179,412,830) | 0 | 0 |
Net change in settlement obligation | (124,572) | 2,691,569 | 0 |
Borrowings on long-term debt | 140,000,000 | 33,200,000 | 1,125,000 |
Payments on long-term debt | (61,964,989) | (10,000,000) | (9,000,000) |
Debt issuance costs | (6,047,141) | 0 | 0 |
Payment of preferred stock dividend | (1,604,167) | 0 | 0 |
Purchase of treasury stock | 0 | (2,700,000) | 0 |
Proceeds from stock options exercised | 582,370 | 0 | 0 |
Payment of contingent consideration | 0 | (3,675,000) | (909,075) |
Net cash provided by (used in) financing activities | 15,661,702 | 19,516,569 | (8,784,075) |
Net increase (decrease) in cash and cash equivalents | 5,810,700 | 2,417,094 | 900,724 |
Cash and cash equivalents at beginning of year | 3,574,661 | 1,157,567 | 256,843 |
Cash and cash equivalents at end of year | 9,385,361 | 3,574,661 | 1,157,567 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 4,246,022 | 1,142,310 | 1,132,939 |
Cash paid for income taxes, net of refunds | 372,677 | 294,599 | (9,545) |
Supplemental disclosure of non-cash investing and financing activity: | |||
Change in ISO advances | (155,000) | (207,291) | (400,000) |
Purchases of merchant portfolios and residual buyouts | 155,000 | 207,291 | 411,094 |
Common stock issued for services | 0 | 0 | (11,094) |
Cancellation of treasury stock in connection with reverse merger | 3,083,469 | 0 | 0 |
Accrued Series A Preferred Stock dividends | $ 229,736 | $ 0 | $ 0 |
Consolidated Statement of Cash8
Consolidated Statement of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Statement of Cash Flows [Abstract] | |
Cash acquired from acquisition | $ 1,345,370 |
Company Description, Operations
Company Description, Operations, and Basis of Presentation | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Description, Operations, and Basis of Presentation | Company Description, Operations, and Basis of Presentation Company Description and Operations CardConnect Corp. (f/k/a FinTech Acquisition Corp.) (“CardConnect” or the “Company”) is a holding company that does not have any operations or material assets other than the direct ownership of CardConnect, LLC. Prior to January 14, 2015, CardConnect, LLC’s legal name was Financial Transaction Services, LLC, which had been doing business as CardConnect since April 2013. CardConnect, LLC, a Delaware limited liability company, is a provider of card-based payment processing services. CardConnect, LLC facilitates the exchange of information and funds between merchants’ and cardholders’ financial institutions by providing electronic payment processing services to merchants, including transaction authorization and electronic draft capture, transaction clearing and settlement, merchant accounting and support, and risk management. CardConnect, LLC also offers a broad range of technology solutions, including software, services and peripherals. The Company was originally incorporated in Delaware in November 2013 as a special purpose acquisition company, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or assets. FTS Holding Corporation ("FTS") was formed on August 2, 2010 and wholly-owned CardConnect, LLC. On July 29, 2016 (the “Closing Date”), the Company consummated its business combination with FTS pursuant to the agreement and plan of merger dated as of March 7, 2016, as amended, by and among the Company, FinTech Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”) and FTS (the “Merger Agreement”). Under the Merger Agreement, FTS merged with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger. In connection with the closing of the Merger, the Company changed its name from FinTech Acquisition Corp. to CardConnect Corp. and FinTech Merger Sub, Inc. changed its name to FTS Holding Corporation. Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Merger, “FinTech” refers to the company prior to the closing of the Merger and “FTS” refers to FTS Holding Corporation prior to the Merger. See Note 3 for further discussion of the Merger. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). The Merger has been accounted for as a reverse merger in accordance with GAAP. This determination was primarily based on FTS’s business comprising the ongoing operations of the Company following the Merger, FTS’s senior management comprising the senior management of the Company and FTS’s stockholders having a majority of the voting power of the Company immediately following the closing of the Merger. For accounting purposes, FinTech is considered the “acquired” company and FTS is considered the “acquirer.” Accordingly, for accounting purposes, the Merger is treated as the equivalent of FTS issuing stock for the net assets of FinTech, accompanied by a recapitalization. The net assets of FinTech are stated at historical cost, with no goodwill or other intangible assets resulting from the Merger. The consolidated assets, liabilities and results of operations prior to the Closing Date of the Merger are those of FTS, and FinTech’s assets, liabilities and results of operations are consolidated with FTS beginning on the Closing Date. The shares and corresponding capital amounts and earnings per share available to common stockholders, pre-merger, have been retroactively restated as shares reflecting the exchange ratio in the Merger. The historical financial information and operating results of FinTech prior to the Merger have not been separately presented in these consolidated financial statements as they were not significant or meaningful. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Reclassifications The consolidated financial statements include the accounts of CardConnect Corp. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain immaterial reclassifications have been made to the prior period statements of operations to place them on a basis comparable with current period presentation. Collectively, unless the context requires otherwise, the consolidated group is referred to as “CardConnect” or the “Company.” Estimates The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to, the value of purchase consideration paid for acquisitions, goodwill and intangible asset impairment review, revenue recognition for multiple element arrangements, loss reserves, assumptions used in the calculation of stock-based compensation and in the calculation of income taxes, and certain tax assets and liabilities as well as the related valuation allowances. Actual results could differ from those estimates. Revenue Recognition and Deferred Revenue Card processing revenues are generated by the Company from fees charged to merchants for card-based processing services. Merchants are charged various rates, which are dependent upon various factors including the type of bankcard, card brand, merchant charge volume, the merchant’s industry and the merchant’s risk profile. Fees principally consist of discount fees, which are a percentage of the dollar amount of each credit or debit transaction and transaction fees, which are fixed per transaction. Card processing revenues are also derived from a variety of service fees, including fees for monthly minimum charge volume requirements, statement fees, annual fees, and fees for other miscellaneous services, including handling chargebacks. Card processing revenues are recognized at the time merchant transactions are processed on a gross basis equal to the full amount of the discount charged to the merchant as the Company is the primary obligor and has latitude in establishing price. Discount and other fees related to payment transactions are recognized as revenue at the time the merchants’ transactions are processed. Interchange and pass-through includes interchange fees paid to card-issuing banks and assessments paid to payment card associations. Interchange fees are set by Visa and MasterCard based on transaction processing volume and are recognized at the time merchant transactions are processed. Revenues from sales of the Company’s technology solutions are recognized when they are realized or realizable and earned. Revenue is considered realized and earned when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; and collection of the resulting receivable is reasonably assured. Contractual arrangements are evaluated for indications that multiple element arrangements may exist including instances where more-than-incidental software deliverables are included. Arrangements may contain multiple elements, such as hardware, software products, maintenance, and professional installation and training services. Revenues are allocated to each element based on the selling price hierarchy. The selling price for a deliverable is based on vendor specific objective evidence (“VSOE”) of selling price, if available, third party evidence (“TPE”) if VSOE of selling price is not available, or estimated selling price (“ESP”) if neither VSOE or selling price nor TPE is available. the Company establishes ESP, based on the judgment of CardConnect’s management, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. In arrangements with multiple elements, the Company determines allocation of the transaction price at inception of the arrangement based on the relative selling price of each unit of accounting. In multiple element arrangements where more-than-incidental software deliverables are included, the Company applied the residual method to determine the amount of software license revenues to be recognized. Under the residual method, if fair value exists for undelivered elements in a multiple-element arrangement, such fair value of the undelivered elements is deferred with the remaining portion of the arrangement consideration recognized upon delivery of the software license or services arrangement. The Company allocates the fair value of each element of a software related multiple-element arrangement based upon its fair value as determined by VSOE, with any remaining amount allocated to the software license. If evidence of the fair value cannot be established for the undelivered elements of a software arrangement then the entire amount of revenue under the arrangement is deferred until these elements have been delivered or objective evidence can be established. These amounts are included in deferred revenue in the consolidated balance sheets. Cost of Services Cost of services consists of interchange and pass-through and other cost of services. Interchange and pass-through consists of interchange fees, dues and assessment, debit network fees and other pass-through costs. Other cost of services primarily consists of residual payments to independent sales organizations. The residual payments represent commissions paid to sales groups based upon a percentage of the net revenues generated from merchant referrals. Other cost of services also includes merchant supplies and service expenses, bank processing costs and other third-party processing costs directly attributable to payment processing and related services to merchants. Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers cash on hand, checking accounts, and savings accounts to be cash and cash equivalents. At times, the balances in these accounts may exceed federally insured limits. Cash equivalents are defined as financial instruments readily transferrable into cash with an original maturity less than 90 days. Restricted Cash Restricted cash consists of funds held in escrow for payment of dividends on the Company's Series A Preferred Stock, processing-related cash collected from bankcard networks that has not been funded to the Company’s merchants and merchant deposits. Processing-related cash is generally paid to the Company’s merchants within two business days. Merchant deposits are funds held from merchants to offset potential chargebacks, adjustments, and fees. The timing of the payment of these fees is generally within one year. Long-term restricted cash reflects funds held in escrow for payment of dividends on the Company's Series A Preferred Stock that will be paid more than one year from the date of the consolidated balance sheets. Accounts Receivable Accounts receivable consists primarily of amounts due from merchants for discount fees net of interchange fees, monthly statement fees and other merchant revenue, as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 210-20, Offsetting , on transactions processed during the month ending on the balance sheet date. In addition to receivables for transaction fees the Company charges its merchants for processing transactions, accounts receivable includes amounts resulting from the Company’s practice of advancing interchange fees to most of its merchants during the month. Accounts receivable are typically received within 30 days following the end of each month. Accounts receivable also includes amounts due from sales of the Company’s technology solutions. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivables when they are deemed uncollectible. Management has determined an allowance for doubtful accounts is not necessary as of December 31, 2016 and 2015 . Processing Assets Processing assets consists of amounts due from the bankcard networks. These amounts are recovered the next business day following the date of processing the transaction. Inventory Inventory consists primarily of Point-of-Sale (“POS”) terminal equipment held for sale and is accounted for on a first-in first-out basis and valued at the lower of cost or market price. Inventory was $1,931,102 and $993,595 at December 31, 2016 and 2015 , respectively, and is included in other current assets on the consolidated balance sheets. Property and Equipment Expenditures for new long-lived assets and expenditures which extend the useful lives of existing long-lived assets are capitalized at cost. Property and equipment are recorded at cost less accumulated depreciation and are depreciated over the estimated useful lives of the assets using the straight-line method, except for leasehold improvements, which are depreciated over the shorter of the estimated useful lives of the assets or the remaining lease term. The Company provides depreciation over the estimated useful lives of assets, principally using the straight-line method, as follows: Furniture and fixtures 6 years Computer hardware and software 3 to 5 years Leasehold improvements 5 to 8 years Equipment 5 to 6 years Leasing equipment 5 years Depreciation for tax purposes is provided using various accelerated methods. Fully depreciated assets are removed from the accounts when they are no longer in service. Tenant improvement allowances are deferred and amortized on a straight-line basis over the life of the lease agreement as a reduction to rent expense. Repairs and maintenance, which do not extend the useful lives of the applicable assets, are charged to expense as incurred. Advertising Advertising costs are expensed as incurred. Advertising expense was $87,345 , $54,364 and $42,549 for the years ended December 31, 2016 , 2015 and 2014 , respectively, and are included in general and administrative expenses in the consolidated statements of operations. Goodwill Goodwill represents the excess consideration over the fair values of net assets acquired in business combinations. the Company applies the provisions of FASB Accounting Standards Codification ("ASC") Topic 350, Intangibles—Goodwill and Other (ASC 350) in accounting for its goodwill. The Company tests goodwill for impairment at least annually in the fourth quarter and between annual tests if an event occurs or changes in circumstances suggest a potential decline in the fair value of the reporting unit. A significant amount of judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others: a significant decline in expected future cash flows; a significant adverse change in in the business climate; unanticipated competition; and slower growth rates. The Company has the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors the Company considers in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of the Company’s reporting units, events or changes affecting the composition or carrying amount of the net assets of our reporting units, sustained decrease in our share price, and other relevant entity-specific events. If the Company determines not to perform the qualitative assessment or if it determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying value, then the Company performs a two-step quantitative test for that reporting unit. In the first step, the fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit is less than its carrying value, the second step of the goodwill impairment test is performed to measure the amount of impairment, if any. In the second step, the fair value of the reporting unit is allocated to the assets and liabilities of the reporting unit as if it had been acquired in a business combination and the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. The implied fair value of the reporting unit’s goodwill is then compared to the actual carrying value of the goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment loss is recognized for the difference. Significant estimates and assumptions are used in the Company’s goodwill impairment review and include the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units and determining the fair value of each reporting unit. The Company’s assessment of qualitative factors involves significant judgments about expected future business performance and general market conditions. In a quantitative assessment, the fair value of each reporting unit is determined based on a combination of techniques, including the present value of future cash flows, applicable multiples of competitors and multiples from sales of like businesses, and requires us to make estimates and assumptions regarding discount rates, growth rates and our future long-term business plans. Changes in any of these estimates or assumptions could materially affect the determination of fair value and the associated goodwill impairment charge for each reporting unit. The Company has determined that it has two reporting units, card processing services and technology solution services. As of December 31, 2016 and 2015 , the Company performed a qualitative assessment for each of its reporting units. Based on the qualitative assessment, the Company determined that there are no indications that it is more likely than not that the fair value of its reporting units is less than the carrying value. Intangible Assets Intangible assets primarily include residual buyouts, employment agreements, merchant and agent relationships, a service contract, tradenames, internally developed software, and website development costs. Intangible assets, which have been acquired in connection with various acquisitions, are recorded at fair value determined using a discounted cash flow model as of the date of the acquisition. After the fair value of all separately identifiable assets has been estimated in a business combination, goodwill is recorded to the extent the consideration paid for the acquisition exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Residual buyouts represent the right to not have to pay a residual to an independent sales agent related to certain future transactions of the agent’s referred merchants. Residual buyout intangible assets are recorded at cost as of the date of acquisition. Employment agreements represent the estimated values of non-solicit and non-compete agreements entered into in business combinations. Trade name intangibles represent the estimated values of trade names acquired in business combinations. Merchant relationships represent the estimated values of card processing revenues acquired in business combinations. Agent relationships represent the estimated values of revenues to be generated from sales agents acquired in business combinations. Service contract intangibles primarily represent the estimated value of the amended and restated merchant processing agreement with First Data Merchant Services Corporation. Technology intangibles represent the estimated values of software, to be sold or licensed, acquired in business combinations. The Company amortizes finite-lived identifiable intangible assets using a method that reflects the pattern in which the economic benefits of the intangible asset are expected to be consumed or otherwise utilized. The estimated useful lives of the Company’s customer-related intangible assets approximate the expected distribution of cash flows generated from each asset. The useful lives of contract-based intangible assets are equal to the terms of the agreement. The assets are amortized over their estimated useful lives, which range from 1 to 18 years. Management evaluates the remaining useful lives and carrying values of the intangible assets at least annually or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include reductions in underlying operating cash flows or increases in attrition rates from estimates. To the extent the estimated cash flows exceed the carrying value, no impairment is necessary. If the estimated cash flows are less than the carrying value, an impairment charge is recorded. Refer to Note 5 for discussion of impairment recorded in 2016 , 2015 and 2014 . The Company capitalizes software development costs and website development costs incurred in accordance with ASC 350-40, Internal Use Software . These costs include salaries and related employee benefits. Internally developed software and website development costs capitalized during 2016 , 2015 and 2014 totaled $3,940,519 , $2,627,132 and $3,019,956 , respectively. Amortization of internally