Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Jan. 31, 2014 | Mar. 05, 2014 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'MAJESCO ENTERTAINMENT CO | ' |
Entity Central Index Key | '0001076682 | ' |
Current Fiscal Year End Date | '--10-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'COOL | ' |
Entity Common Stock, Shares Outstanding | ' | 46,459,764 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Jan-14 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $12,349 | $13,385 |
Due from factor, net | 1,597 | 2,134 |
Accounts and other receivables | 1,485 | 1,169 |
Inventory | 3,003 | 4,859 |
Advance payments for inventory | 160 | 1,064 |
Capitalized software development costs and license fees | 2,121 | 7,825 |
Prepaid expenses and other current assets | 248 | 2,827 |
Total current assets | 20,963 | 33,263 |
Property and equipment, net | 1,025 | 817 |
Investment in GMS Entertainment Limited | 3,316 | 3,500 |
Other assets | 69 | 69 |
Total assets | 25,373 | 37,649 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 9,369 | 8,994 |
Inventory financing | 0 | 1,764 |
Advances from customers and deferred revenue | 30 | 6,838 |
Total current liabilities | 9,399 | 17,596 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock - $.001 par value; 250,000,000 shares authorized; 46,374,302 and 46,295,969 shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively | 46 | 46 |
Additional paid-in capital | 124,521 | 124,148 |
Accumulated deficit | -108,042 | -103,530 |
Accumulated other comprehensive loss | -551 | -611 |
Net stockholders' equity | 15,974 | 20,053 |
Total liabilities and stockholders' equity | $25,373 | $37,649 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 46,374,302 | 46,295,969 |
Common stock, shares outstanding | 46,374,302 | 46,295,969 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Net revenues | $21,934 | $23,472 |
Cost of sales | ' | ' |
Product costs | 7,542 | 8,414 |
Software development costs and license fees | 11,003 | 7,906 |
Total cost of sales | 18,545 | 16,320 |
Gross profit | 3,389 | 7,152 |
Operating costs and expenses | ' | ' |
Product research and development | 1,246 | 2,082 |
Selling and marketing | 4,056 | 3,729 |
General and administrative | 2,107 | 2,251 |
Workforce reduction | 0 | 776 |
Loss on impairment of capitalized software development costs and license fees - cancelled games | 0 | 175 |
Depreciation and amortization | 81 | 111 |
Total operating costs and expenses | 7,490 | 9,124 |
Operating loss | -4,101 | -1,972 |
Other expenses (income) | ' | ' |
Interest and financing costs | 162 | 183 |
Loss from equity method investment | 247 | 0 |
Change in fair value of warrant liability | 0 | -17 |
Loss before income taxes | -4,510 | -2,138 |
Income taxes | 2 | 3 |
Net loss | ($4,512) | ($2,141) |
Net loss per share: | ' | ' |
Basic (in dollars per share) | ($0.10) | ($0.05) |
Diluted (in dollars per share) | ($0.10) | ($0.05) |
Weighted average shares outstanding: | ' | ' |
Basic (in shares) | 44,695,611 | 40,482,898 |
Diluted (in shares) | 44,695,611 | 40,482,898 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Net loss | ($4,512) | ($2,141) |
Other comprehensive (loss) income | ' | ' |
Foreign currency translation adjustments | 60 | -47 |
Other comprehensive (loss) income | 60 | -47 |
Comprehensive loss | ($4,452) | ($2,188) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($4,512) | ($2,141) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 81 | 111 |
Loss from equity method investment | 247 | 0 |
Non-cash compensation expense | 373 | 280 |
Provision for price protection | 2,722 | 763 |
Amortization of capitalized software development costs and license fees | 7,226 | 2,336 |
Loss on impairment of capitalized software development costs and license fees | 0 | 175 |
Provision for excess inventory | 28 | 229 |
Change in fair value of warrant liability | 0 | -17 |
Changes in operating assets and liabilities: | ' | ' |
Due from factor | -2,185 | 7,054 |
Accounts and other receivables | -316 | 1,912 |
Inventory | 1,828 | 4,226 |
Capitalized software development costs and license fees | -1,522 | -2,855 |
Advance payments for inventory | 904 | 15 |
Prepaid expenses and other assets | 2,579 | 1,311 |
Accounts payable and accrued expenses | 378 | -204 |
Advances from customers and deferred revenue | -6,808 | -4,402 |
Net cash provided by operating activities | 1,023 | 8,793 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchases of property and equipment | -289 | -26 |
Net cash used in investing activities | -289 | -26 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Repayment of inventory financing | -1,767 | 0 |
Net cash used in financing activities | -1,767 | 0 |
Effect of exchange rates on cash and cash equivalents | -3 | -42 |
Net (decrease) increase in cash and cash equivalents | -1,036 | 8,725 |
Cash and cash equivalents - beginning of period | 13,385 | 18,038 |
Cash and cash equivalents - end of period | 12,349 | 26,763 |
SUPPLEMENTAL CASH FLOW INFORMATION | ' | ' |
Cash paid during the period for interest and financing costs | 137 | 144 |
Cash paid during the period for income taxes | $0 | $0 |
PRINCIPAL_BUSINESS_ACTIVITY_AN
PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION | 3 Months Ended | |||||||||||
Jan. 31, 2014 | ||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||||||
Organization, Consolidation and Presentation Of Financial Statements Disclosure [Text Block] | ' | |||||||||||
1. PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION | ||||||||||||
The accompanying financial statements present the financial results of Majesco Entertainment Company and Majesco Europe Limited, its wholly owned subsidiary, (“Majesco” or “the Company”) on a consolidated basis. | ||||||||||||
The Company is a provider of video game products primarily for the mass-market consumer. It sells its products primarily to large retail chains, specialty retail stores, and distributors. It publishes video games for major current generation interactive entertainment hardware platforms, including Nintendo’s DS, 3DS, Wii and WiiU, Sony’s PlayStation 3, or PS3, and PlayStation Portable, or PSP®, Microsoft’s Xbox 360 and Xbox One and the personal computer, or PC. It also publishes games for digital platforms, including mobile platforms like the iPhone, iPad and Android devices, as well as online sites such as Facebook and Steam. | ||||||||||||
The Company’s video game titles are targeted at various demographics at a range of price points. Due to the larger budget requirements for developing and marketing premium console titles for core gamers, it focuses on publishing more casual games targeting mass-market consumers. In some instances, its titles are based on licenses of well-known properties and, in other cases based on original properties. The Company enters into agreements with content providers and video game development studios for the creation of its video games. | ||||||||||||
The Company’s operations involve similar products and customers worldwide. These products are developed and sold domestically and internationally. The Company may also enter into agreements with licensees, particularly for sales of its products internationally. The Company is centrally managed and its chief operating decision makers, the chief executive and other officers, use consolidated and other financial information supplemented by sales information by product category, major product title and platform for making operational decisions and assessing financial performance. Accordingly, the Company operates in a single reportable segment. In fiscal 2013, the Company acquired an interest in GMS Entertainment Limited, which is focused on the development and operation of real money online games, social casinos and lottery systems (See Note 18). | ||||||||||||
Geographic regions. Net revenues by geographic region were as follows: | ||||||||||||
Three months ended January 31, | ||||||||||||
2014 | % | 2013 | % | |||||||||
United States | $ | 18,937 | 86 | $ | 17,328 | 74 | ||||||
