Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 09, 2017 | |
Document Information [Line Items] | ||
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 Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 11,829,645 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets (Cu
Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,618,305 | $ 4,120,738 |
Accounts receivable, net | 850,832 | 907,750 |
Settlement processing assets | 34,138,949 | 43,851,311 |
Prepaid expenses and other | 272,586 | 142,029 |
Note receivable | 700,000 | 200,000 |
Current assets before restricted cash | 39,580,672 | 49,221,828 |
Restricted cash | 14,725,430 | 15,803,641 |
Total current assets | 54,306,102 | 65,025,469 |
Property and equipment, net | 2,516,801 | 2,494,510 |
Other assets: | ||
Intangibles, net | 132,114 | 172,899 |
Deferred tax asset | 1,621,000 | 1,621,000 |
Other assets | 229,571 | 200,808 |
Total other assets | 1,982,685 | 1,994,707 |
Total assets | 58,805,588 | 69,514,686 |
Current liabilities: | ||
Accounts payable | 231,648 | 145,044 |
Accrued expenses | 807,821 | 703,322 |
Settlement processing obligations | 34,138,949 | 43,851,311 |
Current liabilities before restricted cash | 35,178,418 | 44,699,677 |
Restricted cash | 14,725,430 | 15,803,641 |
Total current liabilities | 49,903,848 | 60,503,318 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; -0- shares issued and outstanding at March 31, 2017 (unaudited) and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value, 200,000,000 shares authorized; 12,449,249 and 12,392,288 issued, and 11,829,645 and 11,795,939 outstanding at March 31, 2017 (unaudited) and December 31, 2016, respectively | 181,874 | 181,818 |
Additional paid-in capital | 63,913,124 | 63,881,365 |
Treasury stock, at cost; 619,604 and 596,349 shares at March 31, 2017 (unaudited) and December 31, 2016 respectively | (749,113) | (718,149) |
Deferred compensation | (3,905,921) | (4,082,025) |
Accumulated deficit | (50,538,224) | (50,251,641) |
Total stockholders’ equity | 8,901,740 | 9,011,368 |
Total liabilities and stockholders’ equity | $ 58,805,588 | $ 69,514,686 |
Consolidated Balance Sheets (C3
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 issued (in shares) | 0 | 0 |
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) | 12,449,249 | 12,392,288 |
Common stock, shares outstanding (in shares) | 11,829,645 | 11,795,939 |
Treasury stock, shares (in shares) | 619,604 | 596,349 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | $ 2,810,744 | $ 3,228,631 |
Operating expenses: | ||
Cost of services | 1,867,945 | 2,154,783 |
Selling, general and administrative: | ||
Non-cash stock based compensation | 207,920 | 287,689 |
Other expenses | 828,272 | 608,349 |
Depreciation and amortization | 228,545 | 224,223 |
Total operating expenses | 3,132,682 | 3,275,044 |
Operating income (loss) | (321,938) | (46,413) |
Other income and (expense): | ||
Interest income | 33,816 | 22,011 |
Other income (expense) | (1,539) | 600 |
Total other income and (expense), net | 35,355 | 21,411 |
Income (loss) before income taxes | (286,583) | (25,002) |
Income taxes | 7,000 | |
Net income (loss) | $ (286,583) | $ (32,002) |
Basic earnings (loss) per common share (in dollars per share) | $ (0.03) | $ 0 |
Diluted earnings (loss) per common share and common share equivalent (in dollars per share) | $ (0.03) | $ 0 |
Weighted average common shares outstanding | ||
Denominator for basic earnings per share, weighted average shares outstanding (in shares) | 8,485,183 | 7,719,248 |
Diluted (in shares) | 8,485,183 | 7,719,248 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities: | ||
Numerator for basic and diluted earnings per share, net income (loss) available to common shareholders | $ (286,583) | $ (32,002) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 187,760 | 183,437 |
Amortization | 40,785 | 40,784 |
Non-cash stock based compensation | 207,920 | 287,689 |
Issuance of stock to consultant | 19,000 | |
Changes in current assets and current liabilities: | ||
Accounts receivable | 56,918 | 122,858 |
Prepaid expenses and other | (130,557) | (177,806) |
Other assets | (28,763) | 599 |
Accounts payable and accrued expenses | 191,103 | 15,180 |
Deferred revenues | 12,500 | |
Net cash provided by operating activities: | 238,583 | 472,239 |
Investing activities: | ||
Purchases of property and equipment | (210,052) | (107,954) |
Note receivable | (500,000) | (200,000) |
Net cash (used) by investing activities: | (710,052) | (307,954) |
Financing activities: | ||
Purchases of treasury stock | (30,964) | |
Net cash (used) by financing activities: | (30,964) | |
Change in cash and cash equivalents | (502,433) | 164,285 |
Cash and cash equivalents, beginning of period | 4,120,738 | 4,059,606 |
Cash and cash equivalents, end of period | 3,618,305 | 4,223,891 |
Supplemental disclosure of cash flow information: | ||
Interest | ||