developed software and website development costs is recorded on a straight-line basis over an estimated useful life of three years. This useful life is consistent with the time period over which the Company believes it will obtain economic benefit for these assets. Amortization expense relating to these costs totaled $2,766,436 , $2,591,185 and $1,798,432 in 2016 , 2015 and 2014 , respectively. The total unamortized development costs at December 31, 2016 and 2015 were $6,103,667 and $4,973,387 , respectively. Total intangible asset amortization expense was $20,578,530 , $19,174,968 and $18,544,472 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Other Receivables Other receivables are primarily loans to independent contractors or sales organizations who board merchants onto the Company's system in order to fund the growth of these contractors’ businesses. Amounts are payable with interest to the Company. The term of these loans normally does not exceed two years and the loan agreements typically include certain performance covenants. Under the terms of the agreements, the Company preserves the right to hold residual payments due to the contractors in the event that the covenants are not met. In 2016 , the Company wrote-off $337,888 of receivables from one independent contractor, which is recorded in general and administrative expense on the consolidated statements of operations and as agent advance forgiveness in the consolidated statements of cash flows. However, based on the provisions of these arrangements and historical experience, no reserve has been recorded for potential uncollectible amounts at December 31, 2016 . Stock-Based Compensation The Company accounts for grants of stock options to employees in accordance with ASC 718, Compensation—Stock Compensation . This standard requires compensation expense to be measured based on the estimated fair value of the share-based awards on the date of grant and recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. Stock based payments issued to non-employees are recorded at their fair values, are revalued quarterly as the equity instruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and ASC 505, Equity . The value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. The option pricing model requires the input of highly subjective assumptions, including the grant date fair value of the Company's common stock, expected volatility and risk-free interest rates. To determine the grant date fair value of FTS's common stock prior to the Merger, FTS engaged an outside consultant to prepare a valuation of the stock price on an annual basis, using information provided by management and information obtained from private and public sources. When an observable transaction occurred near the grant date of an option award, such as the purchase of treasury stock, FTS used the observable price to estimate the grant date fair value of the options. Subsequent to the Merger, the Company uses the closing market price of its common stock at the grant date. The Company uses an expected volatility based on the historical volatilities of a group of guideline companies and the "simplified" method for calculating the expected life of its stock options. Stock based payments to non-employees are recognized at fair value on the date of grant and re-measured at each subsequent reporting date through the settlement of the instrument. The risk free interest rates are obtained from publicly available U.S. Treasury yield curve rates. Income Taxes The Company accounts for income taxes under the liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes a valuation allowance if, based on the weight of available evidence regarding future taxable income, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Regarding the recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, the Company follows a two-step process prescribed by GAAP. The first step for evaluating a tax position involves determining whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities. The second step then requires a company to measure the tax position benefits as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies any interest and penalties on tax liabilities on the consolidated statements of operations as components of other expenses. Processing Liabilities Processing liabilities primarily reflect the differences arising between the amounts the Company receives from the bankcard networks and the amounts funded to the Company’s merchants. Such differences arise from timing differences, merchant reserves and chargeback processing. Except for merchant reserves, the amounts are generally paid within two business days. Disputes between a cardholder and a merchant periodically arise due to cardholder dissatisfaction with merchandise quality or a merchant’s services. These disputes may not be resolved in the merchant’s favor, and, in some cases, the transaction is “charged back” to the merchant. The purchase price is then refunded by the merchant to the cardholder through the respective card-issuing bank. However, in the case of merchant insolvency, bankruptcy or other nonpayment, the Company may be liable for any such charges disputed by cardholders. The Company maintains a deposit from certain merchants as an offset to potential contingent liabilities that are the responsibility of such merchants The merchant reserve balance as of December 31, 2016 and 2015 totaled $986,499 and $422,876 , respectively. Accounting for Preferred Stock The Company classifies its Series A Preferred Stock, issued in connection with the Merger, on its consolidated balance sheets using the guidance in ASC 480-10-S99. The Series A Preferred Stock contains certain provisions that allow the holder to redeem the preferred stock for cash, beginning seven years following the date of issuance, or if certain events occur, such as a change in control. As redemption under these circumstances is not solely within the Company’s control, the Series A Preferred Stock is classified as temporary equity. Fair Value Measurements The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurements and Disclosures , which defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, processing assets and liabilities, residuals payable and settlement obligation approximated their fair values as of December 31, 2016 and 2015 , because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of December 31, 2016 and 2015 , because interest rates on these instruments approximate market interest rates. Business Combinations Business acquisitions have been recorded using the acquisition method of accounting, and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. After the purchase price has been allocated, goodwill is recorded to the extent the consideration paid for the acquisition exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. The operating results of an acquisition are included in the Company's consolidated statements of operations from the date of such acquisition. Related Parties Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-dealing markets may not exist. A description of related-party transactions is provided in Note 15. Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements are issued for potential recognition or disclosure. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting . The ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2016. The Company elected to early adopt this guidance in 2016. As a result of adopting this ASU, the Company recognized excess tax benefits realized from the settlement and exercise of stock options as a component of income tax expense in the consolidated statements of operations, and within income tax cash flows as an operating activity in the consolidated statements of cash flows. The Company has elected to account for forfeitures in compensation cost as they occur, as permitted by this ASU. In April 2015, the FASB issued Accounting Standards Update ("ASU") No. 2015-03 (ASU 2015-03), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This standard amends the existing guidance to require that debt issuance costs be presented in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. ASU 2015-03 is effective on a retrospective basis for annual and interim reporting periods beginning after December 15, 2015. The Company adopted this standard in 2016, and as a result, the debt issuance costs incurred in connection with the Merger are included as a reduction of the Company's long-term debt balance on the consolidated balance sheet as of December 31, 2016. The adoption of this standard did not impact the Company's consolidated balance sheet as of December 31, 2015. In August 2015, the FASB issued ASU No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . ASU 2015-15 clarified the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Such costs may be presented in the balance sheet as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU simplifies the balance sheet classification of deferred income taxes under GAAP by requiring that all deferred tax assets and liabilities be classified as non-current. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2016. Early adoption is permitted. The new guidance can be applied on either a prospective or retrospective basis. The Company elected to early adopt this guidance and apply it on a prospective basis in 2015. Adoption of this ASU resulted in a reclassification of the Company’s net current deferred tax asset to the net long-term deferred tax liability in our consolidated balance sheet as of December 31, 2015 and 2016. Recently Issued Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. For public companies, this ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 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. For public companies, this ASU is effective for annual periods beginning after December 15, 2017, including interim periods wit |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions During the years ended December 31, 2016 , 2015 and 2014 , the Company acquired the businesses and intangible assets described below: Residual Buyouts From time to time, the Company acquires future commission streams from new and existing sales agents in exchange for an up-front cash payment. For new sales agents, this results in an increase in overall gross volume to the Company, and new merchants from these agents which are boarded onto the Company's processing platforms. For existing sales agents, this results in a future decrease in other cost of services as the Company is no longer required to compensate the agent on the acquired merchants. The residual buyouts are treated as asset acquisitions, resulting in recording a residual buyout intangible asset at cost on the date of acquisition. These assets are generally amortized using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are expected to be utilized over their estimated useful lives, ranging from one to eight years. The weighted-average amortization period for all residual buyouts is four years. Acquisition costs related to these transactions, which are typically immaterial in nature, are expensed as incurred and recorded in general and administrative expenses. A summary of residual buyouts for the years ended December 31, 2016 , 2015 and 2014 is as follows: 2016 2015 2014 Cash payments $ 9,528,500 $ 6,779,396 $ 4,672,000 Advance repayments 155,000 207,791 400,000 Contingent payments — — 120,844 Stock awards — — 11,094 Total consideration $ 9,683,500 $ 6,987,187 $ 5,203,938 Business Combinations FinTech Acquisition Corp. Background and Summary On the Closing Date, FinTech and FTS consummated the previously announced transactions contemplated by the Merger Agreement. The Merger Agreement provided for, among other things, the acquisition of FTS by FinTech pursuant to the Merger. In connection with the Merger, FinTech paid cash consideration of approximately $179 million (including approximately $2 million of “Excess Cash” as defined in the Merger Agreement), and issued 15,162,470 shares of common stock and options to purchase 3,463,950 shares of common stock in exchange for the total issued and outstanding shares of common and preferred stock of FTS. The cash portion of the consideration was funded by a combination of cash held in trust by FinTech of $100 million , borrowings under a new $100 million first lien secured credit facility and a $40 million second lien secured credit facility (See “Note 6. Long-Term Debt—First Lien Facility” and “—Second Lien Facility”), and $42 million in gross proceeds from the private placements of preferred and common stock completed immediately prior to the Merger (See “—Series A Preferred Stock Offering” and “—Common Stock Offering”). Prior to the Closing Date, there were 13,733,333 shares of FinTech common stock outstanding and, in connection with the closing of the Merger, the Company redeemed 1,119,051 shares of its common stock at a redemption price of $10.01 per share pursuant to the terms of the Company’s amended and restated certificate of incorporation, resulting in a total payment to redeeming stockholders of $11,201,698 . Immediately following the Merger, there were 1,500,000 shares of Series A Preferred Stock outstanding, 28,751,331 shares of common stock outstanding, outstanding warrants to purchase 10,300,000 shares of common stock and outstanding options to purchase 6,854,429 shares of common stock. Series A Preferred Stock Offering On the Closing Date, in connection with the partial financing of the Merger, the Company issued 1,500,000 shares of newly created Series A Preferred Stock (the “Preferred Stock”) and 480,544 shares of common stock (such shares of common stock, together with the Preferred Stock, the “Shares”) to Falcon Strategic Partners V, LP (“Series A Purchaser”) in a private placement pursuant to the Securities Purchase Agreement with the Series A Purchaser dated June 23, 2016. The Shares were sold to the Series A Purchaser in a private placement transaction exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506 of Regulation D promulgated by the SEC. The Company incurred fees of $570,397 in connection with issuing the Preferred Stock, which were recorded as a discount to the redeemable preferred stock on the consolidated balance sheet on the date the offering closed. The aggregate purchase price for the Preferred Stock was $37.5 million , of which $30.0 million was used to pay a portion of the cash consideration for the Merger, to repay the Company's existing debt in connection with the Merger, to pay transaction expenses relating to the Merger and for general corporate purposes, and the remaining $7.5 million was placed in a separate account for use in funding the first two years of cash dividends on the Preferred Stock. The Preferred Stock has an aggregate liquidation preference of $37.5 million plus all unpaid dividends. During the first two years following issuance, dividends accrue at a rate of 11.43% per annum, compounding quarterly, of which 10.0% will be payable in cash quarterly and 1.43% will accrue and be payable in connection with a redemption of the Preferred Stock or a Change of Control (as defined in the Certificate of Designation for the Preferred Stock). Thereafter, dividends accrue at 13.40% per annum, compounding quarterly, all of which will accrue and be payable in connection with a redemption of the Preferred Stock or a Change of Control. The Preferred Stock is redeemable, at the Series A Purchaser’s option, beginning seven years following the date of issuance (the “Mandatory Redemption Date”) at a price equal to the then aggregate liquidation preference of the outstanding Preferred Stock. The Company has the right (the “Optional Redemption Right”) to redeem the Preferred Stock beginning three and a half years following the date of issuance. The redemption price (the "Redemption Price") will be 102% of the liquidation preference if the redemption occurs during the first redemption year, 101% of the liquidation preference if the redemption occurs during the second redemption year, and 100% of the liquidation value thereafter. Common Stock Offering On the Closing Date, in connection with the partial financing of the Merger, the Company issued an aggregate of 467,647 shares of common stock (the “PIPE Shares”) to FTVENTURES III, L.P., FTVENTURES III-N, L.P. and FTVENTURES III-T, L.P., each a stockholder of FTS, certain other stockholders of FTS and an affiliate of Betsy Cohen, a director of the Company (collectively, the “PIPE Investors”), pursuant to securities purchase agreements with the PIPE Investors dated July 27, 2016. The PIPE Shares were sold to the PIPE Investors in a private placement transaction (the “PIPE Transaction”) exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. Of the PIPE Shares sold in the PIPE Transaction, 350,000 shares were sold at a purchase price of $10.00 per share, and the remaining 117,647 shares, which were sold to the affiliate of Mrs. Cohen, were sold at a purchase price of $10.20 per share, the most recent closing bid price of the Company’s common stock, as required by applicable NASDAQ Listing Rules. The Company used the proceeds from the PIPE Transaction to pay a portion of the cash consideration for the Merger, repay FTS’s existing debt in connection with the Merger, pay transaction expenses relating to the Merger and redeem shares of common stock in connection with the Merger pursuant to the Company’s amended and restated certificate of incorporation. The Company incurred fees of $299,041 in connection with issuing the PIPE Shares, which were recorded as an adjustment to Additional Paid-In Capital at closing. Registration Rights Agreement On the Closing Date, FinTech entered into a registration rights agreement (the “Registration Rights Agreement”) with the FTS stockholders other than the executive officers of FTS, which provides registration rights with respect to the shares of the Company's common stock that were issued to such FTS stockholders as partial consideration under the Merger Agreement and other shares acquired prior to the Follow On Offering (as defined below). The Registration Rights Agreement requires that the Company consummate a secondary offering, which will be a registered underwritten public offering of shares of the Company's common stock held by CardConnect stockholders that elect to participate in such offering (the “Follow On Offering”), and that the Company file a shelf registration statement to register any shares of its common stock held by FTVENTURES III, L.P., FTVENTURES III-N, L.P. and FTVENTURES III-T, L.P (together, the “FTV Entities”). If such shelf registration statement becomes unavailable at any time, the FTV Entities will have certain demand and piggyback registration rights, subject to customary underwriter cutbacks and issuer blackout periods. The Company is required to pay customary fees and expenses relating to registrations under the Registration Rights Agreement. Vanco Payment Solutions, Inc. On October 31, 2015, the Company purchased certain assets and assumed certain liabilities of Vanco Payment Solutions, Inc. (“Vanco”) for cash consideration of $24,000,000 . The Company expensed $203,529 of acquisition costs associated with this transaction, which were recorded as general and administrative expense in the accompanying Consolidated Statement of Operations for the year ended December 31, 2015. The allocation of the Vanco purchase price and the estimated fair market values of the Vanco assets acquired and liabilities assumed are as follows: Restricted cash $ 1,345,370 Other receivables 25,241 Merchant relationships 8,820,000 Agent relationships 6,080,000 Noncompete agreements 340,000 Goodwill 8,760,000 Total assets acquired $ 25,370,611 Processing liabilities 1,370,611 Net assets acquired $ 24,000,000 The goodwill associated with the acquisition is deductible for tax purposes. The merchant relationship intangible asset has an estimated amortization period of seven years . The agent relationship intangible asset has an estimated amortization period of eleven years . The noncompete agreement has an estimated amortization period of five years . The weighted-average amortization period for all intangibles acquired is nine years . The assets the Company purchased and liabilities assumed from Vanco did not represent a stand-alone entity. Vanco has never had separate audited financial statements prepared for these assets and liabilities, and distinct accounts needed to present the full financial statements of the portion of Vanco acquired by the Company have not been maintained. Therefore, the Company concluded it was impracticable to disclose pro forma revenue and earnings for the years ended December 31, 2015 and 2014, in accordance with ASC 805, Business Combinations . Marathon Solutions, Inc. On July 13, 2012, the Company acquired Marathon Solutions, Inc. The transaction included contingent consideration with an estimated fair value of $4,188,361 which was accrued on the acquisition date and is payable based upon operational performance during the first, second and third 12 month periods after closing. In 2013, the Company paid $4,683,409 in contingent consideration. On September 19, 2013, the asset purchase agreement was amended, which modified the terms of the potential contingent consideration to be paid in 2014 and 2015. As a result, the Company accrued a contingent liability with an estimated fair value of $2,476,410 on the amendment date. In 2014, the Company paid $255,518 in contingent consideration. On December 1, 2014, the asset purchase agreement was amended, which eliminated the potential contingent consideration for the third 12 month period after closing. As a result, the Company reduced its contingent liability by $2,220,892 , which is included in operating expenses on the Consolidated Statements of Operations for the year ended December 31, 2014. No contingent consideration was payable as of December 31, 2016 and 2015. Dependable Payment Processing, Inc./Discount Payment Processing, Inc. On November 26, 2012, the Company acquired Dependable Payment Processing, Inc. and Discount Payment Processing, Inc. (collectively, “DPP”). The transaction included contingent consideration with an estimated fair value of $4,588,337 , which was accrued on the acquisition date and payable based upon operational performance during the first and second 12 month periods after closing. At December 31, 2013, the Company re-evaluated the expected operational performance of DPP and, as a result, reduced its contingent liability by $2,996,008 . In 2014, the Company paid $909,075 in contingent consideration earned for the first 12 month period after closing. In 2014, contingent consideration of $3,675,000 was earned for the second 12 month period after closing, of which $2,991,747 was included in operating expenses on the consolidated statements of operations. The contingent consideration was paid in February of 2015 and no contingent consideration was payable as of December 31, 2016 and 2015. