Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly
period ended September 30,
2016
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition
period from ________________ to ________________
Commission file number: 0-20660
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PAYBOX CORP
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|
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(Exact
name of registrant as specified in its charter)
|
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Delaware
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11-2895590
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer
Identification No.)
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500 East Broward Boulevard, Suite 1550
Fort Lauderdale, Florida
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33394
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(Address
of principal executive offices)
|
|
(Zip
Code)
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Registrant’s telephone number, including area
code: (954)
510-3750
Direct Insite Corp.
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☑ No
☐
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes ☑ No
☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or
a smaller reporting company. See the definitions of
“large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act.
Large
accelerated filer
|
☐
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Accelerated
filer
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☐
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Non-accelerated
filer
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☐
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Smaller
reporting company
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☑
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Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
☐ No ☑
As of
November 9, 2016, there were 13,077,046 shares of the
registrant’s Common Stock outstanding.
PAYBOX CORP
(Formerly Direct Insite Corp.)
TABLE OF CONTENTS
PART
I. FINANCIAL INFORMATION
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2-18
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ITEM
1. FINANCIAL STATEMENTS
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2
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CONDENSED BALANCE
SHEETS AS OF SEPTEMBER 30, 2016 (UNAUDITED) AND DECEMBER 31,
2015
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2
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CONDENSED
STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2016 AND 2015 (UNAUDITED)
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3
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CONDENSED
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2016 AND 2015 (UNAUDITED)
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4
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NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
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5
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ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
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13
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ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
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18
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ITEM
4. CONTROLS AND PROCEDURES
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18
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PART
II. OTHER INFORMATION
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19
– 20
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ITEM
1. LEGAL PROCEEDINGS
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19
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ITEM
1A. RISK FACTORS
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19
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ITEM
2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF
PROCEEDS
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19
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ITEM
3. DEFAULTS IN SENIOR SECURITIES
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19
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ITEM
4. MINE SAFETY DISCLOSURES
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19
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ITEM
5. OTHER INFORMATION
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19
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ITEM
6. EXHIBITS
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20
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SIGNATURES
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21
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PART I – FINANCIAL INFORMATION
Item
1. Financial Information
PAYBOX CORP
(Formerly Direct Insite Corp.)
CONDENSED BALANCE SHEETS
(in thousands, except share data)
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September
30, 2016
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December 31,
2015
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(Audited)
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Assets
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Current
assets:
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Cash and cash
equivalents
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$2,584
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$2,375
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Accounts
receivable
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1,249
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1,444
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Prepaid expenses
and other current assets
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479
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405
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Total current
assets
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4,312
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4,224
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Property and
equipment, net
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1,229
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934
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Deferred tax
assets
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1,195
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1,195
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Other
assets
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220
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247
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Total
assets
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$6,956
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$6,600
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Liabilities
and Stockholders’ Equity
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Current
liabilities:
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Accounts payable
and accrued expenses
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$1,587
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$1,468
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Capital lease
obligations
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–
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11
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Deferred
rent
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29
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37
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Total current
liabilities
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1,616
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1,516
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Commitments and
contingencies
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Stockholders’
equity:
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Preferred stock,
$0.0001 par value; 2,000,000 shares authorized; none issued or
outstanding
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–
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–
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Common stock,
$0.0001 par value; 50,000,000 shares authorized; 13,100,888 and 12,979,536 shares issued
and 13,060,961 and
12,939,609 shares outstanding in 2016 and 2015,
respectively
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1
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1
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Additional paid-in
capital
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116,590
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116,478
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Accumulated
deficit
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(110,923)
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(111,067)
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Common stock in
treasury, at cost; 24,371
shares in 2016 and 2015
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(328)
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(328)
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Total
stockholders’ equity
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5,340
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5,084
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Total liabilities
and stockholders’ equity
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$6,956
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$6,600
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See
notes to condensed financial statements.
2
PAYBOX CORP
(Formerly Direct Insite Corp.)
CONDENSED STATEMENTS OF OPERATIONS – UNAUDITED
(in thousands, except share data)
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For
the three months ended
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For
the nine months ended
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||
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September
30, 2016
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September 30,
2015
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September
30, 2016
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September 30,
2015
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Revenues:
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Recurring
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$1,272
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$1,683
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$4,078
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$5,086
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Non-recurring
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336
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241
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967
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963
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Total
revenues
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1,608
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1,924
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5,045
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6,049
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Operating costs and
expenses:
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Operations,
research and development
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663
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771
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2,010
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2,582
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General and
administrative
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481
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566
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1,640
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1,752
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Sales and
marketing
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399
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337
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1,073
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1,117
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Amortization and
depreciation
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56
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64
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176
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220
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Total operating
costs and expenses
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1,599
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1,738
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4,899
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5,671
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Operating
income
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9
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186
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146
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378
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Other expense,
net
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1
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–
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1
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2
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Income before
provision for income taxes
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8
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186
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145
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376
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Provision for
income taxes
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1
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24
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1
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24
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Net
income
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$7
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$162
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$144
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$352
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Basic income per
share attributable to common stockholders
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$0.00
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$0.01
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$0.01
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$0.03
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Diluted income per
share attributable to common stockholders
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$0.00
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$0.01
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$0.01
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$0.03
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Basic weighted
average common stock outstanding
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13,009
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12,863
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12,969
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12,831
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Diluted weighted
average common stock outstanding
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13,009
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12,896
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12,972
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12,854
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See
notes to condensed financial statements.
3
PAYBOX CORP
(Formerly Direct Insite Corp.)
