Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 31, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'DecisionPoint Systems, Inc. | ' |
Entity Central Index Key | '0001505611 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 12,729,563 |
Unaudited_Condensed_Consolidat
Unaudited Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash | $1,420 | $641 |
Accounts receivable, net | 9,649 | 10,504 |
Due from related party | ' | 188 |
Inventory, net | 681 | 1,533 |
Deferred costs | 4,055 | 3,809 |
Deferred tax assets | 49 | 49 |
Prepaid expenses and other current assets | 52 | 188 |
Total current assets | 15,906 | 16,912 |
Property and equipment, net | 145 | 136 |
Other assets, net | 141 | 165 |
Deferred costs, net of current portion | 1,615 | 1,807 |
Goodwill | 8,401 | 8,395 |
Intangible assets, net | 3,029 | 3,907 |
Total assets | 29,237 | 31,322 |
Current liabilities | ' | ' |
Accounts payable | 8,443 | 9,774 |
Accrued expenses and other current liabilities | 2,897 | 2,976 |
Lines of credit | 4,642 | 3,883 |
Current portion of debt | 1,095 | 1,474 |
Due to related parties | 114 | 77 |
Accrued earn out consideration | 291 | 319 |
Warrant liability | 637 | 803 |
Unearned revenue | 7,263 | 7,481 |
Total current liabilities | 25,382 | 26,787 |
Long term liabilities | ' | ' |
Unearned revenue, net of current portion | 2,313 | 2,481 |
Debt, net of current portion and discount | 1,805 | 1,961 |
Accrued earn out consideration, net of current portion | 94 | 149 |
Deferred tax liabilities | 732 | 740 |
Other long term liabilities | 72 | 77 |
Total liabilities | 30,398 | 32,195 |
Commitments and contingencies and subsequent event | ' | ' |
STOCKHOLDERS' DEFECIT | ' | ' |
Cumulative Convertible Preferred stock, $0.001 par value, 10,000,000 shares authorized, 1,547,845 and 1,514,155 shares issued and outstanding, including cumulative and imputed preferred dividends of $2,122 and $1,956, and with a liquidation preference of $13,584 and $13,232 at June 30, 2014 and December 31, 2013, respectively | 12,649 | 12,193 |
Common stock, $0.001 par value, 100,000,000 shares authorized,12,883,446 issued and 12,729,563 outstanding as of June 30, 2014, and as of December 31, 2013 | 13 | 13 |
Additional paid-in capital | 17,235 | 17,231 |
Treasury stock, 153,883 shares of common stock | -205 | -205 |
Accumulated deficit | -30,271 | -29,475 |
Unearned ESOP shares | -557 | -629 |
Accumulated other comprehensive income | -25 | -1 |
Total stockholders' deficit | -1,161 | -873 |
Total liabilities and stockholders' deficit | $29,237 | $31,322 |
Unaudited_Condensed_Consolidat1
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shared authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 1,547,845 | 1,514,155 |
Preferred stock, shares outstanding | 1,547,845 | 1,514,155 |
Preferred stock, dividends (in dollars) | $2,122 | $1,956 |
Preferred Stock, Liquidation preference (in dollars) | $13,584 | $13,232 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shared authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 12,883,446 | 12,883,446 |
Common stock, shares outstanding | 12,729,563 | 12,729,563 |
Treasury stock, shares | 153,883 | 153,883 |
Unaudited_Condensed_Consolidat2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net sales | $16,514 | $14,721 | $33,222 | $28,493 |
Cost of sales | 12,731 | 11,155 | 25,866 | 22,103 |
Gross profit | 3,783 | 3,566 | 7,356 | 6,390 |
Selling, general and administrative expense | 3,417 | 4,464 | 7,134 | 9,496 |
Operating income (loss) | 366 | -898 | 222 | -3,106 |
Other expense: | ' | ' | ' | ' |
Interest expense | 222 | 256 | 429 | 483 |
Fair market value adjustment of warrant liabilities | 84 | ' | -166 | ' |
Other income, net | -21 | -8 | -31 | -14 |
Total other expense | 285 | 248 | 232 | 469 |
Net income (loss) before income taxes | 81 | -1,146 | -10 | -3,575 |
Provision (benefit) for income taxes | 100 | -30 | 122 | -357 |
Net loss | -19 | -1,116 | -132 | -3,218 |
Cumulative and imputed dividends on Series A and B preferred stock | -27 | -27 | -54 | -54 |
Cash and imputed dividends on Series D and E preferred stock | -307 | -191 | -609 | -384 |
Net loss attributable to common shareholders | -353 | -1,334 | -795 | -3,656 |
Net loss per share - | ' | ' | ' | ' |
Basic and diluted | ($0.03) | ($0.15) | ($0.06) | ($0.42) |
Weighted average shares outstanding - | ' | ' | ' | ' |
Basic and diluted | 12,342,169 | 8,698,626 | 12,328,410 | 8,659,931 |
Comprehensive loss | ($19) | ($1,113) | ($156) | ($3,217) |
Unaudited_Condensed_Consolidat3
Unaudited Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($132) | ($3,218) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 911 | 995 |
Amortization of deferred financing costs and note discount | 79 | 106 |
Employee and Director stock-based compensation | 50 | 9 |
Change in fair value of warrants | -166 | ' |
ESOP compensation expense | 26 | 69 |
Allowance for doubtful accounts | -36 | 42 |
Loss on disposal of property and equipment | ' | 4 |
Deferred taxes. net | -9 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 892 | 2,850 |
Due from related party | 188 | ' |
Inventory, net | 852 | -40 |
Deferred costs | -55 | 71 |
Prepaid expenses and other current assets | 188 | -318 |
Other assets, net | 10 | 4 |
Accounts payable | -1,331 | -169 |
Accrued expenses and other current liabilities | -47 | -19 |
Due to related parties | 37 | ' |
Unearned revenue | -388 | -229 |
Net cash provided by operating activities | 1,069 | 157 |
Cash flows from investing activities | ' | ' |
Purchases of property and equipment | -37 | -11 |
Net cash used in investing activities | -37 | -11 |
Cash flows from financing activities | ' | ' |
(Repayments) borrowings from lines of credit, net | 758 | -700 |
Proceeds from issuance of term debt | ' | 1,000 |
Repayment of debt | -546 | -1,018 |
Paid financing costs | -100 | -119 |
Dividends paid | -247 | -154 |
Payments for contingent aquisition liability | -84 | ' |
Net cash used in by financing activities | -219 | -991 |
Effect on cash of foreign currency translation | -34 | 8 |
Net increase (decrease) in cash | 779 | -837 |
Cash at beginning of period | 641 | 1,103 |
Cash at end of period | 1,420 | 266 |
Supplemental disclosures of cash flow information: | ' | ' |
Interest paid | 456 | 502 |
Income taxes paid | 31 | 33 |
Supplemental disclosure of non-cash financing activities: | ' | ' |
Accrued and imputed dividends on preferred stock | $663 | $438 |
Description_of_Business
Description of Business | 6 Months Ended |
Jun. 30, 2014 | |
Description of Business [Abstract] | ' |
DESCRIPTION OF BUSINESS | ' |
NOTE 1 - DESCRIPTION OF BUSINESS | |
Description of Business | |
DecisionPoint Systems, Inc., (“DecisionPoint”, the “Company”, “we”, or “us”) through its subsidiaries is an enterprise mobility systems integrator that sells and installs mobile computing and wireless systems that are used both within a company’s facilities in conjunction with wireless networks and in the field using carrier-based wireless networks. These systems generally include mobile computers, mobile application software, and related data capture equipment including bar code scanners and radio frequency identification (“RFID”) readers. The Company also provides professional services, proprietary and third party software and software customization as an integral part of its customized solutions for its customers. The suite of software products utilizes late breaking technologies to empower the mobile worker in many areas including merchandising, sales and delivery; field service; logistics and transportation; and warehouse management. |
Basis_of_Presentation_Liquidit
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
NOTE 2 - BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the period ended June 30, 2014, are not necessarily indicative of results for the full 2014 fiscal year or any other future interim periods. | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, DecisionPoint Systems International and Apex Systems Integrators, Inc. (“Apex”). DecisionPoint Systems International has two wholly-owned subsidiaries, DecisionPoint Systems Group, Inc. (“DPS Group”) and CMAC, Inc. (“CMAC”). The Company currently operates in one business segment. | |||||||||||||||||
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the recorded amounts reported therein. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company uses historical experience and various other assumptions that are believed to be reasonable under the circumstances to form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates and assumptions used in preparation of the unaudited condensed consolidated financial statements. | |||||||||||||||||
These unaudited condensed consolidated financial statements have been prepared by management and should be read in conjunction with the audited consolidated financial statements of DecisionPoint Systems, Inc. and notes thereto for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2014. | |||||||||||||||||
Liquidity and Going Concern | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements were prepared on a going concern basis in accordance with U.S. GAAP. The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raises substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business, the Company must establish sustained positive operating results through increased sales, successfully implement cost cutting measures, avoid further unforeseen expenses, potentially raise additional equity or debt capital, and successfully refinance its current debt obligations when they come due in February of 2015. There can be no assurance that the Company will be able to achieve sustainable positive operating results or cost reductions or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. | |||||||||||||||||
If the Company does not continue to achieve positive operating results and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, (1) a reduction in the nature and scope of the Company’s operations, (2) the Company’s inability to fully implement its current business plan and (3) continued defaults under the Company’s various loan agreements (for a description of past defaults, see the discussion below). There can be no assurance that the Company will successfully improve its liquidity position. The accompanying unaudited condensed consolidated financial statements do not reflect any adjustments that might be required if our liquidity position does not improve. | |||||||||||||||||
In the quarter ended June 30, 2014, the Company experienced an increase in revenue of $1.8 million, or 12.2% compared to the quarter ended June 30, 2013, and a $4.7 million, or 16.6% increase in revenue for the six months ended June 30, 2014 over the comparable six months of 2013. In the quarter ended June 30, 2014, the Company experienced a net loss of $19,000 compared to the net loss of $1.1 million for the quarter ended June 30, 2013, and a $132,000 net loss for the six months ended June 30, 2014 compared to a net loss of $3.2 million for the comparable period in 2013. At June 30, 2014, the Company had a substantial working capital deficit totaling $9.5 million which improved by $0.4 million from the working capital deficit of $9.9 million at December 31, 2013. Although a portion of this deficit is associated with deferred costs, unearned revenues and term debt that has been classified current due to expected future covenant violations (see further discussion at Note 8), the liabilities of the Company that we expect will have to be satisfied in the foreseeable future in cash substantially exceed the operating assets that weexpected to have available in cash. As a result of our historical operations, the availability under our credit line has contracted and our liquidity has been constrained. | |||||||||||||||||
To address liquidity constraints, the Company has reduced non-essential expenses. Such expense reduction measures have included, but have not been limited to, consolidation of information technology environments, consolidation of our East Coast depot facility into our larger California depot facility, the reduction of outsourced consulting expertise where unnecessary and the replacement of certain service providers with lower cost providers. The Company has also consolidated administrative personnel and reduced total staffing levels by 29% from April 2013 through February 2014, constituting annual savings of approximately $3 million. These cost reduction measures have reduced the expense structure of the Company’s business significantly. The Company is focused on continuing to improve processes and reduce costs. Currently, the Company has no plans to seek additional outside funding through the sale of our securities unless deemed necessary. Should additional outside funding be needed, there is no assurance that such funding will be available on terms acceptable to us, or at all. If the Company raises additional funds by selling additional shares of capital stock, or securities convertible into shares of our capital stock, the ownership interest of the Company’s existing common stock holders will be diluted. | |||||||||||||||||
During 2012, 2013 and the first six months of 2014, all principal and interest payments on the Company’s term debt were made within payment terms. On August 16, 2013, the Company's credit agreement ("RBC Credit Agreement") with the Royal Bank of Canada ("RBC") was amended and certain financial covenants were modified. These financial covenants required the Company to maintain specified ratios for fixed coverage and a ratio of funded debt to EBITDA to be tested on a quarterly basis. The Company was not in compliance with the reset covenants in 2013 and the first six months of 2014. Although management of the Company believes it is not likely that, as a result of this noncompliance, RBC will exercise its rights up to, and including, acceleration of the outstanding debt, there can be no assurance that RBC will not exercise its rights pursuant to the RBC Credit Agreement.Accordingly, the term debt due to RBC is classified as current on the accompanying unaudited condensed consolidated balance sheets. | |||||||||||||||||
As of June 30, 2014, the outstanding balance on our line of credit with Silicon Valley Bank (“SVB”) was $4.6 million, up from $3.9 million at December 31, 2013, and the availability under the line of credit has decreased to $1.7 million (see Note 7 – Lines of Credit). The Company relies on the SVB and RBC lines of credit to fund daily operating activities, and the Company maintains very little cash on hand. As of June 30, 2014, the Company was in compliance with the Tangible Net Worth financial covenant under the SVB line of credit and had available a $1.0 million cushion over the covenant requirement. The Company currently believes that at the time of this filing it is compliant with all the terms and provisions of the SVB lending agreement. Should the Company’s results fail to improve further or once more deteriorate in a manner consistent with its recent historical financial performance, the Company will violate the Tangible Net Worth financial covenant unless it can raise additional outside funding in amounts that are approximately twice the amount of the losses incurred. | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
There have been no material changes to the Company's significant accounting policies during the six months ended June 30, 2014. For a comprehensive description of the Company's significant accounting policies, see Footnote 2 of the Company's consolidated financial statements included in the Company's 2013 Annual Report on Form 10-K filed on March 31, 2014 with the SEC. | |||||||||||||||||