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment A summary of property and equipment, net as of December 31, 2016 and 2015 is as follows: December 31, 2016 2015 Leasehold improvements $ 3,341,700 $ 3,195,291 Equipment 429,416 409,601 Leasing equipment 777,804 777,804 Computer hardware and software 3,978,697 3,140,243 Furniture and fixtures 1,771,492 1,573,542 10,299,109 9,096,481 Less accumulated depreciation (4,707,847 ) (2,987,472 ) Total property and equipment, net $ 5,591,262 $ 6,109,009 Depreciation expense was $1,745,160 , $1,187,567 and $870,136 for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets and goodwill consisted of the following as of December 31, 2016 : Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Residual buyouts $ 47,386,859 $ (30,989,047 ) $ 16,397,812 1 to 18 years – proportional cash flow Employment agreement 5,815,000 (5,138,096 ) 676,904 1 to 6 years – proportional cash flow Trade name 1,079,100 (973,182 ) 105,918 5 years – proportional cash flow Merchant relationships 34,863,500 (24,096,301 ) 10,767,199 5 to 13 years – proportional cash flow Agent relationships 28,835,000 (12,144,508 ) 16,690,492 10 to 13 years – proportional cash flow Service contract 18,600,000 (14,479,042 ) 4,120,958 1 to 4 years – proportional cash flow Internally developed software 9,507,571 (3,510,576 ) 5,996,995 1 to 4 years – straight line Technology 2,881,700 (1,729,134 ) 1,152,566 4 to 6 years – proportional cash flow Website development 143,861 (37,189 ) 106,672 1 to 3 years – straight line Total finite-lived intangible assets 149,112,591 (93,097,075 ) 56,015,516 Indefinite-lived intangible assets: Goodwill 40,241,161 — 40,241,161 Total identifiable intangible assets and goodwill $ 189,353,752 $ (93,097,075 ) $ 96,256,677 Refer to Note 2 for discussion of the amortization method of finite-lived intangible assets. Intangible assets and goodwill consisted of the following as of December 31, 2015 : Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Residual buyouts $ 37,703,359 $ (25,017,382 ) $ 12,685,977 1 to 14 years – proportional cash flow Employment agreement 5,815,000 (4,002,952 ) 1,812,048 1 to 7 years – proportional cash flow Trade name 1,079,100 (940,787 ) 138,313 6 years – proportional cash flow Merchant relationships 34,863,500 (19,046,022 ) 15,817,478 6 to 14 years – proportional cash flow Agent relationships 28,835,000 (9,367,772 ) 19,467,228 11 to 14 years – proportional cash flow Service contract 18,600,000 (12,009,413 ) 6,590,587 1 to 5 years – proportional cash flow Internally developed software 8,122,872 (3,247,935 ) 4,874,937 1 to 4 years – straight line Technology 2,881,700 (1,352,886 ) 1,528,814 5 to 7 years – proportional cash flow Website development 547,008 (448,558 ) 98,450 2 to 3 years – straight line Total finite-lived intangible assets 138,447,539 (75,433,707 ) 63,013,832 Indefinite-lived intangible assets: Goodwill 40,241,161 — 40,241,161 Total identifiable intangible assets and goodwill $ 178,688,700 $ (75,433,707 ) $ 103,254,993 At December 31, 2016 , 2015 and 2014 , the Company evaluated the expected remaining cash flows of the residual buyouts and recorded an impairment of $0 , $0 and $25,731 , respectively. In 2016 the Company disposed of $2,436,330 of fully-amortized internally developed software intangible assets and $478,033 of fully-amortized website development intangible assets. In 2016 , the Company also disposed of $43,805 of capitalized internally developed software costs due to the projects being terminated by the Company. The Company recognized a $43,805 loss on the disposal of the terminated projects for the year ended December 31, 2016 . At December 31, 2016 , the estimated future amortization expense of aggregate finite-lived intangible assets is as follows: Years ending December 31: 2017 $ 16,725,394 2018 13,381,060 2019 9,200,368 2020 5,670,920 2021 4,053,842 Thereafter 6,983,932 $ 56,015,516 The change in the carrying amount of goodwill for the years ended December 31, 2016 , 2015 and 2014 , is as follows: Balance at January 1, 2014 $ 31,481,161 Acquisitions — Balance at December 31, 2014 31,481,161 Acquisitions 8,760,000 Balance at December 31, 2015 40,241,161 Acquisitions — Balance at December 31, 2016 $ 40,241,161 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s long-term debt at December 31, 2016 and December 31, 2015, consisted of the following: December 31, 2016 December 31, 2015 Credit facility: 2016 First lien term credit facility, net of $3,828,939 of deferred financing costs $ 94,171,061 $ — 2016 Second lien term credit facility, net of $1,740,247 of deferred financing costs 38,259,753 — 2012 Revolving credit facility — 59,964,989 Total debt 132,430,814 59,964,989 Less current portion 4,250,000 — Total long-term debt $ 128,180,814 $ 59,964,989 Prior Year Credit Facility In connection with the Merger, on the Closing Date, FTS repaid the outstanding balance of $57,964,989 under its 2012 revolving credit facility and terminated the facility. New Credit Facilities In connection with the Merger, on the Closing Date, the Company, through Merger Sub, entered into a credit agreement with BMO Harris Bank N.A. (“BMO”), as administrative agent, for a first lien credit facility (the “First Lien Facility”), and entered into a second lien credit agreement with Babson Capital Finance LLC, also acting as administrative agent, for a second lien term loan facility (the “Second Lien Facility”). Each facility is guaranteed by the Company and its two indirect wholly-owned subsidiaries, CardConnect, LLC and Princeton Payment Solutions, LLC, and secured by a pledge of all of the assets of the Company and its subsidiaries. The Company capitalized debt issuance costs of $6,047,141 in connection with the credit agreements, which will be amortized to interest expense over the term of the credit agreements. The capitalized debt issuance costs are reported as contra-liabilities and are presented net against the long-term debt on the consolidated balance sheets. Amortization of debt issuance costs was $477,955 for the year ended December 31, 2016 . First Lien Credit Facility The First Lien Facility consists of a $30 million senior secured first lien revolving credit facility, with a $10 million sublimit for issuance of standby letters of credit and a $5 million sublimit for swingline loans, and a $100 million senior secured first lien term credit facility. The Company may increase the First Lien Facility by up to $35 million (less amounts obtained from the related expansion feature under the Second Lien Facility), subject to customary restrictions and conditions. The First Lien Facility matures on July 29, 2021 and bears interest at rates based either on the three-month London Interbank Offered Rate, or LIBOR, plus a margin of between 2.00% and 3.50% , or, at the Company’s option, BMO’s base rate plus a margin of between 1.00% and 2.50% , with the margin in each case depending upon consolidated total net leverage ratios (described below). The term loan portion of the First Lien Facility will amortize $1.25 million per quarter beginning with the quarter ending December 31, 2016 through the quarter ending September 30, 2018; thereafter $1.875 million per quarter through the quarter ending September 30, 2020; and finally $2.5 million per quarter through the quarter ending June 30, 2021. At December 31, 2016 , the interest rate on the outstanding balance of the first lien term credit facility was 4.11% . There were no draws on the first lien revolving credit facility during 2016. The Company may prepay the First Lien Facility, without premium. The First Lien Facility requires mandatory prepayments, without premium, in the following amounts: • 100% of the net cash proceeds of (i) sales of assets not in the ordinary course of business, (ii) sales of debt securities, and (iii) casualty or condemnation events (subject to specified thresholds and exceptions, including permitted reinvestment periods); and • 75% of “Excess Cash Flow,” as defined in the first lien credit agreement, with a reduction to 50% if the total net leverage ratio for the fiscal year is 3.00 to 1.00 , and a reduction to 25% if such ratio is 2.50 to 1.00 . Second Lien Credit Facility The Second Lien Facility consists of a $40 million senior secured second lien term loan which has a $35 million expansion feature similar to, and coordinated with, the expansion feature of the First Lien Facility such that the maximum aggregate expansion for both such financings cannot exceed $35 million . The Second Lien Facility matures on July 29, 2022 and bears interest at LIBOR plus 9.50% (with a LIBOR floor of 1.00% ) or, at the Company’s option, the base rate (generally, the Wall Street Journal “prime rate”) plus 8.50% (with a base rate floor of 2.00% ). The Second Lien Facility does not amortize and may not be prepaid prior to the payment in full of the First Lien Facility, notwithstanding the foregoing, the Company is permitted to make payments under the Second Lien Facility out of the “available amount” (as defined under the First Lien Facility). If voluntary prepayments (in addition to those allowed to be made from the available amount) become permitted (following payment of the First Lien Facility in full), there will be a prepayment fee of 2% of the outstanding loan amount during the first loan year, 1% of the outstanding loan amount in the second loan year and no prepayment fee thereafter. Mandatory prepayments are the same as under the First Lien Facility but are conditioned on the prior repayment in full of the First Lien Facility. At December 31, 2016 , the interest rate on the outstanding balance of the Second Lien Facility was 10.50% . On November 2, 2016, the Company entered into Amendment No. 1 to the Company’s First Lien Facility and Amendment No. 1 to the Company’s Second Lien Facility. These amendments permit the Company to repurchase up to $2.5 million of the Company’s outstanding warrants on the terms set forth in such amendments. Covenants Pursuant to its First and Second Lien Credit Facilities, the Company is required to comply with certain financial and operating covenants, which it was in compliance with at December 31, 2016 . The Company is also required to provide audited financial statements to the lenders within 90 days after the end of each fiscal year. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock The Company is authorized to issue 200,000,000 shares of common stock with a par value of $0.001 per share. Holders of the Company's common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Holders of the Company's common stock have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the Company's common stock. If the Company liquidates, dissolves or winds up, stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share from time to time in one or more series. The Company's Board of Directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions, applicable to the shares of each series. As of December 31, 2016 , there were 1,500,000 shares of preferred stock designated as Series A Preferred Stock. As of December 31, 2016 , there were no shares of preferred stock issued or outstanding other than the Series A Preferred Stock issued to the Series A Purchaser as described in Note 3. The amount of cumulative dividends in arrears on the Series A Preferred Stock was $229,736 at December 31, 2016 , which are included in the balance of the redeemable Series A Preferred Stock on the consolidated balance sheets. The Series A Preferred Stock is non-voting, although it has rights to consent to certain actions the Company may take. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, an amount per share of Preferred Stock equal to the Preferred Stock Accreted Value, plus any Cash Accruing Dividends accrued but unpaid (whether or not declared) and any interest accrued but unpaid on any unpaid Cash Accruing Dividends, together with any other dividends declared but unpaid. If upon any such liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they shall be entitled, the holders of shares of Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Warrants Prior to the Merger, there were outstanding warrants to purchase an aggregate of 10,300,000 shares of FinTech’s common stock. Following the Merger, these warrants remain outstanding and each warrant entitles its holder to purchase one share of the Company's common stock at an exercise price of $12.00 per share and will expire on July 29, 2021, or earlier upon liquidation by the Company. The Company may redeem the outstanding warrants at a price of $0.01 per warrant if the last sale price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period. FTS Holding Corporation 2010 Stock Option Plan On September 15, 2010, FTS's Board of Directors approved the FTS Holding Corporation 2010 Stock Option Plan (the "2010 Plan"). Under the 2010 Plan, FTS was authorized to issue up to 5,200,000 shares and 5,165,000 stock options were outstanding immediately prior to the Merger. In connection with the Merger, on the Closing Date all outstanding unvested stock options issued under the 2010 Plan became fully vested and all vested stock options were then immediately settled for $9,716,492 of cash, which is included in distribution to former stockholders in connection with reverse merger on the consolidated statements of stockholders' equity, and options to purchase 3,463,950 shares of common stock of the Company. The actual tax benefit realized for the tax deductions from options settled was $2,435,074 . For the years ended December 31, 2016 , 2015 and 2014 , the Company recognized compensation expense of $3,054,066 , $1,886,523 and $1,907,702 , respectively, under the 2010 Plan. The year ended December 31, 2016 included $2,107,911 of remaining unrecognized compensation expense related to the accelerated vesting of FTS stock options on the Closing Date. No stock options under the 2010 Plan remain available for issuance at December 31, 2016 . CardConnect Corp. 2016 Omnibus Equity Compensation Plan In connection with the Merger, on the Closing Date the Company’s stockholders approved the CardConnect Corp. 2016 Omnibus Equity Compensation Plan (the “2016 Plan”), which authorized 3,796,296 shares for issuance. On October 28, 2016, the Company’s stockholders approved an amendment and restatement of the 2016 Plan that authorized an additional 1,000,000 shares of common stock for issuance. As of December 31, 2016 , there were 4,796,296 shares authorized and 422 shares available for issuance under the 2016 Plan. Stock-based compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. The stock options issued under the 2016 Plan vest in four equal installments over four years . For the year ended December 31, 2016 , the Company recognized compensation expense of $1,818,049 under the 2016 Plan. As of December 31, 2016 , unrecognized compensation expense of $18,019,148 is expected to be recognized over a weighted-average period of 3.9 years. The weighted-average assumptions used and fair value of options are as follows: December 31, 2016 2015 2014 Risk-free interest rate 1.30 % 1.56 % 1.78 % Expected dividend yield — — — Expected volatility 40.9 % 36.1 % 42.1 % Expected life in years 6.25 6.25 6.25 Fair value $ 4.34 $ 4.29 $ 2.75 Stock option activity for the years ended 2014 , 2015 and 2016 was as follows: Options Weighted-Average Exercise Price Weighted-Average Contractual Term (Years) Outstanding at January 1, 2014 4,697,500 $ 3.66 7.92 Granted 270,000 4.84 9.87 Forfeited (37,000 ) 4.55 0 Outstanding at December 31, 2014 4,930,500 $ 3.72 7.17 Granted 370,500 5.70 9.75 Forfeited (101,000 ) 4.73 0 Outstanding at December 31, 2015 5,200,000 3.72 7.17 Exchanged (1,701,050 ) 3.83 0 Granted 4,566,908 10.46 9.64 Forfeited (7,969 ) 4.73 0 Exercised (124,470 ) 4.68 0 Outstanding at December 31, 2016 7,933,419 $ 7.63 7.76 Exercisable at December 31, 2016 3,371,511 $ 3.81 5.22 For the year ended December 31, 2016 , the total intrinsic value of options exercised was $814,519 . As of December 31, 2016 , options outstanding had an aggregate intrinsic value of $40,192,223 . As of December 31, 2016 , options exercisable had an intrinsic value of $29,979,522 . For the year ended December 31, 2016 , cash received from option exercises was $582,370 and the actual tax benefit realized for the tax deductions from options exercised was $194,837 . Activity in non-vested shares as of December 31, 2014 , 2015 and 2016 was as follows: Non-vested Shares Options Weighted-Average Grant Date Fair Value Non-vested at January 1, 2014 2,240,443 $ 1.85 Granted 270,000 2.75 Vested (1,031,445 ) 1.77 Forfeited (37,000 ) 1.99 Non-vested at December 31, 2014 1,441,998 2.20 Granted 370,500 4.29 Vested (700,534 ) 2.42 Forfeited (101,000 ) 5.06 Non-vested at December 31, 2015 1,010,964 3.09 Granted 4,566,908 4.34 Vested (1,007,995 ) 3.09 Forfeited (7,969 ) 2.04 Non-vested at December 31, 2016 4,561,908 $ 3.09 Restricted Stock The 2016 Plan provides for the issuance of restricted stock awards to the Company's directs and employees. The recipient of a share of restricted stock is entitled to voting rights and dividends on the common stock. The fair value of restricted stock is equal to the fair value of the Company's common stock on the grant date. The restricted stock issued to the Company's directors vests on the earlier of (i) one day prior to the next regularly scheduled annual shareholders meeting, or (ii) one year from the grant date. The restricted stock issued to the Company's employees vests in four equal installments over four years. As of December 31, 2016 , 233,966 shares of restricted stock were issued and the Company recognized compensation expense of $164,230 for the year ended December 31, 2016 . As of December 31, 2016 , unrecognized compensation expense for the restricted stock of $2,160,623 is expected to be recognized over a weighted-average period of 3.8 years. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan | Defined Contribution Plan The Company established a defined contribution savings plan covering substantially all of the Company’s employees. The plan provides tax-deferred amounts for each participant, consisting of employee elective contributions, employer matching and discretionary employer contributions. Total expense recognized in connection the plan for the years ended December 31, 2016 , 2015 and 2014 was $432,448 , $320,120 and $350,519 , respectively, and is included in general and administrative expenses in the consolidated statements of operations. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock FTS Series A Convertible Preferred Stock FTS’s Articles of Incorporation authorized the issuance of 20,365,000 shares of $.0001 par value Series A Convertible Preferred Stock. The holders of FTS's Series A Convertible Preferred Stock were entitled to receive dividends, as and if declared by the Board of Directors. Dividends on each share of FTS's Series A Convertible Preferred Stock accrued on a daily basis at an annual rate of 8% , compounded and accumulated quarterly from the date of issuance, on the Series A liquidation value plus all accumulated and unpaid dividends. The FTS Series A Convertible Preferred Stock was convertible into common stock. The conversion rate was determined by multiplying the number of shares to be converted by the Series A liquidation value ( $2.387 ) and dividing that result by the Series A conversion price then in effect determined in accordance with FTS’s Articles of Incorporation. The outstanding shares of FTS's Series A Convertible Stock were exchanged in connection with the Merger and no shares are available for issuance as of December 31, 2016 . CardConnect Corp. Preferred Stock On the Closing Date, in connection with the Merger, the Company issued 1,500,000 shares of Series A Preferred Stock as described in Note 3. |
Treasury Stock
