Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 09, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | PAYMENT DATA SYSTEMS INC | |
Entity Central Index Key | 1,088,034 | |
Trading Symbol | pyds | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding (in shares) | 15,943,624 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,716,316 | $ 4,800,554 |
Accounts receivable, net | 1,147,482 | 969,674 |
Settlement processing assets | 34,767,837 | 38,027,984 |
Prepaid expenses and other | 179,330 | 176,945 |
Notes receivable, net | 72,500 | 150,000 |
Current assets before merchant reserves | 38,883,465 | 44,125,157 |
Merchant reserves | 13,602,562 | 14,977,468 |
Total current assets | 52,486,027 | 59,102,625 |
Property and equipment, net | 2,050,221 | 2,105,186 |
Other assets: | ||
Intangibles, net | 3,926,426 | 4,676,427 |
Deferred tax asset | 1,394,000 | 1,394,000 |
Other assets | 303,759 | 157,565 |
Total other assets | 5,624,185 | 6,227,992 |
Total assets | 60,160,433 | 67,435,803 |
Current liabilities: | ||
Accounts payable | 251,906 | 300,736 |
Accrued expenses | 1,217,307 | 1,006,262 |
Settlement processing obligations | 34,767,837 | 38,027,984 |
Deferred revenues | 35,000 | 0 |
Current liabilities before merchant reserve obligations | 36,272,050 | 39,334,982 |
Merchant reserve obligations | 13,602,562 | 14,977,468 |
Total current liabilities | 49,874,612 | 54,312,450 |
Non-current liabilities: | ||
Deferred rent | 58,457 | 0 |
Total liabilities | 49,933,069 | 54,312,450 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0- shares outstanding at September 30, 2018 (unaudited) and December 31, 2017, respectively | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized; 17,020,180 and 16,874,235 issued, and 15,943,624 and 16,201,634 outstanding at September 30, 2018 (unaudited) and December 31, 2017, respectively | 185,447 | 186,299 |
Additional paid-in capital | 74,371,930 | 74,041,083 |
Treasury stock, at cost; 1,076,556 and 672,601 shares at September 30, 2018 (unaudited) and December 31, 2017, respectively | (1,797,442) | (831,059) |
Deferred compensation | (6,372,735) | (7,012,544) |
Accumulated deficit | (56,159,836) | (53,260,426) |
Total stockholders’ equity | 10,227,364 | 13,123,353 |
Total liabilities and stockholders’ equity | $ 60,160,433 | $ 67,435,803 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 17,020,180 | 16,874,235 |
Common stock, shares outstanding (in shares) | 15,943,624 | 16,201,634 |
Treasury stock, shares (in shares) | 1,076,556 | 672,601 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenues | $ 6,473,743 | $ 3,588,853 | $ 18,601,283 | $ 8,950,038 |
Cost of services | 5,014,603 | 2,764,236 | 14,551,621 | 6,486,587 |
Gross profit | 1,459,140 | 824,617 | 4,049,662 | 2,463,451 |
Selling, general and administrative: | ||||
Stock-based compensation | 289,038 | 230,206 | 961,893 | 655,885 |
Other expenses | 1,519,793 | 1,172,021 | 4,613,720 | 2,800,033 |
Depreciation and amortization | 473,225 | 314,789 | 1,389,164 | 770,607 |
Total selling, general and administrative expenses | 2,282,056 | 1,717,016 | 6,964,777 | 4,226,525 |
Operating (loss) | (822,916) | (892,399) | (2,915,115) | (1,763,074) |
Other income and (expense): | ||||
Interest income | 23,327 | 16,381 | 50,244 | 88,927 |
Other income (expense) | 1,423 | 993 | (539) | (121) |
Other income and (expense), net | 24,750 | 17,374 | 49,705 | 88,806 |
(Loss) before income taxes | (798,166) | (875,025) | (2,865,410) | (1,674,268) |
Income taxes | 15,000 | 15,000 | 34,000 | 36,677 |
Net (loss) | $ (813,166) | $ (890,025) | $ (2,899,410) | $ (1,710,945) |
Basic (loss) per common share (in dollars per share) | $ (0.07) | $ (0.10) | $ (0.24) | $ (0.20) |
Diluted (loss) per common share (in dollars per share) | $ (0.07) | $ (0.10) | $ (0.24) | $ (0.20) |
Weighted average common shares outstanding | ||||
Basic (in shares) | 12,145,323 | 8,954,831 | 12,098,828 | 8,637,169 |
Diluted (in shares) | 12,145,323 | 8,954,831 | 12,098,828 | 8,637,169 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities: | ||
Net (loss) | $ (2,899,410) | $ (1,710,945) |
Adjustments to reconcile net (loss) to net cash (used) by operating activities: | ||
Depreciation | 639,164 | 564,920 |
Amortization | 750,000 | 205,687 |
Provision for loss on note receivable | 72,500 | 0 |
Bad debt expense | 0 | 71,667 |
Stock based compensation | 961,893 | 655,885 |
Issuance of stock to consultant for services | 7,911 | 15,400 |
Changes in current assets and current liabilities: | ||
Accounts receivable | (177,808) | 30,733 |
Prepaid expenses and other | (2,385) | (84,783) |
Other assets | (146,194) | 64,440 |
Accounts payable and accrued expenses | 162,215 | 220,100 |
Merchant reserves | (1,374,906) | (894,741) |
Deferred revenue | 35,000 | 0 |
Deferred rent | 58,457 | 0 |
Net cash (used) by operating activities | (1,913,563) | (861,637) |
Investing activities: | ||
Purchases of property and equipment | (584,198) | (344,611) |
Purchase of Singular Payments, LLC | 0 | (900,000) |
Notes receivable | 5,000 | (600,000) |
Net cash (used) by investing activities | (579,198) | (1,844,611) |
Financing activities: | ||
Purchases of treasury stock | (966,383) | (109,382) |
Net cash (used) by financing activities | (966,383) | (109,382) |
Change in cash, cash equivalents and merchant reserves | (3,459,144) | (2,815,630) |
Cash, cash equivalents and merchant reserves, beginning of period | 19,778,022 | 19,924,379 |
Cash, cash equivalents and merchant reserves, end of period | 16,318,878 | 17,108,749 |
Supplemental disclosure of cash flow information: | ||
Interest | 0 | 0 |
Income taxes | 49,000 | 21,677 |
Non-cash transactions: | ||
Issuance of common stock in exchange for purchase of Singular Payments, LLC | 0 | 3,500,000 |
Forgiveness of note receivable in exchange for purchase of Singular Payments, LLC | 0 | 600,000 |