Revenue Recognition - Revenues are generated through product sales, warranty and maintenance agreements, software customization, and professional services. Product sales are recognized when the following criteria are met (1) there is persuasive evidence that an arrangement exists; (2) delivery has occurred and title has passed to the customer which generally happens at the point of shipment provided that no significant obligations remain; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. The Company generates revenues from the sale of extended warranties on wireless and mobile hardware and systems. Revenue related to extended warranty and service contracts is recorded as unearned revenue and is recognized over the life of the contract as the Company maintains financial risk throughout the term of these contracts and may be liable to refund a customer for amounts paid in certain circumstances. Our policy is to classify shipping and handling costs billed to customers and the related expenses as cost of sales. | |||||||||||||||||
The Company also generates revenue from professional services and customer specified software customization on either a fee-for-service or fixed fee basis. Revenue from software customization and professional services that is contracted as fee-for-service is recognized in the period in which the services are performed or delivered. Adjustments to contract price and estimated labor costs are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The Company records sales net of sales tax. | |||||||||||||||||
The Company enters into revenue arrangements that contain multiple deliverables. Judgment is required to properly identify the accounting units of the multiple deliverable transactions and to determine the manner in which revenue should be allocated among the accounting units. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria of revenue recognition have been met for each deliverable in order for revenue recognition to occur in the appropriate accounting period. In an arrangement with multiple deliverables, the delivered item or items shall be considered a separate unit of accounting if both of the following criteria are met: (i) the delivered item or items have value to the customer on a standalone basis; (ii) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement shall be combined with the other applicable undelivered item(s) within the arrangement and the allocation of arrangement consideration and the recognition of revenue then shall be determined for those combined deliverables as a single unit of accounting. While changes in the allocation of the arrangement consideration between the units of accounting will not affect the amount of total revenue recognized for a particular sales arrangement, any material changes in these allocations could affect the timing of revenue recognition, which could affect the Company’s results of operations. When the Company enters into an arrangement that includes multiple elements, we allocate revenue based on their relative selling prices. We use a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor specific objective evidence of fair value (“VSOE”), (ii) third party evidence of selling prices (“TPE”) and (iii) best estimate of selling price (“ESP”) as a proxy for VSOE. When both VSOE and TPE are unavailable, we use ESP. We determine ESP by considering all relevant factors in establishing the price, which is demonstrated in a gross margin model used. | |||||||||||||||||
Revenue from software licenses may contain arrangements with multiple deliverables, including post-contract customer support, that are subject to software revenue recognition guidance. The revenue for these arrangements is allocated to the software and non-software deliverable based on the relative selling prices of all components in the arrangement using the criteria above. Post-contract support is recognized ratably over the support period. When a contract contains multiple elements wherein the only undelivered element is post-contract customer support and VSOE of the fair value of post-contract customer support does not exist, revenue from the entire arrangement is recognized ratably over the support period. Software royalty revenue is recognized in arrears on a quarterly basis, based upon reports received from licensees during the period, unless collectability is not reasonably assured, in which case revenue is recognized when payment is received from the licensee. | |||||||||||||||||
Concentration of Credit Risk - Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and accounts payable. Beginning January 1, 2013, all of our cash balances were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor at each financial institution. This coverage is available at all FDIC member institutions. The Company uses Silicon Valley Bank, which is an FDIC insured institution. Based on these facts, collectability of bank balances appears to be adequate. | |||||||||||||||||
Historically, a relatively small number of customers have accounted for a significant portion of the Company’s revenue. The Company had one customer who represented 12% and 11% of the Company’s revenue for the six months ended June 30, 2014 and 2013, respectively. The Company had three customers, two of which were not the same, who represented 25% and 22% of its revenue for the six months ended June 30, 2014 and 2013, respectively. The Company’s accounts receivable was concentrated with one customer at June 30, 2014, representing 18% of gross accounts receivable and with one customer at June 30, 2013, representing 13% of gross accounts receivable. Customer mix can shift significantly from year to year, but a concentration of the business with a few large customers is typical in any given year. A decline in revenues could occur if a customer that has been a significant source of revenue in one financial reporting period is a less significant source of revenue in the following period. The loss of a significant customer could have a material adverse impact on the Company. | |||||||||||||||||
The Company has the same four primary vendors for the six months ended June 30, 2014 compared to the similar period in 2013. For the six months ended June 30, 2014, the Company had purchases from these four vendors that collectively represented 58% of total purchases and 65% of the total outstanding accounts payable at June 30, 2014. For the six months ended June 30, 2013, the Company had purchases from these four vendors that collectively represented 55% of total purchases and 67% of the total outstanding accounts payable at June 30, 2013. The same single vendor represented 21% and 18% of the total purchases for the six months ended June 30, 2014 and 2013, respectively. Loss of this certain vendor could have a material adverse effect on our operations. | |||||||||||||||||
The Company’s contracts with these customers and other customers do not include any specific purchase requirements or other requirements outside of the normal course of business. The majority of customer contracts are on an annual basis for service support while on a purchase order basis for hardware purchases. Typical hardware sales are submitted on an estimated order basis with subsequent follow on orders for specific quantities. These sales are ultimately subject to the time that the units are installed at each of the customer locations as per their requirements. Service contracts are purchased on an annual basis generally and are the performance responsibility of the actual service provider as opposed to the Company. Termination provisions are generally standard clauses based upon non-performance, but a customer can cancel with a certain reasonable notice period anywhere from 30 to 90 days. General industry standards for contracts provide ordinary terms and conditions, while actual work and performance aspects are usually dictated by a Statement of Work which outlines what is being ordered, product specifications, delivery, installation and pricing. | |||||||||||||||||
Translation of Foreign Currencies - The Company's functional currency is the U.S. dollar. The financial statements of the Company's foreign subsidiary is measured using the local currency, in this case the Canadian dollar (CDN$), as its functional currency and is translated to U.S. dollars for reporting purposes. Assets and liabilities of the subsidiary are translated at exchange rates as of the balance sheet dates. Revenues and expenses of the subsidiary are translated at the rates of exchange in effect during the year. | |||||||||||||||||
Fair Value Measurement - Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: | |||||||||||||||||
● | Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
● | Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. | ||||||||||||||||
● | Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company. | ||||||||||||||||
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. | |||||||||||||||||
Liabilities Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||
The Company measures certain liabilities at fair value on a recurring basis such as our contingent consideration related to business combinations and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the six months ended June 30, 2014. | |||||||||||||||||
The Company has classified its contingent consideration related to the Apex acquisition as a Level 3 liability. Revenue and other assumptions used in the calculation require significant management judgment. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. Based on that assessment, the Company recognized an adjustment of $0 to the actual calculation of the earn-out obligations it incurred in connection with its Apex acquisition during the six months ended June 30, 2013. On June 9, 2014, the accounting expert issued its final report and the fair value of the earn-out was calculated to be CDN$400,000 of which CDN$89,000 (US$84,000) (22.22%) was paid in cash and CDN$311,000 (US$291,000) (77.78%) payable in the form of a convertible promissory note (see Note 5 – Business Combinations). The convertible promissory note is expected to be executed in the third quarter of 2014. | |||||||||||||||||
As part of the Apex acquisition in 2012, the Company is obligated to pay bonus consideration to the CEO of Apex. Such bonus is considered additional contingent purchase consideration as the Company is obligated to pay the bonus regardless of whether or not the CEO’s employment is retained. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Closing Date). At June 30, 2014 there is CDN$101,000 (US$94,000) recorded in earn out consideration in the Company’s unaudited condensed consolidated financial statements. | |||||||||||||||||
The Company has classified certain warrants related to the August 2013 issuance and sale of Common Stock in a private offering as a Level 3 Liability. Assumptions used in the calculation require significant judgment. The Company reassesses the fair value of the warrant liabilities on a quarterly basis. Based on that assessment, the Company recognized a $166,000 reduction to the fair value of the warrant liability for the six months ended June 30, 2014. | |||||||||||||||||
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 385 | $ | - | $ | - | $ | 385 | |||||||||
Fair value of warrants issued in connection | |||||||||||||||||
with share purchase agreement | 637 | - | - | 637 | |||||||||||||
Balance at June 30, 2014 | $ | 1,022 | $ | - | $ | - | $ | 1,022 | |||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 468 | $ | - | $ | - | $ | 468 | |||||||||
Fair value of warrants issued in connection | |||||||||||||||||
with share purchase agreement | 803 | - | - | 803 | |||||||||||||
Balance at December 31, 2013 | $ | 1,271 | $ | - | $ | - | $ | 1,271 | |||||||||
The following table summarizes changes to the fair value of the contingent consideration and derivative warrants, which are Level 3 liabilities (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Derivative | ||||||||||||||||
consideration | warrants | ||||||||||||||||
Balance at December 31, 2013 | $ | 468 | $ | 803 | |||||||||||||
Adjustments to fair value of warrants (reflected in other income) | - | (166 | ) | ||||||||||||||
Cash paid for contingent acqusition liability | (84 | ) | - | ||||||||||||||
Effect of currency translation | 1 | - | |||||||||||||||
Balance at June 30, 2014 | $ | 385 | $ | 637 | |||||||||||||
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis | |||||||||||||||||
The Company's non-financial assets and liabilities, such as goodwill, intangible assets, and other long lived assets resulting from business combinations are measured at fair value using income and market comparable valuation methodologies at the date of acquisition and subsequently re-measured if there are indicators of impairment. There were no indicators of impairment identified during the six months ended June 30, 2014. | |||||||||||||||||
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” (Topic 606), which supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and most industry specific guidance. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This new guidance is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this new guidance beginning in fiscal 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt this new guidance and management is currently evaluating which transition approach to use and the impact of this new guidance on our consolidated financial position or results of operations. |
Loss_Per_Common_Share
Loss Per Common Share | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Loss Per Common Share [Abstract] | ' | ||||||||
LOSS PER COMMON SHARE | ' | ||||||||
NOTE 3 – LOSS PER COMMON SHARE | |||||||||
Basic loss per share is computed by dividing the loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The weighted-average basic and diluted shares for each of the six months ended June 30, 2014 and 2013 exclude approximately 0.4 million and 0.5 million, respectively, of shares related to the Employee Stock Ownership Plan that have not been committed to be released. | |||||||||
For periods presented in which there is a net loss, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive. All potentially dilutive securities are anti-dilutive due to the net loss incurred by the Company in the periods presented. | |||||||||
Potential dilutive securities consist of (in thousands): | |||||||||
Six Months Ended June 30, | |||||||||
2014 | 2013 | ||||||||
Convertible preferred stock - Series A | 270 | 270 | |||||||
Convertible preferred stock - Series B | 131 | 131 | |||||||
Convertible preferred stock - Series D | 10,287 | 7,042 | |||||||
Convertible preferred stock - Series E | 8,330 | - | |||||||
Warrants to purchase common stock | 3,555 | 981 | |||||||
Options to purchase common stock | 737 | 544 | |||||||
Total potentially dilutive securities | 23,310 | 8,968 | |||||||
Warrant_Liability
Warrant Liability | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Warrant Liability [Abstract] | ' | ||||||||||||||||
WARRANT LIABILITY | ' | ||||||||||||||||
NOTE 4 – WARRANT LIABILITY | |||||||||||||||||