Treasury Stock | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Treasury Stock | Treasury Stock During 2015, FTS purchased 540,000 outstanding shares of common stock from a related party for $2,700,000 (see Note 15). The transaction was accounted for under the cost method. In connection with the Merger, FTS canceled 681,538 shares of treasury stock on the Closing Date. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic (loss) earnings per share is calculated by dividing net (loss) income attributable to the Company’s common shareholders for period by the weighted average number of common shares outstanding for the period. In computing dilutive (loss) earnings per share, basic (loss) earnings per share is adjusted for the assumed issuance of all applicable potentially dilutive share-based awards, including common stock options, restricted stock and warrants. Below are basic and diluted net (loss) earnings per share for the periods indicated (amounts in thousands except share and per share data): Year Ended December 31, 2016 2015 2014 Numerator: Net (loss) income $ (16,143,769 ) $ 1,172,484 $ (12,010,901 ) Less: Preferred stock dividends (1,833,903 ) — — Net (loss) income available for common stockholders $ (17,977,672 ) $ 1,172,484 $ (12,010,901 ) Denominator: Weighted-average common shares outstanding – basic 20,906,638 15,189,788 15,425,903 Dilutive effect of stock options — 1,584,287 — Weighted-average common shares outstanding - diluted 20,906,638 16,774,075 15,425,903 Net (loss) income per share available for common stockholders - basic $ (0.86 ) $ 0.08 $ (0.78 ) Net (loss) income per share available for common stockholders - diluted $ (0.86 ) $ 0.07 $ (0.78 ) Antidilutive options, unvested restricted stock awards and warrants excluded from the computations 15,952,567 — 967,903 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes and liabilities for the years ended December 31, 2016 and 2015 , included the following: 2016 2015 Current: Federal $ (2,218,975 ) $ 1,428,089 State 38,681 256,845 Total current (2,180,294 ) 1,684,934 Deferred: Federal 749,613 (238,993 ) State 40,014 (62,164 ) Total deferred 789,627 (301,157 ) Total $ (1,390,667 ) $ 1,383,777 A reconciliation of U.S. income tax computed at the statutory rate and to the effective tax rate for the year ended December 31, 2016 , is as follows: Statutory rate: 35.00 % Increase (decrease) in taxes resulting from the following: State income taxes net of federal tax benefit 1.31 Deferred tax adjustments (1.16 ) Nondeductible expenses (5.64 ) Valuation allowance (22.26 ) Other 0.68 Total 7.93 % The net deferred tax liability was comprised of the following at December 31, 2016 and 2015 : 2016 2015 Deferred tax assets: Finite-lived intangible assets $ 10,744,080 $ 9,714,314 Stock-based compensation 3,008,821 2,711,579 Reserves and other accrued expenses 1,032,995 708,768 Net operating loss 3,701,597 — Other 557,010 69,333 Gross deferred tax assets 19,044,503 13,203,994 Valuation allowance (15,981,476 ) (10,458,857 ) Deferred tax liabilities: Finite-lived intangible assets (2,265,215 ) (1,857,212 ) Indefinite-lived intangible assets (2,576,843 ) (1,787,215 ) Depreciation (797,812 ) (887,926 ) Gross deferred tax liabilities (5,639,870 ) (4,532,353 ) Net deferred tax liability $ (2,576,843 ) $ (1,787,216 ) A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2016 and 2015 , a valuation allowance of $15,981,476 and $10,458,857 , respectively, has been recorded. The Company has federal net operating loss carryforwards of $9,415,064 , which will expire between 2034 and 2036. In addition, the Company has pretax state net operating loss carryforwards of $8,012,432 , which will expire between 2023 and 2036. The Company also has federal research and development credits of $327,887 and a Pennsylvania research and development credit of $34,713 that will expire in 2036 and 2031, respectively. Certain tax attributes are subject to an annual limitation as a result of the Merger, which constitutes a change of ownership as defined under Internal Revenue Code Section 382. The Company has a full valuation allowance recorded against all net operating losses and credits associated with the jurisdictions in which it operates. The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes . FASB ASC 740 clarifies the accounting and reporting for uncertainties in income tax law by prescribing a comprehensive model for the financial statement recognition, measurement, presentations, and disclosure for uncertain tax positions taken or expected to be taken in income tax returns. The liability for total gross unrecognized tax benefits was $183,118 , $221,584 and $116,258 of which $119,026 , $144,029 and $75,568 as of December 31, 2016 , 2015 and 2014 , respectively, would affect the Company’s effective tax rate. The Company does not expect any significant changes within the next twelve months in its unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2016 , 2015 , and 2014 is as follows: December 31, 2016 2015 2014 Beginning of year balance $ 221,584 $ 116,258 $ 94,591 Increases in prior period tax positions — — — Decreases in prior period tax positions (13,601 ) (3,213 ) (32,413 ) Increases in current period tax positions — 108,539 54,080 Decreases relating to settlements (24,865 ) — — Decreases relating to statutes of limitations — — — End of year balance $ 183,118 $ 221,584 $ 116,258 The Company records interest as a component of income tax expense. The Company’s income tax provision included $48,309 of expense (net of a federal tax benefit of $9,235 ), $6,379 of expense (net of a federal tax benefit of $3,796 ) and $3,505 of expense (net of a federal tax benefit of $2,091 ) related to interest and penalties for the years ended December 31, 2016 , 2015 and 2014 , respectively. Such expense brought the balance of accrued interest to $64,080 , $15,771 and $5,596 at December 31, 2016 , 2015 and 2014 , respectively. The Company files a U.S. federal income tax return along with various state income tax returns. As the statute of limitations for the Company's U.S. federal income tax return is three years, the federal tax return is subject to examination for periods 2013 and after. The statute of limitations for the Company's state income tax returns is generally three to four years; as such, the state income tax returns may be subject to examination for periods 2012 and after. |
Lease Obligations
Lease Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Lease Obligations | Lease Obligations The Company leases office equipment and office space under operating agreements expiring through 2023. Rent expense on operating leases is recorded on a straight-line basis over the term of the lease agreement. Substantially all of the leases require the Company to pay maintenance, insurance, and property taxes. Future minimum lease payments for all non-cancelable leases as of December 31, 2016 were as follows: Years ending December 31: 2017 $ 1,709,284 2018 1,740,587 2019 1,647,248 2020 1,620,416 2021 1,659,409 Thereafter 3,439,881 $ 11,816,825 Rental expense charged to operations for leased facilities and office equipment was $1,978,604 , $1,885,091 and $1,823,798 for the years ended December 31, 2016 , 2015 and 2014 , respectively. Sublease rental income for leased facilities was $686,097 , $129,520 and $87,600 for the years ended December 31, 2016 , 2015 and 2014 , respectively. At December 31, 2016 , minimum rentals to be received in the future under non-cancelable subleases were $4,056,467 , and will cease in 2023. The Company vacated its leased premises at Canonsburg, PA on February 14, 2014, in connection with the transition, employment and general release agreement disclosed in Note 14. The Company accounted for its “Cease-Use Liability” in accordance with ASC 420 — Exit or Disposal Cost Obligations . |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is party to a contract with First Data Merchant Services Corporation (“FDMS”), under which FDMS provides services related to transaction processing and transmittal, transaction authorization, and data capture and access to reporting tools. The contract expires on December 31, 2021, with successive renewal options of two years . The Company is required to pay minimum services fees equal to 70% of the prior year’s services fees paid to FDMS. The minimum services fees to be paid to FDMS in 2017 is $9,283,439 . Approximately 91% of the Company’s revenues are processed by FDMS. The Company is party to a contract with TSYS Acquiring Solutions, LLC (“TSYS”), under which TSYS provides merchant authorization, accounting and clearing services. The contract expires on October 31, 2020, with successive renewal options of two years. The Company is required to pay minimum services fees each month of the contract equal to the greater of the contractually agreed upon amount for each processing year or 70% of the average monthly volume over the last three months of the prior processing year. The minimum services fees to be paid to TSYS in 2017 , 2018 , 2019 and 2020 are $1,219,155 , $1,350,000 , $1,550,000 and $1,500,000 , respectively. In consideration of the Company executing the contract, TSYS provided the Company with a one-time signing incentive in the amount of $250,000 . The Company amortizes the signing incentive as a reduction of cost of services over the contract term of five years . The Company is involved in ordinary course legal proceedings, which include all claims, lawsuits, investigations and proceedings, including unasserted claims, which are probable of being asserted, arising in the ordinary course of business. the Company has considered all such ordinary course legal proceedings in formulating its disclosures and assessments. In the opinion of the Company, based on consultations with outside counsel, material losses are not considered reasonably possible in connection with these ordinary course legal proceedings. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions On February 14, 2014, the Company entered into a transition, employment and general release agreement with its then Chief Executive Officer (the “Executive”). Under the terms of the agreement, the Executive resigned his positions as Chief Executive Officer of FTS Holding Corporation and Financial Transaction Services, LLC, and was appointed Non-Executive Chairman of the Board of FTS Holding Corporation. The Company and the Executive entered into an amended and restated employment agreement where the Executive’s employment was transferred from Financial Transaction Services, LLC to FTS Holding Corporation for consideration of $1,000,000 , which was paid in February, 2014. The Executive received additional payments of $500,000 each in June and September, 2014, and a payment of $950,000 in December, 2014. The Company was also required to make donations to two organizations, totaling $250,000 , which were paid in January, 2014, and are included in general and administrative expense in the consolidated statements of operations. No amounts were due to the Executive as of December 31, 2016 and 2015 . On March 21, 2013, the Executive was provided a line of credit by the Company in the amount of $1.5 million . The line of credit has a maturity date of (i) the earlier of March 31, 2018, and (ii) the date of sale of the Company. The line of credit is subject to an interest rate of the greater of 2.0% or an applicable federal rate. On June 18, 2013, the line of credit provided to the Executive was amended to increase the principal amount to $1.7 million . On September 25, 2013, the Company provided a non-negotiable promissory note to the Executive in the amount $2,000,000 . The note had an original maturity date of the earlier of (i) three business days prior to the date the Company sells all or substantially all of its assets, merges or is otherwise acquired or (ii) June 30, 2015. In connection with the transition, employment and general release agreement, the maturity date was amended to the earlier of (i) the date the Company sells all or substantially all of its assets, merges or is otherwise acquired and (ii) March 31, 2018. In connection with the Merger, the total outstanding balance of $2,450,000 was repaid to the Company on the Closing Date. On February 26 2015, the Company purchased 540,000 outstanding shares of common stock from the Executive for $2,700,000 . On May 9, 2013, the then President, and current Chief Executive Officer (the “CEO”), of the Company was provided a non-negotiable promissory note by the Company in the amount of $500,000 . The note has a maturity date of (i) the earlier of March 31, 2018, and (ii) the date of sale of the Company. The note is subject to an interest rate of the greater of 2.0% or an applicable federal rate. On June 12, 2013, the note was amended to increase the principal amount to $650,000 . On July 7, 2014, the note was amended to increase the principal amount to $950,000 . On June 11, 2015, the note was amended to increase the principal amount to $1,250,000 . In connection with the Merger, the outstanding balance of $1,250,000 was repaid to the Company on the Closing Date. As of December 31, 2016 and 2015 , the outstanding principal balance of these loans was $0 and $3,700,000 , respectively, and is classified as long-term related-party receivables on the consolidated balance sheets. On October 13, 2014, the Company entered into an independent contractor agreement with a sales agent who is a related party. In connection with the agreement, the Company provided a $200,000 revolving line of credit note to the sales agent. The sales agent may draw down a maximum of $15,000 per month for the time period of 12 months after the effective date. The note matures in November, 2018, and is subject to an interest rate of 5.0% , which begins accruing one year after the effective date of the note. Payments commence 25 months after the effective date of the note and the outstanding balance will be paid in 24 monthly installments. If certain performance targets are met within 24 months of the effective date, either 50% or 100% of the outstanding loan balance shall be forgiven. On September 30, 2016, the Company entered into a residual buyout agreement with the sales agent. Total consideration under the agreement was $115,500 , of which $40,500 was paid in cash to the sales agent and $75,000 reduced the balance of the revolving line of credit. On October 18, 2016, the note was amended to defer the interest accrual and first payment until March 1, 2017. The amendment also extended the maturity date to April 1, 2019. As of December 31, 2016 and 2015 , the outstanding loan balance was $200,000 and $170,000 , respectively. On January 16, 2013, the Company entered into an independent contractor agreement with a sales agent who is a related party. In connection with the agreement, the Company provided a $250,000 revolving line of credit note to the sales agent at an interest rate of 5.0% , which began accruing one year after the effective date of the note. Payments were to commence 19 months after the effective date of the note and the outstanding balance was to be paid in 24 monthly installments. If certain performance targets were met, either 50% or 100% of the outstanding loan balance shall be forgiven. On May 9, 2014, the note was amended to extend the repayment to 25 months after the effective date of the original note. As of December 31, 2014, the outstanding loan balance was $237,693 and the Company accrued a reserve of $125,000 as the sales agent was expected to achieve the performance target to forgive 50% of the outstanding balance. During 2015, $125,000 of the outstanding balance was forgiven and the remaining balance was repaid, primarily through a residual buyout. During 2015, the Company entered into residual buyout agreements with the independent contractor. Total consideration under these agreements was $560,000 , of which $352,209 was paid in cash to the independent contractor and $207,791 repaid all outstanding loan balances. The note matured in August 2016. On January 22, 2008, the Company entered into an independent contractor agreement with a sales agent who is a related party. For the years ended December 31, 2016 , 2015 and 2014 , the Company recognized commission expense of $293,768 , $184,682 and $109,572 , respectively. As of December 31, 2016 and 2015 , residuals payable to the sales agent were $73,358 and $24,951 , respectively. In connection with the Company relocating its corporate headquarters during 2012, the Company provided certain employees with loans to assist with the purchase of new residences. Interest on the loans accrues semi-annually on the unpaid principal balance at the then-applicable Federal Short-Term Rate. The loans are being forgiven by the Company in 36 equal monthly installments beginning the first month following the funding date. If the Company terminates the employee without cause, then the outstanding principal amount and any unpaid interest accrued will be forgiven. If the Company terminates the employee with cause, or the employee voluntarily terminates his/her employment, then the outstanding principal amount and any unpaid interest accrued shall become due immediately. As of December 31, 2016 and 2015 , the outstanding principal balance of these loans was $0 and $116,887 , respectively, and is classified as related-party receivables on the consolidated balance sheets. The balance of relocation loans forgiven was $0 , $152,583 and $351,550 for the years ended December 31, 2016 , 2015 and 2014 , respectively. No relocation loans were provided to the Company employees during 2016 and 2015 under this program. The Company also provides relocation loans to its employees on an as-needed basis, primarily to assist with the relocation from one office location to another. As of December 31, 2016 and 2015 , the outstanding principal balance of these loans was $89,645 and $0 , respectively, and is classified as related-party receivables on the consolidated balance sheets. The balance of relocation loans forgiven was $220,355 , $0 and $0 for the years ended December 31, 2016 , 2015 and 2014 , respectively. On March 6, 2012, the Company entered into Management Carve-Out Agreements with certain of its executive officers providing for payments to such executives upon a change in control. Pursuant to the agreement, the Company's CEO, Chief Operating Officer, Executive Vice President of Sales and a Company director received $1,250,000 , $329,150 , $254,240 and $5,505,000 , respectively, upon closing of the Merger. The payments are included in general and administrative expense on the consolidated statements of operations. The Company relies on Trustwave Holdings, Inc. (“Trustwave”) to provide certain PCI compliance services. A non-executive director of FTS and of the Company is also a non-executive director of Trustwave. For the years ended December 31, 2016 , 2015 and 2014 , the Company recorded expenses of $912,299 , $647,302 and $632,626 , respectively, for these services. At December 31, 2016 and 2015 , amounts due to Trustwave totaled $(865) and $128,655 , respectively. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segments | Segments The Company’s core business is providing Merchant Acquiring services to Small and Medium sized Businesses (“SMB”). The Company also provides services to larger Enterprise customers that primarily utilize sophisticated Enterprise Resource Planning (“ERP”) systems to manage their business. These services are primarily ERP integration services utilizing the Company’s secure hosted payment gateway, and may also include secure, point-to-point encryption (“P2PE”) payment terminals and acceptance devices. The Company also provides Merchant Acquiring services to certain of its Enterprise customers. Merchant Acquiring services provided to both SMB and Enterprise customers are aggregated for financial reporting purposes in the Merchant Acquiring segment, as they both provide processing services related to bankcard transactions, exhibit similar economic characteristics, and share the same systems to provide services. The Enterprise services business activity does not meet applicable materiality thresholds for separate segment disclosure but is included as the primary component of an “all other” category under GAAP as set forth below. The other category also includes corporate overhead expenses and non-recurring charges unrelated to Merchant Acquiring services and Enterprise services. Year Ended December 31, 2016 2015 2014 Revenue Merchant Acquiring Services $ 582,157,399 $ 453,286,973 $ 387,329,552 Other 7,162,504 5,360,967 2,655,221 $ 589,319,903 $ 458,647,940 $ 389,984,773 Cost of services (exclusive of depreciation and amortization) Merchant Acquiring Services $ 521,278,623 $ 407,162,016 $ 345,813,559 Other 2,459,794 1,915,772 128,950 $ 523,738,417 $ 409,077,788 $ 345,942,509 General and administrative Merchant Acquiring Services $ 28,685,967 $ 19,771,303 $ 17,985,762 Other 26,617,123 5,549,203 7,950,641 55,303,090 25,320,506 25,936,403 Depreciation expense Merchant Acquiring Services $ 1,588,654 $ 965,446 $ 643,358 Other 156,506 222,121 226,778 $ 1,745,160 $ 1,187,567 $ 870,136 Amortization expense Merchant Acquiring Services $ 20,386,431 $ 18,945,882 $ 18,315,386 Other 192,099 229,086 229,086 $ 20,578,530 $ 19,174,968 $ 18,544,472 Interest expense, net Merchant Acquiring Services $ 5,124,657 $ 1,249,526 $ 1,187,103 Other — — — $ 5,124,657 $ 1,249,526 $ 1,187,103 Income/(loss) from operations Merchant Acquiring Services $ 10,217,724 $ 6,442,326 $ 3,800,633 Other (22,263,018 ) (2,555,215 ) (5,880,234 ) $ (12,045,294 ) $ 3,887,111 $ (2,079,601 ) As of December 31, 2016 2015 Assets Merchant Acquiring Services $ 161,638,414 $ 140,164,642 Other 6,210,109 5,746,976 $ 167,848,523 $ 145,911,618 Goodwill Merchant Acquiring Services $ 38,604,607 $ 38,604,607 Other 1,636,554 1,636,554 $ 40,241,161 $ 40,241,161 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 15, 2017, the Company entered into the Fifth Amendment to the Amended and Restated Merchant Program Processing Agreement (the "Amendment") with FDMS. Under the terms of the Amendment and in exchange for a cash payment of $4,500,000 , certain contract terms were modified, which included reductions in the pricing schedules associated with transaction processing, and extending the term of the contract to December 31, 2024. |