Issuance of deferred compensation to Vaden Landers | $ 0 | $ 630,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of Payment Data Systems, Inc. and its subsidiaries (the “Company”) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, the accompanying interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company's financial position, results of operations and cash flows for such periods. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2017 , as filed with the Securities and Exchange Commission on March 30, 2018. Results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year. Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 period. Actual results could differ from those estimates. Revenue Recognition: Revenue consists primarily of fees generated through the electronic processing of payment transactions and related services, and is recognized as revenue during the period in which the transactions are processed or when the related services are performed. The Company complies with ASC 606-10 and reports revenues as gross as a principal versus net as an agent. Although some of the Company's processing agreements vary with respect to specific credit risks, the Company has determined for each agreement it is acting in the principal role. Merchants may be charged for these processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. Certain merchant customers are charged a flat fee per transaction, while others may also be charged miscellaneous fees, including fees for chargebacks or returns, monthly minimums, and other miscellaneous services. Revenues derived from electronic processing of credit, debit, and prepaid card transactions that are authorized and captured through third-party networks are reported gross of amounts paid to sponsor banks as well as interchange and assessments paid to credit card associations. Sales taxes billed are reported directly as a liability to the taxing authority, and are not included in revenue. Cash and Cash Equivalents : Cash and cash equivalents includes cash and other money market instruments. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Merchant Reserves : The Company has merchant reserve requirements associated with Automated Clearing House ("ACH") transactions. The merchant reserve assets are carried on the Company's balance sheet with a corresponding liability. Merchant Reserves are set for each merchant. Funds are collected from each merchant and held as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement. While this cash is not restricted in its use, the Company believes that designating this cash to collateralize Merchant Reserves strengthens our fiduciary standing with the Company's member sponsors and is in accordance with the guidelines set by the card networks. The reconciliation of cash and cash equivalents to cash, cash equivalents and merchant reserves is as follows for each period presented: September 30, 2018 September 30, 2017 Beginning cash, cash equivalents and merchant reserves: Cash and cash equivalents $ 4,800,554 $ 4,120,738 Merchant reserves 14,977,468 15,803,641 Total $ 19,778,022 $ 19,924,379 Ending cash, cash equivalents and merchant reserves: Cash and cash equivalents $ 2,716,316 $ 2,199,849 Merchant reserves 13,602,562 14,908,900 Total $ 16,318,878 $ 17,108,749 Allowance for Estimated Losses: The Company maintains an allowance for estimated doubtful accounts receivable resulting from the inability or failure of the Company’s customers to make required payments. The Company determines the allowance for estimated doubtful accounts receivable losses based on an account-by-account review, taking into consideration such factors as the age of the outstanding balance, historical pattern of collections and financial condition of the customer. Past losses incurred by the Company due to bad debts have been within its expectations. If the financial conditions of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make contractual payments, additional allowances might be required. Estimates for doubtful account losses are variable based on the volume of transactions processed and could increase or decrease accordingly. At September 30, 2018 and December 31, 2017 , the Company’s allowance for estimated doubtful accounts was $58,731 and $61,223 , respectively. Accounting for Internal Use Software: The Company capitalizes the costs associated with software being developed or obtained for internal use when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed-in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project, and (iii) interest costs incurred, when material, while developing internal-use software. The Company ceases capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose. In the nine months ended September 30, 2018 and September 30, 2017 , the Company capitalized $163,888 and $243,039 , respectively of such costs. Valuation of Long-Lived and Intangible Assets: The Company assesses the impairment of long-lived and intangible assets at least annually, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important, which could trigger an impairment review, include the following: significant under performance relative to historical or projected future cash flows; significant changes in the manner of use of the assets or the strategy of the overall business; and significant negative industry trends. When management determines that the carrying value of long-lived and intangible assets may not be recoverable, impairment is measured as the excess of the assets’ carrying value over the estimated fair value. No impairment losses were recorded in 2017 or during the nine months ended September 30, 2018 . Management is not aware of any impairment changes that may currently be required; however, the Company cannot predict the occurrence of events that might adversely affect the reported values in the future. Reserve for Processing Losses: If, due to insolvency or bankruptcy of one of the Company’s merchant customers, or for any other reason, the Company is not able to collect amounts from its credit card, ACH or prepaid customers that have been properly "charged back" by the customer, or if a prepaid cardholder incurs a negative balance, the Company must bear the credit risk for the full amount of the transaction. The Company may require cash deposits and other types of collateral from certain merchants to minimize any such risk. In addition, the Company utilizes a number of systems and procedures to manage merchant risk. ACH, prepaid and credit card merchant processing loss reserves are primarily determined by performing a historical analysis of the Company’s loss experience and considering other factors that could affect that experience in the future, such as the types of transactions processed and nature of the merchant relationship with its consumers and the Company’s relationship with the Company’s prepaid card holders. This reserve amount is subject to the risk that actual losses may be greater than the Company’s estimates. The Company has not incurred any significant processing losses to date. Estimates for processing losses are variable based on the volume of transactions processed and could increase or decrease accordingly. At September 30, 2018 and December 31, 2017 , the Company’s reserve for processing losses was $313,614 and $172,832 , respectively. Recently Adopted Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606) and a subsequent amendment to the standard in March 2016, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Consideration (Reporting Revenue Gross versus Net) . The original standard provides guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment to the standard clarifies implementation guidance on principal