The Company has determined that certain warrants the Company has issued contain provisions that protect the holders from future issuances of the Company’s Common Stock at prices below such warrants’ then-in-effect respective exercise prices (see Note 9). These provisions could result in modification of the warrants then-in-effect exercise price. The Company has evaluated the guidance ASC 480-10 Distinguishing Liabilities from Equity and ASC 815-40 Contracts in an Entity’s Own Equity. Pursuant to this guidance, the Company’s management has concluded that these instruments do not meet the criteria for classification as equity treatment and must be recorded as a liability as a result of the terms in the warrants that provide for price protection in the event of a future issuance. The Company recognizes these warrants as liabilities at their fair value and re-measures them at fair value on each reporting date. ASC 820 Fair Value Measurement provides requirements for disclosure of liabilities that are measured at fair value on a recurring basis in periods subsequent to the initial recognition (see Note 2). | |||||||||||||||||
The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities. The estimated fair values were determined using a Monte Carlo option pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of derivative liabilities. Various factors are considered in the pricing models the Company uses to value the warrants, including the Company’s current common stock price, the remaining life of the warrants, the volatility of the Company’s common stock price, and the risk-free interest rate. In addition, as of the valuation dates, management assessed the probabilities of future financing assumptions in the Monte Carlo valuation models. Future changes in these factors will have a significant impact on the computed fair value of the warrant liability. Accordingly, the Company expects future changes in the fair value of the warrants to continue to vary from quarter to quarter. | |||||||||||||||||
The Company revalues the warrants as of the end of each reporting period. The estimated fair value of the outstanding warrant liabilities was approximately $637,000 and $803,000, as of June 30, 2014 and December 31, 2013, respectively. The increase in fair value of the warrant liabilities for the three months ended June 30, 2014 was $84,000 while the decrease in fair value of the warrant liabilities for the six months ended June 30, 2014 was $166,000. The adjustments to the fair value of the warrant liabilities are included in other income in the Company’s consolidated statement of operations. | |||||||||||||||||
The warrant liabilities were valued at the closing dates of the common stock purchase agreement (see Note 9(c)) and the end of each reporting period using a Monte Carlo valuation model with the following assumptions: | |||||||||||||||||
Placement Agent Warrants | Investor Warrants | ||||||||||||||||
Warrants | June | December | June | December | |||||||||||||
30, 2014 | 31, 2013 | 30, 2014 | 31, 2013 | ||||||||||||||
Closing price per share of common stock | $ | 0.46 | $ | 0.53 | $ | 0.46 | $ | 0.53 | |||||||||
Exercise price per share (range) | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||||
Expected volatility | 125.2 | % | 123.5 | % | 125.2%-125.4 | % | 123.5 | % | |||||||||
Risk-free interest rate | 1.3 | % | 1.6 | % | 1.3 | % | 1.6 | % | |||||||||
Dividend yield | - | - | - | - | |||||||||||||
Remaining expected term of underlying securities (years) | 4.1 | 4.6 | 4.1 | 4.6 |
Business_Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2014 | |
Business Combinations [Abstract] | ' |
BUSINESS COMBINATIONS | ' |
NOTE 5 – BUSINESS COMBINATIONS | |
Illume Mobile | |
On July 31, 2012 (“Illume Closing Date”), the Company consummated an asset purchase agreement (“Asset Purchase Agreement”) with MacroSolve, Inc. Pursuant to the Asset Purchase Agreement, the Company purchased the business (including substantially all the related assets) of the seller’s Illume Mobile division (“Illume Mobile”), based in Tulsa, Oklahoma. Founded in 1996, Illume Mobile is a mobile business solutions provider that serves mobile products and platforms. Illume Mobile’s initial core business is the development and integration of business applications for mobile environments. The Company accounted for the transaction using the purchase method of accounting and the operating results for Illume Mobile have been consolidated into the Company’s results of operations beginning on August 1, 2012. | |
In consideration for the business of Illume Mobile, the Company paid $1,000,000, of which $250,000 was paid in cash and $750,000 was paid in the form of 617,284 shares of the Company’s common stock. The Company valued the shares issued in conjunction with the acquisition at $697,531. | |
Pursuant to the Asset Purchase Agreement, the Company could have been required to make an additional payment (“Earn-Out Payment”) to the seller of up to $500,000 of which 50% would be payable in cash, and 50% would be in shares of the common stock of the Company. In 2013, it was determined there was not an Earn-Out Payment obligation due under the Asset Purchase Agreement. The Company continues to recognize no Earn-Out Payment obligation in 2014. | |
Apex | |
On June 4, 2012 (the “Apex Closing Date”), pursuant to a Stock Purchase Agreement (the “Apex Purchase Agreement”), the Company acquired all of the issued and outstanding shares of Apex, a corporation organized under the laws of the Province of Ontario, Canada. Apex is a provider of wireless mobile work force software solutions. Its suite of products utilizes the latest technologies to empower the mobile worker in many areas including merchandising, sales and delivery; field service; logistics and transportation; and, warehouse management. Its clients are North American companies that are household names whose products and services are used daily to feed, transport, entertain and care for people throughout the world. The Company accounted for the transaction using the purchase method of accounting and the operating results for Apex have been consolidated into the Company’s results of operations beginning on June 5, 2012. | |
In consideration for the shares of Apex, the Company paid CDN$5,000,000 (US$4,801,000 at the Closing Date) (the “Apex Closing Amount”) in cash. The Company may be required to pay up to an undiscounted amount of CDN$3,500,000 (US$3,360,700 at the Closing Date) in consideration for Apex achieving certain levels of adjusted earnings before interest, depreciation, taxes and amortization (the “EBITDA”), as defined by the Apex Purchase Agreement, in the period ended July 2013. The fair value of the earn-out (the “Apex Earn-Out Payment”) was calculated to be approximately CDN$1,076,000 (US$1,033,000 at the Closing Date). At September 30, 2013, the calculated Apex Earn-Out Payment due under the Apex Purchase Agreement was CDN$341,000 (US$331,000). The adjustment of CDN$735,000 (US$713,000) was recorded as a separate component of operating expenses in the unaudited condensed consolidated statement of operations and comprehensive loss as of September 30, 2013. On June 9, 2014, the accounting expert issued their final report and the fair value of the Apex Earn-Out Payment was calculated to be CDN$400,000 of which CDN$89,000 (US$84,000) (22.22%) was paid in cash and CDN$311,000 (US$291,000) (77.78%) payable in the form of a convertible promissory note. As of June 30, 2014, there is CDN$311,000 (US$291,000) recorded in earn out consideration in the unaudited condensed consolidated financial statements (see Note 12). The convertible promissory note is expected to be executed in the third quarter of 2014. | |
As part of the Apex Purchase Agreement, the Company is obligated to pay bonus consideration to the CEO of Apex. Such bonus is considered additional contingent purchase consideration as the Company is obligated to pay the bonus regardless of whether or not the CEO’s employment is retained. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Closing Date). At June 30, 2014 there is CDN$101,000 (US$94,000) recorded in earn out consideration in the Company’s unaudited condensed consolidated financial statements. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||
NOTE 6 – GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||
The following summarizes the transaction affecting goodwill through June 30, 2014 (in thousands): | |||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 8,395 | |||||||||||||||||||||||
Effect of currency translation on Apex | 6 | ||||||||||||||||||||||||
Balance at June 30, 2014 | $ | 8,401 | |||||||||||||||||||||||
As of June 30, 2014 and December 31, 2013, the Company’s intangible assets and accumulated amortization consist of the following (in thousands): | |||||||||||||||||||||||||
30-Jun-14 | 31-Dec-13 | ||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||
Gross | Amortization | Net | Gross | Amortization | Net | ||||||||||||||||||||
Customer relationships | $ | 3,267 | $ | (1,912 | ) | $ | 1,355 | $ | 3,264 | $ | (1,654 | ) | $ | 1,610 | |||||||||||
Contractor and resume databases | 675 | (473 | ) | 202 | 675 | (405 | ) | 270 | |||||||||||||||||
Tradename | 864 | (462 | ) | 402 | 862 | (364 | ) | 498 | |||||||||||||||||
Internal use software | 2,807 | (1,737 | ) | 1,070 | 2,802 | (1,299 | ) | 1,503 | |||||||||||||||||
Covenant not to compete | 104 | (104 | ) | - | 104 | (78 | ) | 26 | |||||||||||||||||
$ | 7,717 | $ | (4,688 | ) | $ | 3,029 | $ | 7,707 | $ | (3,800 | ) | $ | 3,907 | ||||||||||||
The effect of foreign currency translation on the goodwill and intangible assets for the six months ended June 30, 2014 is approximately $6 and ($8). |
Lines_of_Credit
Lines of Credit | 6 Months Ended |
Jun. 30, 2014 | |
Line of Credit Facility [Abstract] | ' |
LINES OF CREDIT | ' |
NOTE 7 – LINES OF CREDIT | |
SVB Line of Credit - The Company has a $10.0 million revolving line of credit with Silicon Valley Bank (“SVB”) which provides for borrowings based upon eligible accounts receivable, as defined in the Loan Agreement (“SVB Loan Agreement”). Under the SVB Loan Agreement as amended, SVB has also provided the Company with term loans as discussed at Note 8. The SVB Loan Agreement is secured by substantially all the assets of the Company and matures in February 2015. As of June 30, 2014 and December 31, 2013, the outstanding balance on the line of credit was approximately $4.6 and $3.9 million, respectively, and the interest rate was 7.0%. The line of credit is due February 2015. The line of credit has a certain financial covenant and other non-financial covenants. The minimum Tangible Net Worth requirement of an $8.7 million deficit is to be further reduced by one half of any funds raised through sales of common stock (as only 50% of additional capital raises are given credit in the Tangible Net Worth calculation). As of June 30, 2014 and December 31, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $1.0 million and $0.8 million cushion over the requirement, respectively. The Company believes that at the time of this filing it is compliant with the terms and provisions of its SVB Loan Agreement. Should the Company continue to incur losses in a manner consistent with its recent historical financial performance, the Company will violate Tangible Net Worth covenant without additional net capital raises in amounts that are approximately twice the amount of the losses incurred. | |
Availability under the line of credit was approximately $1.7 million as of June 30, 2014. The line of credit allows the Company to cause the issuance of letters of credit on account of the Company to a maximum of the borrowing base as defined in the SVB Loan Agreement. No letters of credit were outstanding as of June 30, 2014 or December 31, 2013. | |
RBC Line of Credit - The Company is party to a credit agreement, dated June 4, 2012 (the “RBC Credit Agreement”) with Royal Bank of Canada (“RBC”). Under the RBC Credit Agreement, the revolving demand facility allows for borrowings up to CDN$200,000 based upon eligible accounts receivable. Interest is based on the Royal Bank Prime (“RBP”) plus 1.5% and is payable on demand. As of June 30, 2014 and December 31, 2013, the outstanding balance on the line of credit was $0 and the interest rate is 4.5%. The RBC Credit Agreement is secured by the assets of Apex. The revolving demand facility has certain financial covenants and other non-financial covenants. The covenants were reset by RBC on August 16, 2013. The Company was not in compliance with the reset covenants at June 30, 2014 and December 31, 2013. See further discussion regarding this condition at Note 8. | |
For the six months ended June 30, 2014 and 2013, the Company’s interest expense for the SVB and RBC lines of credit, including amortization of deferred financing costs, was approximately $211,000 and $171,000, respectively. | |
RBC and SVB are party to a subordination agreement, pursuant to which RBC agreed to subordinate any security interest in assets of the Company granted in connection with the RBC Credit Agreement to SVB’s security interest in assets of the Company and its subsidiaries. | |
Under the RBC Credit Agreement, the lender provided Apex with a term loan as discussed at Note 8. |
Term_Debt
Term Debt | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Long-Term Debt, Unclassified [Abstract] | ' | ||||||||||||||||||||||||
TERM DEBT | ' | ||||||||||||||||||||||||
NOTE 8 – TERM DEBT | |||||||||||||||||||||||||
Term debt as of June 30, 2014, consists of the following (in thousands): | |||||||||||||||||||||||||
Balance | Additions | Payments | Amortization of Note Discount | Effect of | Balance | ||||||||||||||||||||
31-Dec-13 | Currency | June 30, | |||||||||||||||||||||||
Translation | 2014 | ||||||||||||||||||||||||
RBC term loan | $ | 1,169 | $ | - | $ | (380 | ) | $ | - | $ | (8 | ) | $ | 781 | |||||||||||
BDC term loan | 1,589 | - | - | - | 4 | 1,593 | |||||||||||||||||||
SVB term loan-2 | 722 | - | (166 | ) | - | - | 556 | ||||||||||||||||||
Total note discounts | (45 | ) | - | - | 15 | - | (30 | ) | |||||||||||||||||
Total debt | $ | 3,435 | $ | - | $ | (546 | ) | $ | 15 | $ | (4 | ) | 2,900 | ||||||||||||
less current portion | (1,095 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 1,805 | |||||||||||||||||||||||
The Company’s debt is recorded at par value adjusted for any unamortized discounts. Discounts and costs directly related to the issuance of debt are capitalized and amortized over the life of the debt using the effective interest rate method and is recorded in interest expense in the accompanying unaudited condensed consolidated statements of operations. Unamortized deferred financing costs of approximately $34,000 and $48,000 are included in other assets in the accompanying unaudited consolidated balance sheets as of June 30, 2014 and December 31, 2013, respectively. | |||||||||||||||||||||||||
RBC Term Loan -- On June 4, 2012, Apex entered into the RBC Credit Agreement with RBC described in Note 7, pursuant to which RBC made available certain credit facilities in the aggregate amount of up to CDN$2,750,000, including a term facility (“RBC Term Loan”) in the amount of CDN $2,500,000 (US$2,401,000 at the Closing Date). The RBC Term Loan accrues interest at RBP plus 4% (7% at June 30, 2014). Principal and interest is payable over a three year period at a fixed principal amount of CDN $70,000 a month beginning in July 2012 and continuing through June 2015. Apex paid approximately $120,000 in financing costs, which has been recorded as deferred financing costs or note discount in the accompanying unaudited consolidated balance sheets as of June 30, 2014 and December 31, 2013, and is being amortized to interest expense over the term of the loan. | |||||||||||||||||||||||||