Quarterly Consolidated Statemen
Quarterly Consolidated Statements of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Consolidated Statements of Operations (Unaudited) | Quarterly Consolidated Statements of Operations (Unaudited) The Company's unaudited quarterly results of operations for the years ended December 31, 2016 and 2015 were as follows: For the Quarter Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Revenue $ 130,009,307 $ 148,444,489 $ 154,031,109 $ 156,834,998 Income (loss) from operations 1,467,699 3,263,114 (19,329,653 ) 2,553,546 Net (loss) income 923,016 2,470,764 (22,081,298 ) 2,543,749 Net income (loss) available for common shareholders 923,016 2,470,764 (22,747,965 ) 1,376,513 Earnings (loss) per share available for common shareholders: Basic $ 0.06 $ 0.16 $ (0.93 ) $ 0.05 Diluted $ 0.05 $ 0.14 $ (0.93 ) $ 0.04 For the Quarter Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Revenue $ 99,610,360 $ 110,593,168 $ 119,679,367 $ 128,765,045 Income from operations 1,169,799 1,304,533 791,156 621,623 Net income 351,359 369,760 166,346 285,019 Net income available for common shareholders 351,359 369,760 166,346 285,019 (Loss) earnings per share available for common shareholders: Basic $ 0.02 $ 0.02 $ 0.01 $ 0.02 Diluted $ 0.02 $ 0.02 $ 0.01 $ 0.02 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). |
Principles of Consolidation and Reclassifications | Principles of Consolidation and Reclassifications The consolidated financial statements include the accounts of CardConnect Corp. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain immaterial reclassifications have been made to the prior period statements of operations to place them on a basis comparable with current period presentation. Collectively, unless the context requires otherwise, the consolidated group is referred to as “CardConnect” or the “Company.” |
Estimates | Estimates The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates include, but are not limited to, the value of purchase consideration paid for acquisitions, goodwill and intangible asset impairment review, revenue recognition for multiple element arrangements, loss reserves, assumptions used in the calculation of stock-based compensation and in the calculation of income taxes, and certain tax assets and liabilities as well as the related valuation allowances. Actual results could differ from those estimates. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue Card processing revenues are generated by the Company from fees charged to merchants for card-based processing services. Merchants are charged various rates, which are dependent upon various factors including the type of bankcard, card brand, merchant charge volume, the merchant’s industry and the merchant’s risk profile. Fees principally consist of discount fees, which are a percentage of the dollar amount of each credit or debit transaction and transaction fees, which are fixed per transaction. Card processing revenues are also derived from a variety of service fees, including fees for monthly minimum charge volume requirements, statement fees, annual fees, and fees for other miscellaneous services, including handling chargebacks. Card processing revenues are recognized at the time merchant transactions are processed on a gross basis equal to the full amount of the discount charged to the merchant as the Company is the primary obligor and has latitude in establishing price. Discount and other fees related to payment transactions are recognized as revenue at the time the merchants’ transactions are processed. Interchange and pass-through includes interchange fees paid to card-issuing banks and assessments paid to payment card associations. Interchange fees are set by Visa and MasterCard based on transaction processing volume and are recognized at the time merchant transactions are processed. Revenues from sales of the Company’s technology solutions are recognized when they are realized or realizable and earned. Revenue is considered realized and earned when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; and collection of the resulting receivable is reasonably assured. Contractual arrangements are evaluated for indications that multiple element arrangements may exist including instances where more-than-incidental software deliverables are included. Arrangements may contain multiple elements, such as hardware, software products, maintenance, and professional installation and training services. Revenues are allocated to each element based on the selling price hierarchy. The selling price for a deliverable is based on vendor specific objective evidence (“VSOE”) of selling price, if available, third party evidence (“TPE”) if VSOE of selling price is not available, or estimated selling price (“ESP”) if neither VSOE or selling price nor TPE is available. the Company establishes ESP, based on the judgment of CardConnect’s management, considering internal factors such as margin objectives, pricing practices and controls, customer segment pricing strategies and the product life cycle. In arrangements with multiple elements, the Company determines allocation of the transaction price at inception of the arrangement based on the relative selling price of each unit of accounting. In multiple element arrangements where more-than-incidental software deliverables are included, the Company applied the residual method to determine the amount of software license revenues to be recognized. Under the residual method, if fair value exists for undelivered elements in a multiple-element arrangement, such fair value of the undelivered elements is deferred with the remaining portion of the arrangement consideration recognized upon delivery of the software license or services arrangement. The Company allocates the fair value of each element of a software related multiple-element arrangement based upon its fair value as determined by VSOE, with any remaining amount allocated to the software license. If evidence of the fair value cannot be established for the undelivered elements of a software arrangement then the entire amount of revenue under the arrangement is deferred until these elements have been delivered or objective evidence can be established. These amounts are included in deferred revenue in the consolidated balance sheets. |
Cost of Services | Cost of Services Cost of services consists of interchange and pass-through and other cost of services. Interchange and pass-through consists of interchange fees, dues and assessment, debit network fees and other pass-through costs. Other cost of services primarily consists of residual payments to independent sales organizations. The residual payments represent commissions paid to sales groups based upon a percentage of the net revenues generated from merchant referrals. Other cost of services also includes merchant supplies and service expenses, bank processing costs and other third-party processing costs directly attributable to payment processing and related services to merchants. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers cash on hand, checking accounts, and savings accounts to be cash and cash equivalents. At times, the balances in these accounts may exceed federally insured limits. Cash equivalents are defined as financial instruments readily transferrable into cash with an original maturity less than 90 days. |
Restricted Cash | Restricted Cash Restricted cash consists of funds held in escrow for payment of dividends on the Company's Series A Preferred Stock, processing-related cash collected from bankcard networks that has not been funded to the Company’s merchants and merchant deposits. Processing-related cash is generally paid to the Company’s merchants within two business days. Merchant deposits are funds held from merchants to offset potential chargebacks, adjustments, and fees. The timing of the payment of these fees is generally within one year. Long-term restricted cash reflects funds held in escrow for payment of dividends on the Company's Series A Preferred Stock that will be paid more than one year from the date of the consolidated balance sheets. |
Accounts Receivable | Accounts Receivable Accounts receivable consists primarily of amounts due from merchants for discount fees net of interchange fees, monthly statement fees and other merchant revenue, as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 210-20, Offsetting , on transactions processed during the month ending on the balance sheet date. In addition to receivables for transaction fees the Company charges its merchants for processing transactions, accounts receivable includes amounts resulting from the Company’s practice of advancing interchange fees to most of its merchants during the month. Accounts receivable are typically received within 30 days following the end of each month. Accounts receivable also includes amounts due from sales of the Company’s technology solutions. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivables when they are deemed uncollectible. Management has determined an allowance for doubtful accounts is not necessary as of December 31, 2016 and 2015 . |
Processing Assets | Processing Assets Processing assets consists of amounts due from the bankcard networks. These amounts are recovered the next business day following the date of processing the transaction. |
Inventory | Inventory Inventory consists primarily of Point-of-Sale (“POS”) terminal equipment held for sale and is accounted for on a first-in first-out basis and valued at the lower of cost or market price. |
Property and Equipment | Property and Equipment Expenditures for new long-lived assets and expenditures which extend the useful lives of existing long-lived assets are capitalized at cost. Property and equipment are recorded at cost less accumulated depreciation and are depreciated over the estimated useful lives of the assets using the straight-line method, except for leasehold improvements, which are depreciated over the shorter of the estimated useful lives of the assets or the remaining lease term. The Company provides depreciation over the estimated useful lives of assets, principally using the straight-line method, as follows: Furniture and fixtures 6 years Computer hardware and software 3 to 5 years Leasehold improvements 5 to 8 years Equipment 5 to 6 years Leasing equipment 5 years Depreciation for tax purposes is provided using various accelerated methods. Fully depreciated assets are removed from the accounts when they are no longer in service. Tenant improvement allowances are deferred and amortized on a straight-line basis over the life of the lease agreement as a reduction to rent expense. Repairs and maintenance, which do not extend the useful lives of the applicable assets, are charged to expense as incurred. |
Advertising | Advertising Advertising costs are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess consideration over the fair values of net assets acquired in business combinations. the Company applies the provisions of FASB Accounting Standards Codification ("ASC") Topic 350, Intangibles—Goodwill and Other (ASC 350) in accounting for its goodwill. The Company tests goodwill for impairment at least annually in the fourth quarter and between annual tests if an event occurs or changes in circumstances suggest a potential decline in the fair value of the reporting unit. A significant amount of judgment is involved in determining if an indicator or change in circumstances relating to impairment has occurred. Such changes may include, among others: a significant decline in expected future cash flows; a significant adverse change in in the business climate; unanticipated competition; and slower growth rates. The Company has the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. The option of whether or not to perform a qualitative assessment is made annually and may vary by reporting unit. Factors the Company considers in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of the Company’s reporting units, events or changes affecting the composition or carrying amount of the net assets of our reporting units, sustained decrease in our share price, and other relevant entity-specific events. If the Company determines not to perform the qualitative assessment or if it determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying value, then the Company performs a two-step quantitative test for that reporting unit. In the first step, the fair value of each reporting unit is compared to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit is less than its carrying value, the second step of the goodwill impairment test is performed to measure the amount of impairment, if any. In the second step, the fair value of the reporting unit is allocated to the assets and liabilities of the reporting unit as if it had been acquired in a business combination and the purchase price was equivalent to the fair value of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is referred to as the implied fair value of goodwill. The implied fair value of the reporting unit’s goodwill is then compared to the actual carrying value of the goodwill. If the implied fair value of goodwill is less than the carrying value of goodwill, an impairment loss is recognized for the difference. Significant estimates and assumptions are used in the Company’s goodwill impairment review and include the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units and determining the fair value of each reporting unit. The Company’s assessment of qualitative factors involves significant judgments about expected future business performance and general market conditions. In a quantitative assessment, the fair value of each reporting unit is determined based on a combination of techniques, including the present value of future cash flows, applicable multiples of competitors and multiples from sales of like businesses, and requires us to make estimates and assumptions regarding discount rates, growth rates and our future long-term business plans. Changes in any of these estimates or assumptions could materially affect the determination of fair value and the associated goodwill impairment charge for each reporting unit. The Company has determined that it has two reporting units, card processing services and technology solution services. As of December 31, 2016 and 2015 , the Company performed a qualitative assessment for each of its reporting units. Based on the qualitative assessment, the Company determined that there are no indications that it is more likely than not that the fair value of its reporting units is less than the carrying value. |
Intangible Assets | Intangible Assets Intangible assets primarily include residual buyouts, employment agreements, merchant and agent relationships, a service contract, tradenames, internally developed software, and website development costs. Intangible assets, which have been acquired in connection with various acquisitions, are recorded at fair value determined using a discounted cash flow model as of the date of the acquisition. After the fair value of all separately identifiable assets has been estimated in a business combination, goodwill is recorded to the extent the consideration paid for the acquisition exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. Residual buyouts represent the right to not have to pay a residual to an independent sales agent related to certain future transactions of the agent’s referred merchants. Residual buyout intangible assets are recorded at cost as of the date of acquisition. Employment agreements represent the estimated values of non-solicit and non-compete agreements entered into in business combinations. Trade name intangibles represent the estimated values of trade names acquired in business combinations. Merchant relationships represent the estimated values of card processing revenues acquired in business combinations. Agent relationships represent the estimated values of revenues to be generated from sales agents acquired in business combinations. Service contract intangibles primarily represent the estimated value of the amended and restated merchant processing agreement with First Data Merchant Services Corporation. Technology intangibles represent the estimated values of software, to be sold or licensed, acquired in business combinations. The Company amortizes finite-lived identifiable intangible assets using a method that reflects the pattern in which the economic benefits of the intangible asset are expected to be consumed or otherwise utilized. The estimated useful lives of the Company’s customer-related intangible assets approximate the expected distribution of cash flows generated from each asset. The useful lives of contract-based intangible assets are equal to the terms of the agreement. The assets are amortized over their estimated useful lives, which range from 1 to 18 years. Management evaluates the remaining useful lives and carrying values of the intangible assets at least annually or when events and circumstances warrant such a review, to determine whether significant events or changes in circumstances indicate that a change in the useful life or impairment in value may have occurred. Indicators of impairment monitored by management include reductions in underlying operating cash flows or increases in attrition rates from estimates. To the extent the estimated cash flows exceed the carrying value, no impairment is necessary. If the estimated cash flows are less than the carrying value, an impairment charge is recorded. Refer to Note 5 for discussion of impairment recorded in 2016 , 2015 and 2014 . The Company capitalizes software development costs and website development costs incurred in accordance with ASC 350-40, Internal Use Software . These costs include salaries and related employee benefits. Internally developed software and website development costs capitalized during 2016 , 2015 and 2014 totaled $3,940,519 , $2,627,132 and $3,019,956 , respectively. Amortization of internally developed software and website development costs is recorded on a straight-line basis over an estimated useful life of three years. This useful life is consistent with the time period over which the Company believes it will obtain economic benefit for these assets. |
Other Receivables | Other Receivables Other receivables are primarily loans to independent contractors or sales organizations who board merchants onto the Company's system in order to fund the growth of these contractors’ businesses. Amounts are payable with interest to the Company. The term of these loans normally does not exceed two years and the loan agreements typically include certain performance covenants. Under the terms of the agreements, the Company preserves the right to hold residual payments due to the contractors in the event that the covenants are not met. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for grants of stock options to employees in accordance with ASC 718, Compensation—Stock Compensation . This standard requires compensation expense to be measured based on the estimated fair value of the share-based awards on the date of grant and recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. Stock based payments issued to non-employees are recorded at their fair values, are revalued quarterly as the equity instruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and ASC 505, Equity . The value of each option grant is estimated on the grant date using the Black-Scholes option pricing model. The option pricing model requires the input of highly subjective assumptions, including the grant date fair value of the Company's common stock, expected volatility and risk-free interest rates. To determine the grant date fair value of FTS's common stock prior to the Merger, FTS engaged an outside consultant to prepare a valuation of the stock price on an annual basis, using information provided by management and information obtained from private and public sources. When an observable transaction occurred near the grant date of an option award, such as the purchase of treasury stock, FTS used the observable price to estimate the grant date fair value of the options. Subsequent to the Merger, the Company uses the closing market price of its common stock at the grant date. The Company uses an expected volatility based on the historical volatilities of a group of guideline companies and the "simplified" method for calculating the expected life of its stock options. Stock based payments to non-employees are recognized at fair value on the date of grant and re-measured at each subsequent reporting date through the settlement of the instrument. The risk free interest rates are obtained from publicly available U.S. Treasury yield curve rates. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method, which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes a valuation allowance if, based on the weight of available evidence regarding future taxable income, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Regarding the recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, the Company follows a two-step process prescribed by GAAP. The first step for evaluating a tax position involves determining whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities. The second step then requires a company to measure the tax position benefits as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company classifies any interest and penalties on tax liabilities on the consolidated statements of operations as components of other expenses. |