CONDENSED STATEMENTS OF CASH FLOWS – UNAUDITED
(in thousands)
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For the nine months ended
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September 30, 2016
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September 30, 2015
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Cash
flows from operating activities
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Net
income
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144
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352
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Adjustments
to reconcile net income to net cash provided by
operations:
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Amortization
and depreciation
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176
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220
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Stock-based
compensation expense
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112
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157
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Deferred
rent expense
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(8)
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(5)
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Changes
in operating assets and liabilities:
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Accounts
receivable
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195
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957
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Prepaid
expenses and other current assets
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(47)
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(151)
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Accounts
payable and accrued expenses
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119
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(133)
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Deferred
revenue
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--
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(50)
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Total
adjustments
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547
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995
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Net
cash provided by operating activities
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691
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1347
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Cash
flows from investing activities:
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Purchases
of property and equipment
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(73)
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(3)
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Capitalization
of internally developed software
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(398)
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(165)
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Net
cash used in investing activities
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(471)
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(168)
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Cash
flows used in financing activities:
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Repayment
of capital lease obligations
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(11)
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(18)
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Net
increase in cash and cash equivalents
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209
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1161
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Cash
and cash equivalents – beginning
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2,375
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871
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Cash
and cash equivalents – ending
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2,584
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2,032
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Supplemental
disclosure of cash flow information:
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Cash
paid for interest
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$1
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3
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Cash
paid for income taxes
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$--
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$--
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Schedule
of non-cash investing and financing activities:
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Issuance
of common stock in settlement of accrued directors’
fees
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$--
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103
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See
notes to condensed financial statements.
4
PAYBOX CORP
(Formerly Direct Insite Corp.)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 – Nature of Business
Paybox
Corp (“Paybox” or the “Company”) operates
as a Software as a Service provider (“SaaS”), providing
financial supply chain automation and workflow efficiencies within
the Procure-to-Pay and Order-to-Cash processes. Specifically,
Paybox’s global electronic invoice (“e-invoice”)
management services automate complex manual business processes such
as invoice validation, order matching, consolidation, dispute
handling, and e-payment processing in a business-to-business
transaction based “fee for services” business
model.
On
September 26, 2016, the Company changed its name from Direct Insite
Corp. to Paybox Corp to align the corporate name and brand with the
Company’s globally deployed Working Capital Management
Platform, Paybox®.
The
Company’s revenue comes from (i) recurring, on-going services
that are billed monthly; and (ii) non-recurring, professional
services derived from the configuration of the Company’s
software platform.
Throughout the
year, the Company operated redundant data centers in Miami,
Florida, and Amsterdam, Netherlands.
As
described in Note 9, the
Company has four major customers that accounted for 86.4% and 87.7%
of the Company’s revenue for the three months ended September
30, 2016 and 2015, respectively, and 88.4% and 89.7% of the
Company’s revenue for the nine months ended September 30,
2016 and 2015, respectively. Loss of any of these customers would
have a material effect on the Company.
In
November 2015, we were notified by HP Enterprise Services
(“HPE”) that one of its clients, representing
approximately 3.9% and 14.7% of our revenue for the nine months
ended September 30, 2016 and 2015, respectively, was terminating
its contract with HPE effective February 23, 2016. As disclosed in
our Current Report on Form 8-K filed with the SEC on February 19,
2016, despite efforts to negotiate a direct contractual agreement
with this client, the client ultimately decided to terminate its
use of our services, and accordingly, the Company has not recorded
revenue from this client after February 2016. We were further
notified by HPE in August 2016 that another of its clients,
representing 5.8% and 6.3% of our revenue for the nine months ended
September 30, 2016 and 2015, respectively, was terminating its
contract with HPE effective August 15, 2016, and accordingly, the
Company has not recorded revenue from this client after August
2016.
Note 2 - Summary of Significant Accounting Policies
Interim Financial Information
The
accompanying unaudited condensed interim financial statements
include the accounts of Paybox. The condensed balance sheet as of
September 30, 2016, the condensed statements of operations for the
three and nine months ended September 30, 2016 and 2015 and the
condensed statements of cash flows for the nine months ended
September 30, 2016 and 2015 have not been audited. These unaudited
condensed interim financial statements have been prepared in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”) for interim financial
information and with the instructions to quarterly reports on Form
10-Q. Accordingly, they do not include all of the information and
footnotes required by GAAP for complete financial statements. The
December 31, 2015 balance sheet was derived from audited
financial statements, but does not include all disclosures required
by GAAP. These interim condensed financial statements include all
adjustments which management considers necessary for a fair
presentation of the financial statements and consist of normal
recurring items. The results of operations for the three and nine
months ended September 30, 2016, are not necessarily indicative of
results that may be expected for any other interim period or for
the full year.
These
unaudited condensed financial statements should be read in
conjunction with the audited financial statements and notes thereto
for the year ended December 31, 2015 included in the
Company’s annual report on Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on
March 22, 2016.
5
Note 2 - Summary of Significant Accounting Policies
(continued)
Use of Estimates
In
preparing financial statements in conformity with accounting
principles generally accepted in the United States of America,
management makes estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the condensed financial
statements, as well as the reported amounts of revenue and expenses
during the reporting period. Management bases its estimates on
historical experience and on various assumptions that are believed
to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources.
The most significant estimates are used in the accounting related
to stock based compensation, the valuation allowance on deferred
tax assets and capitalized internally developed software. Actual
results could differ from those estimates.
Revenue Recognition
The
Company records revenue in accordance with Accounting Standards
Codification (“ASC”) 605, Revenue Recognition (“ASC
605”), and SEC Staff Accounting Bulletin Topic 13, Revenue Recognition in Financial
Statements. Revenue is recognized when it is both earned and
realizable, that is, when the following criteria are
met:
● persuasive evidence
of arrangements exist;
● delivery has
occurred or services have been rendered;
● the seller’s
price is fixed and determinable; and
● collectability is
reasonably assured.
The
following are the specific revenue recognition policies for each
major category of revenue.
Recurring
(Ongoing Services)
The
Company provides transactional data processing services through its
SaaS software solutions to its customers. The customer is charged a
monthly fixed rate on a per transaction basis or a fixed fee based
on monthly transaction volumes. Revenue is recognized as the
services are provided.
Non-Recurring
(Professional Services)
The
Company provides non-recurring engineering services to its
customers, which may include initial or additional development,
modification, and customization services to the Company’s
software platform. Such services are billed based on: (i) hourly
rates; or (ii) milestone billings. For hourly billed services,
revenue is recognized when work is performed. For milestone billed
services, revenue is recognized when the project milestone has been
accepted by the customer. We do not sell software licenses,
upgrades or enhancements, or post-contract customer
services.