Europe | 2,997 | 14 | 6,144 | 26 | ||||||||
Total net revenues | $ | 21,934 | 100 | $ | 23,472 | 100 | ||||||
The accompanying interim condensed consolidated financial statements of the Company are unaudited, but in the opinion of management, reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim period. Accordingly, they do not include all information and notes required by generally accepted accounting principles for complete financial statements. The Company’s financial results are impacted by the seasonality of the retail selling season and the timing of the release of new titles. The results of operations for interim periods are not necessarily indicative of results to be expected for the entire fiscal year. The balance sheet at October 31, 2013 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended October 31, 2013 filed with the Securities and Exchange Commission on Form 10-K on January 14, 2014. | ||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary located in the United Kingdom. Significant intercompany accounts and transactions have been eliminated in consolidation. The Company has 50% of the voting control of GMS Entertainment Limited (GMS) and the right to appoint one-half of the directors of GMS. All business activities and transactions that significantly impact GMS must be approved by both equity owners. Accordingly, the Company accounts for GMS on the equity method as a corporate joint venture. | |
Revenue Recognition. The Company recognizes revenue upon the shipment of its products when: (1) title and the risks and rewards of ownership are transferred; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable. Certain products are sold to customers with a street date (the earliest date these products may be resold by retailers). Revenue for sales of these products is not recognized prior to their street date. Some of the Company’s software products provide limited online features at no additional cost to the consumer. Generally, such features have been considered to be incidental to the Company’s overall product offerings and an inconsequential deliverable. Accordingly, the Company does not defer any revenue related to products containing these limited online features. However, in instances where online features or additional functionality is considered a substantive deliverable in addition to the software product, such characteristics will be taken into account when applying the Company’s revenue recognition policy. | |
The Company generally sells its products on a no-return basis, although in certain instances, the Company provides price protection or other allowances on certain unsold products. Price protection, when granted and applicable, allows customers a partial credit against amounts they owe the Company with respect to merchandise unsold by them. Revenue is recognized, and accounts receivable is presented, net of estimates of these allowances. | |
The Company estimates potential future product price protection and other allowances related to current period product revenue. The Company analyzes historical experience, current sell through of retailer inventory of the Company’s products, current trends in the video game market, the overall economy, changes in customer demand and acceptance of the Company’s products and other related factors when evaluating the adequacy of price protection and other allowances. | |
Sales incentives or other consideration given by the Company to customers that are considered adjustments of the selling price of its products, such as rebates and product placement fees, are reflected as reductions of revenue. Sales incentives and other consideration that represent costs incurred by the Company for benefits received, such as the appearance of the Company’s products in a customer’s national circular ad, are reflected as selling and marketing expenses, in accordance with Accounting Standards Codification (“ASC”) 605-50, Customer Payments and Incentives. | |
In addition, some of the Company’s software products are sold exclusively as downloads of digital content for which the consumer takes possession of the digital content for a fee. Revenue from product downloads is generally recognized when the download is made available (assuming all other recognition criteria are met). | |
When the Company operates hosted online games in which players can play for free and purchase virtual goods for use in the games, it recognizes revenues from the sale of virtual goods as service revenues over the estimated period in which players use the game. It currently estimates these periods of use to be three to four months. The Company periodically assesses its estimates for this period of use and future increases or decreases in these estimates and adjusts recognized revenues prospectively. The Company also recognizes advertising revenue as ads are served. The Company has not earned significant revenue to date related to its online games. | |
The Company records revenue for distribution agreements where it is acting as an agent as defined by ASC Topic 605, Revenue Recognition, Subtopic 45, Principal Agent Considerations, on a net basis. When the Company enters into license or distribution agreements that provide for multiple copies of games in exchange for guaranteed amounts, revenue is recognized in accordance with the terms of the agreements, generally upon delivery of a master copy, assuming our performance obligations are complete and all other recognition criteria are met, or as per-copy royalties are earned on sales of games. | |
In certain instances, customers and distributors provide the Company with cash advances on their orders. These advances are then applied against future sales to these customers. Advances are classified as advances from customers and deferred revenue in the accompanying balance sheets. | |
Inventory. Inventory is stated at the lower of cost as determined by the first-in, first-out method, or market. The Company estimates the net realizable value of slow-moving inventory on a title-by-title basis and charges the excess of cost over net realizable value to cost of sales. Such estimates may change and additional charges may be incurred until the related inventory items are sold. | |
Capitalized Software Development Costs and License Fees. Software development costs include fees in the form of milestone payments made to independent software developers and licensors. Software development costs are capitalized once technological feasibility of a product is established and management expects such costs to be recoverable against future revenues. For products where proven game engine technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a product-by-product basis. Amounts related to software development that are not capitalized are charged immediately to product research and development costs. Commencing upon a related product’s release capitalized costs are amortized to cost of sales based upon the higher of (i) the ratio of current revenue to total projected revenue or (ii) straight-line charges over the expected marketable life of the product. | |
Prepaid license fees represent license fees to owners for the use of their intellectual property rights in the development of the Company’s products. Minimum guaranteed royalty payments for intellectual property licenses are initially recorded as an asset (prepaid license fees) and a current liability (accrued royalties payable) at the contractual amount upon execution of the contract or when specified milestones or events occur and when no significant performance remains with the licensor. Licenses are expensed to cost of sales at the higher of (i) the contractual royalty rate based on actual sales or (ii) an effective rate based upon total projected revenue related to such license. Capitalized software development costs and prepaid license fees are classified as non-current if they relate to titles for which the Company estimates the release date to be more than one year from the balance sheet date. | |
