Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | THESTREET, INC. | |
Entity Central Index Key | 1,080,056 | |
Document Type | 10-Q | |
Trading Symbol | TST | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 49,013,925 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 23,990,179 | $ 21,371,122 |
Accounts receivable, net of allowance for doubtful accounts of $331,793 as of September 30, 2017 and $316,204 as of December 31, 2016 | 4,809,393 | 5,119,959 |
Other receivables, net | 309,832 | 358,266 |
Prepaid expenses and other current assets | 2,014,597 | 1,416,956 |
Total current assets | 31,124,001 | 28,266,303 |
Noncurrent Assets: | ||
Property and equipment, net of accumulated depreciation and amortization of $5,420,056 as of September 30, 2017 and $5,682,286 as of December 31, 2016 | 2,834,366 | 3,550,007 |
Marketable securities | 1,600,250 | 1,550,000 |
Other assets | 302,091 | 285,843 |
Goodwill | 29,408,292 | 29,183,141 |
Other intangible assets, net of accumulated amortization of $22,545,755 as of September 30, 2017 and $20,134,178 as of December 31, 2016 | 14,399,003 | 15,127,818 |
Restricted cash | 500,000 | 500,000 |
Total Assets | 80,168,003 | 78,463,112 |
Current Liabilities: | ||
Accounts payable | 2,189,424 | 2,526,034 |
Accrued expenses | 3,563,019 | 5,115,558 |
Deferred revenue | 24,338,054 | 22,476,962 |
Other current liabilities | 1,906,511 | 983,799 |
Total current liabilities | 31,997,008 | 31,102,353 |
Noncurrent Liabilities: | ||
Deferred tax liability | 2,481,303 | 2,036,487 |
Other noncurrent liabilities | 2,146,454 | 3,274,816 |
Total liabilities | 36,624,765 | 36,413,656 |
Stockholders' Equity: | ||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; 5,500 issued and outstanding as of September 30, 2017 and December 31, 2016; the aggregate liquidation preference totals $55,000,000 as of September 30, 2017 and December 31, 2016 | 55 | 55 |
Common stock; $0.01 par value; 100,000,000 shares authorized; 43,404,372 shares issued and 35,872,589 shares outstanding as of September 30, 2017, and 42,936,906 shares issued and 35,421,217 shares outstanding as of December 31, 2016 | 434,044 | 429,369 |
Additional paid-in capital | 272,345,333 | 271,143,445 |
Accumulated other comprehensive loss | (5,005,790) | (5,898,305) |
Treasury stock at cost; 7,531,783 shares as of September 30, 2017 and 7,515,689 shares as of December 31, 2016 | (13,223,610) | (13,211,141) |
Accumulated deficit | (211,006,794) | (210,413,967) |
Total stockholders' equity | 43,543,238 | 42,049,456 |
Total liabilities and stockholders' equity | $ 80,168,003 | $ 78,463,112 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts on accounts receivable | $ 331,793 | $ 316,204 |
Accumulated depreciation and amortization on property and equipment | 5,420,056 | 5,682,286 |
Accumulated amortization on other intangibles | $ 22,545,755 | $ 20,134,178 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 5,500 | 5,500 |
Preferred stock, outstanding | 5,500 | 5,500 |
Preferred stock, aggregate liquidation preference | $ 55,000,000 | $ 55,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 43,404,372 | 42,936,906 |
Common stock, oustanding | 35,872,589 | 35,421,217 |
Treasury stock, shares | 7,531,783 | 7,515,689 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Business to business | $ 7,870,124 | $ 7,215,910 | $ 23,112,310 | $ 21,879,869 |
Business to consumer | 7,382,672 | 7,997,944 | 23,380,528 | 25,695,944 |
Total revenue | 15,252,796 | 15,213,854 | 46,492,838 | 47,575,813 |
Operating expense: | ||||
Cost of services (exclusive of depreciation and amortization shown separately below) | 6,645,804 | 7,924,852 | 20,631,855 | 23,956,285 |
Sales and marketing | 3,077,783 | 3,736,815 | 10,198,956 | 11,634,402 |
General and administrative | 3,882,898 | 3,937,226 | 11,761,402 | 12,930,523 |
Depreciation and amortization | 1,352,760 | 1,080,651 | 3,834,785 | 2,996,121 |
Restructuring and other charges | (582,519) | 198,979 | 960,491 | |
Total operating expense | 14,959,245 | 16,097,025 | 46,625,977 | 52,477,822 |
Operating income (loss) | 293,551 | (883,171) | (133,139) | (4,902,009) |
Net interest income (expense) | 8,168 | (12,179) | 26,224 | (24,273) |
Net income (loss) before income taxes | 301,719 | (895,350) | (106,915) | (4,926,282) |
Provision for income taxes | 111,850 | 325,781 | 485,912 | 949,657 |
Net income (loss) | $ 189,869 | $ (1,221,131) | $ (592,827) | $ (5,875,939) |
Net income (loss) per share: | ||||
Basic net income (loss) attributable to common stockholders (in dollars per share) | $ 0.01 | $ (0.03) | $ (0.02) | $ (0.17) |
Diluted net income (loss) attributable to common stockholders (in dollars per share) | $ 0.01 | $ (0.03) | $ (0.02) | $ (0.17) |
Weighted average basic shares outstanding (in shares) | 35,869,751 | 35,253,930 | 35,710,049 | 35,228,863 |
Weighted average diluted shares outstanding (in shares) | 36,142,548 | 35,253,930 | 35,710,049 | 35,228,863 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 189,869 | $ (1,221,131) | $ (592,827) | $ (5,875,939) |
Foreign currency translation (loss) gain | (158,076) | (630,567) | 842,265 | (2,835,673) |
Unrealized gain (loss) on marketable securities | 55,500 | 20,000 | 50,250 | (100,000) |
Comprehensive income (loss) | $ 87,293 | $ (1,831,698) | $ 299,688 | $ (8,811,612) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (592,827) | $ (5,875,939) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation expense | 1,205,978 | 1,152,025 |
Provision for (recovery of) doubtful accounts | 69,260 | (13,892) |
Depreciation and amortization | 3,834,785 | 2,996,121 |
Deferred taxes | 444,816 | 842,176 |
Restructuring and other charges | 105,113 | |
Deferred rent | (394,839) | (547,350) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 332,707 | 1,465,800 |
Other receivables | 49,336 | 266,451 |
Prepaid expenses and other current assets | (582,693) | (393,861) |
Other assets | (4,417) | 3,999 |
Accounts payable | (344,356) | 40,502 |
Accrued expenses | (1,573,044) | (38,541) |
Deferred revenue | 1,719,817 | (1,404,244) |
Other current liabilities | (540) | (208,328) |
Other liabilities | 99,475 | |
Net cash provided by (used in) operating activities | 4,163,983 | (1,510,493) |
Cash Flows from Investing Activities: | ||
Restricted cash | 161,250 | |
Capital expenditures | (1,832,925) | (2,707,638) |
Net cash used in investing activities | (1,832,925) | (2,546,388) |
Cash Flows from Financing Activities: | ||
Cash dividends paid on common stock | (68,245) | (12,492) |
Shares withheld on RSU vesting to pay for withholding taxes | (12,469) | (5,057) |
Net cash used in financing activities | (80,714) | (17,549) |
Effect of foreign exchange rate changes on cash and cash equivalents | 368,713 | (425,091) |
Net increase (decrease) in cash and cash equivalents | 2,619,057 | (4,499,521) |
Cash and cash equivalents, beginning of period | 21,371,122 | 28,445,416 |
Cash and cash equivalents, end of period | $ 23,990,179 | $ 23,945,895 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION TheStreet, Inc. is a leading financial news and information provider. Our business-to-business (B2B) and business-to-consumer (B2C) content and products provide individual and institutional investors, advisors and dealmakers with actionable information from the worlds of finance and business. Our B2B business products have helped diversify our business from primarily serving retail investors to also providing an indispensable source of business intelligence for both high net worth individuals and executives in the top firms in the world. The Deal delivers sophisticated news and analysis on changes in corporate control including mergers and acquisitions, private equity, corporate activism and restructuring. BoardEx is an institutional relationship capital management database and platform which holds in-depth profiles of over 1 million of the world’s most important business leaders. Our third B2B business product, RateWatch, publishes bank rate market information including competitive deposit, loan and fee rate data. Our B2B business derives revenue primarily from subscription products, events/conferences and information services. Our B2C business is led by our namesake website, TheStreet.com, and includes free content and houses our premium subscription products, such as RealMoney, RealMoney Pro and Actions Alerts PLUS, that target varying segments of the retail investing public. Our B2C business primarily generates revenue from subscription products and advertising revenue. Unaudited Interim Financial Statements The interim condensed consolidated balance sheet as of September 30, 2017, the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016, and the condensed statements of cash flows for the nine months ended September 30, 2017 and 2016 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company’s financial position as of September 30, 2017, its results of consolidated operations and comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016, and cash flows for the nine months ended September 30, 2017 and 2016. The financial data and other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2017 or for any other future annual or interim period. There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on March 20, 2017. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework and additional quantitative disclosures regarding contract balances and remaining performance obligations. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 2016). When effective, ASU 2014-09 prescribes either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company will adopt this guidance on January 1, 2018. The Company is currently evaluating the overall impact that ASU 2014-09 will have on the Company’s consolidated financial statements, as well as the expected timing and method of adoption. The Company has established an implementation team, including external advisers, and has commenced the review of the Company’s revenue portfolio and related contracts across its various business units and geographies. Discussions regarding changes to the Company’s current accounting policies and practices remain ongoing and preliminary conclusions are subject to change. Upon adoption, the Company will recognize revenue from contracts with customers as each performance obligation is satisfied, either at a point in time or over a period of time, based on when control transfers to customers. The Company plans to adopt the new revenue recognition standard under the modified retrospective transition method by recognizing the cumulative effect of applying the standard as an adjustment to the Company’s Balance Sheet. Until the Company completes testing of the new revenue recognition standard, the Company does not anticipate being able to provide the impact of the new standard on the Balance Sheets or Statements of Operations however from the initial review and assessment of a sample of contracts with customers the Company does not anticipate the new accounting pronouncement to have a material impact on the Company’s financial statements, except enhanced disclosure regarding revenue recognition, including disclosures of revenue streams, performance obligations, variable consideration and the related judgments and estimates necessary to apply the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other Simplifying the Test for goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation |
CASH AND CASH EQUIVALENTS, MARK
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH | 2. CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH The Company’s cash and cash equivalents and restricted cash primarily consist of checking accounts and money market funds. As of September 30, 2017 and December 31, 2016, marketable securities consist of two municipal auction rate securities (“ARS”) issued by the District of Columbia with a cost basis of approximately $1.9 million and a fair value of approximately $1.6 million and $1.6 million, respectively. With the exception of the ARS, Company policy limits the maximum maturity for any investment to three years. The ARS mature in the year 2038. The Company accounts for its marketable securities in accordance with the provisions of ASC 320-10. The Company classifies these securities as available for sale and the securities are reported at fair value. Unrealized gains and losses are recorded as a component of accumulated other comprehensive loss and excluded from net income (loss) as they are deemed temporary. Additionally, as of September 30, 2017 and December 31, 2016, the Company has a total of approximately $500 thousand of cash that serves as collateral for an outstanding letter of credit, and which cash is therefore restricted. The letter of credit serves as a security deposit for the Company’s office space in New York City. September 30, 2017 December 31, 2016 Cash and cash equivalents $ 23,990,179 $ 21,371,122 Marketable securities 1,600,250 1,550,000 Restricted cash 500,000 500,000 Total cash and cash equivalents, marketable securities and restricted cash $ 26,090,429 $ 23,421,122 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS The Company measures the fair value of its financial instruments in accordance with ASC 820-10, which refines the definition of fair value, provides a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The statement establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: • Level 1: Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). • Level 2: Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or vary substantially). • Level 3: Inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). Financial assets and liabilities included in our financial statements and measured at fair value are classified based on the valuation technique level in the table below: As of September 30, 2017 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 23,990,179 $ 23,990,179 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,600,250 — — 1,600,250 Contingent earn-out (3) 940,815 — — 940,815 Total at fair value $ 27,031,244 $ 24,490,179 $ — $ 2,541,065 As of December 31, 2016 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 21,371,122 $ 21,371,122 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,550,000 — — 1,550,000 Contingent earn-out (3) 907,657 — — 907,657 Total at fair value $ 24,328,779 $ 21,871,122 $ — $ 2,457,657 (1) Cash and cash equivalents and restricted cash, totaling approximately $24.5 million and $21.9 million as of September 30, 2017 and December 31, 2016, respectively, consist primarily of checking accounts and money market funds for which we determine fair value through quoted market prices. (2) Marketable securities include two municipal ARS issued by the District of Columbia having a fair value totaling approximately $1.6 million and $1.6 million as of September 30, 2017 and December 31, 2016, respectively. Historically, the fair value of ARS investments approximated par value due to the frequent resets through the auction process. Due to events in credit markets, the auction events, which historically have provided liquidity for these securities, have been unsuccessful. The result of a failed auction is that these ARS holdings will continue to pay interest in accordance with their terms at each respective auction date; however, liquidity of the securities will be limited until there is a successful auction, the issuer redeems the securities, the securities mature or until such time as other markets for these ARS holdings develop. For each of our ARS, we evaluate the risks related to the structure, collateral and liquidity of the investment, and forecast the probability of issuer default, auction failure and a successful auction at par, or a redemption at par, for each future auction period. Temporary impairment charges are recorded in accumulated other comprehensive loss, whereas other-than-temporary impairment charges are recorded in our consolidated statement of operations. As of September 30, 2017, the Company determined there was a decline in the fair value of its ARS investments of approximately $250 thousand from its cost basis, which was deemed temporary and was included within accumulated other comprehensive loss. (3) Contingent earn-out represents additional purchase consideration payable to the former shareholders of Management Diagnostics Limited based upon the achievement of specific 2017 audited revenue benchmarks. The probability of achieving each benchmark is based on Management’s assessment of the projected 2017 revenue. The present value of each probability weighted payment was calculated by discounting the probability weighted payment by the corresponding present value factor. The following tables provide a reconciliation of the beginning and ending balance for the Company’s assets and liabilities measured at fair value using significant unobservable inputs (Level 3): Marketable Balance December 31, 2016 $ 1,550,000 Change in fair value of investment 50,250 Balance September 30, 2017 $ 1,600,250 Contingent Balance December 31, 2016 $ 907,657 Accretion to net present value 33,158 Balance September 30, 2017 $ 940,815 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 4. STOCK-BASED COMPENSATION Stock-based compensation expense recognized in the Company’s consolidated statements of operations for the nine months ended September 30, 2017 and 2016 includes compensation expense for all share-based payment awards based upon the estimated grant date fair value. The Company recognizes compensation expense for share-based payment awards on a straight-line basis over the requisite service period of the award. As stock-based compensation expense is based upon awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company estimates forfeitures at the time of grant which are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the value of stock option awards on the date of grant using the Black-Scholes option-pricing model. This determination is affected by the Company’s stock price as well as assumptions regarding expected volatility, risk-free interest rate, and expected dividends. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted-average value of the applicable assumption used to value stock option awards at their grant date. In determining the volatility assumption, the Company used a historical analysis of the volatility of the Company’s share price for the preceding period equal to the expected option lives. The expected option lives, which represent the period of time that options granted are expected to be outstanding, were estimated based upon the “simplified” method for “plain-vanilla” options. The risk-free interest rate assumption was based upon observed interest rates appropriate for the term of the Company’s stock option awards. The dividend yield assumption was based on the history and expectation of future dividend payouts. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service period. The Company’s estimate of pre-vesting forfeitures is primarily based on historical experience and is adjusted to reflect actual forfeitures as the options vest. The weighted-average grant date fair value per share of stock option awards granted during the nine months ended September 30, 2017 and 2016 was $0.27 and $0.37, respectively, using the Black-Scholes model with the following weighted-average assumptions: For the Nine Months Ended 2017 2016 Expected option lives 3.7 years 4.5 years Expected volatility 37.64% 34.78% Risk-free interest rate 1.55% 1.11% Expected dividend yield 0.00% 0.00% The value of each restricted stock unit awarded is equal to the closing price per share of the Company’s Common Stock on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods. The weighted-average grant date fair value per share of restricted stock units granted during the nine months ended September 30, 2017 and 2016 was $0.90 and $1.30, respectively. As of September 30, 2017, there remained approximately 1.2 million shares available for future awards under the Company’s 2007 Performance Incentive Plan (the “2007 Plan”). In connection with awards under both the 2007 Plan and awards issued outside of the 2007 Plan as inducement grants to new hires, the Company recorded approximately $401 thousand and $1.2 million of noncash stock-based compensation for the three and nine month periods ended September 30, 2017, respectively, as compared to $407 thousand and $1.3 million (inclusive of approximately $105 thousand included in restructuring and other charges) of noncash stock-based compensation expense for the three and nine month periods ended September 30, 2016, respectively. A summary of the activity of the 2007 Plan, and awards issued outside of the 2007 Plan pertaining to stock option grants is as follows: Shares Weighted Aggregate Weighted Awards outstanding at December 31, 2016 5,900,731 $ 1.52 Options granted 135,000 $ 0.90 Options exercised — N/A Options forfeited (27,923 ) $ 1.15 Options expired (623,714 ) $ 1.78 Awards outstanding at September 30, 2017 5,384,094 $ 1.47 $ 48 3.59 Awards vested and expected to vest at September 30, 2017 5,350,569 $ 1.47 $ 47 3.58 Awards exercisable at September 30, 2017 3,491,073 $ 1.62 $ 10 2.48 A summary of the activity of the 2007 Plan pertaining to grants of restricted stock units is as follows: Shares Aggregate Weighted Awards outstanding at December 31, 2016 717,995 Restricted stock units granted 565,599 Restricted stock units settled by delivery of Common Stock upon vesting (467,466 ) Restricted stock units forfeited (46,389 ) Awards outstanding at September 30, 2017 769,739 $ 831 0.63 Awards expected to vest at September 30, 2017 763,739 $ 825 0.54 A summary of the status of the Company’s unvested stock-based payment awards as of September 30, 2017 and changes in the nine months then ended, is as follows: Unvested Awards Number of Shares Weighted Average Grant Date Fair Value Shares underlying awards unvested at December 31, 2016 3,936,427 $ 0.62 Shares underlying options granted 135,000 $ 0.27 Shares underlying restricted stock units granted 565,599 $ 0.90 Shares underlying options vested (1,432,488 ) $ 0.38 Shares underlying restricted stock units settled by delivery of Common Stock upon vesting (467,466 ) $ 1.15 Shares underlying options forfeited (27,923 ) $ 0.37 Shares underlying restricted stock units cancelled (46,389 ) $ 1.20 Shares underlying awards unvested at September 30, 2017 2,662,760 $ 0.70 For the nine months ended September 30, 2017 and 2016, the total fair value of stock-based awards vested was approximately $952 thousand and $389 thousand, respectively. For the nine months ended September 30, 2017 and 2016, the total intrinsic value of options exercised was $0 and $0, respectively (there were no options exercised during either period). For the nine months ended September 30, 2017 and 2016, approximately 135 thousand and 2.9 million stock options, respectively, were granted, and no stock options were exercised in either period yielding $0 of cash proceeds to the Company. Additionally, for the nine months ended September 30, 2017 and 2016, approximately 566 thousand and 558 thousand restricted stock units, respectively, were granted, and approximately 467 thousand and 136 thousand shares, respectively, were issued under restricted stock unit grants. For the nine months ended September 30, 2017 and 2016, the total intrinsic value of restricted stock units that vested was approximately $409 thousand and $193 thousand, respectively. As of September 30, 2017 and 2016, the total intrinsic value of awards outstanding was approximately $879 thousand and $1.3 million, respectively. As of September 30, 2017, there was approximately $1.1 million of unrecognized stock-based compensation expense remaining to be recognized over a weighted-average period of 1.18 years. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 5. STOCKHOLDERS’ EQUITY Treasury Stock In December 2000, the Company’s Board of Directors authorized the repurchase of up to $10 million of the Company’s Common Stock, from time to time, in private purchases or in the open market. In February 2004, the Company’s Board of Directors approved the resumption of the stock repurchase program (the “Program”) under new price and volume parameters, leaving unchanged the maximum amount available for repurchase under the Program. However, the affirmative vote of the holders of a majority of the outstanding shares of Series B Preferred Stock, voting separately as a single class, is necessary for the Company to repurchase its Common Stock (except for the purchase or redemption from employees, directors and consultants pursuant to agreements providing us with repurchase rights upon termination of their service with us), unless after such purchase we have unrestricted cash (net of all indebtedness for borrowed money, purchase money obligations, promissory notes or bonds) equal to at least two times the product obtained by multiplying the number of shares of Series B Preferred Stock outstanding at the time such dividend is paid by the liquidation preference. During the nine months ended September 30, 2017 and 2016, the Company did not purchase any shares of Common Stock under the Program. Since inception of the Program, the Company has purchased a total of 5,453,416 shares of Common Stock at an aggregate cost of approximately $7.3 million. In addition, pursuant to the terms of the Company’s 2007 Plan, and certain procedures adopted by the Compensation Committee of the Board of Directors, in connection with the exercise of stock options by the Company’s employees, and the issuance of shares of Common Stock in settlement of vested restricted stock units, the Company may withhold shares in lieu of payment of the exercise price and/or the amount of applicable withholding taxes then due. Through September 30, 2017, the Company had withheld an aggregate of 1,866,759 shares which have been recorded as treasury stock. In addition, the Company received an aggregate of 211,608 shares in treasury stock resulting from prior acquisitions. These shares have also been recorded as treasury stock. Dividends During the nine months ended September 30, 2017 and 2016, we did not declare any cash dividends on our Common Stock or Series B Preferred Stock. We do not expect to declare dividends in the foreseeable future. The declaration, amount and payment of any future dividends will be at the sole discretion of our Board of Directors. When determining whether to declare a dividend in the future, our Board of Directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders, and such other factors as our Board of Directors may deem relevant. The Certificate of Designations for the Series B Preferred Stock currently prohibits the Company from paying cash dividends in excess of $0.10 per share per annum without the prior approval of the holder of the Series B Preferred Stock. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | 6. LEGAL PROCEEDINGS The Company is party to legal proceedings arising in the ordinary course of business or otherwise, none of which is deemed material. |
NET INCOME (LOSS) PER SHARE OF
NET INCOME (LOSS) PER SHARE OF COMMON STOCK | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE OF COMMON STOCK | 7. NET INCOME (LOSS) PER SHARE OF COMMON STOCK Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of common shares and potential common shares outstanding during the period, so long as the inclusion of potential common shares does not result in a lower net loss per share. Potential common shares consist of restricted stock units (using the treasury stock method), the incremental common shares issuable upon the exercise of stock options (using the treasury stock method), and the conversion of the Company’s convertible preferred stock (using the if-converted method). For the three months ended September 30, 2016, approximately 1.4 million unvested restricted stock units and vested and unvested stock options, respectively, were excluded from the calculation, as their effect would result in a lower net loss per share. For the nine months ended September 30, 2017 and 2016, approximately 569 thousand and 1.2 million unvested restricted stock units and vested and unvested stock options, respectively, were excluded from the calculation, as their effect would result in a lower net loss per share. The following table reconciles the numerator and denominator for the calculation. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Basic and diluted net income (loss) per share: Numerator: Net income (loss) attributable to common stockholders $ 189,869 $ (1,221,131 ) $ (592,827 ) $ (5,875,939 ) Denominator: Weighted average basic shares outstanding 35,869,751 35,253,930 35,710,049 35,228,863 Weighted average diluted shares outstanding 36,142,548 35,253,930 35,710,049 35,228,863 Net income (loss) per share: Basic net income (loss) attributable to common stockholders $ 0.01 $ (0.03 ) $ (0.02 ) $ (0.17 ) Diluted net income (loss) attributable to common stockholders $ 0.01 $ (0.03 ) $ (0.02 ) $ (0.17 ) |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES Income tax expense for the three and nine months ended September 30, 2017 was approximately $112 thousand and $486 thousand, respectively, and reflects an effective tax rate of 37% and -454%, respectively, as compared to approximately $326 thousand and $950 thousand, respectively, for the three and nine months ended September 30, 2016, reflecting an effective tax rate of -36% and -19%, respectively. Income tax expense for the three and nine months ended September 30, 2017 primarily relates to the recognition of $148 thousand and $445 thousand, respectively, of a deferred tax liability associated with goodwill that is tax deductible but constitutes an indefinite lived intangible asset for financial reporting purposes, as well as the recognition of a $36 thousand credit and $41 thousand expense, respectively, of income tax in certain jurisdictions where there are no net operating losses available to offset taxable income. Income tax expense for the three and nine months ended September 30, 2016 primarily relates to the recognition of $281 thousand and $842 thousand, respectively, of a deferred tax liability associated with goodwill that is tax deductible but constitutes an indefinite lived intangible asset for financial reporting purposes, as well as the recognition of $45 thousand and $108 thousand, respectively, of income tax expense in certain jurisdictions where there are no net operating losses available to offset taxable income. The Company accounts for its income taxes in accordance with ASC 740-10, Income Taxes The Company had approximately $160 million of federal and state net operating loss carryforwards (“NOL”) as of December 31, 2016, which results in deferred tax assets of approximately $75 million. The Company has a full valuation allowance against its deferred tax assets as management concluded that it was more likely than not that the Company would not realize the benefit of its deferred tax assets by generating sufficient taxable income in future years. The Company expects to continue to provide a full valuation allowance until, or unless, it can sustain a level of profitability that demonstrates its ability to utilize these assets. The ability of the Company to utilize its NOL in full to reduce future taxable income may become subject to various limitations under Section 382 of the Internal Revenue Code of 1986 (“IRC”). The utilization of such carryforwards may be limited upon the occurrence of certain ownership changes, including the purchase and sale of stock by 5% shareholders and the offering of stock by the Company during any three-year period resulting in an aggregate change of more than 50% of the beneficial ownership of the Company. In the event of an ownership change, Section 382 imposes an annual limitation on the amount of these carryforwards that can reduce future taxable income. Subject to potential Section 382 limitations, the federal losses are available to offset future taxable income through 2036 and expire from 2019 through 2036. Since the Company does business in various states and each state has its own rules with respect to the number of years losses may be carried forward, the state net operating loss carryforwards expire through 2036. |
BUSINESS CONCENTRATIONS AND CRE
BUSINESS CONCENTRATIONS AND CREDIT RISK | 9 Months Ended |
Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
BUSINESS CONCENTRATIONS AND CREDIT RISK | 9. BUSINESS CONCENTRATIONS AND CREDIT RISK Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains all of its cash, cash equivalents and restricted cash in federally insured financial institutions, and performs periodic evaluations of the relative credit standing of these institutions. As of September 30, 2017 and December 31, 2016, the Company’s cash, cash equivalents and restricted cash primarily consisted of checking accounts and money market funds. For the three and nine months ended September 30, 2017 and 2016, no individual client accounted for 10% or more of consolidated revenue. As of September 30, 2017 and December 31, 2016, no individual client accounted for more than 10% of our gross accounts receivable balance. The Company’s customers are primarily concentrated in the United States and Europe, and we carry accounts receivable balances. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. To date, actual losses have been within management’s expectations. |
RESTRUCTURING AND OTHER CHARGES
RESTRUCTURING AND OTHER CHARGES | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER CHARGES | 10. RESTRUCTURING AND OTHER CHARGES During the three months ended March 31, 2017, the Company implemented a targeted reduction in force which resulted in restructuring and other charges of approximately $199 thousand. During the three months ended March 31, 2016, the Company announced the resignation of the Company’s President and Chief Executive Officer, who was also a member of the Company’s Board of Directors. In connection with this resignation, the Company paid severance, will provide continuing medical coverage for 18 months, and incurred recruiting fees, resulting in restructuring and other charges of approximately $1.4 million. During the year ended December 31, 2012, the Company implemented a targeted reduction in force. Additionally, in assessing the ongoing needs of the organization, the Company elected to discontinue using certain software as a service, consulting and data providers, and elected to write-off certain previously capitalized software development projects. The actions were taken after a review of the Company’s cost structure with the goal of better aligning the cost structure with the Company’s revenue base. These restructuring efforts resulted in restructuring and other charges of approximately $3.4 million during the year ended December 31, 2012. Additionally, as a result of the Company’s acquisition of The Deal, LLC (“The Deal”) in September 2012, the Company discontinued the use of The Deal’s office space and implemented a reduction in force to eliminate redundant positions, resulting in restructuring and other charges of approximately $3.5 million during the year ended December 31, 2012. In August 2015, the Company received a one year notice of termination under which the landlord elected to terminate The Deal’s office space lease. As a result, the Company was no longer obligated to fulfill the original full lease term and recorded an adjustment to its restructuring reserve totaling approximately $1.2 million during the three months ended September 30, 2015 and a lease termination credit of approximately $583 thousand when the office space was vacated in August 2016. Collectively, these activities are referred to as the “2012 Restructuring”. As of December 31, 2016, there was no remaining balance in the 2012 Restructuring reserve account. The following table displays the activity of the 2012 Restructuring reserve account during the nine months ended September 30, 2016. Lease Termination Balance December 31, 2015 $ 99,309 Payments net of sublease receipts (77,609 ) Balance September 30, 2016 $ 21,700 |
OTHER LIABILITIES
OTHER LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | 11. OTHER LIABILITIES Other liabilities consist of the following: September 30, 2017 December 31, 2016 Deferred rent $ 1,506,965 $ 1,904,319 Acquisition contingent earn-out — 907,657 Deferred revenue 581,313 460,748 Other 58,176 2,092 Total other liabilities $ 2,146,454 $ 3,274,816 |
STATE AND MUNICIPAL SALES TAX
STATE AND MUNICIPAL SALES TAX | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
STATE AND MUNICIPAL SALES TAX | 12. STATE AND MUNICIPAL SALES TAX In accordance with generally accepted accounting principles, we make a provision for a liability for taxes when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. For a period of time, we did not collect or remit state or municipal sales tax on the charges to our customers for our services in certain states, except that we historically complied with New York sales tax. As such, we recorded a reserve totaling approximately $1.4 million during the six months ended June 30, 2016 as our best estimate of the potential tax exposure for any retroactive assessment. The Company concluded its review of sales tax exposure during the fourth quarter of 2016 which resulted in a reduction to that estimate totaling $700 thousand. As of September 30, 2017, no provision remains. |
SEGMENT AND GEOGRAPHIC DATA