Internally Developed Software
The
Company released the first phase of PAYBOX®, a new version of
its accounts receivable platform in November 2014. It was designed
for a global bank and is available to all Order-to-Cash process
customers. According to ASC 350-40, Intangibles-Goodwill and
Other-Internal-Use Software, the Company is able to capitalize the
costs associated with the application development stage of a
project. The Company started amortizing capitalized costs when the
software was ready for use and placed in service in November 2014.
The capitalized costs are being amortized on a straight-line basis
over the estimated five-year useful life of the software. As
additional functionality is added, costs incurred are capitalized
in accordance with ASC 350-40. Precontract software development
costs are generally charged to operating costs and expenses as
incurred, however, in accordance with professional standards the
Company defers precontract costs when such costs are directly
associated with specific anticipated contracts for which recovery
is probable.
6
Note 2 - Summary of Significant Accounting Policies
(continued)
Income Taxes
The
Company accounts for income taxes using the asset and liability
method. This method requires the determination of deferred tax
assets and liabilities based on the differences between the
financial statement and income tax basis of assets and liabilities,
using enacted tax rates. Additionally, net deferred tax assets are
adjusted by a valuation allowance if, based on the weight of
available evidence, it is more likely than not that some portion or
all of the net deferred tax assets will not be realized. In
addition, the Company expects to provide a valuation allowance on
the remaining future tax benefits until it can sustain a level of
profitability that demonstrates its ability to utilize the
remaining assets, or other significant positive evidence arises
that suggests its ability to utilize the remaining assets. The
future realization of a portion of its reserved deferred tax assets
related to tax benefits associated with the exercise of stock
options, if and when realized, will not result in a tax benefit in
the statement of operations, but rather will result in an increase
in additional paid-in capital. The Company will continue to
re-assess its reserves on deferred income tax assets in future
periods on a quarterly basis.
Earnings Per Share
The
Company displays earnings per share in accordance with ASC 260,
Earnings Per Share
(“ASC 260”). ASC 260 requires dual presentation of
basic and diluted earnings per share (“EPS”). Basic
earnings per share is computed by dividing net income (loss)
attributable to common stockholders by the weighted average number
of common shares outstanding for the period. Diluted earnings per
share include the potential dilution that could occur if securities
or other contracts to issue common stock were exercised or
converted into common stock.
The
computation of diluted weighted average common shares outstanding
used in the calculation of diluted earnings per share for the three
and nine months ended September 30, 2016 and 2015 is as
follows (in thousands):
|
For the three months ended
September 30,
|
For the nine months ended
September 30,
|
||
|
2016
|
2015
|
2016
|
2015
|
Basic weighted
average shares outstanding
|
13,009
|
12,863
|
12,969
|
12,831
|
Stock
Options
|
--
|
6
|
--
|
2
|
Restricted stock
grants
|
--
|
27
|
3
|
21
|
Weighted average
shares outstanding-diluted
|
13,009
|
12,896
|
12,972
|
12,854
|
Securities that
could potentially dilute basic EPS in the future, that were not
included in the computation of diluted EPS because to do so would
have been anti-dilutive for the periods presented, consists of the
following (in thousands):
|
For the three months ended
September 30,
|
For the nine months ended
September 30,
|
||
|
2016
|
2015
|
2016
|
2015
|
Stock
Options
|
480
|
530
|
514
|
596
|
Unvested stock
grants
|
143
|
7
|
139
|
10
|
Potential
anti-dilutive common shares
|
623
|
537
|
653
|
606
|
7
Note 2 - Summary of Significant Accounting Policies
(continued)
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash and accounts receivable.
The Company has cash deposits in excess of the maximum amounts
insured by the Federal Depository Insurance Corporation at
September 30, 2016 and December 31, 2015.
The
Company performs ongoing credit evaluations of its customers’
financial condition and, generally, requires no collateral from its
customers. Concentrations of credit risk with respect to accounts
receivable and revenue are disclosed in Note 9.
Recently Issued and Adopted Accounting Pronouncements
In
March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation:
Improvements to Employee Share-Based Payment Accounting,
which changes how companies account for certain aspects of
share-based payments to employees. The new guidance requires all
income tax effects of awards to be recognized in the income
statement when the awards vest or are settled, allows an employer
to repurchase more of an employee’s shares than previously
allowed for tax withholding purposes without triggering liability
accounting, allows a company to make a policy election to account
for forfeitures as they occur, and eliminates the requirement that
excess tax benefits be realized before companies can recognize
them. The new guidance also requires excess tax benefits and tax
shortfalls to be presented on the cash flow statement as an
operating activity rather than as a financing activity, and
clarifies that cash paid to a tax authority when shares are
withheld to satisfy its statutory income tax withholding obligation
are to be presented as a financing activity. The standard is
effective for financial statements issued for fiscal years
beginning after December 15, 2016, and interim periods within those
fiscal years. Early adoption is permitted. The Company has elected
to adopt this standard early and applied it as of January 1, 2016,
with no significant impact on its financial
statements.
Several
ASUs were issued during March through November 2016 that modified
ASU 2014-09, Revenue from
Contracts with Customers. The Company is currently
evaluating the effect of the new accounting guidance, including
these modifications, on its financial statements or notes
thereto.
Note 3 – Property and Equipment
Property and
equipment (with their respective useful lives) consist of the
following at September 30, 2016 and December 31, 2015 (in
thousands):
|
2016
|
2015
|
Computer equipment
and purchased software (3 years)
|
$1,449
|
$1,378
|
Internally
developed software either placed or not yet placed in service (5
years)
|
1,499
|
1,101
|
Furniture and
fixtures and leasehold improvements (5 – 7
years)
|
161
|
159
|
|
3,109
|
2,638
|
Less: accumulated
depreciation and amortization
|
(1,880)
|
(1,704)
|
Property and
equipment, net
|
$1,229
|
$934
|
Depreciation and
amortization expense related to property and equipment for the
three months ended September 30, 2016 and 2015 was
approximately $56,000 and $64,000, respectively.
Depreciation and
amortization expense related to property and equipment for the nine
months ended September 30, 2016 and 2015 was approximately
$176,000 and $220,000, respectively.