The amortization period for capitalized software development costs and prepaid license fees is usually no longer than one year from the initial release of the product. If actual revenues or revised forecasted revenues fall below the initial forecasted revenue for a particular license, the charge to cost of sales may be larger than anticipated in any given quarter. The recoverability of capitalized software development costs and prepaid license fees is evaluated quarterly based on the expected performance of the specific products to which the costs relate. When, in management’s estimate, future cash flows will not be sufficient to recover previously capitalized costs, the Company expenses these capitalized costs to “cost of sales-software development costs and license fees,” in the period such a determination is made. These expenses may be incurred prior to a game’s release for games that have been developed. If a game is cancelled prior to completion of development and never released to market, the amount is expensed to operating costs and expenses. If the Company was required to write off licenses, due to changes in market conditions or product acceptance, its results of operations could be materially adversely affected. | |
Costs of developing online free-to-play social games, including payments to third-party developers are expensed as research and development expenses. Revenue from these games is largely dependent on players’ future purchasing behavior in the game and currently the Company cannot reliably project that future net cash flows from developed games will exceed related development costs. | |
Prepaid license fees and milestone payments made to the Company’s third party developers are typically considered non-refundable advances against the total compensation they can earn based upon the sales performance of the products. Any additional royalty or other compensation earned beyond the milestone payments is expensed to cost of sales as incurred. | |
Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities or the disclosure of gain or loss contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Among the more significant estimates included in these financial statements are price protection and customer allowances, the valuation of inventory, the recoverability of advance payments for capitalized software development costs and intellectual property licenses, and the valuation allowances for deferred tax benefits. Actual results could differ from those estimates. | |
Any loss in value of the Company’s investment in GMS Entertainment Limited, after the application of the equity method, that is other than a temporary decline would be recognized in the period the loss in value occurs. GMS has a limited operating history and its assets consist primarily of software and intangible assets. Key assuptions in the Company’s estimates of the fair value of GMS include the timely completion of future license and distribution arrangements for its technology and developments in the online gaming industry as a whole, which are subject to significant uncertainty. Accordingly, the Company’s estimates of the fair value of GMS may change significantly in the near term. | |
Loss Per Share. Basic loss per share of common stock is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted (loss) per share excludes the potential impact of common stock options, unvested shares of restricted stock and outstanding common stock purchase warrants because their effect would be anti-dilutive. | |
Commitments and Contingencies. We are subject to claims and litigation in the ordinary course of our business. We record a liability for commitments and contingencies when the amount is both probable and reasonably estimable. | |
Concentrations. The Company develops and distributes video game software for proprietary platforms under licenses from Nintendo, Sony and Microsoft, which must be periodically renewed. The Company’s agreements with these manufacturers also grant them certain control over the supply and manufacturing of the Company’s products. In addition, for the three months ended January 31, 2014, sales of the Company’s Zumba Fitness games accounted for approximately 72% of net revenues and for the three months ended January 31, 2013, sales of the Company’s Zumba Fitness games accounted for approximately 67% of net revenues. | |
Recent Accounting Pronouncements. | |
Income Taxes — In July 2013, the FASB issued an update to ASC 740, Income Taxes. The update to ASC 740 establishes standards for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The update becomes effective for the Company on November 1, 2014. Adoption of the update is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows. | |
FAIR_VALUE
FAIR VALUE | 3 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Fair Value Disclosures [Text Block] | ' | |||||||||||||
3. FAIR VALUE | ||||||||||||||
The table below segregates all financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. | ||||||||||||||
January 31, | Quoted prices | Significant | Significant | |||||||||||
2014 | in active | other | unobservable | |||||||||||
markets | observable | inputs | ||||||||||||
for identical | inputs | (level 3) | ||||||||||||
assets | (level 2) | |||||||||||||
(level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 7,786 | $ | 7,786 | $ | — | $ | — | ||||||
Bank deposits | 4,563 | 4,563 | — | — | ||||||||||
Total financial assets | $ | 12,349 | $ | 12,349 | $ | — | $ | — | ||||||
October 31, | Quoted prices | Significant | Significant | |||||||||||
2013 | in active | other | unobservable | |||||||||||
markets | observable | inputs | ||||||||||||
for identical | inputs | (level 3) | ||||||||||||
assets | (level 2) | |||||||||||||
(level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 7,283 | $ | 7,283 | $ | — | $ | — | ||||||
Bank deposits | 6,102 | 6,102 | — | — | ||||||||||
Total financial assets | $ | 13,385 | $ | 13,385 | $ | — | $ | — | ||||||
In the three months ended January 31, 2013, the Company had outstanding warrants that required settlement by transferring assets under certain change of control circumstances and were classified as liabilities in the Company’s consolidated balance sheets. The Company measured the fair value of the warrants at each balance sheet date, using the Black-Scholes method, and recorded a gain or loss in earnings each period as change in fair value of warrants. The warrants expired in March 2013. A summary of the changes to the Company’s warrant liability, as measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the three months ended January 31, 2013 is presented below: | ||||||||||||||
Beginning balance | $ | 17 | ||||||||||||
Total (gain) included in net loss | -17 | |||||||||||||
Ending balance | $ | - | ||||||||||||
Assumptions used to determine the fair value of the warrants in the three months ended January 31, 2013 were: | ||||||||||||||
Estimated fair value of stock | $0.61-$1.00 | |||||||||||||
Expected warrant term | 0.1-0.3 years | |||||||||||||
Risk-free rate | 0.0-0.1 | % | ||||||||||||
Expected volatility | 77.4-84.8 | % | ||||||||||||
Dividend yield | 0 | % | ||||||||||||
The carrying value of accounts receivable, accounts payable and accrued expenses, due from factor, and advances from customers are reasonable estimates of their fair values because of their short-term maturity. | ||||||||||||||
DUE_FROM_FACTOR_NET
DUE FROM FACTOR, NET | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Due From Factor Disclosure [Text Block] | ' | |||||||
4. DUE FROM FACTOR, NET | ||||||||
Due from factor consists of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Outstanding accounts receivable sold to factor | $ | 8,285 | $ | 9,131 | ||||
Less: customer allowances | -3,253 | -3,319 | ||||||
Less: provision for price protection | -3,435 | -1,943 | ||||||
Less: advances from factor | - | -1,735 | ||||||
$ | 1,597 | $ | 2,134 | |||||