SEGMENT AND GEOGRAPHIC DATA | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DATA | 13. SEGMENT AND GEOGRAPHIC DATA Segments Effective October 1, 2016 as a result of organizational changes related to our new management team, we changed our financial reporting to better reflect how we gather and analyze business and financial information about our businesses. We now report our results in three segments: (i) The Deal / BoardEx and (ii) RateWatch, which comprise our business to business segment, and (iii) business to consumer, which is primarily comprised of the Company’s premium subscription newsletter products and website advertising. We have revised our financial results for the three and nine months ended September 30, 2016 to conform to the current segment presentation. For the Three Months Ended For the Nine Months Ended September 30, September 30, Revenue: 2017 2016 2017 2016 - The Deal / BoardEx $ 5,951,582 $ 5,429,641 $ 17,418,253 $ 16,463,193 - RateWatch 1,918,542 1,786,269 5,694,057 5,416,676 Total business to business 7,870,124 7,215,910 23,112,310 21,879,869 - Business to consumer 7,382,672 7,997,944 23,380,528 25,695,944 Total $ 15,252,796 $ 15,213,854 $ 46,492,838 $ 47,575,813 Operating income (loss): - The Deal / BoardEx $ (356,519 ) $ (315,527 ) $ (1,344,469 ) $ (3,482,414 ) - RateWatch 212,600 151,288 540,441 (215,843 ) Total business to business (143,919 ) (164,239 ) (804,028 ) (3,698,257 ) - Business to consumer 437,470 (718,932 ) 670,889 (1,203,752 ) Total $ 293,551 $ (883,171 ) $ (133,139 ) $ (4,902,009 ) Due to the nature of the Company’s operations, a majority of its assets are utilized across all segments. In addition, segment assets are not reported to, or used by, the Chief Operating Decision Maker to allocate resources or assess performance of the Company’s segments. Accordingly, the Company has not disclosed asset information by segment. Geographic Data During the nine months ended September 30, 2017 and 2016, substantially all of the Company’s revenue was from customers in the United States and substantially all of our long-lived assets are located in the United States. The remainder of the Company’s revenue and its long-lived assets are a result of our BoardEx operations outside of the United States, which is headquartered in London, England. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS Exchange Agreement On November 10, 2017, TheStreet, Inc. (the “Company”) entered into an Exchange Agreement (the “Exchange Agreement”) with TCV VI, L.P., a Delaware limited partnership (“TCV VI”), and TCV Member Fund, L.P., a Cayman Islands exempted limited partnership (“TCV Member Fund” and, together with TCV VI, the “TCV Holders”), which provided for, among other things, the exchange by the TCV Holders of all shares of Series B Preferred Stock of the Company held by them for an aggregate of (i) 6,000,000 shares of newly issued common stock, par value $0.01 per share of the Company (“Common Stock”) and (ii) cash consideration in the amount of $20,000,000 (the “Exchange Transaction”). The Exchange Transaction closed on November 10, 2017. The retirement of the Series B Preferred Stock removes, among other rights of the TCV Holders and restrictions on the Company, a $55 million liquidation preference previously held by TCV. Purchase Agreement On November 10, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with 180 Degree Capital Corp. (“180 Degree Capital”) and TheStreet SPV Series, a limited liability company series of 180 Degree Capital Management, LLC (the “Investors”), pursuant to which the Company sold and issued 7,136,363 shares of its Common Stock, to the Investors at a purchase price of $1.10 per Common Stock in a closing that occurred on November 10, 2017 (the “Financing Transaction”). The closing bid price of the Company’s Common Stock as reported by NASDAQ on November 9, 2017, was $0.92 per share, and the Financing Transaction closed on November 10, 2017. Registration Rights Agreement In connection with the Exchange and Financing Transaction, the Company agreed to register the shares for resale and the Company has agreed to prepare and file a registration statement with the Securities and Exchange Commission within 90 days of the closing. The TCV Holders and the Investors received additional registration rights as set forth in the transaction documents. Amended and Restated Employment Agreement On November 8, 2017, the Company and James Cramer entered into an amended and restated employment agreement with a new four-year term commencing January 1, 2018 (the “Employment Agreement”). Pursuant to the Employment Agreement, Mr. Cramer will author articles for the Company’s publications, provide online video content for the Company’s websites, participate in events and provide reasonable promotional and other services, subject to his personal and professional availability, effective January 1, 2018 through December 31, 2021. In consideration for providing these services, Mr. Cramer will receive a royalty based on the total net revenues of the Company’s consumer subscription products as well as revenues from investor and conference programs, presentations or events offered by the Company in which Mr. Cramer is advertised or serves as a presenter, speaker, participant or panelist. The annual minimum royalty shall not be less than $2.0 million and effective January 1, 2018, the Company will pay Mr. Cramer a monthly draw against the annual royalty payment equal to $2.5 million. At the end of each year, the Company will prepare a royalty statement and calculate and pay the total royalty payable to Mr. Cramer for such year. To the extent the annual royalty amount exceeds the total monthly draw we paid during the period, then such excess amounts will be paid to Mr. Cramer, to the extent the total monthly draw paid during the period exceeds the annual royalty amount, such excess (up to a maximum of $500,000) shall be recoverable by the Company as set forth in the agreement. In addition, during the term of the Employment Agreement, the Company will pay Mr. Cramer an annual license fee in the amount of $300,000 for the use of his name and likeness, payable in four equal installments of $75,000 on each of January 1, April 1, July 1 and October 1. Effective January 2, 2018, Mr. Cramer will be granted restricted stock units (“RSUs”) under the Company’s 2007 Performance Incentive Plan covering 1,000,000 shares of the Company’s Common Stock. The RSUs will be payable in shares of Common Stock and will vest and become payable as to 25% of the shares in four equal installments on December 31 of each of 2018, 2019, 2020 and 2021, respectively, subject to Mr. Cramer’s continued service through each such vesting date and other terms as set forth in the applicable award agreement. Upon (i) the consummation of a “change of control” of the Company, (ii) a termination of Mr. Cramer’s employment by the Company without “cause” or (iii) Mr. Cramer’s resignation for “good reason” (as such terms are defined in the Employment Agreement or the award agreement, as applicable), all of the unvested RSUs held by Mr. Cramer will become fully vested. Mr. Cramer has agreed that, during the term of the Employment Agreement and, if, during the term of the Employment Agreement, either the Company terminates Mr. Cramer’s employment for cause or Mr. Cramer resigns without good reason, for a period of 18 months following such termination of employment, Mr. Cramer will not author articles or columns for any other digital financial publication that competes with the Company without first obtaining the Company’s consent. In addition, subject to certain exceptions, during the term of the Employment Agreement and for a period of 18 months after the cessation of his employment, he will not solicit for employment, in any business enterprise or activity, any person who was employed by the Company during the six months prior to the cessation of his employment. The Employment Agreement may be terminated by the Company for cause, by Mr. Cramer for good reason, upon Mr. Cramer’s death, disability, upon the dissolution or liquidation of the Company, or by Mr. Cramer for specified events provided under the employment agreement. |
DESCRIPTION OF THE BUSINESS A21
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The interim condensed consolidated balance sheet as of September 30, 2017, the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016, and the condensed statements of cash flows for the nine months ended September 30, 2017 and 2016 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company’s financial position as of September 30, 2017, its results of consolidated operations and comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016, and cash flows for the nine months ended September 30, 2017 and 2016. The financial data and other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2017 or for any other future annual or interim period. There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on March 20, 2017. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The Company has evaluated subsequent events for recognition or disclosure. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. In addition, this guidance requires new or expanded disclosures related to the judgments made by companies when following this framework and additional quantitative disclosures regarding contract balances and remaining performance obligations. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 2016). When effective, ASU 2014-09 prescribes either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company will adopt this guidance on January 1, 2018. The Company is currently evaluating the overall impact that ASU 2014-09 will have on the Company’s consolidated financial statements, as well as the expected timing and method of adoption. The Company has established an implementation team, including external advisers, and has commenced the review of the Company’s revenue portfolio and related contracts across its various business units and geographies. Discussions regarding changes to the Company’s current accounting policies and practices remain ongoing and preliminary conclusions are subject to change. Upon adoption, the Company will recognize revenue from contracts with customers as each performance obligation is satisfied, either at a point in time or over a period of time, based on when control transfers to customers. The Company plans to adopt the new revenue recognition standard under the modified retrospective transition method by recognizing the cumulative effect of applying the standard as an adjustment to the Company’s Balance Sheet. Until the Company completes testing of the new revenue recognition standard, the Company does not anticipate being able to provide the impact of the new standard on the Balance Sheets or Statements of Operations however from the initial review and assessment of a sample of contracts with customers the Company does not anticipate the new accounting pronouncement to have a material impact on the Company’s financial statements, except enhanced disclosure regarding revenue recognition, including disclosures of revenue streams, performance obligations, variable consideration and the related judgments and estimates necessary to apply the new standard. In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash In January 2017, the FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other Simplifying the Test for goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation |
CASH AND CASH EQUIVALENTS, MA22
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents marketable securities and restricted cash | The letter of credit serves as a security deposit for the Company’s office space in New York City. September 30, 2017 December 31, 2016 Cash and cash equivalents $ 23,990,179 $ 21,371,122 Marketable securities 1,600,250 1,550,000 Restricted cash 500,000 500,000 Total cash and cash equivalents, marketable securities and restricted cash $ 26,090,429 $ 23,421,122 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements based on valuation technique | Financial assets and liabilities included in our financial statements and measured at fair value are classified based on the valuation technique level in the table below: As of September 30, 2017 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 23,990,179 $ 23,990,179 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,600,250 — — 1,600,250 Contingent earn-out (3) 940,815 — — 940,815 Total at fair value $ 27,031,244 $ 24,490,179 $ — $ 2,541,065 As of December 31, 2016 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 21,371,122 $ 21,371,122 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,550,000 — — 1,550,000 Contingent earn-out (3) 907,657 — — 907,657 Total at fair value $ 24,328,779 $ 21,871,122 $ — $ 2,457,657 (1) Cash and cash equivalents and restricted cash, totaling approximately $24.5 million and $21.9 million as of September 30, 2017 and December 31, 2016, respectively, consist primarily of checking accounts and money market funds for which we determine fair value through quoted market prices. (2) Marketable securities include two municipal ARS issued by the District of Columbia having a fair value totaling approximately $1.6 million and $1.6 million as of September 30, 2017 and December 31, 2016, respectively. Historically, the fair value of ARS investments approximated par value due to the frequent resets through the auction process. Due to events in credit markets, the auction events, which historically have provided liquidity for these securities, have been unsuccessful. The result of a failed auction is that these ARS holdings will continue to pay interest in accordance with their terms at each respective auction date; however, liquidity of the securities will be limited until there is a successful auction, the issuer redeems the securities, the securities mature or until such time as other markets for these ARS holdings develop. For each of our ARS, we evaluate the risks related to the structure, collateral and liquidity of the investment, and forecast the probability of issuer default, auction failure and a successful auction at par, or a redemption at par, for each future auction period. Temporary impairment charges are recorded in accumulated other comprehensive loss, whereas other-than-temporary impairment charges are recorded in our consolidated statement of operations. As of September 30, 2017, the Company determined there was a decline in the fair value of its ARS investments of approximately $250 thousand from its cost basis, which was deemed temporary and was included within accumulated other comprehensive loss. (3) Contingent earn-out represents additional purchase consideration payable to the former shareholders of Management Diagnostics Limited based upon the achievement of specific 2017 audited revenue benchmarks. The probability of achieving each benchmark is based on Management’s assessment of the projected 2017 revenue. The present value of each probability weighted payment was calculated by discounting the probability weighted payment by the corresponding present value factor. |
Schedule of assets and liabilities fair value using significant unobservable inputs (Level 3) | The following tables provide a reconciliation of the beginning and ending balance for the Company’s assets and liabilities measured at fair value using significant unobservable inputs (Level 3): Marketable Balance December 31, 2016 $ 1,550,000 Change in fair value of investment 50,250 Balance September 30, 2017 $ 1,600,250 Contingent Balance December 31, 2016 $ 907,657 Accretion to net present value 33,158 Balance September 30, 2017 $ 940,815 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of valuation assumptions | The weighted-average grant date fair value per share of stock option awards granted during the nine months ended September 30, 2017 and 2016 was $0.27 and $0.37, respectively, using the Black-Scholes model with the following weighted-average assumptions: For the Nine Months Ended 2017 2016 Expected option lives 3.7 years 4.5 years Expected volatility 37.64% 34.78% Risk-free interest rate 1.55% 1.11% Expected dividend yield 0.00% 0.00% |
Schedule of stock option activity | A summary of the activity of the 2007 Plan, and awards issued outside of the 2007 Plan pertaining to stock option grants is as follows: Shares Weighted Aggregate Weighted Awards outstanding at December 31, 2016 5,900,731 $ 1.52 Options granted 135,000 $ 0.90 Options exercised — N/A Options forfeited (27,923 ) $ 1.15 Options expired (623,714 ) $ 1.78 Awards outstanding at September 30, 2017 5,384,094 $ 1.47 $ 48 3.59 Awards vested and expected to vest at September 30, 2017 5,350,569 $ 1.47 $ 47 3.58 Awards exercisable at September 30, 2017 3,491,073 $ 1.62 $ 10 2.48 |
Schedule of restricted stock units | A summary of the activity of the 2007 Plan pertaining to grants of restricted stock units is as follows: Shares Aggregate Weighted Awards outstanding at December 31, 2016 717,995 Restricted stock units granted 565,599 Restricted stock units settled by delivery of Common Stock upon vesting (467,466 ) Restricted stock units forfeited (46,389 ) Awards outstanding at September 30, 2017 769,739 $ 831 0.63 Awards expected to vest at September 30, 2017 763,739 $ 825 0.54 |
Schedule of unvested awards | A summary of the status of the Company’s unvested stock-based payment awards as of September 30, 2017 and changes in the nine months then ended, is as follows: Unvested Awards Number of Shares Weighted Average Grant Date Fair Value Shares underlying awards unvested at December 31, 2016 3,936,427 $ 0.62 Shares underlying options granted 135,000 $ 0.27 Shares underlying restricted stock units granted 565,599 $ 0.90 Shares underlying options vested (1,432,488 ) $ 0.38 Shares underlying restricted stock units settled by delivery of Common Stock upon vesting (467,466 ) $ 1.15 Shares underlying options forfeited (27,923 ) $ 0.37 Shares underlying restricted stock units cancelled (46,389 ) $ 1.20 Shares underlying awards unvested at September 30, 2017 2,662,760 $ 0.70 |
NET INCOME (LOSS) PER SHARE O25
NET INCOME (LOSS) PER SHARE OF COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of net income (loss) per share | The following table reconciles the numerator and denominator for the calculation. For the Three Months Ended For the Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Basic and diluted net income (loss) per share: Numerator: Net income (loss) attributable to common stockholders $ 189,869 $ (1,221,131 ) $ (592,827 ) $ (5,875,939 ) Denominator: Weighted average basic shares outstanding 35,869,751 35,253,930 35,710,049 35,228,863 Weighted average diluted shares outstanding 36,142,548 35,253,930 35,710,049 35,228,863 Net income (loss) per share: Basic net income (loss) attributable to common stockholders $ 0.01 $ (0.03 ) $ (0.02 ) $ (0.17 ) Diluted net income (loss) attributable to common stockholders $ 0.01 $ (0.03 ) $ (0.02 ) $ (0.17 ) |
RESTRUCTURING AND OTHER CHARG26
RESTRUCTURING AND OTHER CHARGES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve account | The following table displays the activity of the 2012 Restructuring reserve account during the nine months ended September 30, 2016. Lease Termination Balance December 31, 2015 $ 99,309 Payments net of sublease receipts (77,609 ) Balance September 30, 2016 $ 21,700 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Schedule of other liabilities | Other liabilities consist of the following: September 30, 2017 December 31, 2016 Deferred rent $ 1,506,965 $ 1,904,319 Acquisition contingent earn-out — 907,657 Deferred revenue 581,313 460,748 Other 58,176 2,092 Total other liabilities $ 2,146,454 $ 3,274,816 |
SEGMENT AND GEOGRAPHIC DATA (Ta