versus agent considerations. Adoption of the new standards is effective for reporting periods beginning after December 15, 2017, with early adoption not permitted. The Company has evaluated the potential impact that the adoption of this standard will have on its financial position, results of operations, and related disclosures, and has adopted the provisions of this new standard beginning January 1, 2018. The Company functions as the merchant of record and has primary responsibility for providing end-to-end payment processing services for its clients. The Company's clients contract with the Company for all credit card processing services including transaction authorization, settlement, dispute resolution, security and risk management solutions, reporting and other value-added services. As such, the Company is the primary obliger in these transactions and is solely responsible for all processing costs, including interchange fees. Further, the Company sets prices as it deems reasonable for each merchant. The gross fees the Company collects are intended to cover the interchange, assessments and other processing fees and include the Company's margin on transactions processed. For these reasons, the Company is the principal obliger in the contractual relationship with its customers and therefor, the Company records its revenues, including interchange and assessments on a gross basis. The Company's existing revenue recognition process will remain intact and the Company will continue to record revenues at the gross amount billed due to the Company's primary responsibility for providing end-to-end payment processing services for its clients. In November 2016, the FASB issued ASU 2016-18 , Statement of Cash Flows (Topic 230) Restricted Cash , which requires that the reconciliation of the beginning of period and the end of period amounts shown in the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, companies will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. This guidance is required to be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. As required, the Company applied the provisions of ASU 2016-18 as of January 1, 2018. As a result, the change in restricted cash has been included in the change in cash, cash equivalents and merchant reserves and the prior period reported information has been recast to reflect the new presentation. New Accounting Pronouncements: In February 2016, the FASB issued, Leases (Topic 842), which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee will be required to recognize on the balance sheet an asset (right to use) and a liability (lease obligation) for leases with terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. generally accepted accounting principles. The new standard is effective for this Company for the fiscal year beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Management does not expect that adopting this standard will have a significant impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 , Compensation - Stock Compensation which expands the scope of current guidance to include all share-based payment arrangements related to the acquisition of goods or services from both non-employees and employees. The guidance is effective for the Company in all fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this standard on its consolidated financial statements, if any. |
Acquisition of Singular Payment
Acquisition of Singular Payments, LLC | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Singular Payments, LLC | Acquisition of Singular Payments, LLC On September 1, 2017, the Company entered into a membership interest purchase agreement with Singular Payments, LLC (“Singular Payments”), a Florida limited liability company in the business of credit card processing, pursuant to which the Company agreed to purchase all of the membership interest in Singular Payments, LLC. The aggregate purchase price was $5,000,000 and consisted of a cash payment of $1,500,000 at closing, minus the balance on the outstanding note receivable of $600,000 and subject to adjustment based on net working capital, and $3,500,000 in shares of common stock, or 1,515,152 shares of the Company's common stock, $0.001 par value per share, valued at $2.31 per share. Such shares are unregistered and subject to a lock-up agreement of 24 months. The final number of shares issued, and the related value per each such share, was determined using the volume-weighted average daily closing price for the shares of common stock for the five business days immediately preceding September 1, 2017, or $2.31 . The purchase price was allocated to the net assets acquired based upon their estimated fair values as follows: Estimated Fair Value Estimated Useful Life Customer list $ 5,000,000 5 years Total $ 5,000,000 The unaudited proforma results including the effects of the Singular Payments acquisition as if it had been consummated on January 1, 2016 were included in a Form 8-K/A filed November 17, 2017 and summarized in the Form 10-K filed March 30, 2018. |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable Under a loan and security agreement dated February 2, 2016, the Company's wholly-owned subsidiary FiCentive, Inc. loaned a principal amount of $200,000 to C2Go, Inc. with an interest rate of 10% per annum for a term of 18 months. The loan was secured by a first lien on all assets of C2Go. C2Go defaulted under the note by failing to repay the loan plus interest on August 2, 2017. A lawsuit filed by FiCentive is pending in Bexar County, San Antonio, Texas. On December 7, 2017, the Company entered into a note purchase and settlement agreement with C2Go and Mercury Investment Partners LLC. Pursuant to the note purchase and settlement agreement Mercury Investment Partners agreed to purchase the note and the rights secured by the security agreement with all rights and obligations and to pay to FiCentive a sum of $200,000 in three installments. The first installment of $50,000 was paid on December 7, 2017. The second installment of $50,000 was due on April 30, 2018, and the remaining amount of $100,000 was due on October 31, 2018. In return, FiCentive agreed to waive all interest due and payable under the terms of the C2Go loan. Mercury Investment Partners has not paid the amount due on April 30, 2018 or the amount due on October 31, 2018. FiCentive has issued a letter of default. FiCentive agreed to extend the due date of the $50,000 payment due April 30, 2018 to May 16, 2018. $5,000 of the $50,000 due May 16, 2018 was received on July 5, 2018. On or about August 14, 2018, a notice of default was sent to Mercury Investment Partners. Mercury Investment Partners did not respond to the letter or make payment in full to FiCentive. On September 4, 2018, FiCentive filed suit