Processing Liabilities | Processing Liabilities Processing liabilities primarily reflect the differences arising between the amounts the Company receives from the bankcard networks and the amounts funded to the Company’s merchants. Such differences arise from timing differences, merchant reserves and chargeback processing. Except for merchant reserves, the amounts are generally paid within two business days. Disputes between a cardholder and a merchant periodically arise due to cardholder dissatisfaction with merchandise quality or a merchant’s services. These disputes may not be resolved in the merchant’s favor, and, in some cases, the transaction is “charged back” to the merchant. The purchase price is then refunded by the merchant to the cardholder through the respective card-issuing bank. However, in the case of merchant insolvency, bankruptcy or other nonpayment, the Company may be liable for any such charges disputed by cardholders. |
Accounting for Preferred Stock | Accounting for Preferred Stock The Company classifies its Series A Preferred Stock, issued in connection with the Merger, on its consolidated balance sheets using the guidance in ASC 480-10-S99. The Series A Preferred Stock contains certain provisions that allow the holder to redeem the preferred stock for cash, beginning seven years following the date of issuance, or if certain events occur, such as a change in control. As redemption under these circumstances is not solely within the Company’s control, the Series A Preferred Stock is classified as temporary equity. |
Fair Value Measurements | Fair Value Measurements The Company accounts for fair value measurements in accordance with ASC 820, Fair Value Measurements and Disclosures , which defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or the price paid to transfer a liability as of the measurement date. A three-tier, fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The three levels are: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active exchange markets. The carrying value of the Company’s financial instruments, including cash and cash equivalents, restricted cash, processing assets and liabilities, residuals payable and settlement obligation approximated their fair values as of December 31, 2016 and 2015 , because of the relatively short maturity dates on these instruments. The carrying amount of debt approximates fair value as of December 31, 2016 and 2015 , because interest rates on these instruments approximate market interest rates. |
Business Combinations | Business Combinations Business acquisitions have been recorded using the acquisition method of accounting, and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value as of the date of acquisition. After the purchase price has been allocated, goodwill is recorded to the extent the consideration paid for the acquisition exceeds the sum of the fair values of the separately identifiable acquired assets and assumed liabilities. The operating results of an acquisition are included in the Company's consolidated statements of operations from the date of such acquisition. |
Related Parties | Related Parties Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-dealing markets may not exist. A description of related-party transactions is provided in Note 15. |
Subsequent Events | Subsequent Events The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements are issued for potential recognition or disclosure. |
Recent Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting . The ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2016. The Company elected to early adopt this guidance in 2016. As a result of adopting this ASU, the Company recognized excess tax benefits realized from the settlement and exercise of stock options as a component of income tax expense in the consolidated statements of operations, and within income tax cash flows as an operating activity in the consolidated statements of cash flows. The Company has elected to account for forfeitures in compensation cost as they occur, as permitted by this ASU. In April 2015, the FASB issued Accounting Standards Update ("ASU") No. 2015-03 (ASU 2015-03), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This standard amends the existing guidance to require that debt issuance costs be presented in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. ASU 2015-03 is effective on a retrospective basis for annual and interim reporting periods beginning after December 15, 2015. The Company adopted this standard in 2016, and as a result, the debt issuance costs incurred in connection with the Merger are included as a reduction of the Company's long-term debt balance on the consolidated balance sheet as of December 31, 2016. The adoption of this standard did not impact the Company's consolidated balance sheet as of December 31, 2015. In August 2015, the FASB issued ASU No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . ASU 2015-15 clarified the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. Such costs may be presented in the balance sheet as an asset and subsequently amortized ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. ASU 2015-15 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU simplifies the balance sheet classification of deferred income taxes under GAAP by requiring that all deferred tax assets and liabilities be classified as non-current. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2016. Early adoption is permitted. The new guidance can be applied on either a prospective or retrospective basis. The Company elected to early adopt this guidance and apply it on a prospective basis in 2015. Adoption of this ASU resulted in a reclassification of the Company’s net current deferred tax asset to the net long-term deferred tax liability in our consolidated balance sheet as of December 31, 2015 and 2016. Recently Issued Accounting Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which removes Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. For public companies, this ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 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. For public companies, this ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The amendments in ASU 2016-18 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. Therefore, 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. The amendments in this ASU do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. The Company has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”) , which adds or clarifies guidance on the presentation and classification of eight specific types of cash receipts and cash payments in the statement of cash flows, with the intent of reducing diversity in practice. For public entities, ASU 2016-15 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. Entities must apply the guidance retrospectively to all periods presented; however, entities may apply prospectively if retrospective application is impracticable. The Company has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”), which amends the existing accounting standards for revenue recognition. ASU 2014-9 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-9 will be effective for the Company beginning in its first quarter of 2018 and early adoption is permitted. Subsequently, the FASB has issued the following standards related to ASU 2014-9: ASU No. 2016-8, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-8”); ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”); and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (“ASU 2016-20”). We must adopt ASU 2016-8, ASU 2016-10, ASU 2016-12 and ASU 2016-20 with ASU 2014-9 (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is in the process of determining the method of adoption and has not yet determined the effect of the adoption of this standard on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The ASU requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. This amendment is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2018. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company has not yet determined the effect of the adoption of this standard on its consolidated financial statements. |
Summary of Significant Accoun28
Summary of Significant Accounting Polcies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | The Company provides depreciation over the estimated useful lives of assets, principally using the straight-line method, as follows: Furniture and fixtures 6 years Computer hardware and software 3 to 5 years Leasehold improvements 5 to 8 years Equipment 5 to 6 years Leasing equipment 5 years A summary of property and equipment, net as of December 31, 2016 and 2015 is as follows: December 31, 2016 2015 Leasehold improvements $ 3,341,700 $ 3,195,291 Equipment 429,416 409,601 Leasing equipment 777,804 777,804 Computer hardware and software 3,978,697 3,140,243 Furniture and fixtures 1,771,492 1,573,542 10,299,109 9,096,481 Less accumulated depreciation (4,707,847 ) (2,987,472 ) Total property and equipment, net $ 5,591,262 $ 6,109,009 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of residual buyout | A summary of residual buyouts for the years ended December 31, 2016 , 2015 and 2014 is as follows: 2016 2015 2014 Cash payments $ 9,528,500 $ 6,779,396 $ 4,672,000 Advance repayments 155,000 207,791 400,000 Contingent payments — — 120,844 Stock awards — — 11,094 Total consideration $ 9,683,500 $ 6,987,187 $ 5,203,938 |
Purchase price and estimated fair values of assets acquired and liabilities assumed | The allocation of the Vanco purchase price and the estimated fair market values of the Vanco assets acquired and liabilities assumed are as follows: Restricted cash $ 1,345,370 Other receivables 25,241 Merchant relationships 8,820,000 Agent relationships 6,080,000 Noncompete agreements 340,000 Goodwill 8,760,000 Total assets acquired $ 25,370,611 Processing liabilities 1,370,611 Net assets acquired $ 24,000,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The Company provides depreciation over the estimated useful lives of assets, principally using the straight-line method, as follows: Furniture and fixtures 6 years Computer hardware and software 3 to 5 years Leasehold improvements 5 to 8 years Equipment 5 to 6 years Leasing equipment 5 years A summary of property and equipment, net as of December 31, 2016 and 2015 is as follows: December 31, 2016 2015 Leasehold improvements $ 3,341,700 $ 3,195,291 Equipment 429,416 409,601 Leasing equipment 777,804 777,804 Computer hardware and software 3,978,697 3,140,243 Furniture and fixtures 1,771,492 1,573,542 10,299,109 9,096,481 Less accumulated depreciation (4,707,847 ) (2,987,472 ) Total property and equipment, net $ 5,591,262 $ 6,109,009 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Intangible assets and goodwill consisted of the following as of December 31, 2015 : Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Residual buyouts $ 37,703,359 $ (25,017,382 ) $ 12,685,977 1 to 14 years – proportional cash flow Employment agreement 5,815,000 (4,002,952 ) 1,812,048 1 to 7 years – proportional cash flow Trade name 1,079,100 (940,787 ) 138,313 6 years – proportional cash flow Merchant relationships 34,863,500 (19,046,022 ) 15,817,478 6 to 14 years – proportional cash flow Agent relationships 28,835,000 (9,367,772 ) 19,467,228 11 to 14 years – proportional cash flow Service contract 18,600,000 (12,009,413 ) 6,590,587 1 to 5 years – proportional cash flow Internally developed software 8,122,872 (3,247,935 ) 4,874,937 1 to 4 years – straight line Technology 2,881,700 (1,352,886 ) 1,528,814 5 to 7 years – proportional cash flow Website development 547,008 (448,558 ) 98,450 2 to 3 years – straight line Total finite-lived intangible assets 138,447,539 (75,433,707 ) 63,013,832 Indefinite-lived intangible assets: Goodwill 40,241,161 — 40,241,161 Total identifiable intangible assets and goodwill $ 178,688,700 $ (75,433,707 ) $ 103,254,993 Intangible assets and goodwill consisted of the following as of December 31, 2016 : Cost Accumulated Amortization Carrying Value Amortization Life and Method Finite-lived intangible assets: Residual buyouts $ 47,386,859 $ (30,989,047 ) $ 16,397,812 1 to 18 years – proportional cash flow Employment agreement 5,815,000 (5,138,096 ) 676,904 1 to 6 years – proportional cash flow Trade name 1,079,100 (973,182 ) 105,918 5 years – proportional cash flow Merchant relationships 34,863,500 (24,096,301 ) 10,767,199 5 to 13 years – proportional cash flow Agent relationships 28,835,000 (12,144,508 ) 16,690,492 10 to 13 years – proportional cash flow Service contract 18,600,000 (14,479,042 ) 4,120,958 1 to 4 years – proportional cash flow Internally developed software 9,507,571 (3,510,576 ) 5,996,995 1 to 4 years – straight line Technology 2,881,700 (1,729,134 ) 1,152,566 4 to 6 years – proportional cash flow Website development 143,861 (37,189 ) 106,672 1 to 3 years – straight line Total finite-lived intangible assets 149,112,591 (93,097,075 ) 56,015,516 Indefinite-lived intangible assets: Goodwill 40,241,161 — 40,241,161 Total identifiable intangible assets and goodwill $ 189,353,752 $ (93,097,075 ) $ 96,256,677 |
Estimated future amortization expense of finite-lived intangible assets | At December 31, 2016 , the estimated future amortization expense of aggregate finite-lived intangible assets is as follows: Years ending December 31: 2017 $ 16,725,394 2018 13,381,060 2019 9,200,368 2020 5,670,920 2021 4,053,842 Thereafter 6,983,932 $ 56,015,516 |
Schedule of Goodwill | The change in the carrying amount of goodwill for the years ended December 31, 2016 , 2015 and 2014 , is as follows: Balance at January 1, 2014 $ 31,481,161 Acquisitions — Balance at December 31, 2014 31,481,161 Acquisitions 8,760,000 Balance at December 31, 2015 40,241,161 Acquisitions — Balance at December 31, 2016 $ 40,241,161 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The Company’s long-term debt at December 31, 2016 and December 31, 2015, consisted of the following: December 31, 2016 December 31, 2015 Credit facility: 2016 First lien term credit facility, net of $3,828,939 of deferred financing costs $ 94,171,061 $ — 2016 Second lien term credit facility, net of $1,740,247 of deferred financing costs 38,259,753 — 2012 Revolving credit facility — 59,964,989 Total debt 132,430,814 59,964,989 Less current portion 4,250,000 — Total long-term debt $ 128,180,814 $ 59,964,989 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average assumptions used and fair value of options are as follows: December 31, 2016 2015 2014 Risk-free interest rate 1.30 % 1.56 % 1.78 % Expected dividend yield — — — Expected volatility 40.9 % 36.1 % 42.1 % Expected life in years 6.25 6.25 6.25 Fair value $ 4.34 $ 4.29 $ 2.75 |
Schedule of Share-based Compensation, Stock Options, Activity | Stock option activity for the years ended 2014 , 2015 and 2016 was as follows: Options Weighted-Average Exercise Price Weighted-Average Contractual Term (Years) Outstanding at January 1, 2014 4,697,500 $ 3.66 7.92 Granted 270,000 4.84 9.87 Forfeited (37,000 ) 4.55 0 Outstanding at December 31, 2014 4,930,500 $ 3.72 7.17 Granted 370,500 5.70 9.75 Forfeited (101,000 ) 4.73 0 Outstanding at December 31, 2015 5,200,000 3.72 7.17 Exchanged (1,701,050 ) 3.83 0 Granted 4,566,908 10.46 9.64 Forfeited (7,969 ) 4.73 0 Exercised (124,470 ) 4.68 0 Outstanding at December 31, 2016 7,933,419 $ 7.63 7.76 Exercisable at December 31, 2016 3,371,511 $ 3.81 5.22 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Activity in non-vested shares as of December 31, 2014 , 2015 and 2016 was as follows: Non-vested Shares Options Weighted-Average Grant Date Fair Value Non-vested at January 1, 2014 2,240,443 $ 1.85 Granted 270,000 2.75 Vested (1,031,445 ) 1.77 Forfeited (37,000 ) 1.99 Non-vested at December 31, 2014 1,441,998 2.20 Granted 370,500 4.29 Vested (700,534 ) 2.42 Forfeited (101,000 ) 5.06 Non-vested at December 31, 2015 1,010,964 3.09 Granted 4,566,908 4.34 Vested (1,007,995 ) 3.09 Forfeited (7,969 ) 2.04 Non-vested at December 31, 2016 4,561,908 $ 3.09 |
Earnings (Loss) per Share (Tabl
Earnings (Loss) per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Summary of basic and diluted net (loss) income per share | Below are basic and diluted net (loss) earnings per share for the periods indicated (amounts in thousands except share and per share data): Year Ended December 31, 2016 2015 2014 Numerator: Net (loss) income $ (16,143,769 ) $ 1,172,484 $ (12,010,901 ) Less: Preferred stock dividends (1,833,903 ) — — Net (loss) income available for common stockholders $ (17,977,672 ) $ 1,172,484 $ (12,010,901 ) Denominator: Weighted-average common shares outstanding – basic 20,906,638 15,189,788 15,425,903 Dilutive effect of stock options — 1,584,287 — Weighted-average common shares outstanding - diluted 20,906,638 16,774,075 15,425,903 Net (loss) income per share available for common stockholders - basic $ (0.86 ) $ 0.08 $ (0.78 ) Net (loss) income per share available for common stockholders - diluted $ (0.86 ) $ 0.07 $ (0.78 ) Antidilutive options, unvested restricted stock awards and warrants excluded from the computations 15,952,567 — 967,903 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | The provision for income taxes and liabilities for the years ended December 31, 2016 and 2015 , included the following: 2016 2015 Current: Federal $ (2,218,975 ) $ 1,428,089 State 38,681 256,845 Total current (2,180,294 ) 1,684,934 Deferred: Federal 749,613 (238,993 ) State 40,014 (62,164 ) Total deferred 789,627 (301,157 ) Total $ (1,390,667 ) $ 1,383,777 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of U.S. income tax computed at the statutory rate and to the effective tax rate for the year ended December 31, 2016 , is as follows: Statutory rate: 35.00 % Increase (decrease) in taxes resulting from the following: State income taxes net of federal tax benefit 1.31 Deferred tax adjustments (1.16 ) Nondeductible expenses (5.64 ) Valuation allowance (22.26 ) Other 0.68 Total 7.93 % |
Schedule of Deferred Tax Assets and Liabilities | The net deferred tax liability was comprised of the following at December 31, 2016 and 2015 : 2016 2015 Deferred tax assets: Finite-lived intangible assets $ 10,744,080 $ 9,714,314 Stock-based compensation 3,008,821 2,711,579 Reserves and other accrued expenses 1,032,995 708,768 Net operating loss 3,701,597 — Other 557,010 69,333 Gross deferred tax assets 19,044,503 13,203,994 Valuation allowance (15,981,476 ) (10,458,857 ) Deferred tax liabilities: Finite-lived intangible assets (2,265,215 ) (1,857,212 ) Indefinite-lived intangible assets (2,576,843 ) (1,787,215 ) Depreciation (797,812 ) (887,926 ) Gross deferred tax liabilities (5,639,870 ) (4,532,353 ) Net deferred tax liability $ (2,576,843 ) $ (1,787,216 ) |
Summary of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2016 , 2015 , and 2014 is as follows: December 31, 2016 2015 2014 Beginning of year balance $ 221,584 $ 116,258 $ 94,591 Increases in prior period tax positions — — — Decreases in prior period tax positions (13,601 ) (3,213 ) (32,413 ) Increases in current period tax positions — 108,539 54,080 Decreases relating to settlements (24,865 ) — — Decreases relating to statutes of limitations — — — End of year balance $ 183,118 $ 221,584 $ 116,258 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Operating Leases of Lessee Disclosure | Future minimum lease payments for all non-cancelable leases as of December 31, 2016 were as follows: Years ending December 31: 2017 $ 1,709,284 2018 1,740,587 2019 1,647,248 2020 1,620,416 2021 1,659,409 Thereafter 3,439,881 $ 11,816,825 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Year Ended December 31, 2016 2015 2014 Revenue Merchant Acquiring Services $ 582,157,399 $ 453,286,973 $ 387,329,552 Other 7,162,504 5,360,967 2,655,221 $ 589,319,903 $ 458,647,940 $ 389,984,773 Cost of services (exclusive of depreciation and amortization) Merchant Acquiring Services $ 521,278,623 $ 407,162,016 $ 345,813,559 Other 2,459,794 1,915,772 128,950 $ 523,738,417 $ 409,077,788 $ 345,942,509 General and administrative Merchant Acquiring Services $ 28,685,967 $ 19,771,303 $ 17,985,762 Other 26,617,123 5,549,203 7,950,641 55,303,090 25,320,506 25,936,403 Depreciation expense Merchant Acquiring Services $ 1,588,654 $ 965,446 $ 643,358 Other 156,506 222,121 226,778 $ 1,745,160 $ 1,187,567 $ 870,136 Amortization expense Merchant Acquiring Services $ 20,386,431 $ 18,945,882 $ 18,315,386 Other 192,099 229,086 229,086 $ 20,578,530 $ 19,174,968 $ 18,544,472 Interest expense, net Merchant Acquiring Services $ 5,124,657 $ 1,249,526 $ 1,187,103 Other — — — $ 5,124,657 $ 1,249,526 $ 1,187,103 Income/(loss) from operations Merchant Acquiring Services $ 10,217,724 $ 6,442,326 $ 3,800,633 Other (22,263,018 ) (2,555,215 ) (5,880,234 ) $ (12,045,294 ) $ 3,887,111 $ (2,079,601 ) As of December 31, 2016 2015 Assets Merchant Acquiring Services $ 161,638,414 $ 140,164,642 Other 6,210,109 5,746,976 $ 167,848,523 $ 145,911,618 Goodwill Merchant Acquiring Services $ 38,604,607 $ 38,604,607 Other 1,636,554 1,636,554 $ 40,241,161 $ 40,241,161 |