SEGMENT AND GEOGRAPHIC DATA (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting | We have revised our financial results for the three and nine months ended September 30, 2016 to conform to the current segment presentation. For the Three Months Ended For the Nine Months Ended September 30, September 30, Revenue: 2017 2016 2017 2016 - The Deal / BoardEx $ 5,951,582 $ 5,429,641 $ 17,418,253 $ 16,463,193 - RateWatch 1,918,542 1,786,269 5,694,057 5,416,676 Total business to business 7,870,124 7,215,910 23,112,310 21,879,869 - Business to consumer 7,382,672 7,997,944 23,380,528 25,695,944 Total $ 15,252,796 $ 15,213,854 $ 46,492,838 $ 47,575,813 Operating income (loss): - The Deal / BoardEx $ (356,519 ) $ (315,527 ) $ (1,344,469 ) $ (3,482,414 ) - RateWatch 212,600 151,288 540,441 (215,843 ) Total business to business (143,919 ) (164,239 ) (804,028 ) (3,698,257 ) - Business to consumer 437,470 (718,932 ) 670,889 (1,203,752 ) Total $ 293,551 $ (883,171 ) $ (133,139 ) $ (4,902,009 ) |
CASH AND CASH EQUIVALENTS, MA29
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 23,990,179 | $ 21,371,122 | $ 23,945,895 | $ 28,445,416 |
Marketable securities | 1,600,250 | 1,550,000 | ||
Restricted cash | 500,000 | 500,000 | ||
Total cash and cash equivalents, marketable securities and restricted cash | $ 26,090,429 | $ 23,421,122 |
CASH AND CASH EQUIVALENTS, MA30
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH (Details Narrative) | 9 Months Ended | |
Sep. 30, 2017USD ($)Security | Dec. 31, 2016USD ($) | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Marketable securities, fair value basis | $ 1,600,250 | $ 1,550,000 |
Restricted cash collateral for outstanding letters of credit | $ 500,000 | 500,000 |
Municipal Auction Rate Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Number of securities | Security | 2 | |
Marketable securities, cost basis | $ 1,900,000 | 1,900,000 |
Marketable securities, fair value basis | $ 1,600,000 | $ 1,600,000 |
Maturity year | 2,038 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Restricted cash | $ 500,000 | $ 500,000 | |
Marketable securities | 1,600,250 | 1,550,000 | |
Total [Member] | |||
Cash and cash equivalents | [1] | 23,990,179 | 21,371,122 |
Restricted cash | [1] | 500,000 | 500,000 |
Marketable securities | [2] | 1,600,250 | 1,550,000 |
Contingent earn-out | [3] | 940,815 | 907,657 |
Total at fair value | 27,031,244 | 24,328,779 | |
Level 1 [Member] | |||
Cash and cash equivalents | [1] | 23,990,179 | 21,371,122 |
Restricted cash | [1] | 500,000 | 500,000 |
Marketable securities | [2] | ||
Contingent earn-out | [3] | ||
Total at fair value | 24,490,179 | 21,871,122 | |
Level 2 [Member] | |||
Cash and cash equivalents | [1] | ||
Restricted cash | [1] | ||
Marketable securities | [2] | ||
Contingent earn-out | [3] | ||
Total at fair value | |||
Level 3 [Member] | |||
Cash and cash equivalents | [1] | ||
Restricted cash | [1] | ||
Marketable securities | [2] | 1,600,250 | 1,550,000 |
Contingent earn-out | [3] | 940,815 | 907,657 |
Total at fair value | $ 2,541,065 | $ 2,457,657 | |
[1] | Cash and cash equivalents and restricted cash, totaling approximately $24.5 million and $21.9 million as of September 30, 2017 and December 31, 2016, respectively, consist primarily of checking accounts and money market funds for which we determine fair value through quoted market prices. | ||
[2] | Marketable securities include two municipal ARS issued by the District of Columbia having a fair value totaling approximately $1.6 million and $1.6 million as of September 30, 2017 and December 31, 2016, respectively. Historically, the fair value of ARS investments approximated par value due to the frequent resets through the auction process. Due to events in credit markets, the auction events, which historically have provided liquidity for these securities, have been unsuccessful. The result of a failed auction is that these ARS holdings will continue to pay interest in accordance with their terms at each respective auction date; however, liquidity of the securities will be limited until there is a successful auction, the issuer redeems the securities, the securities mature or until such time as other markets for these ARS holdings develop. For each of our ARS, we evaluate the risks related to the structure, collateral and liquidity of the investment, and forecast the probability of issuer default, auction failure and a successful auction at par, or a redemption at par, for each future auction period. Temporary impairment charges are recorded in accumulated other comprehensive loss, whereas other-than-temporary impairment charges are recorded in our consolidated statement of operations. As of September 30, 2017, the Company determined there was a decline in the fair value of its ARS investments of approximately $250 thousand from its cost basis, which was deemed temporary and was included within accumulated other comprehensive loss. | ||
[3] | Contingent earn-out represents additional purchase consideration payable to the former shareholders of Management Diagnostics Limited based upon the achievement of specific 2017 audited revenue benchmarks. The probability of achieving each benchmark is based on Management's assessment of the projected 2017 revenue. The present value of each probability weighted payment was calculated by discounting the probability weighted payment by the corresponding present value factor. |
FAIR VALUE MEASUREMENTS (Deta32
FAIR VALUE MEASUREMENTS (Details 1) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Contingent Earn-Out [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of the period | $ 907,657 |
Accretion of net present value | 33,158 |
Balance at end of the period | 940,815 |
Marketable Securities [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of the period | 1,550,000 |
Change in fair value of investment | 50,250 |
Balance at end of the period | $ 1,600,250 |
FAIR VALUE MEASUREMENTS (Deta33
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cash and cash equivalents and restricted cash | $ 24,500,000 | $ 21,900,000 |
Marketable securities, fair value | 1,600,250 | 1,550,000 |
Municipal Auction Rate Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Marketable securities, fair value | 1,600,000 | $ 1,600,000 |
Decline in fair value of ARS | $ 250,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected option lives | P3Y8M12D | P4Y6M |
Expected volatility | 37.64% | 34.78% |
Risk-free interest rate | 1.55% | 1.11% |
Expected dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION (Det35
STOCK-BASED COMPENSATION (Details 1) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options granted | 135,000 | |
2007 Performance Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Awards outstanding at beginning | 5,900,731 | |
Options granted | 135,000 | 2,900,000 |
Options exercised | ||
Options forfeited | (27,923) | |
Options expired | (623,714) | |
Awards outstanding at ending | 5,384,094 | |
Awards vested and expected to vest at ending | 5,350,569 | |
Awards exercisable at ending | 3,491,073 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Awards outstanding at beginning | $ 1.52 | |
Options granted | 0.90 | |
Options exercised | ||
Options forfeited | 1.15 | |
Options expired | 1.78 | |
Awards outstanding at ending | 1.47 | |
Awards vested and expected to vest at ending | 1.47 | |
Awards exercisable at ending | $ 1.62 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value [Roll Forward] | ||
Awards outstanding at ending | $ 48 | |
Awards vested and expected to vest at ending | 48 | |
Awards exercisable at ending | $ 10 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward] | ||
Awards outstanding at ending | 3 years 7 months 2 days | |
Awards vested and expected to vest at ending | 3 years 6 months 29 days | |
Awards exercisable at ending | 2 years 5 months 23 days |
STOCK-BASED COMPENSATION (Det36
STOCK-BASED COMPENSATION (Details 2) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Restricted stock units granted | 565,599 | |
Restricted stock units settled by delivery of Common Stock upon vesting | (467,466) | |
Restricted stock units forfeited | (46,389) | |
2007 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Awards outstanding at beginning | 717,995 | |
Restricted stock units granted | 565,599 | 558,000 |
Restricted stock units settled by delivery of Common Stock upon vesting | (467,466) | (136,000) |
Restricted stock units forfeited | (46,389) | |
Awards outstanding at ending | 769,739 | |
Awards expected to vest at ending | 763,739 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Intrinsic Value [Roll Forward] | ||
Awards outstanding at ending | $ 831,000 | |
Awards expected to vest at ending | $ 825,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Contractual Life [Roll Foward] | ||
Awards outstanding at ending | 7 months 18 days | |
Awards expected to vest at ending | 6 months 14 days |
STOCK-BASED COMPENSATION (Det37
STOCK-BASED COMPENSATION (Details 3) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Shares underlying awards unvested at beginning | 3,936,427 | |
Shares underlying options granted | 135,000 | |
Shares underlying restricted stock units granted | 565,599 | |
Shares underlying options vested | (1,432,488) | |
Shares underlying restricted stock units settled by delivery of Common Stock upon vesting | (467,466) | |
Shares underlying options forfeited | (27,923) | |
Shares underlying restricted stock units cancelled | (46,389) | |
Shares underlying awards unvested at ending | 2,662,760 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Shares underlying awards unvested at beginning | $ 0.62 | |
Shares underlying options granted | 0.27 | $ 0.37 |
Shares underlying restricted stock units granted | 0.90 | $ 1.30 |
Shares underlying options vested | 0.38 | |