8
Note 4 – Accounts Payable and Accrued Expenses
Accounts payable
and accrued expenses consist of the following at September 30, 2016
and December 31, 2015 (in thousands):
|
2016
|
2015
|
Trade accounts
payable
|
$352
|
$262
|
Sales taxes
payable
|
539
|
539
|
Accrued
directors’ fees
|
402
|
377
|
Other accrued
expenses
|
294
|
290
|
Total accounts
payable and accrued expenses
|
$1,587
|
$1,468
|
Note 5 – Capital Lease Obligations
The
Company had equipment under two capital lease obligations that
expired as of June 2016. The assets and liabilities under capital
leases are recorded at the lower of the present value of the
minimum lease payments or the fair values of the assets. There were
no remaining payments due under these capital leases as of
September 30, 2016.
The
implied interest rates related to these capital leases range from
7.4% to 8.9%. The gross book value and the net book value of the
related assets are approximately $77,000 and $1,000, respectively,
as of September 30, 2016, and $77,000 and $21,000, respectively, as
of December 31, 2015.
Note 6 – Stockholders’ Equity
Preferred Stock
The
Company is authorized to issue 2,000,000 shares of preferred stock,
of which none were issued and outstanding as of September 30, 2016
and December 31, 2015.
Common Stock, Options and Stock Grants
Nine
Months Ended September 30, 2016
During
the nine months ended September 30, 2016, 162,000 restricted common
shares were granted with an aggregate grant date fair value of
approximately $100,000. During the nine months ended September 30,
2016, approximately 121,000 restricted common shares with an
aggregate grant date fair value of approximately $82,000 vested.
During the nine months ended September 30, 2016, the Company
recognized approximately $30,000 of stock based compensation
expense related to the expected vesting of stock
options.
Nine
Months Ended September 30, 2015
During
the nine months ended September 30, 2015, 135,000 restricted common
shares were granted with an aggregate grant date fair value of
approximately $100,000. During this time, approximately 81,000
restricted common shares with an aggregate grant date fair value of
approximately $65,000 vested. During the nine months ended
September 30, 2015, the Company issued 111,602 shares of restricted
common stock pursuant to the Company’s Directors’
Deferred Compensation Plan dated January 1, 2008 (the
“Directors’ Deferred Compensation Plan”). These
shares were issued to settle approximately $103,175 of accrued
directors’ fees to two former directors for past services.
During the nine months ended September 30, 2015, the Company
recognized $92,000 of stock based compensation expense related to
the expected vesting of 124,000 options. Outstanding options vest
over a four-year period, with 25% vesting on the first anniversary
of the grant date and the remaining 75% vesting in equal monthly
amounts through the fourth anniversary of the grant date. In March
2015, 90,000 options were awarded to employees. These options vest
over three years with 33% vesting at the end of each of the three
years. These options expire after a five-year term.
9
Note 6 – Stockholders’ Equity (continued)
Common Stock, Options and Stock Grants (continued)
The
Company estimates the grant date fair value of the stock option
using the Black-Scholes-Merton option model and the following
assumptions: volatility of 90%, risk free rate of 0.89%, dividend
rate of zero, and expected term of 3.75 years. The grant date fair
value of the stock options issued was determined to be
approximately $44,100.
Stock Option Plans
The
Company has granted options under multiple stock-based compensation
plans that do not differ substantially in the characteristics of
the awards. Nonqualified and incentive stock options have been
granted to directors, officers and employees of the Company under
the Company’s stock option plans. Options generally vest over
three to four years and expire five years from the date of the
grant. On June 3, 2014, the Company’s stockholders approved
the adoption of the 2014 Stock Incentive Plan (the “2014
Plan”). The 2014 Plan replaces the 2004 Stock
Option/Stock Issuance Plan which expired on August 20, 2014.
The 2014 Plan provides for the grant of non-qualified stock
options, incentive stock options, and stock appreciation rights,
shares of restricted stock, stock units and shares of unrestricted
stock. Eligible participants include officers, employees and
directors. The aggregate number of shares authorized for
issuance under the 2014 Plan is 1,200,000, and is subject to
adjustment as described in the 2014 Plan. As of
September 30, 2016, 622,808 shares were available for issuance
under the 2014 plan. Awards that expire or are cancelled without
delivery of shares generally become available for issuance under
the plans.
The
following is a summary of stock option activity for nine months
ended September 30, 2016, relating to all of the Company’s
common stock plans:
|
Shares
|
Weighted Average Exercise
|
Weighted AverageRemaining
Contractual Term
|
Aggregate Intrinsic Value
|
|
(in thousands)
|
Price
|
(in years)
|
(in thousands)
|
Outstanding at
January 1, 2016
|
600
|
$1.24
|
2.10
|
$--
|
Expired
|
(20)
|
$1.20
|
--
|
$--
|
Forfeited…………………………
|
(100)
|
$1.65
|
--
|
$--
|
Outstanding at
September 30, 2016
|
480
|
$1.16
|
1.27
|
$--
|
Exercisable at
September 30, 2016
|
395
|
$1.18
|
0.61
|
$--
|
The
following table summarizes stock option information as of September
30, 2016:
|
|
Weighted Average
|
|
|
Number Outstanding
|
Remaining
|
Options Exercisable
|
Exercise Prices
|
(in thousands)
|
Contractual Term
|
(in thousands)
|
$0.90
|
90
|
3.5
years
|
30
|
$1.15
|
310
|
0.4
years
|
310
|
$1.50
|
80
|
2.2
years
|
55
|
Total
|
480
|
1.27
years
|
395
|
As of
September 30, 2016, there was approximately $38,000 of unrecognized
compensation costs related to stock options
outstanding.
10
Note 6 – Stockholders’ Equity (continued)
Restricted Stock Grants
A
summary of the status of the Company’s non-vested stock
grants as of September 30, 2016 and changes during the nine months
then ended is presented below:
Non-Vested Shares
|
Shares
(in thousands)
|
Weighted-Average
Grant Date Fair Value
|
Non-vested at
January 1, 2016
|
78
|
$0.74
|
Granted
|
161
|
$0.62
|
Vested
|
(121)
|
$0.68
|
Non-vested at
September 30, 2016
|
118
|
$0.64
|
The
future expected expense as of September 30, 2016 for non-vested
shares is approximately $75,000 and will be recognized as expense
through December 31, 2017.