against Mercury Investment Partners in Bexar County District Court and litigation is continuing. There are no assurances the Company will be able to recover the remaining $145,000 principal due and there are no assurances the Company will be able to recover any value from its lien on all the assets of C2Go if payment in full of the obligation is not made. Due to the uncertainty of the situation and “more likely than not” recognition threshold as of September 30, 2018 , the Company recorded a loss reserve on the note receivable of $72,500 as of June 30, 2018 and the reserve remains unchanged as of September 30, 2018. On March 7, 2017, the Company agreed to provide $500,000 to Singular Payments, LLC, a Florida limited liability company, under a secured line of credit promissory note. Interest on the note did not accrue until the earlier of August 31, 2017, the date of closing and funding the Company’s proposed acquisition of Singular Payments or the termination of a non-binding letter of intent regarding the proposed acquisition, or until such mutually agreed upon extended date. The loan was increased to $600,000 on August 2, 2017. The Singular Payments, LLC acquisition closed on September 1, 2017. The note receivable was applied to the cash purchase price as part of the purchase agreement. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consisted of the following balances: September 30, 2018 December 31, 2017 Accrued commissions $ 57,224 $ 331,214 Reserve for merchant losses 313,614 172,832 Other accrued expenses 658,670 387,882 Accrued taxes 34,689 45,129 Accrued salaries 153,110 69,205 Total accrued expenses $ 1,217,307 $ 1,006,262 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Common Stock Purchase Warrants: On August 21, 2018, the Company entered into a warrant agreement with University Fancards, LLC in conjunction with a Prepaid Card Marketing and Processing Agreement (the "Prepaid Agreement"). On the date the first financial transaction is processed on a card issued (the "Issue Date") under the Prepaid agreement, the Company issued Fancards a warrant to purchase an aggregate of up to 150,000 shares of the Company's common stock. Warrants to purchase 30,000 shares vested immediately on the Issue Date. The additional warrants will vest in 30,000 share increments on July 31, 2019, July 31, 2020, July 31, 2021 and July 31, 2022. The strike price for the warrants will be $1.80 per share when the warrants vest on the Issue Date. The strike price for the remaining warrants will be the lesser of $2.00 per share or 120% of the market price of the common stock on the vesting date of the warrant. As of September 30, 2018, the first financial transaction had not been processed on a card issued under the Prepaid Agreement. The Company will estimate the fair value of the warrant as of the Issue Date based upon a Black-Sholes valuation. |
Net (Loss) Per Share
Net (Loss) Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net (Loss) Per Share | Net (Loss) Per Share Basic (loss) per share (EPS) was computed by dividing net (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted EPS differs from basic EPS due to the assumed conversion of potentially dilutive awards and options that were outstanding during the period. The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net (loss) for the three and nine months ended September 30, 2018 and September 30, 2017 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Numerator for basic and diluted (loss) per share, net income (loss) available to common shareholders $ (813,166 ) $ (890,025 ) (2,899,410 ) (1,710,945 ) Denominator: Denominator for basic (loss) per share, weighted average shares outstanding 12,145,323 8,954,831 12,098,828 8,637,169 Effect of dilutive securities — — — — Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion 12,145,323 8,954,831 12,098,828 8,637,169 Basic (loss) per common share $ (0.07 ) $ (0.10 ) $ (0.24 ) $ (0.20 ) Diluted (loss) per common share and common share equivalent $ (0.07 ) $ (0.10 ) $ (0.24 ) $ (0.20 ) The awards and options to purchase shares of common stock that were outstanding at September 30, 2018 and September 30, 2017 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows: Nine Months Ended September 30, 2018 2017 Anti-dilutive awards and options 3,848,336 3,433,543 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recorded based on the difference between financial reporting and tax basis of assets and liabilities and are measured by the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Deferred tax assets are computed with the presumption that they will be realizable in future periods when taxable income is generated. Predicting the ability to realize these assets in future periods requires judgment by management. U.S. generally accepted accounting principles prescribe a recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Income tax benefits that meet the “more likely than not” recognition threshold should be recognized. Goodwill is amortized over 15 years for tax purposes. The Company has recognized a deferred tax asset of approximately $1.4 million and has recorded a valuation allowance of approximately $8.2 million to reduce the other deferred tax assets. The Company reviews the assessment of the deferred tax asset and valuation allowance on an annual basis or more often when events indicate a change to the valuation allowance may be warranted. At December 31, 2017, the Company had available net operating loss carryforwards of approximately $41.3 million , which expire beginning in the year 2021. Approximately $0.1 million of the total net operating loss carryforward is subject to an IRS Section 382 limitation from 1999. Management is not aware of any tax positions that would have a significant impact on the Company’s financial position. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Louis Hoch During the nine months ended September 30, 2018 and the year ended December 31, 2017 , the Company purchased a total of $8,633 and $1,826 , respectively, of corporate imprinted sportswear and caps from Angry Pug Sportswear. Louis Hoch, the Company’s President and Chief Executive Officer, is a 50% owner of Angry Pug Sportswear. Miguel Chapa During the nine months ended September 30, 2018 and the year ended December 31, 2017 , the Company received $21,745 and $29,555 , respectively, in revenue from Lush Rooftop. Miguel Chapa, a member of the Company’s Board of Directors, is an owner of Lush Rooftop. Louis Hoch, the Company’s President and Chief Executive Officer, is also a minority owner in Lush Rooftop. Directors and Officers On January 8, 2018 and January 9, 2018, the Company repurchased 397,845 shares for $956,128 in a private transaction at the closing prices on January 8, 2018 and January 9, 2018 from officers, employees and director's to cover the respective employees', officers' and directors' share of taxes for shares that vested on that day, as approved by the Audit Committee and the Board of Directors on the same day, with the respective officers and directors recusing themselves. In particular, the Company repurchased the following shares from Named Executive Officers and directors: • Michael Long (Chairman of the Board): 158,476 shares valued at $2.40 per share or total of $380,342 ; • Louis Hoch (President and Chief Executive Officer): 158,476 shares valued at $2.40 per share or total of $380,342 ; and • Tom Jewell (Chief Financial Officer): 13,060 shares valued at $2.50 per share or total of $32,650 . |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings Under a loan and security agreement dated February 2, 2016, the Company's wholly-owned subsidiary FiCentive, Inc. loaned a principal amount of $200,000 to C2Go, Inc. with an interest rate of 10% per annum for a term of 18 months. The loan was secured by a first lien on all assets of C2Go. C2Go defaulted under the note by failing to repay the loan plus interest on August 2, 2017. A lawsuit filed by FiCentive is pending in Bexar County, San Antonio, Texas. On December 7, 2017, the Company entered into a note purchase and settlement agreement with C2Go and Mercury Investment Partners LLC. Pursuant to the note purchase and settlement agreement Mercury Investment Partners agreed to purchase the note and the rights secured by the security agreement with all rights and obligations and to pay to FiCentive a sum of $200,000 in three installments. The first installment of $50,000 was paid on December 7, 2017. The second installment of $50,000 was due on April 30, 2018, and the remaining amount of $100,000 was due on October 31, 2018. In return, FiCentive agreed to waive all interest due and payable under the terms of the C2Go loan. Mercury Investment Partners has not paid the amount due April 30, 2018 or the amount due on October 31, 2018. FiCentive has issued a letter of default. FiCentive agreed to extend the due date of the $50,000 payment due April 30, 2018 to May 16, 2018. $5,000 of the $50,000 due was received on July 5, 2018. On or about August 14, 2018, a notice of default was sent to Mercury Investment Partners. Mercury Investment Partners did not respond to the letter or make payment in full to FiCentive. On September 4, 2018, FiCentive filed suit against Mercury Investment Partners in Bexar County District Court and litigation is continuing. There are no assurances that the Company will be able to recover the remaining $145,000 principal and there are no assurances there will be any assets for the Company to recover from its lien on all the assets of C2Go if payment in full of the obligation is not made. Due to the uncertainty of the situation and “more likely than not” recognition threshold as of September 30, 2018 , the Company has recorded a $72,500 loss reserve on the note receivable of $72,500 as of June 30, 2018 and the reserve remains unchanged as of September 30, 2018. Aside from the lawsuit described above, the Company may be involved in legal matters arising in the ordinary course of business from time to time. While the Company believes that such matters are currently not material, there can be no assurance that matters arising in the ordinary course of business for which the Company is or could become involved in litigation will not have a material adverse effect on its business, financial condition or results of operations. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of Payment Data Systems, Inc. and its subsidiaries (the “Company”) have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, the accompanying interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company's financial position, results of operations and cash flows for such periods. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2017 , as filed with the Securities and Exchange Commission on March 30, 2018. Results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition: Revenue consists primarily of fees generated through the electronic processing of payment transactions and related services, and is recognized as revenue during the period in which the transactions are processed or when the related services are performed. The Company complies with ASC 606-10 and reports revenues as gross as a principal versus net as an agent. Although some of the Company's processing agreements vary with respect to specific credit risks, the Company has determined for each agreement it is acting in the principal role. Merchants may be charged for these processing services at a bundled rate based on a percentage of the dollar amount of each transaction and, in some instances, additional fees are charged for each transaction. Certain merchant customers are charged a flat fee per transaction, while others may also be charged miscellaneous fees, including fees for chargebacks or returns, monthly minimums, and other miscellaneous services. Revenues derived from electronic processing of credit, debit, and prepaid card transactions that are authorized and captured through third-party networks are reported gross of amounts paid to sponsor banks as well as interchange and assessments paid to credit card associations. Sales taxes billed are reported directly as a liability to the taxing authority, and are not included in revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents : Cash and cash equivalents includes cash and other money market instruments. The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. |
Merchant Reserves | Merchant Reserves : The Company has merchant reserve requirements associated with Automated Clearing House ("ACH") transactions. The merchant reserve assets are carried on the Company's balance sheet with a corresponding liability. Merchant Reserves are set for each merchant. Funds are collected from each merchant and held as collateral to minimize contingent liabilities associated with any losses that may occur under the merchant agreement. While this cash is not restricted in its use, the Company believes that designating this cash to collateralize Merchant Reserves strengthens our fiduciary standing with the Company's member sponsors and is in accordance with the guidelines set by the card networks. |