Shares underlying restricted stock units settled by delivery of Common Stock upon vesting | 1.15 | |
Shares underlying options forfeited | 0.37 | |
Shares underlying restricted stock units cancelled | 1.20 | |
Shares underlying awards unvested at ending | $ 0.70 |
STOCK-BASED COMPENSATION (Det38
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted-average grant date fair value of stock option (in dollars per share) | $ 0.27 | $ 0.37 | ||
Weighted-average grant date fair value per share (in dollars per share) | $ 0.90 | $ 1.30 | ||
Noncash share-based compensation | $ 1,205,978 | $ 1,152,025 | ||
Restructuring and other charges | 105,113 | |||
Total fair value of share-based awards vested | 952,000 | 389,000 | ||
Total intrinsic value of options exercised | $ 0 | 0 | ||
Number of stock option granted | 135,000 | |||
Number of RSU granted | 565,599 | |||
Number of shares issued for settled by delivery of common stock upon vesting | 467,466 | |||
2007 Performance Incentive Plan [Member] | ||||
Number of remaining shares available for future grants | 1,200,000 | 1,200,000 | ||
Noncash share-based compensation | $ 401,000 | $ 407,000 | $ 1,200,000 | 1,300,000 |
Restructuring and other charges | $ 105,000 | |||
Number of stock option granted | 135,000 | 2,900,000 | ||
Proceeds from the exercise of stock options | $ 0 | |||
Unrecognized stock-based compensation expense | 1,100,000 | $ 1,100,000 | ||
Weighted average period of recognization | 1 year 2 months 5 days | |||
2007 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Total intrinsic value of share-based awards other than options vested | $ 409,000 | $ 193,000 | ||
Number of RSU granted | 565,599 | 558,000 | ||
Number of shares issued for settled by delivery of common stock upon vesting | 467,466 | 136,000 | ||
Total intrinsic value of share-based awards options and equity instruments other than options outstanding | $ 879,000 | $ 1,300,000 | $ 879,000 | $ 1,300,000 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2000 | |
Number of treasury shares purchased | 211,608 | |
Cash dividend paid to common shares (Series B Preferred Stock on a converted common share basis) (in dollars per share) | $ 0.10 | |
2007 Performance Incentive Plan [Member] | ||
Number of shares for withholding taxes | 1,866,759 | |
Share Repurchase Program [Member] | Common Stock [Member] | ||
Number of authorized shares repurchased | $ 10,000,000 | |
Number of treasury shares purchased | 5,453,416 | |
Value of treasury shares purchased | $ 7,300,000 |
NET LOSS PER SHARE OF COMMON ST
NET LOSS PER SHARE OF COMMON STOCK (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net income (loss) attributable to common stockholders | $ 189,869 | $ (1,221,131) | $ (592,827) | $ (5,875,939) |
Denominator: | ||||
Weighted average basic shares outstanding | 35,869,751 | 35,253,930 | 35,710,049 | 35,228,863 |
Weighted average diluted shares outstanding | 36,142,548 | 35,253,930 | 35,710,049 | 35,228,863 |
Net income (loss) per share: | ||||
Basic net income (loss) attributable to common stockholders | $ 0.01 | $ (0.03) | $ (0.02) | $ (0.17) |
Diluted net income (loss) attributable to common stockholders | $ 0.01 | $ (0.03) | $ (0.02) | $ (0.17) |
NET LOSS PER SHARE OF COMMON 41
NET LOSS PER SHARE OF COMMON STOCK (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |||
Number of restricted stock units and option excluded from calculation | 1,400,000 | 569,000 | 1,200,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||||
Income tax expense | $ 111,850 | $ 325,781 | $ 485,912 | $ 949,657 | |
Effective tax rate | 37.00% | (36.00%) | (454.00%) | (19.00%) | |
Income tax expense recognised as deferred tax liabilities, goodwill and intangible assets | $ 148,000 | $ 281,000 | $ 445,000 | $ 842,000 | |
Certain Jurisdictions Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Income tax expense | $ 36,000 | $ 45,000 | $ 41,000 | $ 108,000 | |
Federal And State Tax Authority [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforwards | $ 160,000,000 | ||||
Deferred tax assets | $ 75,000,000 | ||||
Description of operating loss carry forward expiration year | Expire from 2019 through 2036 | ||||
Description of operating loss carryforwards limitations on use | The utilization of such carryforwards may be limited upon the occurrence of certain ownership changes, including the purchase and sale of stock by 5% shareholders and the offering of stock by the Company during any three-year period resulting in an aggregate change of more than 50% of the beneficial ownership of the Company. |
BUSINESS CONCENTRATIONS AND C43
BUSINESS CONCENTRATIONS AND CREDIT RISK (Details Narrative) - Customer Concentration Risk [Member] - Number | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Exceeds 10% Revenue [Member] | |||
Number of customers | 0 | 0 | |
Exceeds 10% Accounts Receivables [Member] | |||
Number of customers | 0 | 0 |
RESTRUCTURING AND OTHER CHARG44
RESTRUCTURING AND OTHER CHARGES (Details) - 2012 Restructuring Reserve Account [Member] - Lease Termination [Member] | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 99,309 |
Payments net of sublease receipts | (77,609) |
Ending balance | $ 21,700 |
RESTRUCTURING AND OTHER CHARG45
RESTRUCTURING AND OTHER CHARGES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Aug. 31, 2016 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2012 | Sep. 30, 2015 | |
Restructuring and other charges | $ (582,519) | $ 198,979 | $ 960,491 | ||||||
lease termination credit | $ 583,000 | ||||||||
2012 Restructuring Reserve Account [Member] | |||||||||
Restructuring reserve | $ 1,200,000 | ||||||||
Employee Severance [Member] | |||||||||
Restructuring and other charges | $ 199,000 | $ 1,400,000 | |||||||
Software [Member] | 2012 Restructuring Reserve Account [Member] | |||||||||
Restructuring and other charges | $ 3,400,000 | ||||||||
Office Space [Member] | 2012 Restructuring Reserve Account [Member] | The Deal, LLC [Member] | |||||||||
Restructuring and other charges | $ 3,500,000 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 1,506,965 | $ 1,904,319 |
Acquisition contingent earn-out | 907,657 | |
Deferred revenue | 581,313 | 460,748 |
Other | 58,176 | 2,092 |
Total other liabilities | $ 2,146,454 | $ 3,274,816 |
STATE AND MUNICIPAL SALES TAX (
STATE AND MUNICIPAL SALES TAX (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Reserve for state and municipal sales tax | $ 1,400,000 | |
Reduction in liablity | $ 700,000 |
SEGMENT AND GEOGRAPHIC DATA (De
SEGMENT AND GEOGRAPHIC DATA (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Total business to business | $ 7,870,124 | $ 7,215,910 | $ 23,112,310 | $ 21,879,869 |
Business to consumer | 7,382,672 | 7,997,944 | 23,380,528 | 25,695,944 |
Total | 15,252,796 | 15,213,854 | 46,492,838 | 47,575,813 |
Operating income (loss): | ||||
Total business to business | (143,919) | (164,239) | (804,028) | (3,698,257) |
Business to consumer | 437,470 | (718,932) | 670,889 | (1,203,752) |
Total | 293,551 | (883,171) | (133,139) | (4,902,009) |
The Deal / BoardEx [Member] | ||||
Revenue: | ||||
Total business to business | 5,951,582 | 5,429,641 | 17,418,253 | 16,463,193 |
Operating income (loss): | ||||
Total business to business | (356,519) | (315,527) | (1,344,469) | (3,482,414) |
RateWatch [Member] | ||||
Revenue: | ||||
Total business to business | 1,918,542 | 1,786,269 | 5,694,057 | 5,416,676 |
Operating income (loss): | ||||
Total business to business | $ 212,600 | $ 151,288 | $ 540,441 | $ (215,843) |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Oct. 01, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Jan. 02, 2018 | Nov. 10, 2017 | Jan. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Nov. 09, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Number of RSU granted | 565,599 | |||||||||
Liquidation preference | $ 55,000,000 | $ 55,000,000 | ||||||||
2007 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Number of RSU granted | 565,599 | 558,000 | ||||||||
Subsequent Event [Member] | Exchange Agreement [Member] | TCV Holders [Member] | Series B Preferred Stock [Member] | ||||||||||
Number of shares issued | 6,000,000 | |||||||||
Portion of cash paid to retire the preferred stock | $ 20,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | |||||||||
Liquidation preference | $ 55,000,000 | |||||||||
Subsequent Event [Member] | Purchase Agreement [Member] | 180 Degree Capital Management LLC [Member] | Common Stock [Member] | ||||||||||
Number of shares issued | 7,136,363 | |||||||||
Share price (in dollars per share) | $ 1.10 | $ 0.92 | ||||||||
Subsequent Event [Member] | Purchase Agreement [Member] | Mr. Cramer [Member] | ||||||||||
Annual license fee | $ 2,500,000 | |||||||||
Annual royalty | $ 75,000 | $ 75,000 | $ 75,000 | $ 75,000 | $ 300,000 | |||||
Description of royalty payments | The annual minimum royalty shall not be less than $2.0 million and effective January 1, 2018, the Company will pay Mr. Cramer a monthly draw against the annual royalty payment equal to $2.5 million. | |||||||||
Subsequent Event [Member] | Amended and Restated Employment Agreement [Member] | Mr. Cramer [Member] | 2007 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Number of RSU granted | 1,000,000 | |||||||||
Description of granted restricted stock units | The RSUs will be payable in shares of Common Stock and will vest and become payable as to 25% of the shares in four equal installments on December 31 of each of 2018, 2019, 2020 and 2021, respectively, subject to Mr. Cramer’s continued service through each such vesting date and other terms as set forth in the applicable award agreement. |