Note 7 – Income Taxes
The
Company accounts for income taxes in accordance with ASC 740,
Income Taxes, which
prescribes a recognition threshold and measurement process for
financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. ASC 740 also
provides guidance on de-recognition, classification, interest and
penalties, accounting in interim period, disclosure and transition.
There were no unrecognized tax benefits as of September 30, 2016
and December 31, 2015.
The
Company has identified its federal tax return and its state tax
return in Florida as “major” tax jurisdictions, as
defined in ASC 740. Based on the Company’s evaluation, it has
been concluded that there are no significant uncertain tax
positions requiring recognition in the Company’s financial
statements. The Company’s evaluation was performed for tax
years ended 2011 through 2015, the only periods subject to
examination. The Company believes that its income tax positions and
deductions would be sustained upon audit and does not anticipate
any adjustments that would result in a material change to its
financial position. The Company has elected to classify interest
and penalties incurred on income taxes, if any, as income tax
expense. No interest or penalties on income taxes have been
recorded during the three months ended September 30, 2016 and 2015.
The Company does not expect its unrecognized tax benefit position
to change during the next twelve months.
Management is
currently unaware of any issues under review that could result in
significant payments, accruals or material deviations from its
position.
As of
September 30, 2016, the Company has a federal net operating loss
carryforward (“NOLs”) remaining of approximately $25
million, which may be available to reduce taxable income, if any.
Due to changes in certain state tax laws, the previous state NOL of
$20 million may no longer be utilized by the Company. Remaining
federal net operating loss carry forwards expire from 2019 through
2035. However, Internal Revenue Code Section 382 rules limit the
utilization of NOLs upon a change in control of a company. During
2015, the Company performed an evaluation as to whether a change in
control had taken place. Management believes that there has been no
change in control in accordance with Section 382. However, if it is
determined that an ownership change has taken place, either
historically or in the future, utilization of its NOLs could be
subject to severe limitations, which could eliminate a substantial
portion of the future income tax benefits of the NOLs. The NOL
carryforward as of September 30, 2016 included approximately
$1,195,000 related to windfall tax benefits for which a benefit
would be recorded in additional paid-in capital if and when
realized.
11
Note 8 – Commitment and Contingencies
The
Company had an employment agreement with Matthew E. Oakes, Chief
Executive Officer and Chairman of the Board of Directors, for a
term effective June 1, 2013 through December 31, 2016. On February
20, 2016, Mr. Oakes’ employment agreement was superseded by a
new employment agreement extending the term through December 31,
2017. The agreement provides for a base salary of $24,583 per
month, discretionary and annual incentive bonuses based on the
Company’s performance in achieving prescribed revenue and
earnings before interest and taxes (“EBIT”) targets.
The agreement also provides for reimbursement of all out-of-pocket
expenses reasonably incurred by him in the performance of his
duties hereunder and certain severance benefits in the event of
termination prior to the expiration date. If Mr. Oakes is
terminated without cause or resigns from employment for “good
reason” (as defined within Mr. Oakes’ employment
agreement), he would receive one year of base salary and COBRA
coverage at the Company’s expense. The Company shall continue
to provide corporate lodging to Mr. Oakes through the term of his
agreement.
Note 9 – Major Customers
Four
customers, HP Enterprise Services (“HPE”), inclusive of
its underlying customers, International Business Machines Corp
(“IBM”), Saint Gobain Shared Services Corp.
(“SGSS”), and one other customer, accounted for a
significant portion of the Company’s revenues for the
respective three and nine month periods ended September 30, 2016
and 2015 as follows:
|
For the three months ended
|
For the nine months ended
|
||
|
2016
|
2015
|
2016
|
2015
|
HPE Customer
A
|
--%
|
15.7%
|
3.9%
|
14.7%
|
HPE Customer
B
|
14.0
|
11.7
|
13.6
|
11.8
|
HPE Customer
C
|
3.0
|
6.6
|
5.8
|
6.3
|
Total
HP
|
17.0%
|
34.0%
|
23.3%
|
32.8%
|
IBM
|
43.9
|
36.4
|
41.3
|
37.8
|
SGSS
|
10.8
|
7.8
|
10.3
|
7.3
|
Other Major
Customer
|
14.7
|
9.5
|
13.5
|
10.0
|
Total Major
Customers
|
86.4%
|
87.7%
|
88.4%
|
89.7%
|
Others
|
13.6
|
12.3
|
11.6
|
12.1
|
Total
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Three
customers accounted for a significant portion of the
Company’s accounts receivable as follows as of the following
dates (in thousands):
|
September 30, 2016
|
December 31, 2015
|
HPE
|
$274
|
$389
|
IBM
|
466
|
467
|
One Other Major
Customer
|
237
|
224
|
Total
|
$977
|
$1,080
|
Note 10 – Subsequent Events
The
Company evaluates events that have occurred after the balance sheet
date but before the financial statements are issued. Based upon the
evaluation, the Company did not identify any recognized or
non-recognized subsequent events that would have required
adjustment or disclosure in the condensed financial
statements.
12
Item
2. Management’s Discussion and Analysis of
Financial Condition and Results of Operations
FORWARD LOOKING STATEMENTS
All
statements other than statements of historical fact included in
this Form 10-Q including, without limitation, statements under,
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” regarding our financial
position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements.
When used in this Form 10-Q, words such as
“anticipate”, “believe”,
“estimate”, “expect”, “intend”
and similar expressions, as such words or expressions relate to us
or our management, identify forward-looking statements. Such
forward-looking statements are based on the beliefs of management,
as well as assumptions made by, and information currently available
to, our management. Actual results could differ materially from
those contemplated by the forward-looking statements as a result of
certain factors including but not limited to, fluctuations in
future operating results, technological changes or difficulties,
management of future growth, expansion of international operations,
current economic conditions, the risk of errors or failures in our
software products, dependence on proprietary technology,
competitive factors, risks associated with potential acquisitions,
the ability to recruit personnel, and dependence on key personnel.