In addition, the RBC Term Loan calls for mandatory repayments based on 20% of Apex’s free cash flow as defined in the RBC Credit Agreement, before discretionary bonuses based on the annual year end audited financial statements of Apex, beginning with the fiscal year ended December 31, 2012, and payable within 30 days of the delivery of the annual audited financial statements, and continuing every six months through December 31, 2014. This amount is estimated to be $0 at June 30, 2014 and December 31, 2013. | |||||||||||||||||||||||||
The RBC Term Loan has certain financial covenants and other non-financial covenants. On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ended December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. As part of the revised financial covenants, covenant testing was waived by RBC for September 30, 2013. The Company was not in compliance with the reset covenants at June 30, 2014 and December 31, 2013. Although the Company believes it is not likely that RBC will exercise their rights up to, and including, acceleration of the outstanding debt, there can be no assurance that RBC will not exercise their rights pursuant to the provisions of the debt obligation. Accordingly, the Company has classified the term debt obligation as current at June 30, 2014 and December 31, 2013. | |||||||||||||||||||||||||
BDC Term Loan -- On June 4, 2012, Apex also entered into the BDC Loan Agreement as part of the Apex Purchase Agreement described in Note 5, pursuant to which BDC made available to Apex a term credit facility (“BDC Term Loan”) in the aggregate amount of CDN $1,700,000 (USD $1,632,000 at the Closing Date). The BDC Term Loan accrues interest at the rate of 12% per annum, and matures on June 23, 2016, with an available one year extension for a fee of 2%, payable at the time of extension. In addition to the interest payable, consecutive quarterly payments of CDN$20,000 as additional interest are due beginning on June 23, 2012, and subject to compliance with bank covenants, Apex will make a mandatory annual principal payment in the form of a cash flow sweep which will be equal to 50% of the Excess Available Funds (as defined by the BDC Loan Agreement) before discretionary bonuses based on the annual year end audited financial statements of Apex. The maximum annual cash flow sweep in any year will be CDN$425,000. As of June 30, 2014, the Company estimates that the cash sweep will be approximately $0. Such payments will be applied to reduce the outstanding principal payment due on the maturity date. In the event that Apex’s annual audited financial statements are not received within 120 days of its fiscal year end, the full CDN$425,000 becomes due and payable on the next payment date. Apex paid approximately $70,000 in financing costs which $35,000 has been recorded as deferred financing costs and $35,000 recorded as a note discount in the accompanying consolidated balance sheet as of June 30, 2014, and is being amortized to interest expense over the term of the loan using the effective interest rate method. As of June 30, 2014, there was approximately $18,000 in unamortized deferred financing costs and $18,000 in unamortized note discount. | |||||||||||||||||||||||||
The terms of the BDC loan agreement also provide for a fee to BDC in the event of the occurrence of any of the following: | |||||||||||||||||||||||||
(a) | if 50% or more of any company comprising Apex or the Company (consolidated assets or shares) is sold or merged with an unrelated entity; or | ||||||||||||||||||||||||
(b) | if there is a change of control of Apex and/or the Company prior to the Maturity Date or any extended maturity date of the BDC Term Loan, | ||||||||||||||||||||||||
In the event of (a) or (b) above, Apex will pay to BDC a bonus in an amount equal to 2% of the aggregate value of Apex and the Company determined as at the closing date of such transaction, which bonus shall become due and payable at the time of the closing of such transaction. Notwithstanding any prepayment of the BDC Term Loan, the bonus and Apex’s obligation to pay same to BDC will remain in full force and effect until the maturity date or any amended or extended maturity date agreed by BDC such that in the event of any sale, initial public offering or similar transaction, Apex’s obligation to pay the bonus amount to the BDC will survive such prepayment. | |||||||||||||||||||||||||
The BDC Loan Agreement contains certain financial and non-financial covenants. On August 22, 2013, the BDC Term Loan was amended and certain financial covenants were modified. Pursuant to the amended loan agreement, the Company is required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised yearly 120 days after each year end. The Company was in compliance with all of our BDC financial covenants as of December 31, 2013. We expect to continue to meet the requirements of our BDC financial covenants over the short and long term. | |||||||||||||||||||||||||
In the event either or both of the RBC Loan Agreement or the BDC Loan Agreement were deemed to be in default, RBC or BDC, as applicable, could, among other things (subject to the rights of SVB as the Company’s senior lender), terminate the facilities, demand immediate repayment of any outstanding amounts, and foreclose on our assets. Any such action would require us to curtail or cease operations, as the Company does not currently have alternative sources of financing. | |||||||||||||||||||||||||
SVB Term Loan - On December 31, 2010, pursuant to an Assumption and Amendment to Loan and Security Agreement ("Amended SVB Loan Agreement"), the Company borrowed $3.0 million from Silicon Valley Bank (“SVB”). The SVB Term Loan was due in 36 equal monthly installments of principal plus interest beginning on February 1, 2011. The SVB Term Loan is secured by substantially all of the assets of the Company except for the assets of Apex. On May 20, 2011, pursuant to a Consent and Amendment to Loan and Security Agreement (“Amendment”), the maturity date was amended to April 30, 2012, with the remaining principal due on that date to be paid as a balloon payment. On September 27, 2011, the agreement was amended and certain covenants were replaced or modified resulting in the Company being in full compliance at September 30, 2011. The principal amount outstanding under the Term Loan accrues interest at a fixed rate equal to 9% per annum. In addition, a final payment equal to 2% of the aggregate amount of the Term Loan is due on the earlier of the maturity date or the date the Term Loan is prepaid. This final payment of $60,000 has been recorded as a discount to the SVB Term Loan, which was amortized to interest expense through December 2013, using the effective interest method. | |||||||||||||||||||||||||
The Amended SVB Loan Agreement includes various customary covenants, limitations and events of default. Financial covenants, among others, include liquidity and fixed charge coverage ratios, minimum tangible net worth requirements and limitations on indebtedness. As of June 30, 2014, the Company was in compliance with the tangible Net Worth financial covenant and had available a $1.0 million cushion over the requirement. The Company currently believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement and expects to continue to meet the requirements of our SVB financial covenants over the short and long term. Should the Company continue to incur losses in a manner consistent with its recent historical financial performance, the Company will violate this covenant without additional net capital raises in amounts that are approximately twice the amount of the losses incurred. | |||||||||||||||||||||||||
On February 27, 2013, the Company amended the Loan and Security Agreement which provided an additional term loan (the “SVB Term Loan 2”) of $1,000,000. The new term loan is due in 36 monthly installments of principal plus accrued interest beginning on April 1, 2013. The additional term loan accrues interest at 7.5% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balance on the SVB Term Loan 2 was approximately $556,000 and $722,000, respectively. | |||||||||||||||||||||||||
For the six months ended June 30, 2014 and 2013, the Company’s interest expense on the term debt, including amortization of deferred financing costs, was approximately $216,000 and $301,000, respectively. | |||||||||||||||||||||||||
In the event either or both RBC Loan Agreement and/or the BDC Loan Agreement were deemed to be in default, then the Amended SVB Loan agreement would be in default, which could, among other things, terminate the facility and term loan, demand immediate repayment of any outstanding amounts, and foreclose on our assets. Any such action would require us to curtail or cease operations, as the Company does not currently have alternative sources of financing. |
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Stockholders' Equity [Abstract] | ' | ||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||||||
NOTE 9 – STOCKHOLDERS’ EQUITY | |||||||||||||||||||||
The Company is authorized to issue two classes of stock designated as common stock and preferred stock. As of June 30, 2014, the Company is authorized to issue 110,000,000 total shares of stock. Of that amount, 100,000,000 shares are common stock, each having a par value of $0.001. The remaining 10,000,000 shares are preferred stock, each having a par value of $0.001, of which 500,000 shares are designated as Series A Preferred Stock, of which 269,608 are issued and outstanding, 500,000 shares are designated as Series B Preferred Stock, of which 131,347 are issued and outstanding, 4,000,000 shares are designated as Series D Preferred Stock, of which 730,357 shares are issued and outstanding, and 2,000,000 are designated as Series E Preferred Stock, of which 416,533 shares are issued and outstanding. | |||||||||||||||||||||
(a) Cumulative Convertible Preferred Stock | |||||||||||||||||||||
A summary of preferred stock outstanding as of June 30, 2014 is as follows (in thousands, except share data): | |||||||||||||||||||||
Description | |||||||||||||||||||||
Series A Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||||||
269,608 shares issued and outstanding, liquidation preference of $975 | |||||||||||||||||||||
plus cumulative dividends of $402 | $ | 1,377 | |||||||||||||||||||
Series B Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||||||
131,347 shares issued and outstanding, liquidation preference of $380 | |||||||||||||||||||||
plus cumulative dividends of $108 | 488 | ||||||||||||||||||||
Series D Preferred, $0.001 par value per share, 4,000,000 shares designated, | |||||||||||||||||||||
730,357 shares issued and outstanding (net of $1,374 in issuance costs), | |||||||||||||||||||||
liquidation preference of $7,449 plus cumulative imputed dividends and | |||||||||||||||||||||
beneficial conversion feature of $1,558 | 7,439 | ||||||||||||||||||||
Series E Preferred, $0.001 par value per share, 2,000,000 shares designated, | |||||||||||||||||||||
416,533 shares issued and outstanding (net of $875 in issuance costs), | |||||||||||||||||||||
liquidation preference of $4,269 plus cumulative imputed dividends of $54 | 3,345 | ||||||||||||||||||||
Total convertible preferred stock | $ | 12,649 | |||||||||||||||||||
Series A Preferred Stock and Series B Preferred Stock | |||||||||||||||||||||
The holders of the Series A and Series B Preferred Stock shall be entitled to receive, when, as, and if declared by the Board of Directors, dividends at an annual rate of 8% of the stated value. The stated value of the Series A Preferred is $4.00 per share and the stated value of the Series B Preferred is $3.20 per share. Dividends shall be cumulative and shall accrue on each share of the outstanding preferred stock from the date of its issue. | |||||||||||||||||||||
The holders of the Series A and Series B Preferred Stock have no voting rights except on matters affecting their rights or preferences. Subject to the rights of the Series D Preferred Stock, upon any liquidation, dissolution or winding-up of the Company, the holders of the Series A (subject to the rights of the Series B Preferred) and Series B Preferred Stock shall be entitled to receive an amount equal to the stated value per share of $4.00 and $3.20, respectively, plus any accrued and unpaid dividends before any payments shall be made to the holders of any common stock or hereinafter issued preferred stock. The Series A Preferred Stock has preference over the Series B Preferred Stock in liquidation. | |||||||||||||||||||||
Each share of Series A Preferred Stock is convertible, at the option of the holder, at a conversion price of $4.00 per share. Each share of Series B Preferred Stock is convertible, at the option of the holder, at a conversion price of $3.20 per share. | |||||||||||||||||||||
Series C Preferred Stock | |||||||||||||||||||||
On December 20, 2012, all issued and outstanding shares of Series C Preferred Stock were redeemed using the proceeds generated from the sale of the Series D Preferred Stock. | |||||||||||||||||||||
In connection with the sale of Series E Preferred Stock, on November 12, 2013, the Company filed a Certificate of Elimination of Series C Preferred Stock (the “Series C Certificate of Elimination”), pursuant to which, the 5,000,000 shares of the Company’s preferred stock that had been designated as Series C Preferred Stock were returned to the status of blank check preferred stock. | |||||||||||||||||||||
Series D Preferred Stock | |||||||||||||||||||||
On December 20, 2012, we filed a Certificate of Designation of Series D Preferred Shares (the “Series D Certificate of Designation”) with the Secretary of State of Delaware. Pursuant to the Series D Certificate of Designation, we designated 4,000,000 shares of our preferred stock as Series D Preferred Stock. The Series D Preferred Stock has a Stated Value of $10.00 per share, votes on an as-converted basis with the common stock, and is convertible, at the option of the holder, into such number of shares of our common stock equal to the number of shares of Series D Preferred Stock to be converted, multiplied by the Stated Value, divided by the Conversion Price in effect at the time of the conversion. The initial Conversion Price is $1.00, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. As a result of the private placement closed on August 15, 2013 and August 21, 2013, the Conversion Price of the Series D Preferred Stock was reduced to $0.90. As a result of the private placement closed on November 12, 2013 and November 22, 2013, the Conversion Price of the Series D Preferred Stock was reduced to $0.71. As a result of the reduction in conversion price, the Company recorded a contingent beneficial conversion feature of $1.3 million. The Series D Preferred Stock entitles the holder to cumulative dividends, payable quarterly, at an annual rate of (i) 8% of the Stated Value during the three year period commencing on the date of issue, and (ii) 12% of the Stated Value commencing three years after the date of issue. We may, at our option, pay dividends in PIK Shares, in which event the applicable dividend rate will be 12% and the number of such PIK Shares issuable as a dividend will be equal to the aggregate dividend payable divided by the lesser of (x) the then effective Conversion Price or (y) the average volume weighted average price of the Company’s common stock for the five prior consecutive trading days. On January 1, 2014, the Board of Directors declared a PIK dividend payable in the form of 26,157 shares of Series D Preferred Stock. The dividends were payable to holders of record as of December 31, 2013 for accrued dividends for the period of October 1, 2013 to December 31, 2013. As those shares were not issued until April 2014, they have not been included in the Series D Preferred Stock balance at December 31, 2013. As such, the Company recorded a dividend payable in Current Liabilities in the in the Condensed Consolidated Balance Sheet at December 31, 2013 at an estimated fair value of $213,000. Additionally, on December 31, 2013, cash dividends of $351 were accrued for fractional share dividends not paid-in-kind. In April 2014, the Company issued 26,157 Series D Preferred Stock PIK dividend shares, for previously accrued dividends. On July 22, 2014, the Company paid a cash dividend of $146,000 on the Series D Preferred Stock for the period from April 1, 2014 to June 30, 2014. Such amount is accrued for in Current Liabilities at June 30, 2014 in the accompanying unaudited condensed consolidated balance sheet. | |||||||||||||||||||||