Outstanding accounts receivable sold to the factor as of January 31, 2014 and October 31, 2013 for which the Company retained credit risk amounted to $167 and $260, respectively. As of January 31, 2014 and October 31, 2013, there were no allowances for uncollectible accounts. Allowances include provisions for customer payments and incentives deductible in future periods. | ||||||||
ACCOUNTS_AND_OTHER_RECEIVABLES
ACCOUNTS AND OTHER RECEIVABLES, NET | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | ' | |||||||
5. ACCOUNTS AND OTHER RECEIVABLES, NET | ||||||||
Accounts and other receivables, net, consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Royalties receivable | $ | 730 | $ | 702 | ||||
Trade accounts receivable, net of allowances of $0 | 755 | 467 | ||||||
Total accounts and other receivables, net | $ | 1,485 | $ | 1,169 | ||||
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory Disclosure [Text Block] | ' | |||||||
6. INVENTORIES | ||||||||
Inventories consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 2,750 | $ | 3,969 | ||||
Packaging and components | 253 | 890 | ||||||
Total inventories | $ | 3,003 | $ | 4,859 | ||||
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Prepaid Expense and Other Assets Current Disclosure [Text Block] | ' | |||||||
7. PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||||
Prepaid expenses consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Deferred cost of sales | $ | - | $ | 1,748 | ||||
Prepaid advertising | - | 994 | ||||||
Other | 248 | 85 | ||||||
Total prepaid expenses and other current assets | $ | 248 | $ | 2,827 | ||||
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Property and Equipment, Net [Abstract] | ' | |||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||
8. PROPERTY AND EQUIPMENT, NET | ||||||||
Property and equipment, net, consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Computers and software | $ | 3,725 | $ | 3,430 | ||||
Furniture and equipment | 1,548 | 1,554 | ||||||
Leasehold improvements | 154 | 154 | ||||||
Total property and equipment, gross | 5,427 | 5,138 | ||||||
Accumulated depreciation | -4,402 | -4,321 | ||||||
Total property and equipment, net | $ | 1,025 | $ | 817 | ||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | ' | |||||||
9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||||||||
Accounts payable and accrued expenses consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Accounts payable-trade | $ | 2,844 | $ | 4,436 | ||||
Royalty and software development | 5,473 | 3,612 | ||||||
Salaries and other compensation | 711 | 742 | ||||||
Other accruals | 341 | 204 | ||||||
Total accounts payable and accrued expenses | $ | 9,369 | $ | 8,994 | ||||
ADVANCES_FROM_CUSTOMERS_AND_DE
ADVANCES FROM CUSTOMERS AND DEFERRED REVENUE | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Deferred Revenue Disclosure [Text Block] | ' | |||||||
10. ADVANCES FROM CUSTOMERS AND DEFERRED REVENUE | ||||||||
Advances from customers and deferred revenue consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Deferred sales revenue | $ | 27 | $ | 5,204 | ||||
Deferred license revenue | - | 1,179 | ||||||
Advances from customers | 3 | 455 | ||||||
Total advances from customers and deferred revenue | $ | 30 | $ | 6,838 | ||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Jan. 31, 2014 | |
Equity [Abstract] | ' |
Stockholders Equity Note Disclosure [Text Block] | ' |
11. STOCKHOLDERS’ EQUITY | |
Common stock warrants | |
In the three months ended January 31, 2014, there were no changes in the Company’s outstanding warrants. As of January 31, 2014, the Company had warrants for 50,000 shares outstanding with and exercise price of $1.06 per share, which expire in March 2015. | |
STOCK_BASED_COMPENSATION_ARRAN
STOCK BASED COMPENSATION ARRANGEMENTS | 3 Months Ended | |||
Jan. 31, 2014 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||
Disclosure Of Compensation Related Costs, Share-Based Payments [Text Block] | ' | |||
12. STOCK BASED COMPENSATION ARRANGEMENTS | ||||
Stock-based compensation expense in the three months ended January 31, 2014 and 2013 amounted to $373 and $280, respectively, and is recorded in general and administrative expenses in the accompanying consolidated statements of operations. | ||||
In the three months ended January 31, 2014, there were no changes in the Company’s outstanding stock options. As of January 31, 2014, the Company had options for 3,363,644 shares outstanding with a weighted-average exercise price of $2.10 per share. | ||||
A summary of the Company’s restricted stock activity in the three months ended January 31, 2014 is presented below: | ||||
Balance at beginning of period | 1,601,157 | |||
Granted | 78,332 | |||
Vested | -73,437 | |||
Outstanding at end of period | 1,606,052 | |||
The grant-date fair value of restricted shares granted during the three months ended January 31, 2014 was $47, based on the fair value of the Company’s common stock on the date of grant. | ||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Disclosure [Text Block] | ' |
13. INCOME TAXES | |
Due to the Company’s history of losses and uncertainty of future taxable income, a valuation allowance sufficient to fully offset net operating losses and other deferred tax assets has been established. The valuation allowance will be maintained until sufficient positive evidence exists to support a conclusion that a valuation allowance is not necessary. The Company’s effective tax rate for the three months ended January 31, 2014 and 2013 differed from the expected U.S. federal statutory rate primarily due to the change in the valuation allowance. | |
LOSS_PER_SHARE
LOSS PER SHARE | 3 Months Ended |
Jan. 31, 2014 | |
Earnings Per Share [Abstract] | ' |
Earnings Per Share [Text Block] | ' |
14. LOSS PER SHARE | |
Options, warrants and restricted shares to acquire 5,019,736 and 4,442,436 shares of common stock were not included in the calculation of diluted loss per common share for the three months ended January 31, 2014 and 2013, respectively, as the effect of their inclusion would be anti-dilutive. | |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
15. COMMITMENTS AND CONTINGENCIES | |
Infringement claims | |
On September 20, 2012, a complaint for patent infringement was filed in the United States District Court for the Eastern District of Virginia by Intelligent Verification Systems, LLC against Microsoft Corporation and the Company. The complaint alleges that Kinect and certain of the Company’s Kinect games, including Zumba Fitness Rush, infringe the plaintiff’s patents relating to biometric facial recognition and facial expression recognition technology. Intelligent Verification Systems is seeking injunctive relief and monetary damages in an unspecified amount for the alleged infringement. The Company, in conjunction with Microsoft, is defending itself against the claim and has certain third party indemnity rights from developers for costs incurred in the litigation. The Company cannot currently estimate a potential range of loss if the claim against the Company is successful. | |
In addition to the item above, the Company at times may be a party to claims and suits in the ordinary course of business. We record a liability when it is both probable that a liability has been incurred and the amount of the loss or range of loss can be reasonably estimated. The Company has not recorded a liability with respect to the matter above. While the Company believes that it has valid defenses with respect to the legal matter pending and intends to vigorously defend the matter above, given the uncertainty surrounding litigation and our inability to assess the likelihood of a favorable or unfavorable outcome, it is possible that the resolution of the matter could have a material adverse effect on our consolidated financial position, cash flows or results of operations. | |
Commitments | |
The Company routinely issues purchase orders and enters into short-term commitments in the ordinary course of business. As of January 31, 2014, commitments under development agreements amounted to $1,505. | |