Such statements reflect the current views of management with
respect to future events and are subject to these and other risks,
uncertainties and assumptions relating to the
operations, results of operations, growth strategy and liquidity.
All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly
qualified in their entirety by this paragraph.
OVERVIEW
The
Company was incorporated under the laws of the State of Delaware on
August 27, 1987. We consummated our initial public offering in
1992. In May 1990, we changed our name to Computer Concepts, Inc.,
in August 2000, we changed our name to Direct Insite Corp., and in
September 2016, we changed our name to Paybox Corp
(“Paybox”).
Paybox
operates as a SaaS, providing best practice financial supply chain
automation and workflow efficiencies within the Order-to-Cash and
Procure-to-Pay processes. Specifically, Paybox’s global
e-invoice management services automate complex manual business
processes such as invoice validation, order matching,
consolidation, dispute handling, and e-payment processing in a
business-to-business transaction based “fee for
services” business model.
Through
the automation and workflow of Order-to-Cash and Procure-to-Pay
processes and the presentation of invoices, orders, and attachment
data via a self-service portal, Paybox is helping our customers
reduce manual invoice-to-order reconciliation costs, reduce the
frequency of inquiries and disputes, improve cash flow, increase
competitiveness and improve customer satisfaction.
Paybox
is currently delivering service and business value across the
Americas, Europe, and Asia, including more than 100 countries, in
17 languages and multiple currencies. Paybox processes more than
$160 billion in invoice value annually on behalf of our clients.
Paybox processes, distributes and hosts millions of invoices,
purchase orders, and supporting attachment documents, making them
accessible on-line with an internet self-service portal. Suppliers,
customers, and internal departments, such as Finance and Accounting
or Customer Service users, can easily access their business
documents.
Our
revenue comes from (i) recurring, on-going services that are billed
monthly; and (ii) non-recurring, professional services derived from
the configuration of our software platform.
HP
Enterprise Services (“HPE”) accounted for approximately
17.0% and 34.0% of revenue for the three months ended September 30,
2016 and 2015, respectively, and approximately 23.3% and 32.8% of
revenue for the nine months ended September 30, 2016 and 2015,
respectively. As of December 31, 2015, we had three principal
contracts with HPE providing e-invoice services. These contracts
have terms ranging from one to five years. The contracts may be
terminated by either party with ninety days’ advance written
notice. In November 2015, we were notified by HPE that one of its
clients, representing approximately 3.9% and 14.7% of our revenue
for the nine months ended September 30, 2016 and 2015, respectively
was terminating its contract with HPE effective February 23, 2016.
As disclosed in our Current Report on Form 8-K filed with the SEC
on February 19, 2016, despite efforts to negotiate a direct
contractual agreement with this client, the client ultimately
decided to terminate its use of our services, and accordingly, the
Company has not recorded revenue from this client after February
2016. We were further notified by HPE in August 2016 that another
of its clients, representing 5.8% and 6.3% of our revenue for the
nine months ended September 30, 2016 and 2015, respectively, was
terminating its contract with HPE effective August 15, 2016, and
accordingly, the Company has not recorded revenue from this client
after August 2016.
13
International
Business Machines, Inc. (“IBM”), representing
approximately 43.9% and 36.4%, of revenue for the three months
ended September 30, 2016 and 2015, respectively, and approximately
41.3% and 37.8%, of revenue for the nine months ended September 30,
2016 and 2015, respectively, utilizes our suite of services to
allow its customers from around the globe to receive, analyze,
dispute and cost allocate all of their invoice data in their local
language and currency via the internet. We have two principal
contracts with IBM to provide e-invoice services for substantially
all of IBM’s operating units. On October 28, 2013, one of
these contracts was extended for a three-year period, through
December 31, 2016, and is renewable annually thereafter. The other
contract was renewed through December 31, 2016, and is renewable
annually thereafter. The contracts may be terminated by either
party with ninety days advance written notice.
RECENT DEVELOPMENTS
On
September 26, 2016, the Company, pursuant to a certificate of
amendment to the Company’s certificate of incorporation filed
with the Secretary of State of the State of Delaware, changed the
Company’s corporate name from Direct Insite Corp. to Paybox
Corp to align the corporate name and brand with the Company’s
globally deployed Working Capital Management Platform,
Paybox®.
SEASONALITY / QUANTITY FLUCTUATIONS
Revenue
from SaaS ongoing services generally is not subject to fluctuations
or seasonal flows. However, we believe that revenue derived from
custom engineering services will have a significant tendency to
fluctuate based on customer demand.
Other
factors, including, but not limited to, new service introductions,
domestic and global economic conditions, customer budgetary
considerations, and the timing of service upgrades may create
fluctuations. As a result of the foregoing factors, our operating
results for any quarter are not necessarily indicative of results
for any future period.
14
RESULTS OF OPERATIONS
Three Months Ended September 30, 2016 Compared to the Three Months
Ended September 30, 2015
The
following is a summary of operating results for the three months
ended September 30, 2016 and 2015 (in thousands):
|
2016
|
2015
|
Increase
(Decrease)
|
|
Revenues:
|
|
|
|
|
Recurring
|
$1,272
|
$1,683
|
$(411)
|
(24.4)%
|
Non-recurring
|
336
|
241
|
95
|
39.4%
|
Total
revenues
|
1,608
|
1,924
|
(316)
|
(16.4)%
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
Operations,
research and development
|
663
|
771
|
(108)
|
(14.0)%
|
General and
administrative
|
481
|
566
|
(85)
|
(15.0)%
|
Sales and
marketing
|
399
|
337
|
62
|
18.4%
|
Amortization and
depreciation
|
56
|
64
|
(8)
|
(12.5)%
|
Total operating
costs and expenses
|
1,599
|
1,738
|
(139)
|
(8.0)%
|
|
|
|
|
|
Operating
income
|
9
|
186
|
(177)
|
(95.2)%
|
|
|
|
|
|
Other expense,
net
|
1
|
--
|
1
|
0%
|
Provision for
Income Tax
|
1
|
24
|
(23)
|
(95.8)%
|
Net
income
|
$7
|
$162
|
$(155)
|
(95.7)%
|
Revenues
For the three months ended September 30, 2016,
total revenue decreased by $316,000, or 16.4%, to $1,608,000 from
$1,924,000 for the comparable prior year
period. Recurring revenue decreased by $411,000, or
24.4%, to $1,272,000 for the three months ended September
30, 2016, from $1,683,000 for the
comparable prior year period, primarily due to the
previously noted loss of the HPE clients in February and August
2016. Non-recurring revenue increased
by $95,000, or 39.4%, to $336,000 for the three months ended
September 30, 2016, due to higher
customer requested modifications and
enhancements.