Upon any liquidation, dissolution or winding-up of our Company, holders of Series D Preferred Stock will be entitled to receive, for each share of Series D Preferred Stock, an amount equal to the Stated Value of $10.00 per share plus any accrued but unpaid dividends thereon before any distribution or payment may be made to the holders of any common stock, Series A Preferred Stock, Series B Preferred Stock, or subsequently issued preferred stock. | |||||||||||||||||||||
In addition, commencing on the trading day on which the closing price of the common stock is greater than $2.00 for thirty consecutive trading days with a minimum average daily trading volume of at least 5,000 shares for such period, and at any time thereafter, the Company may, in its sole discretion, effect the conversion of all of the outstanding shares of Series D Preferred Stock to common stock (subject to the condition that, all of the shares issuable upon such conversion may be re-sold without limitation under an effective registration statement or pursuant to Rule 144 under the Securities Act of 1933, as amended). | |||||||||||||||||||||
The Series D Preferred Stock also contains registration rights which compel the Company to file a registration statement with the SEC within 60 days of the final closing date (December 31, 2012), and requires the registration statement to become effective within 90 days thereafter. The initial registration statement was filed on February 12, 2013. If the registration statement is not declared effective by May 12, 2013, a partial liquidated damage equal to 0.1% of the purchase price paid by each investor shall be payable on each monthly anniversary until the registration statement becomes effective. In no event shall the partial liquidated damage exceed 0.6% of the purchase price paid by each investor. On July 30, 2013, the registration statement was declared effective by the SEC. On October 15, 2013, the Company paid liquidated damages of $18,000. | |||||||||||||||||||||
Pursuant to the Series D Certificate of Designation, commencing two years from the termination or expiration of the offering of the Series D Preferred Stock (which termination occurred on December 31, 2012), and at any time thereafter, the Company in its sole discretion may redeem all of the outstanding shares of Series D Preferred Stock at a purchase price of $10.00 per share plus any accrued but unpaid dividends. | |||||||||||||||||||||
Series E Preferred Stock | |||||||||||||||||||||
In November 2013, the Company issued 409,000 shares of Series E Preferred for cash consideration totaling $4,090,000. In conjunction with the issuance, the Company incurred issuance costs totaling $875,000, consisting of placement fees of $327,000, legal and other expenses of $270,000, and issued 818,000 warrants to purchase shares of common stock with an exercise price of $0.55 per share to the placement agent with an estimated fair value of $278,000 determined using the Black Scholes option valuation pricing model. The fair value calculation was prepared using the following assumptions: Stock price: $0.47; expected term: 2.5 years; risk free rate of interest of 0.44%; volatility of 143%; and dividend yield of $0. | |||||||||||||||||||||
On November 12, 2013, the Company filed a Certificate of Designation of Series E Preferred Stock (the “Series E Certificate of Designation”) with the Secretary of State of Delaware. Pursuant to the Series E Certificate of Designation, we designated 2,000,000 shares of the Company’s preferred stock as Series E Preferred Stock. The Series E Preferred Stock has a Stated Value of $10.00 per share, does not have voting rights, and is convertible, at the option of the holder, into such number of shares of common stock equal to the number of shares of Series E Preferred Stock to be converted, multiplied by the Stated Value, divided by the Conversion Price in effect at the time of the conversion. The initial Conversion Price is $0.50, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. | |||||||||||||||||||||
The Series E Preferred Stock entitles the holder to cumulative dividends (subject to the prior dividend rights of the Company’s Series D Preferred Stock), payable quarterly, at an annual rate of (i) 10% of the Stated Value during the three year period commencing on the date of issue, and (ii) 14% of the Stated Value commencing three years after the date of issue. We may, at our option (subject to certain conditions), pay dividends in PIK shares, in which event the applicable dividend rate will be 14% and the number of shares issuable as a dividend will be equal to the aggregate dividend payable divided by the lesser of (x) the then effective Conversion Price or (y) the average volume weighted average price of our common stock for the five prior consecutive trading days. On January 1, 2014, the Board of Directors declared a PIK dividend payable in the form of 7,533 shares of Series E Preferred Stock. The dividends were payable to holders of record as of December 31, 2013 for accrued dividends for the period of October 1, 2013 to December 31, 2013. As those shares were not issued until April 2014, they have not been included in the Series E Preferred Stock balance at December 31, 2013. As such, the Company recorded a dividend payable in Current Liabilities in the Condensed Consolidated Balance Sheet at December 31, 2013 at an estimated fair value of $75,000. Additionally, on December 31, 2013, cash dividends of $561 were accrued for fractional share dividends not paid-in-kind. In April 2014, the Company issued 7,533 Series E Preferred Stock PIK dividend shares, for previously accrued dividends. On July 22, 2014, the Company paid a cash dividend of $104,000 on the Series E Preferred Stock for the period from April 1, 2014 to June 30, 2014. Such amount is accrued for in Current Liabilities at June 30, 2014 in the accompanying unaudited condensed consolidated balance sheet. | |||||||||||||||||||||
Upon any liquidation, dissolution or winding-up of our Company, holders of Series E Preferred Stock will be entitled to receive (following payment in full of amounts owed to in respect of the Company’s Series D Preferred Stock), for each share of Series E Preferred Stock, an amount equal to the Stated Value of $10.00 per share plus any accrued but unpaid dividends thereon before any distribution or payment may be made to the holders of any common stock, Series A Preferred Stock, Series B Preferred Stock, or subsequently issued preferred stock. | |||||||||||||||||||||
In addition, commencing on the trading day on which the closing price of the common stock is greater than $1.35 for thirty consecutive trading days with a minimum average daily trading volume of at least 10,000 shares for such period, and at any time thereafter, the Company may, in our sole discretion, effect the conversion of all of the outstanding shares of Series E Preferred Stock to common stock (subject to the condition that, all of the shares issuable upon such conversion may be re-sold without limitation under an effective registration statement or pursuant to Rule 144 under the Securities Act of 1933, as amended). | |||||||||||||||||||||
The Series E Preferred Stock also contains registration rights which compel the Company to file a registration statement with the SEC within 60 days of the final closing date (November 22, 2013), and requires the registration statement to become effective within 90 days thereafter. The initial registration statement was filed on January 10, 2014. If the registration statement is not declared effective by January 21, 2014, a partial liquidated damage equal to 0.1% of the purchase price paid by each investor shall be payable on each monthly anniversary until the registration statement becomes effective. In no event shall the partial liquidated damage exceed 0.6% of the purchase price paid by each investor. On January 22, 2014, the registration statement was declared effective by the SEC. | |||||||||||||||||||||
On November 12, 2013, we filed Amendment No. 2 to our Certificate of Designation of Series A Preferred Stock (the “Series A Amendment”), and Amendment No. 2 to our Certificate of Designation of Series B Preferred Stock (the “Series B Amendment”). Pursuant to the Series A Amendment and the Series B Amendment, the Series A Preferred Stock and the Series B Preferred Stock will be subordinate to the Series E Preferred Stock with respect to any distributions upon any liquidation, dissolution or winding-up of our Company, respectively. | |||||||||||||||||||||
(b) Common Stock | |||||||||||||||||||||
For the six months ended June 30, 2014 | |||||||||||||||||||||
There were no common stock issuances for the six months ended June 30, 2014. | |||||||||||||||||||||
For the year ended December 31, 2013 | |||||||||||||||||||||
On April 26, 2013, the Company issued 70,207 shares of its common stock to 3 employees as part of a specified portion of their regular annual cash bonus. The shares were valued at $83,000 and were recorded as part of selling, general and administrative expenses in the consolidated statement of operations and comprehensive loss as of December 31, 2013. | |||||||||||||||||||||
On August 15, 2013, the Company entered into a purchase agreement with multiple accredited investors relating to the issuance and sale of Common Stock in a private offering. On August 15, 2013, the initial closing date (the “Initial Closing”) of the purchase agreement, we sold (i) an aggregate of 2,594,000 shares of our Common Stock for $0.60 per share and (ii) Common Stock Purchase Warrants (the “Investor Warrants”) for the purchase of an aggregate of 1,297,000 shares for aggregate gross proceeds of $1,556,400. The Investor Warrants have a five-year term, an exercise price of $1.00 and contain certain provisions for anti-dilution and price adjustments in the event of a future offering. | |||||||||||||||||||||
On August 21, 2013, the final closing date (the “Final Closing”) of the Purchase Agreement, we sold (i) an aggregate of 333,333 shares of our Common Stock for $0.60 per share and (ii) 166,667 Investor Warrants for aggregate gross proceeds of $200,000. | |||||||||||||||||||||
For a period commencing on the Initial Closing and terminating on a date which is 24 months from the Initial Closing, in the event the Company issues or grants any shares of Common Stock or securities convertible, exchangeable or exercisable for shares of Common Stock pursuant to which shares of Common Stock may be acquired at a price less than $0.60 per share, then the Company shall promptly issue additional shares of Common Stock to the investors under the Purchase Agreement in an amount sufficient that the subscription price paid, when divided by the total number of shares issued (shares purchased under the Purchase Agreement plus the additional shares issued under this provision), will result in an actual price paid by the Subscriber per share of Common Stock equal to such lower price. | |||||||||||||||||||||
On December 10, 2013, the Company issued 585,467 shares of its common stock as a result of the anti-dilution adjustment triggered by the sale of Series E Preferred Shares. The common stock issued to investors at the closings on August 15, 2013 and August 21, 2013 contained certain price protection provisions. These price protections are considered embedded options to contingently acquire common stock that are clearly and closely related to the host common stock and are therefore not bifurcated. The shares issued were valued at $263,000 and were recorded as deemed dividend as of December 31, 2013. | |||||||||||||||||||||
If the Company at any time while the Investor Warrants are outstanding, shall sell or grant an option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities convertible, exchangeable or exercisable for shares of common stock (as, at an effective price per share less than the exercise price of the Investor Warrants then in effect, the exercise price of the Investor Warrants will be reduced to equal to such lower price. | |||||||||||||||||||||
As a result of the sale of Series E Preferred Shares described above, the conversion price of the Investor Warrants was reduced to $0.50 per share on November 12, 2013. | |||||||||||||||||||||
Pursuant to the purchase agreement, we agreed to, within 30 days of August 21, 2013, file a registration statement (the “Common Stock Registration Statement”) with the SEC covering the re-sale of the Common Shares and the shares of common stock underlying the Investor Warrants. We also agreed to use its best efforts to have the Common Stock Registration Statement become effective as soon as possible after filing (and in any event within 120 days of the filing of such Common Stock Registration Statement). If the Common Stock Registration Statement is not declared effective within the requisite period of time, a partial liquidated damage equal to 0.2% of the purchase price paid by each investor shall be payable on each monthly anniversary until it becomes effective. In no event shall the partial liquidated damage exceed 10% of the purchase price paid by each investor. On October 4, 2013, the Common Stock Registration Statement was declared effective by the SEC. | |||||||||||||||||||||
The Company paid the placement agent $175,600 in commissions (equal to 10% of the gross proceeds), and issued to the placement agent five-year warrants (the “Placement Agent Warrants”) to purchase 292,733 shares of our common stock (equal to 10% of the number of shares of common stock sold under the purchase agreement). The Placement Agent Warrants have a five-year term, an exercise price of $0.60 and contain provisions for anti-dilution and price adjustments in the event of a future offering. | |||||||||||||||||||||
If the Company at any time while the Placement Agent Warrants are outstanding, shall sell or grant an option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities convertible, exchangeable or exercisable for shares of common stock, at an effective price per share less than the exercise price of the Placement Agent Warrants then in effect, the exercise price of the Placement Agent Warrants will be reduced to equal to such lower price. As a result of the sale of Series E Preferred Shares described above, the conversion price of the Placement Agent Warrants was reduced to $0.50 per share on November 12, 2013. | |||||||||||||||||||||
The Company recorded the Investor Warrants and Placement Agent Warrants as a liability (see further disclosure at Note 4). Accordingly, the net proceeds raised ($1.7 million in gross offering proceeds, net of $0.2 million in cost), were allocated to the fair value of the warrant liability of $1.1 million and the remainder was recorded as equity ($0.4 million). | |||||||||||||||||||||