WORKFORCE_REDUCTION
WORKFORCE REDUCTION | 3 Months Ended | ||||
Jan. 31, 2014 | |||||
Workforce Reduction Disclosure [Abstract] | ' | ||||
Workforce Reduction Disclosure [Text Block] | ' | ||||
16. WORKFORCE REDUCTION | |||||
Workforce Reduction | |||||
In January 2013, the Company implemented a realignment of its workforce to reduce certain fixed costs and provide for a more flexible cost model in the development and distribution of its games. The realignment included a reduction in workforce of approximately 40 employees, including employees related to the closure of its studio in Massachusetts, which focused on social games for Facebook, game-testing personnel in its New Jersey facility, and other marketing and support personnel. | |||||
The Company recorded the following charges in the three months ended January 31, 2013: | |||||
Severance costs | $ | 766 | |||
Lease termination costs | 10 | ||||
Total workforce reduction costs | $ | 776 | |||
Changes in the Company’s accrued liabilities for workforce reduction costs in the three months ended January 31, 2013 were as follows: | |||||
Beginning balance | $ | - | |||
Workforce reduction costs accrued | 776 | ||||
Workforce reduction costs paid | -142 | ||||
Ending balance | $ | 634 | |||
RELATED_PARTIES
RELATED PARTIES | 3 Months Ended |
Jan. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
17. RELATED PARTIES | |
The Company has an agreement with Morris Sutton, the Company’s former Chief Executive Officer and Chairman Emeritus, under which he provides services as a consultant. The agreement provides for a monthly retainer of $13. For the three months ended January 31, 2014 and 2013, consulting fees incurred under the agreement amounted to $38 and $38, respectively. The Company purchases a portion of its Zumba belt accessories from a supplier, on terms equal to those of another supplier. The Company estimates that Morris Sutton and another relative of Jesse Sutton, the Company’s Chief Executive Officer, earned compensation from such supplier of approximately $16 and $10 in the three months ended January 31, 2014 and 2013, respectively, based on the value of the Company’s purchases. | |
The Company has an agreement with a Board member under which he provides specified strategic consulting services. The agreement provides for a monthly retainer of $10. For the three months ended January 31, 2014 and 2013, consulting fees incurred under the agreement amounted to $30 and $30, respectively. | |
INVESTMENT_IN_GMS_ENTERTAINMEN
INVESTMENT IN GMS ENTERTAINMENT LIMITED | 3 Months Ended |
Jan. 31, 2014 | |
Equity Method Investments and Joint Ventures [Abstract] | ' |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | ' |
18. INVESTMENT IN GMS ENTERTAINMENT LIMITED | |
In the fiscal year ended October 31, 2013, the Company formed GMS Entertainment Limited (“GMS”), an Isle of Man company, with a third party to pursue online casino gaming. The Company accounts for GMS on the equity method as a corporate joint venture. | |
In the three months ended January 31, 2014, the Company’s share of GMS’s net loss was $247, which is included in loss from equity method investment in the statement of operations. GMS’s fiscal year end is September 30, which differs from the Company’s fiscal year end by one month. The Company’s policy is to record its share of GMS’s periodic results on the basis of a one-month delay. In addition, the Company recognized $63 of foreign currency translation gain, which is included in foreign currency translation adjustments in other comprehensive loss. The functional currency of GMS is the pound sterling. | |
As of December 31, 2013, the assets of GMS consisted of approximately $1,000 of cash and working capital and $2,600 of intangible assets and goodwill. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Consolidation, Policy [Policy Text Block] | ' |
Principles of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary located in the United Kingdom. Significant intercompany accounts and transactions have been eliminated in consolidation. The Company has 50% of the voting control of GMS Entertainment Limited (GMS) and the right to appoint one-half of the directors of GMS. All business activities and transactions that significantly impact GMS must be approved by both equity owners. Accordingly, the Company accounts for GMS on the equity method as a corporate joint venture. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition. The Company recognizes revenue upon the shipment of its products when: (1) title and the risks and rewards of ownership are transferred; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable. Certain products are sold to customers with a street date (the earliest date these products may be resold by retailers). Revenue for sales of these products is not recognized prior to their street date. Some of the Company’s software products provide limited online features at no additional cost to the consumer. Generally, such features have been considered to be incidental to the Company’s overall product offerings and an inconsequential deliverable. Accordingly, the Company does not defer any revenue related to products containing these limited online features. However, in instances where online features or additional functionality is considered a substantive deliverable in addition to the software product, such characteristics will be taken into account when applying the Company’s revenue recognition policy. | |
The Company generally sells its products on a no-return basis, although in certain instances, the Company provides price protection or other allowances on certain unsold products. Price protection, when granted and applicable, allows customers a partial credit against amounts they owe the Company with respect to merchandise unsold by them. Revenue is recognized, and accounts receivable is presented, net of estimates of these allowances. | |
The Company estimates potential future product price protection and other allowances related to current period product revenue. The Company analyzes historical experience, current sell through of retailer inventory of the Company’s products, current trends in the video game market, the overall economy, changes in customer demand and acceptance of the Company’s products and other related factors when evaluating the adequacy of price protection and other allowances. | |
Sales incentives or other consideration given by the Company to customers that are considered adjustments of the selling price of its products, such as rebates and product placement fees, are reflected as reductions of revenue. Sales incentives and other consideration that represent costs incurred by the Company for benefits received, such as the appearance of the Company’s products in a customer’s national circular ad, are reflected as selling and marketing expenses, in accordance with Accounting Standards Codification (“ASC”) 605-50, Customer Payments and Incentives. | |
In addition, some of the Company’s software products are sold exclusively as downloads of digital content for which the consumer takes possession of the digital content for a fee. Revenue from product downloads is generally recognized when the download is made available (assuming all other recognition criteria are met). | |
When the Company operates hosted online games in which players can play for free and purchase virtual goods for use in the games, it recognizes revenues from the sale of virtual goods as service revenues over the estimated period in which players use the game. It currently estimates these periods of use to be three to four months. The Company periodically assesses its estimates for this period of use and future increases or decreases in these estimates and adjusts recognized revenues prospectively. The Company also recognizes advertising revenue as ads are served. The Company has not earned significant revenue to date related to its online games. | |