Quarterly Consolidated Statem38
Quarterly Consolidated Statements of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The Company's unaudited quarterly results of operations for the years ended December 31, 2016 and 2015 were as follows: For the Quarter Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Revenue $ 130,009,307 $ 148,444,489 $ 154,031,109 $ 156,834,998 Income (loss) from operations 1,467,699 3,263,114 (19,329,653 ) 2,553,546 Net (loss) income 923,016 2,470,764 (22,081,298 ) 2,543,749 Net income (loss) available for common shareholders 923,016 2,470,764 (22,747,965 ) 1,376,513 Earnings (loss) per share available for common shareholders: Basic $ 0.06 $ 0.16 $ (0.93 ) $ 0.05 Diluted $ 0.05 $ 0.14 $ (0.93 ) $ 0.04 For the Quarter Ended March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 Revenue $ 99,610,360 $ 110,593,168 $ 119,679,367 $ 128,765,045 Income from operations 1,169,799 1,304,533 791,156 621,623 Net income 351,359 369,760 166,346 285,019 Net income available for common shareholders 351,359 369,760 166,346 285,019 (Loss) earnings per share available for common shareholders: Basic $ 0.02 $ 0.02 $ 0.01 $ 0.02 Diluted $ 0.02 $ 0.02 $ 0.01 $ 0.02 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accounting Policies [Abstract] | |||
Inventory | $ 1,931,102 | $ 993,595 | |
Advertising costs | $ 87,345 | 54,364 | $ 42,549 |
Number of reporting units | segment | 2 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangibles | $ 20,578,530 | 19,174,968 | 18,544,472 |
Software development costs | 3,940,519 | 2,627,132 | 3,019,956 |
Unamortized development costs on software | 6,103,667 | 4,973,387 | |
Write-off of other receivables | 337,888 | ||
Merchant reserve | $ 986,499 | 422,876 | |
Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 1 year | ||
Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 18 years | ||
Internally developed software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangibles | $ 2,766,436 | $ 2,591,185 | $ 1,798,432 |
Internally developed software [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 1 year | 1 year | |
Internally developed software [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset useful life | 4 years | 4 years |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Property Plant and Equipment Useful Life (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Furniture and fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 6 years |
Computer hardware and software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Computer hardware and software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Leasehold improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 8 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 6 years |
Leasing equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Acquisitions - Residual Buyout
Acquisitions - Residual Buyout (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Combinations [Abstract] | |||
Cash payments | $ 9,528,500 | $ 6,779,396 | $ 4,672,000 |
Advance repayments | 155,000 | 207,791 | 400,000 |
Contingent payments | 0 | 0 | 120,844 |
Stock awards | 0 | 0 | 11,094 |
Total consideration | $ 9,683,500 | $ 6,987,187 | $ 5,203,938 |
Acquisitions - FinTech Acquisit
Acquisitions - FinTech Acquisition Corp. (Details) - USD ($) | Jul. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 28, 2016 | Dec. 31, 2013 |
Business Combination (Textual) | ||||||
Cash consideration to acquire business | $ 9,528,500 | $ 6,779,396 | $ 4,672,000 | |||
Cash held in trust | $ 100,000,000 | |||||
Common stock, shares outstanding | 29,051,348 | 15,145,708 | ||||
Outstanding warrants to purchase of common stock | 10,300,000 | |||||
Outstanding options to purchase of common stock | 7,933,419 | 5,200,000 | 4,930,500 | 4,697,500 | ||
Value of stock issued | $ 39,844 | |||||
Series A Preferred Stock Offering [Member] | ||||||
Business Combination (Textual) | ||||||
Common stock, shares issued in connection with acquisition | 480,544 | |||||
Preferred stock, shares outstanding | 1,500,000 | 1,500,000 | ||||
Preferred stock, shares issued | 1,500,000 | |||||
Value of stock issued | $ 37,500,000 | |||||
Value of stock issued for acquisition | 30,000,000 | |||||
Value of stock issued for payment of future cash dividends | 7,500,000 | |||||
Preferred stock liquidation preference | $ 37,500,000 | |||||
Dividend rate, percentage | 11.43% | |||||
Dividend rate, portion of quarterly cash, percentage | 10.00% | |||||
Dividend rate, redemption or change of control, percentage | 1.43% | |||||
Dividend rate, future percentage | 13.40% | |||||
Preferred stock redemption price percentage of liquidation preference, year one | 102.00% | |||||
Preferred stock redemption price percentage of liquidation preference, year two | 101.00% | |||||
Preferred stock redemption price percentage of liquidation preference, thereafter | 100.00% | |||||
Common Stock Offering [Member] | ||||||
Business Combination (Textual) | ||||||
Common stock, shares issued | 467,647 | |||||
Sale of stock, number of shares issued | 350,000 | |||||
Sale of stock, price per share (in dollars per share) | $ 10 | |||||
Additional paid in capital at closing | $ 299,041 | |||||
Common Stock Offering [Member] | Mrs. Cohen [Member] | ||||||
Business Combination (Textual) | ||||||
Sale of stock, number of shares issued | 117,647 | |||||
Sale of stock, price per share (in dollars per share) | $ 10.20 | |||||
FinTech Acquisition Corp. [Member] | ||||||
Business Combination (Textual) | ||||||
Cash consideration to acquire business | $ 179,000,000 | |||||
Excess cash related to merger | $ 2,000,000 | |||||
Common stock, shares issued in connection with acquisition | 15,162,470 | |||||
Options to purchase of common stock (in shares) | 3,463,950 | |||||
Proceeds from issuance of private placements | $ 42,000,000 | |||||
Common stock, shares outstanding | 28,751,331 | 13,733,333 | ||||
Common stock shares redeemed | 1,119,051 | |||||
Common stock, redemption price per share (in dollars per share) | $ 10.01 | |||||
Common stock shares redeemed, value | $ 11,201,698 | |||||
Outstanding warrants to purchase of common stock | 10,300,000 | |||||
Outstanding options to purchase of common stock | 6,854,429 | |||||
Discount to redeemable preferred stock | $ 570,397 | |||||
FinTech Acquisition Corp. [Member] | First lien secured credit facility [Member] | ||||||
Business Combination (Textual) | ||||||
Secured credit facility | 100,000,000 | |||||
FinTech Acquisition Corp. [Member] | Second lien secured credit facility [Member] | ||||||
Business Combination (Textual) | ||||||
Secured credit facility | $ 40,000,000 |
Acquisitions - Vanco Payment So
Acquisitions - Vanco Payment Solutions, Inc. (Details) - USD ($) | Oct. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||
Cash consideration to acquire business | $ 9,528,500 | $ 6,779,396 | $ 4,672,000 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 40,241,161 | $ 40,241,161 | $ 31,481,161 | $ 31,481,161 | |
Vanco Payment Solutions [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration to acquire business | $ 24,000,000 | ||||
Business acquisition costs expensed | 203,529 | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Restricted cash | 1,345,370 | ||||
Other receivables | 25,241 | ||||
Intangible assets | 340,000 | ||||
Goodwill | 8,760,000 | ||||
Total assets acquired | 25,370,611 | ||||
Processing liabilities | 1,370,611 | ||||
Net assets acquired | $ 24,000,000 | ||||
Estimated amortization period of acquired intangible assets | 9 years | ||||
Vanco Payment Solutions [Member] | Merchant relationships [Member] | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | $ 8,820,000 | ||||
Estimated amortization period of acquired intangible assets | 7 years | ||||
Vanco Payment Solutions [Member] | Agent relationships [Member] | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Intangible assets | $ 6,080,000 | ||||
Estimated amortization period of acquired intangible assets | 11 years | ||||
Vanco Payment Solutions [Member] | Noncompete agreements [Member] | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Estimated amortization period of acquired intangible assets | 5 years |
Acquisitions - Marathon Solutio
Acquisitions - Marathon Solutions, Inc. (Details) - USD ($) | Sep. 19, 2013 | Jul. 13, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||||
Contingent consideration value | $ 0 | $ 0 | $ 120,844 | |||
Payment of contingent consideration | 0 | 3,675,000 | 909,075 | |||
Increase (decrease) in contingent consideration liability | $ 0 | $ 0 | 770,854 | |||
Marathon Solutions, Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration value | $ 2,476,410 | $ 4,188,361 | ||||
Payment of contingent consideration | 255,518 | $ 4,683,409 | ||||
Increase (decrease) in contingent consideration liability | $ (2,220,892) |
Acquisitions - Dependable Payme
Acquisitions - Dependable Payment Processing and Discount Payment Processing (Details) - USD ($) | Nov. 26, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||
Contingent consideration value | $ 0 | $ 0 | $ 120,844 | ||
Increase (decrease) in contingent consideration liability | 0 | 0 | 770,854 | ||
Payment of contingent consideration | $ 0 | $ 3,675,000 | 909,075 | ||
Dependable Payment Processing, Inc., and Discount Payment Processing, Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration value | $ 4,588,337 | ||||
Increase (decrease) in contingent consideration liability | 3,675,000 | $ (2,996,008) | |||
Payment of contingent consideration | 909,075 | ||||
Dependable Payment Processing, Inc., and Discount Payment Processing, Inc [Member] | Operating Expense [Member] | |||||
Business Acquisition [Line Items] | |||||
Increase (decrease) in contingent consideration liability | $ 2,991,747 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 10,299,109 | $ 9,096,481 | |
Less accumulated depreciation | (4,707,847) | (2,987,472) | |
Total property and equipment, net | 5,591,262 | 6,109,009 | |
Depreciation expense | 1,745,160 | 1,187,567 | $ 870,136 |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 3,341,700 | 3,195,291 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 429,416 | 409,601 | |
Leasing equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 777,804 | 777,804 | |
Computer hardware and software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | 3,978,697 | 3,140,243 | |
Furniture and fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment | $ 1,771,492 | $ 1,573,542 |
Intangible Assets and Goodwil47
Intangible Assets and Goodwill - Intangible Assets and Goodwill (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 149,112,591 | $ 138,447,539 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (93,097,075) | (75,433,707) | ||
Total | 56,015,516 | 63,013,832 | ||
Goodwill | 40,241,161 | 40,241,161 | $ 31,481,161 | $ 31,481,161 |
Total identifiable intangible assets and goodwill | 189,353,752 | 178,688,700 | ||
Total identifiable intangible assets and goodwill, net | $ 96,256,677 | 103,254,993 | ||
Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 1 year | |||
Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 18 years | |||
Residual buyouts [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 47,386,859 | 37,703,359 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (30,989,047) | (25,017,382) | ||
Total | $ 16,397,812 | $ 12,685,977 | ||
Residual buyouts [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 1 year | 1 year | ||
Residual buyouts [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 18 years | 14 years | ||
Employment agreement [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 5,815,000 | $ 5,815,000 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (5,138,096) | (4,002,952) | ||
Total | $ 676,904 | $ 1,812,048 | ||
Employment agreement [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 1 year | 1 year | ||
Employment agreement [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 6 years | 7 years | ||
Trade name [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 1,079,100 | $ 1,079,100 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (973,182) | (940,787) | ||
Total | $ 105,918 | $ 138,313 | ||
Amortization Life and Method | 5 years | 6 years | ||
Merchant relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 34,863,500 | $ 34,863,500 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (24,096,301) | (19,046,022) | ||
Total | $ 10,767,199 | $ 15,817,478 | ||
Merchant relationships [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 5 years | 6 years | ||
Merchant relationships [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 13 years | 14 years | ||
Agent relationships [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 28,835,000 | $ 28,835,000 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (12,144,508) | (9,367,772) | ||
Total | $ 16,690,492 | $ 19,467,228 | ||
Agent relationships [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 10 years | 11 years | ||
Agent relationships [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 13 years | 14 years | ||
Service contract [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 18,600,000 | $ 18,600,000 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (14,479,042) | (12,009,413) | ||
Total | $ 4,120,958 | $ 6,590,587 | ||
Service contract [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 1 year | 1 year | ||
Service contract [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 4 years | 5 years | ||
Internally developed software [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 9,507,571 | $ 8,122,872 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (3,510,576) | (3,247,935) | ||
Total | $ 5,996,995 | $ 4,874,937 | ||
Internally developed software [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 1 year | 1 year | ||
Internally developed software [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 4 years | 4 years | ||
Technology [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 2,881,700 | $ 2,881,700 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (1,729,134) | (1,352,886) | ||
Total | $ 1,152,566 | $ 1,528,814 | ||
Technology [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 4 years | 5 years | ||
Technology [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 6 years | 7 years | ||
Website development [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived Intangible Assets, Cost | $ 143,861 | $ 547,008 | ||
Finite-lived Intangible Assets, Accumulated Amortization | (37,189) | (448,558) | ||
Total | $ 106,672 | $ 98,450 | ||
Website development [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 1 year | 2 years | ||
Website development [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization Life and Method | 3 years | 3 years |
Intangible Assets and Goodwil48
Intangible Assets and Goodwill - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gain (loss) on disposition of intangible assets | $ (43,805) | ||
Residual buyouts [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of finite-lived intangible assets | 0 | $ 0 | $ 25,731 |
Internally developed software [Member] | Disposal Group, Not Discontinued Operations [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Disposal group, intangible assets | 2,436,330 | ||
Internally developed software [Member] | Disposal Group, Not Discontinued Operations, Abandonment [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Disposal group, intangible assets | 43,805 | ||
Website development [Member] | Disposal Group, Not Discontinued Operations [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Disposal group, intangible assets | $ 478,033 |
Intangible Assets and Goodwil49
Intangible Assets and Goodwill - Future Amortization (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,017 | $ 16,725,394 | |
2,018 | 13,381,060 | |
2,019 | 9,200,368 | |
2,020 | 5,670,920 | |
2,021 | 4,053,842 | |
Thereafter | 6,983,932 | |
Total | $ 56,015,516 | $ 63,013,832 |
Intangible Assets and Goodwil50
Intangible Assets and Goodwill - Change in Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | |||
Beginning of Period | $ 40,241,161 | $ 31,481,161 | $ 31,481,161 |
Acquisitions | 0 | 8,760,000 | 0 |
End of Period | $ 40,241,161 | $ 40,241,161 | $ 31,481,161 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total debt | $ 132,430,814 | $ 59,964,989 |
Less current portion | 4,250,000 | 0 |
Total long-term debt | 128,180,814 | 59,964,989 |
2016 First lien term credit facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 94,171,061 | 0 |
Deferred financing costs | 3,828,939 | |
2016 Second lien term credit facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 38,259,753 | 0 |
Deferred financing costs | 1,740,247 | |
2012 Revolving credit facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 0 | $ 59,964,989 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) | Jul. 29, 2016USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2018USD ($) | Nov. 02, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||
Debt issuance costs | $ 6,047,141 | $ 6,047,141 | $ 0 | $ 0 | ||||
Amortization of capitalized debt issuance costs | $ 477,955 | $ 0 | $ 0 | |||||
Repurchase of warrants, authorized amount | $ 2,500,000 | |||||||
2012 Revolving credit facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Repaid outstanding credit facility | $ 57,964,989 | |||||||
2016 First lien term credit facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 2.00% | |||||||
2016 First lien term credit facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 3.50% | |||||||
2016 First lien term credit facility [Member] | BMO Base Rate [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 1.00% | |||||||
2016 First lien term credit facility [Member] | BMO Base Rate [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 2.50% | |||||||
2016 First lien term credit facility [Member] | Line of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 30,000,000 | |||||||
2016 First lien term credit facility [Member] | Line of Credit [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount of expansion feature (subject to restrictions) | 35,000,000 | |||||||
2016 First lien term credit facility [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 100,000,000 | |||||||
Effective interest rate on outstanding balance | 4.11% | |||||||
Amount of draws | $ 0 | |||||||
Mandatory prepayment based on cash proceeds from sale of assets not in ordinary course, sale of debt securities, and casualty or condemnation events (percent) | 100.00% | |||||||
Mandatory prepayment based on Excess Cash Flow, basic (percent) | 75.00% | |||||||
Mandatory prepayment based on Excess Cash Flow, with net leverage ratio of 3.00 to 1.00 (percent) | 50.00% | |||||||
Mandatory prepayment based on Excess Cash Flow, with net leverage ratio of 2.50 to 1.00 (percent) | 25.00% | |||||||
2016 First lien term credit facility [Member] | Secured Debt [Member] | Forecast [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Quarterly amortization of term loan | $ 2,500,000 | $ 1,875,000 | $ 1,250,000 | |||||
2016 First lien term credit facility [Member] | Secured Debt [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt covenant net leverage ratio | 2.50 | |||||||
2016 First lien term credit facility [Member] | Secured Debt [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt covenant net leverage ratio | 3 | |||||||
2016 First lien term credit facility [Member] | Bridge Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 5,000,000 | |||||||
2016 First lien term credit facility [Member] | Standby Letters of Credit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, borrowing capacity | 10,000,000 | |||||||
Second lien secured credit facility [Member] | Secured Debt [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 40,000,000 | |||||||
Amount of expansion feature (subject to restrictions) | $ 35,000,000 | |||||||
Effective interest rate on outstanding balance | 10.50% | |||||||
Prepayment fee percent in first loan year (percent) | 2.00% | |||||||
Prepayment fee percent in first loan year (percent) | 1.00% | |||||||
Second lien secured credit facility [Member] | Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 9.50% | |||||||
Second lien secured credit facility [Member] | Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 1.00% | |||||||
Second lien secured credit facility [Member] | Secured Debt [Member] | Prime Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 8.50% | |||||||
Second lien secured credit facility [Member] | Secured Debt [Member] | Prime Rate [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate margin | 2.00% |
Stockholder's Equity - Common S
Stockholder's Equity - Common Stock (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Stockholder's Equity - Preferre
Stockholder's Equity - Preferred Stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Jul. 29, 2016 | Dec. 31, 2015 | |
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | 0 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0 | |
Preferred stock, cumulative preferred dividends in arrears | $ 229,736 | ||
Series A Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding | 1,500,000 | 1,500,000 |
Stockholder's Equity - Warrants
Stockholder's Equity - Warrants (Details) | Jul. 29, 2016day$ / shares | Jul. 28, 2016shares |
Warrants [Line Items] | ||
Outstanding warrants to purchase of common stock | shares | 10,300,000 | |
Exercise price of warrant (in dollars per share) | $ 12 | |
Convertible Warrant [Member] | ||
Warrants [Line Items] | ||