Operating Costs and Expenses
Costs
of operations, research and development decreased by approximately
$108,000, or 14.0%, to $663,000 for the three months ended
September 30, 2016 from $771,000 for the comparable prior year
period. These costs consist principally of salaries and related
expenses for software development, programming, custom engineering,
network services, and quality control and
assurance. Also included are costs for purchased
services, network costs, costs of the production co-location
facilities and other expenses directly related to our custom
engineering and SaaS services. The decrease was
primarily due to a headcount-related reduction in compensation
expense and lower cloud license fees, partially offset by higher
scanning charges.
General
and administrative costs decreased by approximately $85,000, or
15.0%, to $481,000 for the three months ended September 30, 2016
from $566,000 for the comparable prior year period, primarily due
to a decrease in salary expense and legal fees.
Sales
and marketing costs increased by approximately $62,000, or 18.4%,
to $399,000 for the three months ended September 30, 2016 from
$337,000 for the comparable prior year period, due to higher
compensation and trade show expenses, partially offset by lower
professional fees.
Amortization and
depreciation decreased by approximately $8,000, or
12.5%, to $56,000 for the three months
ended September 30, 2016 from $64,000 for the comparable prior year
period, as the amortization of internally developed software
costs were offset by existing assets that became fully depreciated
during the interim period.
15
Operating Income
We had
operating income of $9,000 for the three months ended September
30, 2016, compared to operating income of $186,000 for the
comparable prior year period, due to the aforementioned decrease in
revenue offset by the lower expenses.
Other Expense, net
Other
expense for the quarter was $1,000, compared $0 in the comparable
prior year period.
Provision for Income Taxes
We
recorded a Florida income tax provision of $24,000 during the third
quarter of 2015 and $1,000 during the third quarter of
2016.
Net Income
Net
income decreased by approximately $155,000, to $7,000, for the
three months ended September 30, 2016, compared to net
income of $162,000 for the comparable prior year period, due to the
decrease in operating income, partially offset by a reduction
in the income tax provision.
Nine Months Ended September 30, 2016 Compared to the Nine Months
Ended September 30, 2015
The
following is a summary of operating results for the nine months
ended September 30, 2016 and 2015 (in thousands):
|
2016
|
2015
|
Increase
(Decrease)
|
|
Revenues:
|
|
|
|
|
Recurring
|
$4,078
|
$5,086
|
$(1,008)
|
(19.8)%
|
Non-recurring
|
967
|
963
|
4
|
0.0%
|
Total
revenues
|
5,045
|
6,049
|
(1,004)
|
(16.6)%
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
Operations,
research and development
|
2,010
|
2,582
|
(572)
|
(22.2)%
|
General and
administrative
|
1,640
|
1,752
|
(112)
|
(6.4)%
|
Sales and
marketing
|
1,073
|
1,117
|
(44)
|
(3.9)%
|
Amortization and
depreciation
|
176
|
220
|
(44)
|
(20.0)%
|
Total operating
costs and expenses
|
4,899
|
5,671
|
(772)
|
(13.4)%
|
|
|
|
|
|
Operating
income
|
146
|
378
|
(232)
|
(61.4)%
|
|
|
|
|
|
Other expense,
net
|
1
|
2
|
1
|
50.0%
|
Provision for
Income Tax
|
1
|
24
|
(23)
|
(95.8)%
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$144
|
$352
|
$(208)
|
(59.1)%
|
Revenues
For the nine months ended September 30, 2016,
total revenue decreased by $1,004,000, or 16.6%, to $5,045,000 from
$6,049,000 for the comparable prior year
period. Recurring revenue decreased by $1,008,000, or
19.8%, to $4,078,000 for the nine months ended September 30, 2016,
from $5,086,000 for the comparable prior year period. This was
primarily due to the previously noted loss of the HPE
clients in February and August 2016. Non-recurring revenue increased by $4,000, to
$967,000 for the nine months ended September 30, 2016 from $963,000
for the comparable prior year period.
16
Operating Costs and Expenses
Costs
of operations, research, and development decreased by approximately
$572,000, or 22.2%, to $2,010,000 for the nine months ended
September 30, 2016 from $2,582,000 for the comparable prior year
period. These costs consist principally of salaries and related
expenses for software development, programming, custom engineering,
network services, and quality control and
assurance. Also included are costs for purchased
services, network costs, costs of the production co-location
facilities and other expenses directly related to our custom
engineering and SaaS services. The lower expense
reflects a $438,000 headcount-related decrease in compensation
expense and lower cloud license fees.
General
and administrative costs decreased by approximately $112,000, or
6.4%, to $1,640,000 for the nine months ended September 30, 2016
from $1,752,000 for the comparable prior year period, due to lower
compensation-related costs and legal and professional
fees.
Sales
and marketing costs decreased by approximately $44,000, or 3.9%, to
$1,073,000 for the nine months ended September 30, 2016 from
$1,117,000 for the comparable prior year period, due to lower
consulting and professional fees.
Amortization and
depreciation decreased by approximately $44,000, or
20.0%, to $176,000 for the nine months
ended September 30, 2016 from $220,000 for the comparable prior
year period as the amortization of internally developed
software costs were offset by existing assets that became fully
depreciated during the interim period.
Operating
Income
Operating income
decreased by approximately $232,000 to $146,000 for the nine months
ended September 30, 2016, compared to operating income of
$378,000 for the comparable prior year period, due to the
aforementioned decrease in revenue, partially offset by the
decrease in operating costs and expenses.