Allowance for Estimated Losses | Allowance for Estimated Losses: The Company maintains an allowance for estimated doubtful accounts receivable resulting from the inability or failure of the Company’s customers to make required payments. The Company determines the allowance for estimated doubtful accounts receivable losses based on an account-by-account review, taking into consideration such factors as the age of the outstanding balance, historical pattern of collections and financial condition of the customer. Past losses incurred by the Company due to bad debts have been within its expectations. If the financial conditions of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make contractual payments, additional allowances might be required. Estimates for doubtful account losses are variable based on the volume of transactions processed and could increase or decrease accordingly. |
Accounting for Internal Use Software | Accounting for Internal Use Software: The Company capitalizes the costs associated with software being developed or obtained for internal use when both the preliminary project stage is completed and it is probable that computer software being developed will be completed and placed-in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project, and (iii) interest costs incurred, when material, while developing internal-use software. The Company ceases capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose. |
Valuation of Long-Lived and Intangible Assets | Valuation of Long-Lived and Intangible Assets: The Company assesses the impairment of long-lived and intangible assets at least annually, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important, which could trigger an impairment review, include the following: significant under performance relative to historical or projected future cash flows; significant changes in the manner of use of the assets or the strategy of the overall business; and significant negative industry trends. When management determines that the carrying value of long-lived and intangible assets may not be recoverable, impairment is measured as the excess of the assets’ carrying value over the estimated fair value. No impairment losses were recorded in 2017 or during the nine months ended September 30, 2018 . Management is not aware of any impairment changes that may currently be required; however, the Company cannot predict the occurrence of events that might adversely affect the reported values in the future. |
Reserve for Processing Losses | Reserve for Processing Losses: If, due to insolvency or bankruptcy of one of the Company’s merchant customers, or for any other reason, the Company is not able to collect amounts from its credit card, ACH or prepaid customers that have been properly "charged back" by the customer, or if a prepaid cardholder incurs a negative balance, the Company must bear the credit risk for the full amount of the transaction. The Company may require cash deposits and other types of collateral from certain merchants to minimize any such risk. In addition, the Company utilizes a number of systems and procedures to manage merchant risk. ACH, prepaid and credit card merchant processing loss reserves are primarily determined by performing a historical analysis of the Company’s loss experience and considering other factors that could affect that experience in the future, such as the types of transactions processed and nature of the merchant relationship with its consumers and the Company’s relationship with the Company’s prepaid card holders. This reserve amount is subject to the risk that actual losses may be greater than the Company’s estimates. The Company has not incurred any significant processing losses to date. Estimates for processing losses are variable based on the volume of transactions processed and could increase or decrease accordingly. |
Recently Adopted and New Accounting Pronouncement | Recently Adopted Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606) and a subsequent amendment to the standard in March 2016, ASU 2016-08, Revenue from Contracts with Customers, Principal versus Agent Consideration (Reporting Revenue Gross versus Net) . The original standard provides guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment to the standard clarifies implementation guidance on principal versus agent considerations. Adoption of the new standards is effective for reporting periods beginning after December 15, 2017, with early adoption not permitted. The Company has evaluated the potential impact that the adoption of this standard will have on its financial position, results of operations, and related disclosures, and has adopted the provisions of this new standard beginning January 1, 2018. The Company functions as the merchant of record and has primary responsibility for providing end-to-end payment processing services for its clients. The Company's clients contract with the Company for all credit card processing services including transaction authorization, settlement, dispute resolution, security and risk management solutions, reporting and other value-added services. As such, the Company is the primary obliger in these transactions and is solely responsible for all processing costs, including interchange fees. Further, the Company sets prices as it deems reasonable for each merchant. The gross fees the Company collects are intended to cover the interchange, assessments and other processing fees and include the Company's margin on transactions processed. For these reasons, the Company is the principal obliger in the contractual relationship with its customers and therefor, the Company records its revenues, including interchange and assessments on a gross basis. The Company's existing revenue recognition process will remain intact and the Company will continue to record revenues at the gross amount billed due to the Company's primary responsibility for providing end-to-end payment processing services for its clients. In November 2016, the FASB issued ASU 2016-18 , Statement of Cash Flows (Topic 230) Restricted Cash , which requires that the reconciliation of the beginning of period and the end of period amounts shown in the statement of cash flows include restricted cash and restricted cash equivalents. If restricted cash is presented separately from cash and cash equivalents on the balance sheet, companies will be required to reconcile the amounts presented on the statement of cash flows to the amounts on the balance sheet. This guidance is required to be applied retrospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. As required, the Company applied the provisions of ASU 2016-18 as of January 1, 2018. As a result, the change in restricted cash has been included in the change in cash, cash equivalents and merchant reserves and the prior period reported information has been recast to reflect the new presentation. New Accounting Pronouncements: In February 2016, the FASB issued, Leases (Topic 842), which is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee will be required to recognize on the balance sheet an asset (right to use) and a liability (lease obligation) for leases with terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. generally accepted accounting principles. The new standard is effective for this Company for the fiscal year beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Management does not expect that adopting this standard will have a significant impact on its consolidated financial statements and related disclosures. In June 2018, the FASB issued ASU 2018-07 , Compensation - Stock Compensation which expands the scope of current guidance to include all share-based payment arrangements related to the acquisition of goods or services from both non-employees and employees. The guidance is effective for the Company in all fiscal years beginning after December 15, 2018. The Company is currently evaluating the impact of this standard on its consolidated financial statements, if any. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of cash and cash equivalents | The reconciliation of cash and cash equivalents to cash, cash equivalents and merchant reserves is as follows for each period presented: September 30, 2018 September 30, 2017 Beginning cash, cash equivalents and merchant reserves: Cash and cash equivalents $ 4,800,554 $ 4,120,738 Merchant reserves 14,977,468 15,803,641 Total $ 19,778,022 $ 19,924,379 Ending cash, cash equivalents and merchant reserves: Cash and cash equivalents $ 2,716,316 $ 2,199,849 Merchant reserves 13,602,562 14,908,900 Total $ 16,318,878 $ 17,108,749 |
Restrictions on cash and cash equivalents | The reconciliation of cash and cash equivalents to cash, cash equivalents and merchant reserves is as follows for each period presented: September 30, 2018 September 30, 2017 Beginning cash, cash equivalents and merchant reserves: Cash and cash equivalents $ 4,800,554 $ 4,120,738 Merchant reserves 14,977,468 15,803,641 Total $ 19,778,022 $ 19,924,379 Ending cash, cash equivalents and merchant reserves: Cash and cash equivalents $ 2,716,316 $ 2,199,849 Merchant reserves 13,602,562 14,908,900 Total $ 16,318,878 $ 17,108,749 |
Acquisition of Singular Payme_2
Acquisition of Singular Payments, LLC (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of acquisition purchase price | The purchase price was allocated to the net assets acquired based upon their estimated fair values as follows: Estimated Fair Value Estimated Useful Life Customer list $ 5,000,000 5 years Total $ 5,000,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consisted of the following balances: September 30, 2018 December 31, 2017 Accrued commissions $ 57,224 $ 331,214 Reserve for merchant losses 313,614 172,832 Other accrued expenses 658,670 387,882 Accrued taxes 34,689 45,129 Accrued salaries 153,110 69,205 Total accrued expenses $ 1,217,307 $ 1,006,262 |
Net (Loss) Per Share (Tables)
Net (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of the numerators and the denominators of the basic and diluted per share computations for net (loss) | The following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for net (loss) for the three and nine months ended September 30, 2018 and September 30, 2017 . Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Numerator for basic and diluted (loss) per share, net income (loss) available to common shareholders $ (813,166 ) $ (890,025 ) (2,899,410 ) (1,710,945 ) Denominator: Denominator for basic (loss) per share, weighted average shares outstanding 12,145,323 8,954,831 12,098,828 8,637,169 Effect of dilutive securities — — — — Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion 12,145,323 8,954,831 12,098,828 8,637,169 Basic (loss) per common share $ (0.07 ) $ (0.10 ) $ (0.24 ) $ (0.20 ) Diluted (loss) per common share and common share equivalent $ (0.07 ) $ (0.10 ) $ (0.24 ) $ (0.20 ) |
Schedule of the awards and options to purchase shares of common stock that were outstanding | The awards and options to purchase shares of common stock that were outstanding at September 30, 2018 and September 30, 2017 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive, are as follows: Nine Months Ended September 30, 2018 2017 Anti-dilutive awards and options 3,848,336 3,433,543 |
Basis of Presentation - Reconci
Basis of Presentation - Reconciliation of Cash and Cash Equivalents to Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 2,716,316 | $ 4,800,554 | $ 2,199,849 | $ 4,120,738 |
Merchant reserves | 13,602,562 | 14,977,468 | 14,908,900 | 15,803,641 |
Total | $ 16,318,878 | $ 19,778,022 | $ 17,108,749 | $ 19,924,379 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Allowance for estimated doubtful accounts | $ 58,731 | $ 61,223 | |
Capitalized computer software, additions | 163,888 | $ 243,039 | |
Asset impairment charges | 0 | 0 | |
Reserve for processing losses | $ 313,614 | $ 172,832 |
Acquisition of Singular Payme_3
Acquisition of Singular Payments, LLC (Details) - USD ($) | Sep. 01, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Cash payments to acquire businesses | $ 0 | $ 900,000 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Singular Payments, LLC | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 5,000,000 | |||
Cash payments to acquire businesses | 1,500,000 | |||
Outstanding balance of note receivable assumed | 600,000 | |||
Equity interest issued or issuable, value | $ 3,500,000 | |||
Equity interest issued or issuable, number of shares (in shares) | 1,515,152 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Share price (in dollars per share) | $ 2.31 | |||
Equity interest issued, lock-up agreement, term | 24 months | |||
Equity interest issued, basis for determining value, number of business days preceding September 1, 2017 | 5 days |
Acquisition of Singular Payme_4
Acquisition of Singular Payments, LLC - Purchase Price (Details) - Singular Payments, LLC | Sep. 01, 2017USD ($) |
Business Acquisition [Line Items] | |
Total | $ 5,000,000 |
Customer List | |
Business Acquisition [Line Items] | |
Customer list | $ 5,000,000 |
Estimated Useful Life | 5 years |
Notes Receivable (Details)
Notes Receivable (Details) | Dec. 07, 2017USD ($)installment | Feb. 02, 2016USD ($) | Oct. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 05, 2018USD ($) | Jun. 30, 2018USD ($) | May 16, 2018USD ($) | Apr. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Aug. 02, 2017USD ($) | Mar. 07, 2017USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Notes receivable, net | $ 72,500 | $ 150,000 | |||||||||
Defaults of Mutual Loan and Security Agreement | Pending Litigation | FiCentive, Inc. V. C2Go, Inc. | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Number of installments | installment | 3 | ||||||||||
Gain related to litigation settlement | $ 50,000 | ||||||||||
Unrecorded amount | 145,000 | $ 50,000 | $ 50,000 | ||||||||
Former gain contingency, recognized in current period | $ 5,000 | ||||||||||