(c) Warrants | |||||||||||||||||||||
For the six months ended June 30, 2014 | |||||||||||||||||||||
There were no warrant issuances for the six months ended June 30, 2014. | |||||||||||||||||||||
For the year ended December 31, 2013 | |||||||||||||||||||||
On August 15, 2013 and August 21, 2013, the Company issued 1,463,667 Investor Warrants and 292,733 Placement Agent Warrants as discussed above. The exercise price of the Investor Warrants and the Placement Agent Warrants will be adjusted in the event of future issuances of the Company’s Common Stock at prices below the exercise price then in effect (“down-round” protection). The Company evaluated the following guidance ASC 480-10 Distinguishing Liabilities from Equity and ASC 815-40 Contracts in Entity’s Own Equity. Based on this guidance, the Company’s management concluded these instruments are to be accounted for as liabilities instead of equity due to the down-round protection feature available on the exercise price of the Warrants. The Company recognized these Warrants as liabilities at their fair value and will re-measure them at fair value on each reporting date. ASC 820 Fair Value Measurement provides requirements for disclosure of liabilities that are measured at fair value on a recurring basis in periods subsequent to the initial recognition (see Note 2). Fair values for warrants are determined using the Monte-Carlo Simulation Model valuation technique. The Monte-Carlo Simulation Model valuation model provides for dynamic assumptions regarding volatility and risk-free interest rates within the total period to expected conversion. In addition, management assessed the probabilities of future financing assumptions. | |||||||||||||||||||||
As of August 15, 2013 and August 21, 2013, the dates of issuance, we recorded the warrant liability at $1,099,000. At December 31, 2013, the warrants were re-valued with a fair value of $803,000. At June 30, 2014, the warrants were revalued with a fair value of $637,000 with the difference of $166,000 recorded in the Company’s Unaudited Condensed Consolidated Statement of Operations and Comprehensive Loss for the six months ended June 30, 2014 | |||||||||||||||||||||
On November 12, 2013 and November 22, 2013 in connection with the sale of Series E Preferred Stock, the Company issued 818,000 warrants to purchase shares of common stock with an exercise price of $0.55 per share provided to the placement agent with an estimated fair value of $278,000 determined using the Black Scholes option valuation pricing model. The fair value calculation was prepared using the following assumptions: stock price: $0.47; expected term: 2.5 years; risk free rate of interest of 0.44%; volatility of 143%; and dividend yield of $0. | |||||||||||||||||||||
The following table summarizes information about the Company’s outstanding common stock warrants as of June 30, 2014: | |||||||||||||||||||||
Total | Weighted | ||||||||||||||||||||
Warrants | Total | Average | |||||||||||||||||||
Date | Strike | Outstanding | Exercise | Exercise | |||||||||||||||||
Issued | Expiration | Price | and Exercisable | Price | Price | ||||||||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | $ | 3.62 | 138,260 | $ | 500,000 | ||||||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | 4.34 | 138,260 | 600,000 | ||||||||||||||||
Placement Agent Preferred Stock - Class D | 12-Dec | 17-Dec | 1.1 | 704,200 | 774,620 | ||||||||||||||||
Common Stock Investor Warrants * | 13-Aug | 18-Aug | 0.5 | 1,463,667 | 731,834 | ||||||||||||||||
Placement Agent Warrants - Common Stock * | 13-Aug | 18-Aug | 0.5 | 292,733 | 146,367 | ||||||||||||||||
Placement Agent Preferred Stock - Class E | 13-Nov | 18-Nov | 0.55 | 818,000 | 449,900 | ||||||||||||||||
3,555,120 | $ | 3,202,721 | $ | 0.9 | |||||||||||||||||
* warrants classified as liabilities |
Esop_Plan
Esop Plan | 6 Months Ended |
Jun. 30, 2014 | |
Esop Plan [Abstract] | ' |
ESOP PLAN | ' |
NOTE 10 – ESOP PLAN | |
The Company has an Employee Stock Ownership Plan (the “ESOP”) which covers all non-union employees. The Company’s contribution expense for the six months ended June 30, 2014, was $89,000 representing approximately $73,000 for the ESOP principal payment and $16,000 for the ESOP interest. ESOP shares are allocated to individual employee accounts as the loan obligation of the ESOP to the Company is reduced. These amounts were previously calculated on an annual basis by an outside, independent financial advisor. Compensation costs relating to shares released are based on the fair value of shares at the time they are committed to be released. The unreleased shares are not considered outstanding in the computation of earnings per common share. ESOP compensation expense consisting of both cash contributions and shares committed to be released for the six months ended June 30, 2014 was approximately $46,000. The fair value of the shares was $0.47 per share, based on the average of the daily market closing share price. |
Stock_Option_Plan
Stock Option Plan | 6 Months Ended | ||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||||||||
STOCK OPTION PLAN | ' | ||||||||||||||||||||||||||
NOTE 11 - STOCK OPTION PLAN | |||||||||||||||||||||||||||
In December 2010, the Company established the 2010 Stock Option Plan (the “Plan”). The Plan authorizes the issuance of 1,000,000 shares of common stock. Pursuant to the terms of the August 16, 2010 merger agreement, the Company assumed all of Old DecisionPoint’s obligations under their outstanding stock option plans. | |||||||||||||||||||||||||||
The Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors, which determines recipients and types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. The term of stock options granted under the Plans cannot exceed ten years. Options shall not have an exercise price less than 100% of the fair market value of the Company’s common stock on the grant date, and generally vest over a period of five years. If the individual possesses more than 10% of the combined voting power of all classes of stock of the Company, the exercise price shall not be less than 110% of the fair market of a share of common stock on the date of grant. | |||||||||||||||||||||||||||
A summary of the status of the Plans as of June 30, 2014, and information with respect to the changes in options outstanding is as follows: | |||||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Options | Average | Aggregate | |||||||||||||||||||||||||
Available | Options | Exercise | Intrinsic | ||||||||||||||||||||||||
for Grant | Outstanding | Price | Value | ||||||||||||||||||||||||
31-Dec-13 | 195,495 | 804,505 | $ | 1.39 | $ | - | |||||||||||||||||||||
Granted | (183,648 | ) | 183,648 | 0.5 | - | ||||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||||
Forfeited | 251,471 | (251,471 | ) | 2.05 | - | ||||||||||||||||||||||
30-Jun-14 | 263,318 | 736,682 | $ | 1.11 | $ | - | |||||||||||||||||||||
Exercisable options at June 30, 2014 | 570,921 | $ | 1.14 | $ | - | ||||||||||||||||||||||
The following table summarizes information about stock options outstanding as of June 30, 2014: | |||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||||||||||||
Average | Weighted- | Average | Weighted- | ||||||||||||||||||||||||
Range of | Remaining | Average | Remaining | Average | |||||||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Contractual | Exercise | |||||||||||||||||||||
Prices | Outstanding | Life (Years) | Price | Exercisable | Life (Years) | Price | |||||||||||||||||||||
$ | 0.46 - 0.53 | 443,648 | 2.52 | $ | 0.5 | 330,440 | 2.53 | $ | 0.49 | ||||||||||||||||||
$ | 1.33 - 2.03 | 136,272 | 2.51 | 1.9 | 130,176 | 2.51 | 1.9 | ||||||||||||||||||||
$ | 2.06 - 4.34 | 156,762 | 6.84 | 2.16 | 110,305 | 6.78 | 2.16 | ||||||||||||||||||||
Total | 736,682 | 3.44 | $ | 1.11 | 570,921 | 3.35 | $ | 1.14 | |||||||||||||||||||
No awards were exercised during the six months ended June 30, 2014 and 2013, respectively. The total fair value of awards vested for the six months ended June 30, 2014 and 2013 was $52,000 and $40,000, respectively. | |||||||||||||||||||||||||||
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period, which is generally equal to the vesting period. The fair value of options granted to directors during the six months ended June 30, 2014, was $58,000 (no options were granted during the six months ended June 30, 2013). The fair values were estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: | |||||||||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||||||
June 30, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Expected term | 1.50 years | N/A | |||||||||||||||||||||||||
Expected volatility | 143.49 | % | N/A | ||||||||||||||||||||||||
Dividend yield | 0 | % | N/A | ||||||||||||||||||||||||
Risk-free interest rate | 0.27 | % | N/A | ||||||||||||||||||||||||
The Company estimates expected volatility using historical volatility of its common stock over a period equal to the expected life of the options. The expected term of the awards represents the period of time that the awards are expected to be outstanding. Management considered expectations for the future to estimate employee exercise and post-vest termination behavior. The Company does not intend to pay common stock dividends in the foreseeable future, and therefore has assumed a dividend yield of zero. The risk-free interest rate is the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term of the awards. | |||||||||||||||||||||||||||
Employee and director stock-based compensation costs for the six months ended June 30, 2014 and 2013, was $50,000 and $21,000, respectively, and is included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. As of June 30, 2014, total unrecognized estimated employee compensation cost related to stock options granted prior to that date was $83,000 which is expected to be recognized over a weighted-average vesting period of 1.62 years. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | |
Jun. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
COMMITMENTS AND CONTINGENCIES | ' | |
NOTE 12 – COMMITMENTS AND CONTINGENCIES | ||
Leases - The Company leases its facilities and certain equipment under various operating leases which expire at various dates through fiscal 2020 and require us to pay a portion of the related operating expenses such as maintenance, property taxes, and insurance. There have been no material changes to our lease arrangements during the six months ended June 30, 2014. Please refer to Note 15 to the audited consolidated financial statements for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2014. | ||
Rent expense for the six months ended June 30, 2014 and 2013, was $263,000 and $348,000, respectively. | ||
Apex Earn Out Obligations - If EBITDA (as uniquely defined in the Apex Purchase Agreement), for the twelve months ending July 31, 2013 (“2013 EBITDA”), is equal to or less than CDN$2,000,000, Apex shall pay an amount, to its former owners, equal to the product of the 2013 EBITDA multiplied by four less CDN$5,000,000 (“2013 EBITDA Basic Earn-Out Amount”), up to a maximum of CDN$3,000,000. An amount equal to 22.22% of the 2013 EBITDA Basic Earn-Out Amount shall be paid in cash and the balance shall be paid by Apex issuing a subordinated convertible note (the “Apex Note”). | ||
Under the terms of the Note, Apex will pay the principal sum due on the Note in eight quarterly payments (“Installment Dates”). Interest from and after June 18, 2014, shall be paid in arrears on the last day of each calendar quarter commencing on September 30, 2014. On June 9, 2014, the accounting expert issued their final report and the fair value of the Earn-Out was calculated to be CDN$400,000 of which CDN$89,000 (US$84,000) (22.22%) was paid in cash and CDN$311,000 (77.78%) payable in the form of a convertible promissory note. At June 30, 2014, there is CDN$311,000 (US$291,000) recorded in accrued earn out consideration in the unaudited condensed consolidated financial statements. The convertible promissory note is expected to be executed in the third quarter of 2014. The interest rate shall be determined as follows: | ||
(i) | 9% per annum, calculated and compounded quarterly before July 1, 2015; and | |
(ii) | 11% per annum, calculated and compounded quarterly after June 30, 2015; | |
(iii) | except, however, that, if, during the term of the Apex Note, the Company raises Net Equity Capital (as defined in the Note) in an amount greater than CDN$5,000,000 and this Note is not repaid in full within 30 days from the date that the Company receives such Net Equity Capital, the interest rate otherwise provided in the Note shall be 15% per annum from the end of such 30-day period to the first anniversary thereof and 20% per annum thereafter to the date of payment in full. | |
The Apex Note is convertible, only on each Installment Date, at the option of the Note holder, into shares of our common stock at a conversion price that is equal to the greater of the Canadian Dollar equivalent of the market price of our common stock on the day prior to the conversion using a fixed rate of US$1.00MN$1.04, or the Canadian Dollar equivalent of US$1.00 =DN$1.04. The shares issuable under the Note will be restricted but will have certain piggy back registration rights as set forth in the Apex Purchase Agreement. | ||
The Company entered into an employment agreement with Donald Dalicandro, the Former Chief Executive Officer of Apex, as a result of the Apex acquisition. The agreement calls for annual bonus upon achieving certain results of operation at Apex for the 12 months ending July 31, 2013, 2014, and 2015. Such bonuses are considered additional contingent purchase consideration as the Company is obligated to pay the bonus regardless of whether or not his employment is retained. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Apex Closing Date). At June 30, 2014, there is CDN$101,000 (US$94,000) recorded in accrued earn out consideration in the unaudited condensed consolidated financial statements. | ||
Apex Escrow Obligation - As part of the Apex Purchase Agreement, from the Apex Closing Date up until the expiry of the bonus period, the Company is obligated to escrow 25% of any Equity Capital raised in excess of $500,000. The funds in the escrow are to be used to pay the 2013 EBITDA Basic Earn-Out and the 2013 EBITDA Additional Earn-Out and the additional bonus consideration. In December 2012, the Company raised $7,042,000 as part of the Series D Purchase Agreement. In August 2013, the Company raised $1,756,000 as part of the Common Stock Purchase Agreement. In November 2013, the Company raised $4,090,000 as part of the Series E Purchase Agreement. These funds have not been placed into escrow pending agreement between the Company and the sellers of Apex regarding the financial institution that will escrow the funds, the amount of funds that are to be placed in escrow and the escrow agreement itself. | ||
Contingencies – In addition to the matter discussed below, from time to time the Company is subject to the possibility of involvement in litigation incidental to the conduct of our business. When applicable, we record accruals for contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in the opinion of management, individually or in the aggregate, no such lawsuits are expected to have a material effect on our financial position or results of operations. | ||