Other Expense, net
Other
expense decreased to $1,000 for the nine months ended September 30,
2016 from $2,000 for the comparable prior year period.
Provision for Income Tax
We
recorded a Florida income tax provision of $24,000 during the third
quarter of 2015. This provision decreased by $23,000 to $1,000 due
to the reduction in income.
Net Income
We had
net income of $144,000 for the nine months ended September 30,
2016, a decrease of approximately $208,000, or 59.1%, from net
income of $352,000 for the comparable prior year period, due to the
aforementioned decrease in operating income.
FINANCIAL CONDITION AND LIQUIDITY
As of
September 30, 2016, we had total stockholders’ equity of
approximately $5,340,000, working capital of $2,696,000 and an
accumulated deficit of $110,923,000. Our cash increased by $209,000
during the nine months ended September 30, 2016, to $2,584,000 of
cash on hand as of September 30, 2016, with a corresponding
decrease in trade accounts receivable.
Our
primary sources for liquidity come from existing cash on hand and
cash generated from operations. We believe we have sufficient
liquidity available to fund our operations for the next twelve
months.
During
the nine months ended September 30, 2016, net cash provided by
operations was $691,000, compared to cash provided by operating
activities of $1,347,000 for the comparable prior year period. The
decrease in cash provided from operations is primarily due to lower
net income, the timing of payments from our customers and the
timing of payments to our vendors.
17
Cash
used in investing activities totaled $471,000 and $168,000 for the
nine months ended September 30, 2016 and 2015, respectively, with
both periods reflecting the capitalization of internally developed
software and purchase of hardware.
Cash
used in financing activities totaled $11,000 and $18,000 for the
nine months ended September 30, 2016 and 2015, respectively,
reflecting payments on equipment
notes and capital leases, primarily using cash provided by
operations.
OUR CRITICAL ACCOUNTING POLICIES
Our
critical accounting policies are described in the audited financial
statements and notes thereto for the year ended December 31, 2015,
included in the Company’s Annual Report on Form 10-K filed
with the SEC on March 22, 2016.
OFF-BALANCE SHEET ARRANGEMENTS
The
Company has no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on its
financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors.
Item
3. Quantitative and Qualitative Disclosure About
Market Risk
Not
applicable.
Item
4. Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As
of the end of the period covered by this report, we conducted an
evaluation, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer, of our
disclosure controls and procedures (as defined in Rule 13a-15(e)
and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation
our Chief Executive Officer and Chief Financial Officer concluded
that, at September 30, 2016, our disclosure controls and procedures
were effective.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There
have been no changes in our internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act)
during the most recent fiscal quarter ended September 30, 2016 that
has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
18
PART
II Other Information
Item
1. Legal Proceedings
We
are not currently involved in any legal or regulatory proceeding,
or arbitration, the outcome of which is expected to have a material
adverse effect on our business, and no such proceedings are known
to be contemplated.
Item
1A. Risk Factors
Not
required.
Item
2. Unregistered Sale of Equity Securities and Use
of Proceeds
Pursuant
to the terms of the Company’s director compensation plan,
each non-officer director of the Company was entitled to receive an
award on January 1, 2016 of restricted shares of common stock
vesting daily over two years, as follows: James A. Cannavino, Paul
Lisiak, Thomas C. Lund, and John J. Murabito, each 40,453
shares. These directors elected to defer receipt of the
shares until January 15th of the year following such
director’s termination of services as director.
On
March 31, 2016, pursuant to the terms of the director compensation
plan, each of Mr. Cannavino, Mr. Lund, and Mr. Murabito were
granted 3,731 shares. These directors elected to defer
receipt of the shares until January 15th of the year following such
director’s termination of services as director.
On June 30, 2016, pursuant to the terms of the
director compensation plan, each of Mr. Cannavino, Mr. Lund and Mr.
Murabito were granted 3,765 shares of restricted stock. The
directors who received grants elected to defer receipt of shares
until January 15th
of the year following such
director’s termination of services as a
director.
On September 30, 2016, pursuant to the terms of
the director compensation plan, each of Mr. Cannavino, Mr. Lund and
Mr. Murabito were granted 5,787 shares of restricted stock. The
directors who received grants elected to defer receipt of shares
until January 15th
of the year following such
director’s termination of services as a
director.
These
awards were made in reliance on Section 4(a)(2) under the
Securities Act of 1933, as amended and/or the “no-sale”
theory.
For
additional information, reference is made to Note 6 of the
Condensed Financial Statements.
Item
3. Defaults upon Senior Securities
None.
Item
4. Mine Safety Disclosures
Not
applicable.
Item
5. Other Information
None.
19
Item
6. Exhibits
Exhibit
Number
|
|
Description
|
|
|
|
10.1
|
|
Employment
Agreement, effective January 1, 2016 by and between Paybox Corp and
Matthew E. Oakes (Incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed February 24,
2016).
|
|
|
|
|
Certification
pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 – Chief Executive
Officer.
|
|
|
|
|
|
Certification
pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities
Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 – Chief Financial
Officer.
|
|
|
|
|
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 – Chief Executive
Officer.
|
|
|
|
|
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 – Chief Financial
Officer.
|
|
|
|
|
101
|
|
The following
materials from Paybox’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2016 formatted in XBRL (eXtensible
Business Reporting Language): (i) Condensed Balance Sheets as of
September 30, 2016 (Unaudited) and December 31, 2015, (ii)
Condensed Statements of Income for the Three and Nine Months Ended
September 30, 2016 and 2015 (Unaudited), (iii) Condensed Statements
of Cash Flows for the Nine Months Ended September 30, 2016 and 2015
(Unaudited), (iv) and Notes to Condensed Financial Statements
(Unaudited).
|
20
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
PAYBOX CORP |
|
|
|
|
|
|
Date: November 10,
2016
|
By:
|
/s/
Matthew
E. Oakes
|
|
|
|
Matthew E.
Oakes
|
|
|
|
Chairman and Chief
Executive
Officer |
|
|
|
|
|
|
By: |
/s/ Lowell M.
Rush |
|
|
|
Lowell M.
Rush |
|
|
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
21