Loss reserve on note receivable | $ 72,500 | $ 72,500 | |||||||||
Defaults of Mutual Loan and Security Agreement | Pending Litigation | FiCentive, Inc. V. C2Go, Inc. | Subsequent Event | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Unrecorded amount | $ 100,000 | ||||||||||
C2Go Loan | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Notes receivable, net | $ 200,000 | ||||||||||
Notes receivable, stated interest rate | 10.00% | ||||||||||
Notes receivable, term | 18 months | ||||||||||
C2Go Loan | Defaults of Mutual Loan and Security Agreement | Pending Litigation | FiCentive, Inc. V. C2Go, Inc. | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Amount awarded from other party | $ 200,000 | ||||||||||
Singular Payments, LLC | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Notes receivable, net | $ 600,000 | $ 500,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued commissions | $ 57,224 | $ 331,214 |
Reserve for merchant losses | 313,614 | 172,832 |
Other accrued expenses | 658,670 | 387,882 |
Accrued taxes | 34,689 | 45,129 |
Accrued salaries | 153,110 | 69,205 |
Total accrued expenses | $ 1,217,307 | $ 1,006,262 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Aug. 31, 2018$ / sharesshares |
Class of Warrant or Right [Line Items] | |
Exercise price of warrants, maximum percentage of market price of common stock | 120.00% |
Maximum | |
Class of Warrant or Right [Line Items] | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 2 |
Common Stock | |
Class of Warrant or Right [Line Items] | |
Number of securities called by warrants (in shares) | 150,000 |
Common Stock, Vesting on August 31, 2018 | |
Class of Warrant or Right [Line Items] | |
Number of securities called by warrants (in shares) | 30,000 |
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.80 |
Common Stock, Vesting on July 31, 2019 | |
Class of Warrant or Right [Line Items] | |
Number of securities called by warrants (in shares) | 30,000 |
Common Stock, Vesting on July 31, 2020 | |
Class of Warrant or Right [Line Items] | |
Number of securities called by warrants (in shares) | 30,000 |
Common Stock, Vesting on July 31, 2021 | |
Class of Warrant or Right [Line Items] | |
Number of securities called by warrants (in shares) | 30,000 |
Common Stock, Vesting on July 31, 2022 | |
Class of Warrant or Right [Line Items] | |
Number of securities called by warrants (in shares) | 30,000 |
Net (Loss) Per Share - Earnings
Net (Loss) Per Share - Earnings per Share Numerator and Denominator (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Numerator for basic and diluted (loss) per share, net income (loss) available to common shareholders | $ (813,166) | $ (890,025) | $ (2,899,410) | $ (1,710,945) |
Denominator: | ||||
Denominator for basic (loss) per share, weighted average shares outstanding (in shares) | 12,145,323 | 8,954,831 | 12,098,828 | 8,637,169 |
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted earnings per share, adjust weighted average shares and assumed conversion (in shares) | 12,145,323 | 8,954,831 | 12,098,828 | 8,637,169 |
Basic (loss) per common share (in dollars per share) | $ (0.07) | $ (0.10) | $ (0.24) | $ (0.20) |
Diluted (loss) per common share and common share equivalent (in dollars per share) | $ (0.07) | $ (0.10) | $ (0.24) | $ (0.20) |
Net (Loss) Per Share - Antidilu
Net (Loss) Per Share - Antidilutive Securities Excluded from Calculation of EPS (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive awards and options (in shares) | 3,848,336 | 3,433,543 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Goodwill amortization period | 15 years | |
Deferred tax assets, net | $ 1.4 | |
Deferred tax assets, valuation allowance | $ 8.2 | |
Operating loss carryforwards | $ 41.3 | |
Portion subject to an IRS Section 382 limitation from 1999 | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards, limitations on use, amount | $ 0.1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jan. 09, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||||||
Revenues | $ 6,473,743 | $ 3,588,853 | $ 18,601,283 | $ 8,950,038 | ||
Louis Hoch | ||||||
Related Party Transaction [Line Items] | ||||||
Treasury stock acquired (in shares) | 158,476 | |||||
Treasury stock, value, acquired | $ 380,342 | |||||
Treasury stock acquired, average cost per share (in dollars per share) | $ 2.40 | |||||
Louis Hoch | Ownership of Angry Pug Sportswear | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 8,633 | $ 1,826 | ||||
Ownership percentage | 50.00% | |||||
Miguel Chapa | Ownership of Lush Rooftop | ||||||
Related Party Transaction [Line Items] | ||||||
Revenues | $ 21,745 | $ 29,555 | ||||
Officers, Employees and Directors | ||||||
Related Party Transaction [Line Items] | ||||||
Treasury stock acquired (in shares) | 397,845 | |||||
Treasury stock, value, acquired | $ 956,128 | |||||
Michael Long | ||||||
Related Party Transaction [Line Items] | ||||||
Treasury stock acquired (in shares) | 158,476 | |||||
Treasury stock, value, acquired | $ 380,342 | |||||
Treasury stock acquired, average cost per share (in dollars per share) | $ 2.40 | |||||
Tom Jewell | ||||||
Related Party Transaction [Line Items] | ||||||
Treasury stock acquired (in shares) | 13,060 | |||||
Treasury stock, value, acquired | $ 32,650 | |||||
Treasury stock acquired, average cost per share (in dollars per share) | $ 2.50 |
Legal Proceedings (Details)
Legal Proceedings (Details) | Dec. 07, 2017USD ($)installment | Feb. 02, 2016USD ($) | Oct. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 05, 2018USD ($) | Jun. 30, 2018USD ($) | May 16, 2018USD ($) | Apr. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | |||||||||
Notes receivable, net | $ 72,500 | $ 150,000 | |||||||
Defaults of Mutual Loan and Security Agreement | FiCentive, Inc. V. C2Go, Inc. | Pending Litigation | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of installments | installment | 3 | ||||||||
Gain related to litigation settlement | $ 50,000 | ||||||||
Unrecorded amount | 145,000 | $ 50,000 | $ 50,000 | ||||||
Former gain contingency, recognized in current period | $ 5,000 | ||||||||
Loss reserve on note receivable | $ 72,500 | $ 72,500 | |||||||
Defaults of Mutual Loan and Security Agreement | FiCentive, Inc. V. C2Go, Inc. | Pending Litigation | Subsequent Event | |||||||||
Loss Contingencies [Line Items] | |||||||||
Unrecorded amount | $ 100,000 | ||||||||
C2Go Loan | |||||||||
Loss Contingencies [Line Items] | |||||||||
Notes receivable, net | $ 200,000 | ||||||||
Notes receivable, stated interest rate | 10.00% | ||||||||
Notes receivable, term | 18 months | ||||||||
C2Go Loan | Defaults of Mutual Loan and Security Agreement | FiCentive, Inc. V. C2Go, Inc. | Pending Litigation | |||||||||
Loss Contingencies [Line Items] | |||||||||
Amount awarded from other party | $ 200,000 |