The Company records revenue for distribution agreements where it is acting as an agent as defined by ASC Topic 605, Revenue Recognition, Subtopic 45, Principal Agent Considerations, on a net basis. When the Company enters into license or distribution agreements that provide for multiple copies of games in exchange for guaranteed amounts, revenue is recognized in accordance with the terms of the agreements, generally upon delivery of a master copy, assuming our performance obligations are complete and all other recognition criteria are met, or as per-copy royalties are earned on sales of games. | |
In certain instances, customers and distributors provide the Company with cash advances on their orders. These advances are then applied against future sales to these customers. Advances are classified as advances from customers and deferred revenue in the accompanying balance sheets. | |
Inventory, Policy [Policy Text Block] | ' |
Inventory. Inventory is stated at the lower of cost as determined by the first-in, first-out method, or market. The Company estimates the net realizable value of slow-moving inventory on a title-by-title basis and charges the excess of cost over net realizable value to cost of sales. Such estimates may change and additional charges may be incurred until the related inventory items are sold. | |
Capitalized Software Development Costs and License Fees [Policy Text Block] | ' |
Capitalized Software Development Costs and License Fees. Software development costs include fees in the form of milestone payments made to independent software developers and licensors. Software development costs are capitalized once technological feasibility of a product is established and management expects such costs to be recoverable against future revenues. For products where proven game engine technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a product-by-product basis. Amounts related to software development that are not capitalized are charged immediately to product research and development costs. Commencing upon a related product’s release capitalized costs are amortized to cost of sales based upon the higher of (i) the ratio of current revenue to total projected revenue or (ii) straight-line charges over the expected marketable life of the product. | |
Prepaid license fees represent license fees to owners for the use of their intellectual property rights in the development of the Company’s products. Minimum guaranteed royalty payments for intellectual property licenses are initially recorded as an asset (prepaid license fees) and a current liability (accrued royalties payable) at the contractual amount upon execution of the contract or when specified milestones or events occur and when no significant performance remains with the licensor. Licenses are expensed to cost of sales at the higher of (i) the contractual royalty rate based on actual sales or (ii) an effective rate based upon total projected revenue related to such license. Capitalized software development costs and prepaid license fees are classified as non-current if they relate to titles for which the Company estimates the release date to be more than one year from the balance sheet date. | |
The amortization period for capitalized software development costs and prepaid license fees is usually no longer than one year from the initial release of the product. If actual revenues or revised forecasted revenues fall below the initial forecasted revenue for a particular license, the charge to cost of sales may be larger than anticipated in any given quarter. The recoverability of capitalized software development costs and prepaid license fees is evaluated quarterly based on the expected performance of the specific products to which the costs relate. When, in management’s estimate, future cash flows will not be sufficient to recover previously capitalized costs, the Company expenses these capitalized costs to “cost of sales-software development costs and license fees,” in the period such a determination is made. These expenses may be incurred prior to a game’s release for games that have been developed. If a game is cancelled prior to completion of development and never released to market, the amount is expensed to operating costs and expenses. If the Company was required to write off licenses, due to changes in market conditions or product acceptance, its results of operations could be materially adversely affected. | |
Costs of developing online free-to-play social games, including payments to third-party developers are expensed as research and development expenses. Revenue from these games is largely dependent on players’ future purchasing behavior in the game and currently the Company cannot reliably project that future net cash flows from developed games will exceed related development costs. | |
Prepaid license fees and milestone payments made to the Company’s third party developers are typically considered non-refundable advances against the total compensation they can earn based upon the sales performance of the products. Any additional royalty or other compensation earned beyond the milestone payments is expensed to cost of sales as incurred. | |
Use of Estimates, Policy [Policy Text Block] | ' |
Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities or the disclosure of gain or loss contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Among the more significant estimates included in these financial statements are price protection and customer allowances, the valuation of inventory, the recoverability of advance payments for capitalized software development costs and intellectual property licenses, and the valuation allowances for deferred tax benefits. Actual results could differ from those estimates. | |
Any loss in value of the Company’s investment in GMS Entertainment Limited, after the application of the equity method, that is other than a temporary decline would be recognized in the period the loss in value occurs. GMS has a limited operating history and its assets consist primarily of software and intangible assets. Key assuptions in the Company’s estimates of the fair value of GMS include the timely completion of future license and distribution arrangements for its technology and developments in the online gaming industry as a whole, which are subject to significant uncertainty. Accordingly, the Company’s estimates of the fair value of GMS may change significantly in the near term. | |
Earnings Per Share, Policy [Policy Text Block] | ' |
Loss Per Share. Basic loss per share of common stock is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted (loss) per share excludes the potential impact of common stock options, unvested shares of restricted stock and outstanding common stock purchase warrants because their effect would be anti-dilutive. | |
Commitments and Contingencies, Policy [Policy Text Block] | ' |
Commitments and Contingencies. We are subject to claims and litigation in the ordinary course of our business. We record a liability for commitments and contingencies when the amount is both probable and reasonably estimable. | |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' |
Concentrations. The Company develops and distributes video game software for proprietary platforms under licenses from Nintendo, Sony and Microsoft, which must be periodically renewed. The Company’s agreements with these manufacturers also grant them certain control over the supply and manufacturing of the Company’s products. In addition, for the three months ended January 31, 2014, sales of the Company’s Zumba Fitness games accounted for approximately 72% of net revenues and for the three months ended January 31, 2013, sales of the Company’s Zumba Fitness games accounted for approximately 67% of net revenues. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recent Accounting Pronouncements. | |