Wells Notice - On July 2, 2014, the Company received a written “Wells Notice” from the staff of the SEC indicating that the staff has made a preliminary determination to recommend that the SEC bring an administrative proceeding against the Company. On the same day Nicholas R. Toms, the Company’s President and Chief Executive Officer and a member of the Board of Directors, also received a Wells Notice. The SEC staff has informed the Company that both Wells Notices relate to allegations that, from late 2009 to early 2011, Mr. Toms was the beneficial owner of shares of common stock of the Company that were held and traded by a Delaware corporation in which Mr. Toms was a 10% owner; that Mr. Toms exercised control over the corporation’s securities account; and that the corporation’s shareholding and trades should have been reflected at the relevant times in public disclosures of Mr. Toms’ other holdings of the Company’s common stock. | ||
A Wells Notice is neither a formal allegation of wrongdoing nor a finding that any violations of law have occurred. Rather, it provides the recipient with an opportunity to respond to issues raised by the SEC staff and offer its perspective to the SEC staff prior to any decision to institute proceedings. The Company intends to make a submission to the SEC staff in response to the Wells Notice setting forth why no action should be commenced against it. | ||
In addition, the Company’s Audit Committee is conducting an internal review, assisted by new outside counsel, and the Company’s independent directors have placed Mr. Toms on leave from his duties as an officer of the Company, pending further inquiries and determinations. Mr. Toms remains a director of the Company and retains his duties as a director. Mr. Dan Romanello, who has served since August 2013 as the Executive Advisor to the CEO, is undertaking Mr. Toms’ duties as an officer on an interim basis. | ||
Settlement of Taglich Action – In July 2014, the Company settled an action brought against it by stockholder Michael N. Taglich, in the Delaware Chancery Court, seeking to compel the Company to hold an annual meeting of stockholders. Pursuant to the settlement, the parties agreed that the Company shall hold an annual meeting of stockholders on or before October 15, 2014. |
Basis_of_Presentation_Liquidit1
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the period ended June 30, 2014, are not necessarily indicative of results for the full 2014 fiscal year or any other future interim periods. | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, DecisionPoint Systems International and Apex Systems Integrators, Inc. (“Apex”). DecisionPoint Systems International has two wholly-owned subsidiaries, DecisionPoint Systems Group, Inc. (“DPS Group”) and CMAC, Inc. (“CMAC”). | |||||||||||||||||
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the recorded amounts reported therein. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company uses historical experience and various other assumptions that are believed to be reasonable under the circumstances to form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates and assumptions used in preparation of the unaudited condensed consolidated financial statements. | |||||||||||||||||
These unaudited condensed consolidated financial statements have been prepared by management and should be read in conjunction with the audited consolidated financial statements of DecisionPoint Systems, Inc. and notes thereto for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2014. | |||||||||||||||||
Liquidity and Going Concern | ' | ||||||||||||||||
Liquidity and Going Concern | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements were prepared on a going concern basis in accordance with U.S. GAAP. The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raises substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business, the Company must establish sustained positive operating results through increased sales, successfully implement cost cutting measures, avoid further unforeseen expenses, potentially raise additional equity or debt capital, and successfully refinance its current debt obligations when they come due in February of 2015. There can be no assurance that the Company will be able to achieve sustainable positive operating results or cost reductions or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. | |||||||||||||||||
If the Company does not continue to achieve positive operating results and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, (1) a reduction in the nature and scope of the Company’s operations, (2) the Company’s inability to fully implement its current business plan and (3) continued defaults under the Company’s various loan agreements (for a description of past defaults, see the discussion below). There can be no assurance that the Company will successfully improve its liquidity position. The accompanying unaudited condensed consolidated financial statements do not reflect any adjustments that might be required if our liquidity position does not improve. | |||||||||||||||||
In the quarter ended June 30, 2014, the Company experienced an increase in revenue of $1.8 million, or 12.2% compared to the quarter ended June 30, 2013, and a $4.7 million, or 16.6% increase in revenue for the six months ended June 30, 2014 over the comparable six months of 2013. In the quarter ended June 30, 2014, the Company experienced a net loss of $19,000 compared to the net loss of $1.1 million for the quarter ended June 30, 2013, and a $132,000 net loss for the six months ended June 30, 2014 compared to a net loss of $3.2 million for the comparable period in 2013. At June 30, 2014, the Company had a substantial working capital deficit totaling $9.5 million which improved by $0.4 million from the working capital deficit of $9.9 million at December 31, 2013. Although a portion of this deficit is associated with deferred costs, unearned revenues and term debt that has been classified current due to expected future covenant violations (see further discussion at Note 8), the liabilities of the Company that we expect will have to be satisfied in the foreseeable future in cash substantially exceed the operating assets that weexpected to have available in cash. As a result of our historical operations, the availability under our credit line has contracted and our liquidity has been constrained. | |||||||||||||||||
To address liquidity constraints, the Company has reduced non-essential expenses. Such expense reduction measures have included, but have not been limited to, consolidation of information technology environments, consolidation of our East Coast depot facility into our larger California depot facility, the reduction of outsourced consulting expertise where unnecessary and the replacement of certain service providers with lower cost providers. The Company has also consolidated administrative personnel and reduced total staffing levels by 29% from April 2013 through February 2014, constituting annual savings of approximately $3 million. These cost reduction measures have reduced the expense structure of the Company’s business significantly. The Company is focused on continuing to improve processes and reduce costs. Currently, the Company has no plans to seek additional outside funding through the sale of our securities unless deemed necessary. Should additional outside funding be needed, there is no assurance that such funding will be available on terms acceptable to us, or at all. If the Company raises additional funds by selling additional shares of capital stock, or securities convertible into shares of our capital stock, the ownership interest of the Company’s existing common stock holders will be diluted. | |||||||||||||||||
During 2012, 2013 and the first six months of 2014, all principal and interest payments on the Company’s term debt were made within payment terms. On August 16, 2013, the Company's credit agreement ("RBC Credit Agreement") with the Royal Bank of Canada ("RBC") was amended and certain financial covenants were modified. These financial covenants required the Company to maintain specified ratios for fixed coverage and a ratio of funded debt to EBITDA to be tested on a quarterly basis. The Company was not in compliance with the reset covenants in 2013 and the first six months of 2014. Although management of the Company believes it is not likely that, as a result of this noncompliance, RBC will exercise its rights up to, and including, acceleration of the outstanding debt, there can be no assurance that RBC will not exercise its rights pursuant to the RBC Credit Agreement.Accordingly, the term debt due to RBC is classified as current on the accompanying unaudited condensed consolidated balance sheets. | |||||||||||||||||
As of June 30, 2014, the outstanding balance on our line of credit with Silicon Valley Bank (“SVB”) was $4.6 million, up from $3.9 million at December 31, 2013, and the availability under the line of credit has decreased to $1.7 million (see Note 7 – Lines of Credit). The Company relies on the SVB and RBC lines of credit to fund daily operating activities, and the Company maintains very little cash on hand. As of June 30, 2014, the Company was in compliance with the Tangible Net Worth financial covenant under the SVB line of credit and had available a $1.0 million cushion over the covenant requirement. The Company currently believes that at the time of this filing it is compliant with all the terms and provisions of the SVB lending agreement. Should the Company’s results fail to improve further or once more deteriorate in a manner consistent with its recent historical financial performance, the Company will violate the Tangible Net Worth financial covenant unless it can raise additional outside funding in amounts that are approximately twice the amount of the losses incurred. | |||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
There have been no material changes to the Company's significant accounting policies during the six months ended June 30, 2014. For a comprehensive description of the Company's significant accounting policies, see Footnote 2 of the Company's consolidated financial statements included in the Company's 2013 Annual Report on Form 10-K filed on March 31, 2014 with the SEC. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition - Revenues are generated through product sales, warranty and maintenance agreements, software customization, and professional services. Product sales are recognized when the following criteria are met (1) there is persuasive evidence that an arrangement exists; (2) delivery has occurred and title has passed to the customer which generally happens at the point of shipment provided that no significant obligations remain; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. The Company generates revenues from the sale of extended warranties on wireless and mobile hardware and systems. Revenue related to extended warranty and service contracts is recorded as unearned revenue and is recognized over the life of the contract as the Company maintains financial risk throughout the term of these contracts and may be liable to refund a customer for amounts paid in certain circumstances. Our policy is to classify shipping and handling costs billed to customers and the related expenses as cost of sales. | |||||||||||||||||
The Company also generates revenue from professional services and customer specified software customization on either a fee-for-service or fixed fee basis. Revenue from software customization and professional services that is contracted as fee-for-service is recognized in the period in which the services are performed or delivered. Adjustments to contract price and estimated labor costs are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The Company records sales net of sales tax. | |||||||||||||||||
The Company enters into revenue arrangements that contain multiple deliverables. Judgment is required to properly identify the accounting units of the multiple deliverable transactions and to determine the manner in which revenue should be allocated among the accounting units. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria of revenue recognition have been met for each deliverable in order for revenue recognition to occur in the appropriate accounting period. In an arrangement with multiple deliverables, the delivered item or items shall be considered a separate unit of accounting if both of the following criteria are met: (i) the delivered item or items have value to the customer on a standalone basis; (ii) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement shall be combined with the other applicable undelivered item(s) within the arrangement and the allocation of arrangement consideration and the recognition of revenue then shall be determined for those combined deliverables as a single unit of accounting. While changes in the allocation of the arrangement consideration between the units of accounting will not affect the amount of total revenue recognized for a particular sales arrangement, any material changes in these allocations could affect the timing of revenue recognition, which could affect the Company’s results of operations. When the Company enters into an arrangement that includes multiple elements, we allocate revenue based on their relative selling prices. We use a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor specific objective evidence of fair value (“VSOE”), (ii) third party evidence of selling prices (“TPE”) and (iii) best estimate of selling price (“ESP”) as a proxy for VSOE. When both VSOE and TPE are unavailable, we use ESP. We determine ESP by considering all relevant factors in establishing the price, which is demonstrated in a gross margin model used. | |||||||||||||||||
Revenue from software licenses may contain arrangements with multiple deliverables, including post-contract customer support, that are subject to software revenue recognition guidance. The revenue for these arrangements is allocated to the software and non-software deliverable based on the relative selling prices of all components in the arrangement using the criteria above. Post-contract support is recognized ratably over the support period. When a contract contains multiple elements wherein the only undelivered element is post-contract customer support and VSOE of the fair value of post-contract customer support does not exist, revenue from the entire arrangement is recognized ratably over the support period. Software royalty revenue is recognized in arrears on a quarterly basis, based upon reports received from licensees during the period, unless collectability is not reasonably assured, in which case revenue is recognized when payment is received from the licensee. | |||||||||||||||||
Concentration of Risk | ' | ||||||||||||||||
Concentration of Credit Risk - Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and accounts payable. Beginning January 1, 2013, all of our cash balances were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor at each financial institution. This coverage is available at all FDIC member institutions. The Company uses Silicon Valley Bank, which is an FDIC insured institution. Based on these facts, collectability of bank balances appears to be adequate. | |||||||||||||||||