Warrant, redemption price (in dollars per share) | 0.01 | |
Warrant, stock price trigger (in dollars per share) | $ 18 | |
Warrant, threshold number of trading days required for conversion | day | 20 | |
Warrant, threshold consecutive trading days required for conversion | 30 days |
Stockholder's Equity - FTS Hold
Stockholder's Equity - FTS Holding Corporation and Card Connect Corp. (Details) - USD ($) | Oct. 28, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jul. 29, 2016 | Jul. 28, 2016 | Dec. 31, 2013 | Sep. 15, 2010 |
Stock-Based Compensation (Textual) | ||||||||
Number of stock options outstanding | 7,933,419 | 5,200,000 | 4,930,500 | 4,697,500 | ||||
Stock options granted (in shares) | 4,566,908 | 370,500 | 270,000 | |||||
Tax benefit realized from exercise of stock options | $ 194,837 | |||||||
Options exercised in period, intrinsic value | 814,519 | |||||||
Options outstanding, intrinsic value | 40,192,223 | |||||||
Options exercisable, intrinsic value | 29,979,522 | |||||||
Proceeds from stock options exercised | 582,370 | $ 0 | $ 0 | |||||
FTS Holding Corporation 2010 Stock Option Plan [Member] | ||||||||
Stock-Based Compensation (Textual) | ||||||||
Number of shares authorized | 5,200,000 | |||||||
FTS Holding Corporation 2010 Stock Option Plan [Member] | Stock Option [Member] | ||||||||
Stock-Based Compensation (Textual) | ||||||||
Number of stock options outstanding | 5,165,000 | |||||||
Cash consideration paid for stock options | $ 9,716,492 | |||||||
Stock options granted (in shares) | 3,463,950 | |||||||
Tax benefit realized from exercise of stock options | $ 2,435,074 | |||||||
Recognized compensation expense | 3,054,066 | $ 1,886,523 | $ 1,907,702 | |||||
Accelerated compensation expense recognized | $ 2,107,911 | |||||||
Number of shares available for grant | 0 | |||||||
CardConnect Corp. 2016 Omnibus Equity Compensation Plan [Member] | ||||||||
Stock-Based Compensation (Textual) | ||||||||
Number of shares authorized | 4,796,296 | 3,796,296 | ||||||
Number of shares available for grant | 422 | |||||||
Number of additional shares authorized | 1,000,000 | |||||||
CardConnect Corp. 2016 Omnibus Equity Compensation Plan [Member] | Stock Option [Member] | ||||||||
Stock-Based Compensation (Textual) | ||||||||
Recognized compensation expense | $ 1,818,049 | |||||||
Vesting period | 4 years | |||||||
Unrecognized compensation expense | $ 18,019,148 | |||||||
Weighted-average period of recognized | 3 years 10 months 24 days |
Stockholder's Equity - Stock Op
Stockholder's Equity - Stock Option Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value | $ 4.34 | $ 4.29 | $ 2.75 |
Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.30% | 1.56% | 1.78% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 40.90% | 36.10% | 42.10% |
Expected life in years | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Fair value | $ 4.34 | $ 4.29 | $ 2.75 |
Stockholder's Equity - Stock 58
Stockholder's Equity - Stock Option Activity (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Beginning balance (in shares) | 5,200,000 | 4,930,500 | 4,697,500 | |
Exchanged (in shares) | (1,701,050) | |||
Granted (in shares) | 4,566,908 | 370,500 | 270,000 | |
Forfeited (in shares) | (7,969) | (101,000) | (37,000) | |
Exercised (in shares) | (124,470) | |||
Ending balance (in shares) | 7,933,419 | 5,200,000 | 4,930,500 | 4,697,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Beginning balance (in dollars per share) | $ 3.72 | $ 3.72 | $ 3.66 | |
Exchanged (in dollars per share) | 3.83 | |||
Granted (in dollars per share) | 10.46 | 5.70 | 4.84 | |
Forfeited (in dollars per share) | 4.73 | 4.73 | 4.55 | |
Exercised (in dollars per share) | 4.68 | |||
Ending balance (in dollars per share) | $ 7.63 | $ 3.72 | $ 3.72 | $ 3.66 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||||
Exercisable (in shares) | 3,371,511 | |||
Exercisable (in dollars per share) | $ 3.81 | |||
Options outstanding Weighted Average Contractual Term | 7 years 9 months 4 days | 7 years 2 months 1 day | 7 years 2 months 1 day | 7 years 11 months 1 day |
Options granted Weighted-Average Contractual Term | 9 years 7 months 21 days | 9 years 9 months | 9 years 10 months 13 days | |
Exercisable Weighted-Average Contractual Term | 5 years 2 months 19 days |
Stockholder's Equity - Activity
Stockholder's Equity - Activity of Non-vested Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Beginning balance (in shares) | 1,010,964 | 1,441,998 | 2,240,443 |
Granted (in shares) | 4,566,908 | 370,500 | 270,000 |
Vested (in shares) | (1,007,995) | (700,534) | (1,031,445) |
Vested (in shares) | (7,969) | (101,000) | (37,000) |
Ending balance (in shares) | 4,561,908 | 1,010,964 | 1,441,998 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Beginning balance (in dollars per share) | $ 3.09 | $ 2.20 | $ 1.85 |
Fair value | 4.34 | 4.29 | 2.75 |
Vested (in dollars per share) | 3.09 | 2.42 | 1.77 |
Forfeited (in dollars per share) | 2.04 | 5.06 | 1.99 |
Ending balance (in dollars per share) | $ 3.09 | $ 3.09 | $ 2.20 |
Stockholder's Equity - Restrict
Stockholder's Equity - Restricted Stock (Details) - CardConnect Corp. 2016 Omnibus Equity Compensation Plan [Member] - Restricted stock [Member] | 12 Months Ended |
Dec. 31, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Issued shares of restricted stock | shares | 233,966 |
Recognized compensation expense | $ 164,230 |
Unrecognized compensation expense for restricted stock | $ 2,160,623 |
Weighted-average period of recognized | 3 years 9 months |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Total expense recognized | $ 432,448 | $ 320,120 | $ 350,519 |
Preferred Stock (Details Textua
Preferred Stock (Details Textual) - $ / shares | Jul. 29, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | 0 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0 | |
Series A Convertible Preferred Stock [Member] | FTS Holding Corporation [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 20,365,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | ||
Preferred stock, dividend rate, percentage | 8.00% | ||
Preferred stock, liquidation value per share (in dollars per share) | $ 2.387 | ||
Series A Preferred Stock Offering [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, dividend rate, percentage | 11.43% | ||
Preferred stock, shares issued | 1,500,000 |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||
Treasury shares canceled | 681,538 | |
Affiliated Entity [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares acquired (in shares) | 540,000 | |
Shares acquired | $ 2,700,000 |
Earnings (Loss) per Share (Deta
Earnings (Loss) per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||||||||||
Net (loss) income | $ 2,543,749 | $ (22,081,298) | $ 2,470,764 | $ 923,016 | $ 285,019 | $ 166,346 | $ 369,760 | $ 351,359 | $ (16,143,769) | $ 1,172,484 | $ (12,010,901) |
Less: Preferred stock dividends | (1,833,903) | 0 | 0 | ||||||||
Net (loss) income available for common stockholders | $ (17,977,672) | $ 1,172,484 | $ (12,010,901) | ||||||||
Denominator: | |||||||||||
Weighted-average common shares outstanding - basic (in shares) | 20,906,638 | 15,189,788 | 15,425,903 | ||||||||
Dilutive effect of stock options (in shares) | 0 | 1,584,287 | 0 | ||||||||
Weighted-average common shares outstanding - diluted (in shares) | 20,906,638 | 16,774,075 | 15,425,903 | ||||||||
Net (loss) income per share available for common stockholders - basic (in dollars per share) | $ 0.05 | $ (0.93) | $ 0.16 | $ 0.06 | $ 0.02 | $ 0.01 | $ 0.02 | $ 0.02 | $ (0.86) | $ 0.08 | $ (0.78) |
Net (loss) income per share available for common stockholders - diluted (in dollars per share) | $ 0.04 | $ (0.93) | $ 0.14 | $ 0.05 | $ 0.02 | $ 0.01 | $ 0.02 | $ 0.02 | $ (0.86) | $ 0.07 | $ (0.78) |
Antidilutive options, unvested restricted stock awards and warrants excluded from the computations (in shares) | 15,952,567 | 0 | 967,903 |
Income Taxes - Provision for Ta
Income Taxes - Provision for Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ (2,218,975) | $ 1,428,089 | |
State | 38,681 | 256,845 | |
Total current | (2,180,294) | 1,684,934 | |
Deferred: | |||
Federal | 749,613 | (238,993) | |
State | 40,014 | (62,164) | |
Total deferred | 789,627 | (301,157) | $ 7,888,807 |
Total | $ (1,390,667) | $ 1,383,777 | $ 8,598,495 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Statutory rate: | 35.00% |
Increase (decrease) in taxes resulting from the following: | |
State income taxes net of federal tax benefit | 1.31% |
Deferred tax adjustments | (1.16%) |
Nondeductible expenses | (5.64%) |
Valuation allowance | (22.26%) |
Other | 0.68% |
Total | 7.93% |
Income Taxes - Deferred Tax Lia
Income Taxes - Deferred Tax Liability (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Finite-lived intangible assets | $ 10,744,080 | $ 9,714,314 |
Stock-based compensation | 3,008,821 | 2,711,579 |
Reserves and other accrued expenses | 1,032,995 | 708,768 |
Net operating loss | 3,701,597 | 0 |
Other | 557,010 | 69,333 |
Gross deferred tax assets | 19,044,503 | 13,203,994 |
Valuation allowance | (15,981,476) | (10,458,857) |
Deferred tax liabilities: | ||
Finite-lived intangible assets | (2,265,215) | (1,857,212) |
Indefinite-lived intangible assets | (2,576,843) | (1,787,215) |
Depreciation | (797,812) | (887,926) |
Gross deferred tax liabilities | (5,639,870) | (4,532,353) |
Net deferred tax liability | $ (2,576,843) | $ (1,787,216) |
Income Taxes - Reconciliation68
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning of year balance | $ 221,584 | $ 116,258 | $ 94,591 |
Increases in prior period tax positions | 0 | 0 | 0 |
Decreases in prior period tax positions | (13,601) | (3,213) | (32,413) |
Increases in current period tax positions | 0 | 108,539 | 54,080 |
Decreases relating to settlements | (24,865) | 0 | 0 |
Decreases relating to statutes of limitations | 0 | 0 | 0 |
End of year balance | $ 183,118 | $ 221,584 | $ 116,258 |
Income Taxes - (Details Textual
Income Taxes - (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | ||||
Valuation allowance | $ 15,981,476 | $ 10,458,857 | ||
Unrecognized tax benefits | 183,118 | 221,584 | $ 116,258 | $ 94,591 |
Unrecognized tax benefits that would affect tax rate | 119,026 | 144,029 | 75,568 | |
Interest and penalties expense | 48,309 | 6,379 | 3,505 | |
Accrued interest | 64,080 | 15,771 | 5,596 | |
Federal | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 9,415,064 | |||
Research and development credits | 327,887 | |||
Tax benefit related to interest and penalties expense | 9,235 | $ 3,796 | $ 2,091 | |
State and Local Jurisdiction | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 8,012,432 | |||
Research and development credits | $ 34,713 |
Lease Obligations - Operating L
Lease Obligations - Operating Lease Obligations (Details) | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 1,709,284 |
2,018 | 1,740,587 |
2,019 | 1,647,248 |
2,020 | 1,620,416 |
2,021 | 1,659,409 |
Thereafter | 3,439,881 |
Total | $ 11,816,825 |
Lease Obligations (Details Text
Lease Obligations (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Leases [Abstract] | |||
Rental expense | $ 1,978,604 | $ 1,885,091 | $ 1,823,798 |
Sublease revenue | 686,097 | $ 129,520 | $ 87,600 |
Minimum rentals to be received on non-cancelable leases | $ 4,056,467 |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
FDMS [Member] | |
Commitments and Contingencies [Textual] | |
Successive renewal options | 2 years |
Minimum service fee commitments | 70.00% |
Minimum services fees payable | $ 9,283,439 |
Percentage of service fees recorded through third party | 91.00% |
TSYS [Member] | |
Commitments and Contingencies [Textual] | |
Successive renewal options | 2 years |
Minimum service fee commitments | 70.00% |
Minimum services fees payable in 2017 | $ 1,219,155 |
Minimum services fees payable in 2018 | 1,350,000 |
Minimum services fees payable in 2019 | 1,550,000 |
Minimum services fees payable in 2020 | 1,500,000 |
Contract singing incentive amount | $ 250,000 |
Merchant authorization contract term | 5 years |
Related-Party Transactions (Det
Related-Party Transactions (Details) | Sep. 30, 2016USD ($) | Jul. 29, 2016USD ($) | Feb. 26, 2015USD ($)shares | Oct. 13, 2014USD ($)installment | May 09, 2014 | May 09, 2013USD ($) | Mar. 21, 2013USD ($) | Jan. 16, 2013USD ($)installment | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Feb. 28, 2014USD ($) | Jan. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 13, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 11, 2015USD ($) | Jul. 07, 2014USD ($) | Sep. 25, 2013USD ($) | Jun. 18, 2013USD ($) | Jun. 12, 2013USD ($) |
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Purchase of common stock from related party | $ 2,700,000 | |||||||||||||||||||||
Cash paid to independent contractor | $ 9,528,500 | 6,779,396 | $ 4,792,843 | |||||||||||||||||||
Executive Officer [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Purchase of common stock from related party (in shares) | shares | 540,000 | |||||||||||||||||||||
Purchase of common stock from related party | $ 2,700,000 | |||||||||||||||||||||
Executive Officer [Member] | Transition, Employment, General Release Agreement [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Expenses from transactions with related party | $ 950,000 | $ 500,000 | $ 500,000 | $ 1,000,000 | ||||||||||||||||||
General and administrative expenses from transactions with related party | $ 250,000 | |||||||||||||||||||||
Executive Officer [Member] | Executive Management Debt Agreements [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Line of credit, maximum borrowing capacity | $ 1,500,000 | $ 1,700,000 | ||||||||||||||||||||
Related party transaction, interest rate | 2.00% | |||||||||||||||||||||
Notes receivable, related parties | $ 2,000,000 | |||||||||||||||||||||
Repayments of related party debt | $ 2,450,000 | |||||||||||||||||||||
Chief Executive Officer [Member] | Executive Management Debt Agreements [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Related party transaction, interest rate | 2.00% | |||||||||||||||||||||
Notes receivable, related parties | $ 500,000 | $ 1,250,000 | $ 950,000 | $ 650,000 | ||||||||||||||||||
Repayments of related party debt | 1,250,000 | |||||||||||||||||||||
Amounts due from related party | 0 | 3,700,000 | ||||||||||||||||||||
Chief Executive Officer [Member] | Management Carve-Out Agreement [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
General and administrative expenses from transactions with related party | 1,250,000 | |||||||||||||||||||||
Affiliated Entity [Member] | Independent Contractor Agreement [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Expenses from transactions with related party | 293,768 | 184,682 | 109,572 | |||||||||||||||||||
Line of credit, maximum borrowing capacity | $ 200,000 | $ 250,000 | ||||||||||||||||||||
Related party transaction, interest rate | 5.00% | 5.00% | ||||||||||||||||||||
Repayments of related party debt | $ 75,000 | 207,791 | ||||||||||||||||||||
Amounts due from related party | 200,000 | 170,000 | ||||||||||||||||||||
Line of credit, maximum monthly draw down amount | $ 15,000 | |||||||||||||||||||||
Commencement of payments after effective date (in months) | 25 months | 25 months | 19 months | |||||||||||||||||||
Number of monthly installment payments | installment | 24 | 24 | ||||||||||||||||||||
Consideration under residual buyout agreement | 115,500 | 560,000 | ||||||||||||||||||||
Cash paid to independent contractor | $ 40,500 | 352,209 | ||||||||||||||||||||
Outstanding loan balance | $ 237,693 | 237,693 | ||||||||||||||||||||
Accrued reserve on related party outstanding loan balance | 125,000 | |||||||||||||||||||||
Amount of loans forgiven | 125,000 | |||||||||||||||||||||
Amounts due to related parties | 73,358 | 24,951 | ||||||||||||||||||||
Affiliated Entity [Member] | Independent Contractor Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Percentage of outstanding loan balance forgiven based on achievement of performance targets | 50.00% | 50.00% | ||||||||||||||||||||
Affiliated Entity [Member] | Independent Contractor Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Percentage of outstanding loan balance forgiven based on achievement of performance targets | 100.00% | 100.00% | ||||||||||||||||||||
Affiliated Entity [Member] | PCI Compliance Services [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Expenses from transactions with related party | 912,299 | 647,302 | 632,626 | |||||||||||||||||||
Amounts due (from) to related parties | (865) | 128,655 | ||||||||||||||||||||
Company Employee [Member] | Corporate Headquarters Relocation [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Amounts due from related party | 0 | 116,887 | ||||||||||||||||||||
Amount of loans forgiven | 0 | 152,583 | 351,550 | |||||||||||||||||||
Number of monthly installments for loan forgiveness | installment | 36 | |||||||||||||||||||||
Company Employee [Member] | Employee Relocation [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
Amounts due from related party | 89,645 | 0 | ||||||||||||||||||||
Amount of loans forgiven | $ 220,355 | $ 0 | $ 0 | |||||||||||||||||||
Chief Operating Officer [Member] | Management Carve-Out Agreement [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
General and administrative expenses from transactions with related party | 329,150 | |||||||||||||||||||||
Executive Vice President of Sales [Member] | Management Carve-Out Agreement [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
General and administrative expenses from transactions with related party | 254,240 | |||||||||||||||||||||
Director [Member] | Management Carve-Out Agreement [Member] | ||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||
General and administrative expenses from transactions with related party | $ 5,505,000 |
Segments (Details)
Segments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | $ 156,834,998 | $ 154,031,109 | $ 148,444,489 | $ 130,009,307 | $ 128,765,045 | $ 119,679,367 | $ 110,593,168 | $ 99,610,360 | $ 589,319,903 | $ 458,647,940 | $ 389,984,773 | |
Cost of services (exclusive of depreciation and amortization) | 523,738,417 | 409,077,788 | 345,942,509 | |||||||||
General and administrative | 55,303,090 | 25,320,506 | 25,936,403 | |||||||||
Depreciation expense | 1,745,160 | 1,187,567 | 870,136 | |||||||||
Amortization expense | 20,578,530 | 19,174,968 | 18,544,472 | |||||||||
Interest expense, net | 5,124,657 | 1,249,526 | 1,187,103 | |||||||||
Income (loss) from operations | 2,553,546 | $ (19,329,653) | $ 3,263,114 | $ 1,467,699 | 621,623 | $ 791,156 | $ 1,304,533 | $ 1,169,799 | (12,045,294) | 3,887,111 | (2,079,601) | |
Assets | 167,848,523 | 145,911,618 | 167,848,523 | 145,911,618 | ||||||||
Goodwill | 40,241,161 | 40,241,161 | 40,241,161 | 40,241,161 | 31,481,161 | $ 31,481,161 | ||||||
Merchant Acquiring Services [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 582,157,399 | 453,286,973 | 387,329,552 | |||||||||
Cost of services (exclusive of depreciation and amortization) | 521,278,623 | 407,162,016 | 345,813,559 | |||||||||
General and administrative | 28,685,967 | 19,771,303 | 17,985,762 | |||||||||
Depreciation expense | 1,588,654 | 965,446 | 643,358 | |||||||||
Amortization expense | 20,386,431 | 18,945,882 | 18,315,386 | |||||||||
Interest expense, net | 5,124,657 | 1,249,526 | 1,187,103 | |||||||||
Income (loss) from operations | 10,217,724 | 6,442,326 | 3,800,633 | |||||||||
Assets | 161,638,414 | 140,164,642 | 161,638,414 | 140,164,642 | ||||||||
Goodwill | 38,604,607 | 38,604,607 | 38,604,607 | 38,604,607 | ||||||||
Other [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Revenue | 7,162,504 | 5,360,967 | 2,655,221 | |||||||||
Cost of services (exclusive of depreciation and amortization) | 2,459,794 | 1,915,772 | 128,950 | |||||||||
General and administrative | 26,617,123 | 5,549,203 | 7,950,641 | |||||||||
Depreciation expense | 156,506 | 222,121 | 226,778 | |||||||||
Amortization expense | 192,099 | 229,086 | 229,086 | |||||||||
Interest expense, net | 0 | 0 | 0 | |||||||||
Income (loss) from operations | (22,263,018) | (2,555,215) | $ (5,880,234) | |||||||||
Assets | 6,210,109 | 5,746,976 | 6,210,109 | 5,746,976 | ||||||||
Goodwill | $ 1,636,554 | $ 1,636,554 | $ 1,636,554 | $ 1,636,554 |
Subsequent Events - (Details)
Subsequent Events - (Details) | Feb. 15, 2017USD ($) |
FDMS [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Payment for agreement modification of merchant processing agreement | $ 4,500,000 |
Quarterly Consolidated Statem76
Quarterly Consolidated Statements of Operations (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 156,834,998 | $ 154,031,109 | $ 148,444,489 | $ 130,009,307 | $ 128,765,045 | $ 119,679,367 | $ 110,593,168 | $ 99,610,360 | $ 589,319,903 | $ 458,647,940 | $ 389,984,773 |
Income (loss) from operations | 2,553,546 | (19,329,653) | 3,263,114 | 1,467,699 | 621,623 | 791,156 | 1,304,533 | 1,169,799 | (12,045,294) | 3,887,111 | (2,079,601) |
Net income | 2,543,749 | (22,081,298) | 2,470,764 | 923,016 | 285,019 | 166,346 | 369,760 | 351,359 | (16,143,769) | 1,172,484 | (12,010,901) |
Net income available for common shareholders | $ 1,376,513 | $ (22,747,965) | $ 2,470,764 | $ 923,016 | $ 285,019 | $ 166,346 | $ 369,760 | $ 351,359 | $ (17,977,672) | $ 1,172,484 | $ (12,010,901) |
Basic (in dollars per share) | $ 0.05 | $ (0.93) | $ 0.16 | $ 0.06 | $ 0.02 | $ 0.01 | $ 0.02 | $ 0.02 | $ (0.86) | $ 0.08 | $ (0.78) |
Diluted (in dollars per share) | $ 0.04 | $ (0.93) | $ 0.14 | $ 0.05 | $ 0.02 | $ 0.01 | $ 0.02 | $ 0.02 | $ (0.86) | $ 0.07 | $ (0.78) |