Income Taxes — In July 2013, the FASB issued an update to ASC 740, Income Taxes. The update to ASC 740 establishes standards for the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The update becomes effective for the Company on November 1, 2014. Adoption of the update is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows. | |
PRINCIPAL_BUSINESS_ACTIVITY_AN1
PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION (Tables) | 3 Months Ended | |||||||||||
Jan. 31, 2014 | ||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||||||
Schedule Of Revenue By Geographical Areas [Table Text Block] | ' | |||||||||||
Net revenues by geographic region were as follows: | ||||||||||||
Three months ended January 31, | ||||||||||||
2014 | % | 2013 | % | |||||||||
United States | $ | 18,937 | 86 | $ | 17,328 | 74 | ||||||
Europe | 2,997 | 14 | 6,144 | 26 | ||||||||
Total net revenues | $ | 21,934 | 100 | $ | 23,472 | 100 | ||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 3 Months Ended | |||||||||||||
Jan. 31, 2014 | ||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | ' | |||||||||||||
The table below segregates all financial assets and liabilities that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date. | ||||||||||||||
January 31, | Quoted prices | Significant | Significant | |||||||||||
2014 | in active | other | unobservable | |||||||||||
markets | observable | inputs | ||||||||||||
for identical | inputs | (level 3) | ||||||||||||
assets | (level 2) | |||||||||||||
(level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 7,786 | $ | 7,786 | $ | — | $ | — | ||||||
Bank deposits | 4,563 | 4,563 | — | — | ||||||||||
Total financial assets | $ | 12,349 | $ | 12,349 | $ | — | $ | — | ||||||
October 31, | Quoted prices | Significant | Significant | |||||||||||
2013 | in active | other | unobservable | |||||||||||
markets | observable | inputs | ||||||||||||
for identical | inputs | (level 3) | ||||||||||||
assets | (level 2) | |||||||||||||
(level 1) | ||||||||||||||
Assets: | ||||||||||||||
Money market funds | $ | 7,283 | $ | 7,283 | $ | — | $ | — | ||||||
Bank deposits | 6,102 | 6,102 | — | — | ||||||||||
Total financial assets | $ | 13,385 | $ | 13,385 | $ | — | $ | — | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | ' | |||||||||||||
A summary of the changes to the Company’s warrant liability, as measured at fair value on a recurring basis using significant unobservable inputs (Level 3), for the three months ended January 31, 2013 is presented below: | ||||||||||||||
Beginning balance | $ | 17 | ||||||||||||
Total (gain) included in net loss | -17 | |||||||||||||
Ending balance | $ | - | ||||||||||||
Fair Value Assumptions Warrants [Table Text Block] | ' | |||||||||||||
Assumptions used to determine the fair value of the warrants in the three months ended January 31, 2013 were: | ||||||||||||||
Estimated fair value of stock | $0.61-$1.00 | |||||||||||||
Expected warrant term | 0.1-0.3 years | |||||||||||||
Risk-free rate | 0.0-0.1 | % | ||||||||||||
Expected volatility | 77.4-84.8 | % | ||||||||||||
Dividend yield | 0 | % | ||||||||||||
DUE_FROM_FACTOR_NET_Tables
DUE FROM FACTOR, NET (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Schedule Of Due From Factor [Table Text Block] | ' | |||||||
Due from factor consists of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Outstanding accounts receivable sold to factor | $ | 8,285 | $ | 9,131 | ||||
Less: customer allowances | -3,253 | -3,319 | ||||||
Less: provision for price protection | -3,435 | -1,943 | ||||||
Less: advances from factor | - | -1,735 | ||||||
$ | 1,597 | $ | 2,134 | |||||
ACCOUNTS_AND_OTHER_RECEIVABLES1
ACCOUNTS AND OTHER RECEIVABLES, NET (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Receivables [Abstract] | ' | |||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | ' | |||||||
Accounts and other receivables, net, consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Royalties receivable | $ | 730 | $ | 702 | ||||
Trade accounts receivable, net of allowances of $0 | 755 | 467 | ||||||
Total accounts and other receivables, net | $ | 1,485 | $ | 1,169 | ||||
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
Inventories consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 2,750 | $ | 3,969 | ||||
Packaging and components | 253 | 890 | ||||||
Total inventories | $ | 3,003 | $ | 4,859 | ||||
PREPAID_EXPENSES_AND_OTHER_CUR1
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Prepaid Expenses and Other Current Assets [Table Text Block] | ' | |||||||
Prepaid expenses consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Deferred cost of sales | $ | - | $ | 1,748 | ||||
Prepaid advertising | - | 994 | ||||||
Other | 248 | 85 | ||||||
Total prepaid expenses and other current assets | $ | 248 | $ | 2,827 | ||||
PROPERTY_AND_EQUIPMENT_NET_Tab
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Property and Equipment, Net [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
Property and equipment, net, consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Computers and software | $ | 3,725 | $ | 3,430 | ||||
Furniture and equipment | 1,548 | 1,554 | ||||||
Leasehold improvements | 154 | 154 | ||||||
Total property and equipment, gross | 5,427 | 5,138 | ||||||
Accumulated depreciation | -4,402 | -4,321 | ||||||
Total property and equipment, net | $ | 1,025 | $ | 817 | ||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | ' | |||||||
Accounts payable and accrued expenses consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Accounts payable-trade | $ | 2,844 | $ | 4,436 | ||||
Royalty and software development | 5,473 | 3,612 | ||||||
Salaries and other compensation | 711 | 742 | ||||||
Other accruals | 341 | 204 | ||||||
Total accounts payable and accrued expenses | $ | 9,369 | $ | 8,994 | ||||
ADVANCES_FROM_CUSTOMERS_AND_DE1
ADVANCES FROM CUSTOMERS AND DEFERRED REVENUE (Tables) | 3 Months Ended | |||||||
Jan. 31, 2014 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | ' | |||||||
Advances from customers and deferred revenue consist of the following: | ||||||||
January 31, | October 31, | |||||||
2014 | 2013 | |||||||
Deferred sales revenue | $ | 27 | $ | 5,204 | ||||
Deferred license revenue | - | 1,179 | ||||||
Advances from customers | 3 | 455 | ||||||
Total advances from customers and deferred revenue | $ | 30 | $ | 6,838 | ||||
STOCK_BASED_COMPENSATION_ARRAN1
STOCK BASED COMPENSATION ARRANGEMENTS (Tables) | 3 Months Ended | |||
Jan. 31, 2014 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | ' | |||
A summary of the Company’s restricted stock activity in the three months ended January 31, 2014 is presented below: | ||||
Balance at beginning of period | 1,601,157 | |||
Granted | 78,332 | |||
Vested | -73,437 | |||
Outstanding at end of period | 1,606,052 | |||
WORKFORCE_REDUCTION_Tables
WORKFORCE REDUCTION (Tables) | 3 Months Ended | ||||
Jan. 31, 2014 | |||||
Workforce Reduction Disclosure [Abstract] | ' | ||||
Schedule Of Workforce Reduction Charges [Table Text Block] | ' | ||||
The Company recorded the following charges in the three months ended January 31, 2013: | |||||
Severance costs | $ | 766 | |||
Lease termination costs | 10 | ||||
Total workforce reduction costs | $ | 776 | |||
Schedule Of Accrued Workforce Reduction Liabilities [Table Text Block] | ' | ||||
Changes in the Company’s accrued liabilities for workforce reduction costs in the three months ended January 31, 2013 were as follows: | |||||
Beginning balance | $ | - | |||
Workforce reduction costs accrued | 776 | ||||
Workforce reduction costs paid | -142 | ||||
Ending balance | $ | 634 | |||
PRINCIPAL_BUSINESS_ACTIVITY_AN2
PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Product Information [Line Items] | ' | ' |
Net revenues | $21,934 | $23,472 |
Sales Revenue Percentage | 100.00% | 100.00% |
United States [Member] | ' | ' |
Product Information [Line Items] | ' | ' |
Net revenues | 18,937 | 17,328 |
Sales Revenue Percentage | 86.00% | 74.00% |
Europe [Member] | ' | ' |
Product Information [Line Items] | ' | ' |
Net revenues | $2,997 | $6,144 |
Sales Revenue Percentage | 14.00% | 26.00% |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
