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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 16. SEGMENT INFORMATION

Prior to the fourth quarter of 2017, we had three reportable business segments: (i) North American Transaction Solutions, (ii) Mobile Solutions and (iii) Online Solutions. Management determines the reportable segments based on the internal reporting used by our Chief Operating Decision Maker, who is our Chief Executive Officer, to evaluate performance and to assess where to allocate resources.

Factors management used to identify the entity’s reportable segments. The increase growth in our North American Transactions Solutions segment and the consolidation of our mobile solutions business with our online solutions business has changed how management evaluates performance and allocates resources. We now have two reportable business segments (i) North American Transaction Solutions and (ii) International Transaction Solutions.

The Company’s reportable segments are business units that offer different products and services in different geographies. The reportable segments are each managed separately because they offer distinct products, in distinct geographic locations, with different delivery and service processes.

North American Transaction Solutions

Our North American Transaction Solutions business segment consists of the former Unified Payments business and Aptito. This segment operates primarily in North America. In March 2013, we acquired all of the business assets of Unified Payments, a provider of comprehensive turnkey, payment processing solutions to small and medium size business owners (merchants) and independent sales organizations across the United States.

In April 2013, we purchased 80% of Aptito, a cloud-based Software-as-a-Service (“SaaS”) restaurant management solution, which provides integrated POS, mPOS, Kiosk, Digital Menus functionality to drive consumer engagement via Apple® iPad®-based POS, kiosk and all other cloud-connected devices.

International Transaction Solutions

Our International Transaction Solutions segment consists of PayOnline and our mobile payments business provided by PayOnline, which operate primarily in Russia.

PayOnline provides a protected payment processing system to accept bank card payments for goods and services.

In June 2012, we formed our subsidiary, OOO TOT Money to develop a business in mobile commerce payment processing. TOT Money launched its initial operations in Russia as a payment facilitator using SMS (short message services, which is a text messaging service) and MMS (multimedia message services) for mobile phone subscribers in Russia. During 2015, we changed or business model, rebranded our name to Digital Provider, and began to offer branded content to subscribers. During 2017, the Digital Provider operations were consolidated into PayOnline and we continue to seek monetization of our mobile operator contracts through a joint venture or other arrangement.

Segment Summary Information

The following tables present financial information of the Company’s reportable segments at and for the three months ended March 31, 2018 and 2017. The “corporate and eliminations” column includes all corporate expenses and intercompany eliminations for consolidated purposes.

Three months Ended March 31, 2018		North American Transaction Solutions				International Transaction Solutions				Corp Exp & Elims				Total
Net revenues		$	13,966,617			$	2,015,777			$	—			$	15,982,394
Cost of revenues			12,064,072				1,554,262				—				13,618,334
Gross Margin			1,902,545				461,515				—				2,364,060
Gross margin %			14	%			23	%			—				15	%
General, administrative, and asset disposal			689,151				581,050				1,176,279				2,446,480
Non-cash compensation			—				—				82,011				82,011
Provision (recovery) for bad debt			121,274				—				—				121,274
Depreciation and amortization			447,086				256,452				—				703,538
Interest expense (income), net			243,238				(7,692	)			7,692				243,238
Other expenses (income)			—				54,147				296,666				350,813
Net (loss) income for segment			401,796				(422,442	)			(1,562,648	)			(1,583,294	)
Segment assets			25,436,796				3,777,484				48,718				29,262,998

Three Months Ended March 31, 2017		North American Transaction Solutions				International Transaction Solutions				Corp Exp & Elims				Total
Net revenues		$	10,964,919			$	2,597,022			$	—			$	13,561,941
Cost of revenues			9,461,450				1,998,542				—				11,459,992
Gross Margin			1,503,469				598,480				—				2,101,949
Gross margin %			14	%			23	%			—				15	%
General, administrative, and asset disposal			751,235				827,750				1,252,176				2,831,161
Non-cash compensation			—				—				596,404				596,404
Provision for bad debt			276,324				2,234				1,200				279,758
Depreciation and amortization			358,756				298,607				—				657,363
Interest expense (income), net			175,180				(7,783	)			102,291				269,688
Other expenses (income)			—				5,774				—				5,774
Net (loss) income for segment		$	(58,026	)		$	(528,102	)		$	(1,952,071	)			(2,538,199	)
Segment assets			14,170,749				8,603,008				211,015				22,984,772