Income taxes | $ 7,000 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Business Description and Accounting Policies [Text Block] | Note 1. 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 December 31, 2016, April 6, 2017. may Use of Estimates: Revenue Recognition: may may third Cash and Cash Equivalents 90 Allowance for Estimated Losses: March 31, 2017 December 31, 2016, $26,556 $26,556, Accounting for Internal Use Software: March 31, 2017, $209,100. Valuation of Long-Lived and Intangible Assets: may may No 2016 three March 31, 2017. may Reserve for Processing Losses: one may may March 31, 2017 $172,832 December 31, 2016. New Accounting Pronouncement: May 2014, ASU 2014 09 “Revenue from Contracts with Customers (Topic 606) March 2016, ASU 2016 08 five December 15, 2017, first 2018. In February 2016, Leases (Topic 842), 12 December 15, 2018, |
Note 2 - Note(s) Receivable
Note 2 - Note(s) Receivable | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 2. On February 2, 2016, C2Go, $200,000 C2Go 10% 18 C2Go’s first C2Go. C2Go Upon maturity of the debt, C2Go 5% C2Go Upon an event of default the interest rate under the loan and security agreement will rise to 18% March 31, 2017, On March 7, 2017, $500,000 May 31, 2017, ten 15% November 1, 2019. If the Singular Payments acquisition closes before interest accrues any unpaid principal amount will be offset against the cash portion of the purchase price. If the acquisition does not close on or before interest accrues, any unpaid principal amount plus interest will have to be paid in 30 may The line of credit is secured by a security agreement of the same date granting a first 100% March 31, 2017 |
Note 3 - Accrued Expenses
Note 3 - Accrued Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | Note 3. Accrued expenses consisted of the following balances: March 31, 2017 December 31, 2016 Accrued commissions $ 192,553 $ 221,837 Reserve for merchant losses 172,832 172,832 Other accrued expenses 326,124 192,769 Accrued taxes 39,722 38,469 Accrued salaries 76,590 77,415 Total accrued expenses $ 807,821 $ 703,322 |
Note 4 - Net Earnings (Loss) Pe
Note 4 - Net Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | Note 4. Basic earnings per share (EPS) were computed by dividing net income (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 income for the three March 31, 2017 2016. Three Months Ended 2017 2016 Numerator: Numerator for basic and diluted earnings per share, net income (loss) available to common shareholders $ (286,583 ) $ (32,002 ) Denominator: Denominator for basic earnings per share, weighted average shares outstanding 8,485,183 7,719,248 Effect of dilutive securities - - Denominator for diluted earnings per share, adjusted weighted average shares and assumed conversion 8,485,183 7,719,248 Basic earnings (loss) per common share $ (0.03 ) $ 0.00 Diluted earnings (loss) per common share and common share equivalent $ (0.03 ) $ 0.00 The awards and options to purchase shares of common stock that were outstanding at March 31, 2017 2016 Three Months Ended 2017 2016 Anti-dilutive awards and options 3,357,831 4,325,676 |
Note 5 - Income Taxes
Note 5 - Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | Note 5. Deferred tax assets and liabilities are recorded based on the difference between financial reporting and tax bases 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 a great deal of 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 The Company has recognized a deferred tax asset of $1.6 $12.7 June 30, 2017. At December 31, 2016, $40.2 2020. $0.1 382 1999. Management is not aware of any tax positions that would have a significant impact on the Company’s financial position. |
Note 6 - Related Party Transact
Note 6 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | Note 6. Nikole Killough During the three March 31, 2017 December 31, 2016, $0 $2,250, Nikole Killough and Louis Hoch, the Company’s President and Chief Executive Officer, are each 50% Miguel Chapa During the three March 31, 2017 December 31, 2016, $7,407 $51,500, |
Note 7 - Legal Proceedings
Note 7 - Legal Proceedings | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Legal Matters and Contingencies [Text Block] | Note 7. On April 26, 2016, 2013 2014. July 2016, January 2017, The Company believes the claim is without merit and it is unlikely that a loss will be incurred; therefore the Company has not accrued for a potential loss. However, the outcomes of the disputes are still uncertain and it is possible the Company may Aside from the lawsuit described above, the Company may |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates: |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition: may may third |
Cash and Cash Equivalents, Unrestricted Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents 90 |
Internal Use Software, Policy [Policy Text Block] | Accounting for Internal Use Software: March 31, 2017, $209,100. |
Receivables, Policy [Policy Text Block] | Allowance for Estimated Losses: March 31, 2017 December 31, 2016, $26,556 $26,556, |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Valuation of Long-Lived and Intangible Assets: may may 2016 three March 31, 2017. may |