GMS Entertainment Limited [Member] | ' | ' |
Accounting Policies [Line Items] | ' | ' |
Equity Method Investment, Ownership Percentage | 50.00% | ' |
Zumba Fitness [Member] | ' | ' |
Accounting Policies [Line Items] | ' | ' |
Concentration Risk, Percentage | 72.00% | 67.00% |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets: | ' | ' |
Total financial assets | $12,349 | $13,385 |
Money Market Funds [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 7,786 | 7,283 |
Bank Deposits [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 4,563 | 6,102 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 12,349 | 13,385 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 7,786 | 7,283 |
Fair Value, Inputs, Level 1 [Member] | Bank Deposits [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 4,563 | 6,102 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Bank Deposits [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Bank Deposits [Member] | ' | ' |
Assets: | ' | ' |
Total financial assets | $0 | $0 |
FAIR_VALUE_Details_1
FAIR VALUE (Details 1) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jan. 31, 2013 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' |
Beginning balance | $17 |
Total (gain) included in net loss | -17 |
Ending balance | $0 |
FAIR_VALUE_Details_2
FAIR VALUE (Details 2) (USD $) | 3 Months Ended |
Jan. 31, 2013 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' |
Dividend yield | 0.00% |
Maximum [Member] | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' |
Estimated fair value of stock | 1 |
Expected warrant term | '3 months 18 days |
Risk-free rate | 0.10% |
Expected volatility | 84.80% |
Minimum [Member] | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' |
Estimated fair value of stock | 0.61 |
Expected warrant term | '1 month 6 days |
Risk-free rate | 0.00% |
Expected volatility | 77.40% |
FAIR_VALUE_Details_Textual
FAIR VALUE (Details Textual) | 3 Months Ended |
Jan. 31, 2014 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' |
Warrants Expiry Date | 31-Mar-13 |
DUE_FROM_FACTOR_NET_Details
DUE FROM FACTOR, NET (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Outstanding accounts receivable sold to factor | $8,285 | $9,131 |
Less: customer allowances | -3,253 | -3,319 |
Less: provision for price protection | -3,435 | -1,943 |
Less: advances from factor | 0 | -1,735 |
Due from factor, net | $1,597 | $2,134 |
DUE_FROM_FACTOR_NET_Details_Te
DUE FROM FACTOR, NET (Details Textual) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Credit Risk Amount | $167 | $260 |
Allowances For Uncollectible Accounts | $0 | $0 |
ACCOUNTS_AND_OTHER_RECEIVABLES2
ACCOUNTS AND OTHER RECEIVABLES, NET (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Royalties receivable | $730 | $702 |
Trade accounts receivable, net of allowances of $0 | 755 | 467 |
Total accounts and other receivables, net | $1,485 | $1,169 |
ACCOUNTS_AND_OTHER_RECEIVABLES3
ACCOUNTS AND OTHER RECEIVABLES, NET (Details Textual) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Allowance for Doubtful Accounts Receivable, Current | $0 | $0 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Finished goods | $2,750 | $3,969 |
Packaging and components | 253 | 890 |
Total inventories | $3,003 | $4,859 |
PREPAID_EXPENSES_AND_OTHER_CUR2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses [Line Items] | ' | ' |
Deferred cost of sales | $0 | $1,748 |
Prepaid advertising | 0 | 994 |
Other | 248 | 85 |
Total prepaid expenses and other current assets | $248 | $2,827 |
PROPERTY_AND_EQUIPMENT_NET_Det
PROPERTY AND EQUIPMENT, NET (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Computers and software | $3,725 | $3,430 |
Furniture and equipment | 1,548 | 1,554 |
Leasehold improvements | 154 | 154 |
Total property and equipment, gross | 5,427 | 5,138 |
Accumulated depreciation | -4,402 | -4,321 |
Total property and equipment, net | $1,025 | $817 |
ACCOUNTS_PAYABLE_AND_ACCRUED_E2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Payable and Accrued Expenses [Line Items] | ' | ' |
Accounts payable-trade | $2,844 | $4,436 |
Royalty and software development | 5,473 | 3,612 |
Salaries and other compensation | 711 | 742 |
Other accruals | 341 | 204 |
Total accounts payable and accrued expenses | $9,369 | $8,994 |
ADVANCES_FROM_CUSTOMERS_AND_DE2
ADVANCES FROM CUSTOMERS AND DEFERRED REVENUE (Details) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Revenue Arrangement [Line Items] | ' | ' |
Advances from customers | $3 | $455 |
Total advances from customers and deferred revenue | 30 | 6,838 |
Sales [Member] | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Deferred Revenue | 27 | 5,204 |
License Revenue [Member] | ' | ' |
Deferred Revenue Arrangement [Line Items] | ' | ' |
Deferred Revenue | $0 | $1,179 |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) (USD $) | 3 Months Ended |
Jan. 31, 2014 | |
Class of Stock [Line Items] | ' |
Class of Warrant or Right, Outstanding | 50,000 |
Warrants Exercise Price | $1.06 |
Warrant Expiration Date | 'March 2015 |
STOCK_BASED_COMPENSATION_ARRAN2
STOCK BASED COMPENSATION ARRANGEMENTS (Details) | 3 Months Ended |
Jan. 31, 2014 | |
Schedule of Restricted Stock Unit Activity [Line Items] | ' |
Balance at beginning of period | 1,601,157 |
Granted | 78,332 |
Vested | -73,437 |
Outstanding at end of period | 1,606,052 |
STOCK_BASED_COMPENSATION_ARRAN3
STOCK BASED COMPENSATION ARRANGEMENTS (Details Textual) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based Compensation, Total | $373 | $280 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 3,363,644 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $2.10 | ' |
Restricted Stock [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Sharebased Compensation Arrangement By Sharebased Payment Award Options Granted In Period Fair Value | $47 | ' |
LOSS_PER_SHARE_Details_Textual
LOSS PER SHARE (Details Textual) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 5,019,736 | 4,442,436 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | Jan. 31, 2014 |
In Thousands, unless otherwise specified | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ' |
Software Developers For Future Milestone Payments | $1,505 |
WORKFORCE_REDUCTION_Details
WORKFORCE REDUCTION (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jan. 31, 2013 |
Work Force Reduction [Line Items] | ' |
Severance costs | $766 |
Lease termination costs | 10 |
Total workforce reduction costs | $776 |
WORKFORCE_REDUCTION_Details_1
WORKFORCE REDUCTION (Details 1) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Jan. 31, 2013 |
Work Force Reduction [Line Items] | ' |
Beginning balance | $0 |
Workforce reduction costs accrued | 776 |
Workforce reduction costs paid | -142 |
Ending balance | $634 |
RELATED_PARTIES_Details_Textua
RELATED PARTIES (Details Textual) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 |
Chief Executive Officer [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Earned Compensation From Suppliers | $16 | $10 |
Board Of Directors [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Related Party Transaction Strategic Consulting Services Fee From Transaction With Related Party Monthly | 10 | ' |
Professional Fees | 30 | 30 |
Former Chief Executive Officer [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Monthly Consulting Fee | 13 | ' |
Professional Fees | $38 | $38 |
INVESTMENT_IN_GMS_ENTERTAINMEN1
INVESTMENT IN GMS ENTERTAINMENT LIMITED (Details Textual) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Jan. 31, 2014 | Jan. 31, 2013 | Jan. 31, 2014 | Dec. 31, 2013 |
GMS Entertainment Limited [Member] | GMS Entertainment Limited [Member] | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' |
Loss from equity method investment | $247 | $0 | $247 | ' |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax, Total | 60 | -47 | 63 | ' |
Cash And Working Capital Of Joint Venture | ' | ' | ' | 1,000 |
Intangible Assets And Goodwill Of Joint Venture | ' | ' | ' | $2,600 |