Contingent Liability Reserve Estimate, Policy [Policy Text Block] | Reserve for Processing Losses: one may may March 31, 2017 $172,832 December 31, 2016. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncement: May 2014, ASU 2014 09 “Revenue from Contracts with Customers (Topic 606) March 2016, ASU 2016 08 five December 15, 2017, first 2018. In February 2016, Leases (Topic 842), 12 December 15, 2018, |
Note 3 - Accrued Expenses (Tabl
Note 3 - Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Notes Tables | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | March 31, 2017 December 31, 2016 Accrued commissions $ 192,553 $ 221,837 Reserve for merchant losses 172,832 172,832 Other accrued expenses 326,124 192,769 Accrued taxes 39,722 38,469 Accrued salaries 76,590 77,415 Total accrued expenses $ 807,821 $ 703,322 |
Note 4 - Net Earnings (Loss) 15
Note 4 - Net Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended 2017 2016 Numerator: Numerator for basic and diluted earnings per share, net income (loss) available to common shareholders $ (286,583 ) $ (32,002 ) Denominator: Denominator for basic earnings per share, weighted average shares outstanding 8,485,183 7,719,248 Effect of dilutive securities - - Denominator for diluted earnings per share, adjusted weighted average shares and assumed conversion 8,485,183 7,719,248 Basic earnings (loss) per common share $ (0.03 ) $ 0.00 Diluted earnings (loss) per common share and common share equivalent $ (0.03 ) $ 0.00 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Three Months Ended 2017 2016 Anti-dilutive awards and options 3,357,831 4,325,676 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable, Current | $ 26,556 | $ 26,556 |
Capitalized Computer Software, Additions | 209,100 | |
Valuation Allowances and Reserves, Balance | 172,832 | 172,832 |
Asset Impairment Charges | $ 0 | $ 0 |
Note 2 - Note(s) Receivable (De
Note 2 - Note(s) Receivable (Details Textual) | Mar. 07, 2017USD ($) | Feb. 02, 2016USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Financing Receivable, Net | $ 700,000 | $ 200,000 | ||
C2Go Loan [Member] | ||||
Financing Receivable, Net | $ 200,000 | |||
Notes Receivable, Stated Interest Rate | 10.00% | |||
Notes Receivable, Term | 1 year 180 days | |||
Notes Receivable Repayment, Shares of Payee Issued to Company, Percent | 5.00% | |||
Notes Receivable, Interest Rate in Event of Default | 18.00% | |||
Singular Payments, LLC [Member] | ||||
Financing Receivable, Net | $ 500,000 | |||
Notes Receivable, Stated Interest Rate | 10.00% | |||
Notes Receivable, Interest Rate in Event of Default | 15.00% | |||
Notes Receivable, Unpaid Principle Balance and Interest, Number of Equal Installments, Upon Failure of Acquisition Closure | 30 | |||
Notes Receivable, Collateral, Membership Interest Pledged | 100.00% |
Note 3 - Accrued Expenses - Acc
Note 3 - Accrued Expenses - Accrued Expenses (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued commissions | $ 192,553 | $ 221,837 |
Reserve for merchant losses | 172,832 | 172,832 |
Other accrued expenses | 326,124 | 192,769 |
Accrued taxes | 39,722 | 38,469 |
Accrued salaries | 76,590 | 77,415 |
Total accrued expenses | $ 807,821 | $ 703,322 |
Note 4 - Net Earnings (Loss) 19
Note 4 - Net Earnings (Loss) Per Share - Earnings Per Share Numerator and Denominator (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Numerator for basic and diluted earnings per share, net income (loss) available to common shareholders | $ (286,583) | $ (32,002) |
Denominator: | ||
Denominator for basic earnings per share, weighted average shares outstanding (in shares) | 8,485,183 | 7,719,248 |
Effect of dilutive securities (in shares) | ||
Denominator for diluted earnings per share, adjusted weighted average shares and assumed conversion (in shares) | 8,485,183 | 7,719,248 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.03) | $ 0 |
Diluted earnings (loss) per common share and common share equivalent (in dollars per share) | $ (0.03) | $ 0 |
Note 4 - Net Earnings (Loss) 20
Note 4 - Net Earnings (Loss) Per Share - Antidilutive Securities Excluded from Calculation of EPS (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Anti-dilutive awards and options (in shares) | 3,357,831 | 4,325,676 |
Note 5 - Income Taxes (Details
Note 5 - Income Taxes (Details Textual) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Goodwill Amortization Period | 15 years | |
Deferred Tax Assets, Net of Valuation Allowance | $ 1.6 | |
Deferred Tax Assets, Valuation Allowance | $ 12.7 | |
Operating Loss Carryforwards | $ 40.2 | |
Portion Subject to an IRS Section 382 Limitation [Member] | ||
Operating Loss Carryforwards | $ 0.1 |
Note 6 - Related Party Transa22
Note 6 - Related Party Transactions (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Angry Pug Sportswear [Member] | ||
Related Party Transaction, Purchases from Related Party | $ 0 | $ 2,250 |
Club Rio Maroc Bar, Lush Rooftop, and Nirvana Bar and Rock [Member] | ||
Revenue from Related Parties | $ 7,407 | $ 51,500 |