Historically, a relatively small number of customers have accounted for a significant portion of the Company’s revenue. The Company had one customer who represented 12% and 11% of the Company’s revenue for the six months ended June 30, 2014 and 2013, respectively. The Company had three customers, two of which were not the same, who represented 25% and 22% of its revenue for the six months ended June 30, 2014 and 2013, respectively. The Company’s accounts receivable was concentrated with one customer at June 30, 2014, representing 18% of gross accounts receivable and with one customer at June 30, 2013, representing 13% of gross accounts receivable. Customer mix can shift significantly from year to year, but a concentration of the business with a few large customers is typical in any given year. A decline in revenues could occur if a customer that has been a significant source of revenue in one financial reporting period is a less significant source of revenue in the following period. The loss of a significant customer could have a material adverse impact on the Company. | |||||||||||||||||
The Company has the same four primary vendors for the six months ended June 30, 2014 compared to the similar period in 2013. For the six months ended June 30, 2014, the Company had purchases from these four vendors that collectively represented 58% of total purchases and 65% of the total outstanding accounts payable at June 30, 2014. For the six months ended June 30, 2013, the Company had purchases from these four vendors that collectively represented 55% of total purchases and 67% of the total outstanding accounts payable at June 30, 2013. The same single vendor represented 21% and 18% of the total purchases for the six months ended June 30, 2014 and 2013, respectively. Loss of this certain vendor could have a material adverse effect on our operations. | |||||||||||||||||
The Company’s contracts with these customers and other customers do not include any specific purchase requirements or other requirements outside of the normal course of business. The majority of customer contracts are on an annual basis for service support while on a purchase order basis for hardware purchases. Typical hardware sales are submitted on an estimated order basis with subsequent follow on orders for specific quantities. These sales are ultimately subject to the time that the units are installed at each of the customer locations as per their requirements. Service contracts are purchased on an annual basis generally and are the performance responsibility of the actual service provider as opposed to the Company. Termination provisions are generally standard clauses based upon non-performance, but a customer can cancel with a certain reasonable notice period anywhere from 30 to 90 days. General industry standards for contracts provide ordinary terms and conditions, while actual work and performance aspects are usually dictated by a Statement of Work which outlines what is being ordered, product specifications, delivery, installation and pricing. | |||||||||||||||||
Translation of Foreign Currencies | ' | ||||||||||||||||
Translation of Foreign Currencies - The Company's functional currency is the U.S. dollar. The financial statements of the Company's foreign subsidiary is measured using the local currency, in this case the Canadian dollar (CDN$), as its functional currency and is translated to U.S. dollars for reporting purposes. Assets and liabilities of the subsidiary are translated at exchange rates as of the balance sheet dates. Revenues and expenses of the subsidiary are translated at the rates of exchange in effect during the year. | |||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
Fair Value Measurement - Fair value is the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: | |||||||||||||||||
● | Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
● | Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. | ||||||||||||||||
● | Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company. | ||||||||||||||||
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. | |||||||||||||||||
Liabilities Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||
The Company measures certain liabilities at fair value on a recurring basis such as our contingent consideration related to business combinations and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the six months ended June 30, 2014. | |||||||||||||||||
The Company has classified its contingent consideration related to the Apex acquisition as a Level 3 liability. Revenue and other assumptions used in the calculation require significant management judgment. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. Based on that assessment, the Company recognized an adjustment of $0 to the actual calculation of the earn-out obligations it incurred in connection with its Apex acquisition during the six months ended June 30, 2013. On June 9, 2014, the accounting expert issued its final report and the fair value of the earn-out was calculated to be CDN$400,000 of which CDN$89,000 (US$84,000) (22.22%) was paid in cash and CDN$311,000 (US$291,000) (77.78%) payable in the form of a convertible promissory note (see Note 5 – Business Combinations). The convertible promissory note is expected to be executed in the third quarter of 2014. | |||||||||||||||||
As part of the Apex acquisition in 2012, the Company is obligated to pay bonus consideration to the CEO of Apex. Such bonus is considered additional contingent purchase consideration as the Company is obligated to pay the bonus regardless of whether or not the CEO’s employment is retained. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Closing Date). At June 30, 2014 there is CDN$101,000 (US$94,000) recorded in earn out consideration in the Company’s unaudited condensed consolidated financial statements. | |||||||||||||||||
The Company has classified certain warrants related to the August 2013 issuance and sale of Common Stock in a private offering as a Level 3 Liability. Assumptions used in the calculation require significant judgment. The Company reassesses the fair value of the warrant liabilities on a quarterly basis. Based on that assessment, the Company recognized a $166,000 reduction to the fair value of the warrant liability for the six months ended June 30, 2014. | |||||||||||||||||
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 385 | $ | - | $ | - | $ | 385 | |||||||||
Fair value of warrants issued in connection | |||||||||||||||||
with share purchase agreement | 637 | - | - | 637 | |||||||||||||
Balance at June 30, 2014 | $ | 1,022 | $ | - | $ | - | $ | 1,022 | |||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 468 | $ | - | $ | - | $ | 468 | |||||||||
Fair value of warrants issued in connection | |||||||||||||||||
with share purchase agreement | 803 | - | - | 803 | |||||||||||||
Balance at December 31, 2013 | $ | 1,271 | $ | - | $ | - | $ | 1,271 | |||||||||
The following table summarizes changes to the fair value of the contingent consideration and derivative warrants, which are Level 3 liabilities (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Derivative | ||||||||||||||||
consideration | warrants | ||||||||||||||||
Balance at December 31, 2013 | $ | 468 | $ | 803 | |||||||||||||
Adjustments to fair value of warrants (reflected in other income) | - | (166 | ) | ||||||||||||||
Cash paid for contingent acqusition liability | (84 | ) | - | ||||||||||||||
Effect of currency translation | 1 | - | |||||||||||||||
Balance at June 30, 2014 | $ | 385 | $ | 637 | |||||||||||||
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis | |||||||||||||||||
The Company's non-financial assets and liabilities, such as goodwill, intangible assets, and other long lived assets resulting from business combinations are measured at fair value using income and market comparable valuation methodologies at the date of acquisition and subsequently re-measured if there are indicators of impairment. There were no indicators of impairment identified during the six months ended June 30, 2014. | |||||||||||||||||
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” (Topic 606), which supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and most industry specific guidance. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This new guidance is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, the Company will adopt this new guidance beginning in fiscal 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt this new guidance and management is currently evaluating which transition approach to use and the impact of this new guidance on our consolidated financial position or results of operations. |
Basis_of_Presentation_Liquidit2
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summarizes changes to the fair value of the contingent consideration and derivative warrants | ' | ||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Derivative | ||||||||||||||||
consideration | warrants | ||||||||||||||||
Balance at December 31, 2013 | $ | 468 | $ | 803 | |||||||||||||
Adjustments to fair value of warrants (reflected in other income) | - | (166 | ) | ||||||||||||||
Cash paid for contingent acqusition liability | (84 | ) | - | ||||||||||||||
Effect of currency translation | 1 | - | |||||||||||||||
Balance at June 30, 2014 | $ | 385 | $ | 637 | |||||||||||||
Warrant [Member] | ' | ||||||||||||||||
Summary of warrant liability measured at fair value on a recurring basis | ' | ||||||||||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 385 | $ | - | $ | - | $ | 385 | |||||||||
Fair value of warrants issued in connection | |||||||||||||||||
with share purchase agreement | 637 | - | - | 637 | |||||||||||||
Balance at June 30, 2014 | $ | 1,022 | $ | - | $ | - | $ | 1,022 | |||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 468 | $ | - | $ | - | $ | 468 | |||||||||
Fair value of warrants issued in connection | |||||||||||||||||
with share purchase agreement | 803 | - | - | 803 | |||||||||||||
Balance at December 31, 2013 | $ | 1,271 | $ | - | $ | - | $ | 1,271 | |||||||||
Loss_Per_Common_Share_Tables
Loss Per Common Share (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Loss Per Common Share [Abstract] | ' | ||||||||
Schedule of potentially dilutive securities | ' | ||||||||
Six Months Ended June 30, | |||||||||
2014 | 2013 | ||||||||
Convertible preferred stock - Series A | 270 | 270 | |||||||
Convertible preferred stock - Series B | 131 | 131 | |||||||
Convertible preferred stock - Series D | 10,287 | 7,042 | |||||||
Convertible preferred stock - Series E | 8,330 | - | |||||||
Warrants to purchase common stock | 3,555 | 981 | |||||||
Options to purchase common stock | 737 | 544 | |||||||
Total potentially dilutive securities | 23,310 | 8,968 | |||||||
Warrant_Liability_Tables
Warrant Liability (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Warrant Liability [Abstract] | ' | ||||||||||||||||
Schedule of warrant liabilities valued at the closing dates of common stock purchase agreement | ' | ||||||||||||||||
Placement Agent Warrants | Investor Warrants | ||||||||||||||||
Warrants | June | December | June | December | |||||||||||||
30, 2014 | 31, 2013 | 30, 2014 | 31, 2013 | ||||||||||||||
Closing price per share of common stock | $ | 0.46 | $ | 0.53 | $ | 0.46 | $ | 0.53 | |||||||||
Exercise price per share (range) | 0.5 | 0.5 | 0.5 | 0.5 | |||||||||||||
Expected volatility | 125.2 | % | 123.5 | % | 125.2%-125.4 | % | 123.5 | % | |||||||||
Risk-free interest rate | 1.3 | % | 1.6 | % | 1.3 | % | 1.6 | % | |||||||||
Dividend yield | - | - | - | - | |||||||||||||
Remaining expected term of underlying securities (years) | 4.1 | 4.6 | 4.1 | 4.6 | |||||||||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Goodwill and Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Schedule of transactions effecting goodwill | ' | ||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 8,395 | |||||||||||||||||||||||
Effect of currency translation on Apex | 6 | ||||||||||||||||||||||||
Balance at June 30, 2014 | $ | 8,401 | |||||||||||||||||||||||
Schedule of intangible assets and accumulated amortization | ' | ||||||||||||||||||||||||
30-Jun-14 | 31-Dec-13 | ||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||
Gross | Amortization | Net | Gross | Amortization | Net | ||||||||||||||||||||
Customer relationships | $ | 3,267 | $ | (1,912 | ) | $ | 1,355 | $ | 3,264 | $ | (1,654 | ) | $ | 1,610 | |||||||||||
Contractor and resume databases | 675 | (473 | ) | 202 | 675 | (405 | ) | 270 | |||||||||||||||||
Tradename | 864 | (462 | ) | 402 | 862 | (364 | ) | 498 | |||||||||||||||||
Internal use software | 2,807 | (1,737 | ) | 1,070 | 2,802 | (1,299 | ) | 1,503 | |||||||||||||||||
Covenant not to compete | 104 | (104 | ) | - | 104 | (78 | ) | 26 | |||||||||||||||||
$ | 7,717 | $ | (4,688 | ) | $ | 3,029 | $ | 7,707 | $ | (3,800 | ) | $ | 3,907 | ||||||||||||
Term_Debt_Tables
Term Debt (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Long-Term Debt, Unclassified [Abstract] | ' | ||||||||||||||||||||||||
Schedule of long term debt | ' | ||||||||||||||||||||||||
Balance | Additions | Payments | Amortization of Note Discount | Effect of | Balance | ||||||||||||||||||||
31-Dec-13 | Currency | June 30, | |||||||||||||||||||||||
Translation | 2014 | ||||||||||||||||||||||||
RBC term loan | $ | 1,169 | $ | - | $ | (380 | ) | $ | - | $ | (8 | ) | $ | 781 | |||||||||||
BDC term loan | 1,589 | - | - | - | 4 | 1,593 | |||||||||||||||||||
SVB term loan-2 | 722 | - | (166 | ) | - | - | 556 | ||||||||||||||||||
Total note discounts | (45 | ) | - | - | 15 | - | (30 | ) | |||||||||||||||||
Total debt | $ | 3,435 | $ | - | $ | (546 | ) | $ | 15 | $ | (4 | ) | 2,900 | ||||||||||||
less current portion | (1,095 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 1,805 | |||||||||||||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Stockholders' Equity [Abstract] | ' | ||||||||||||||||||||
Schedule of preferred stock outstanding | ' | ||||||||||||||||||||
Description | |||||||||||||||||||||
Series A Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||||||
269,608 shares issued and outstanding, liquidation preference of $975 | |||||||||||||||||||||
plus cumulative dividends of $402 | $ | 1,377 | |||||||||||||||||||
Series B Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||||||
131,347 shares issued and outstanding, liquidation preference of $380 | |||||||||||||||||||||
plus cumulative dividends of $108 | 488 | ||||||||||||||||||||
Series D Preferred, $0.001 par value per share, 4,000,000 shares designated, | |||||||||||||||||||||
730,357 shares issued and outstanding (net of $1,374 in issuance costs), | |||||||||||||||||||||
liquidation preference of $7,449 plus cumulative imputed dividends and | |||||||||||||||||||||
beneficial conversion feature of $1,558 | 7,439 | ||||||||||||||||||||
Series E Preferred, $0.001 par value per share, 2,000,000 shares designated, | |||||||||||||||||||||
416,533 shares issued and outstanding (net of $875 in issuance costs), | |||||||||||||||||||||
liquidation preference of $4,269 plus cumulative imputed dividends of $54 | 3,345 | ||||||||||||||||||||
Total convertible preferred stock | $ | 12,649 | |||||||||||||||||||
Schedule of outstanding common stock warrants | ' | ||||||||||||||||||||
Total | Weighted | ||||||||||||||||||||
Warrants | Total | Average | |||||||||||||||||||
Date | Strike | Outstanding | Exercise | Exercise | |||||||||||||||||
Issued | Expiration | Price | and Exercisable | Price | Price | ||||||||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | $ | 3.62 | 138,260 | $ | 500,000 | ||||||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | 4.34 | 138,260 | 600,000 | ||||||||||||||||
Placement Agent Preferred Stock - Class D | 12-Dec | 17-Dec | 1.1 | 704,200 | 774,620 | ||||||||||||||||
Common Stock Investor Warrants * | 13-Aug | 18-Aug | 0.5 | 1,463,667 | 731,834 | ||||||||||||||||
Placement Agent Warrants - Common Stock * | 13-Aug | 18-Aug | 0.5 | 292,733 | 146,367 | ||||||||||||||||
Placement Agent Preferred Stock - Class E | 13-Nov | 18-Nov | 0.55 | 818,000 | 449,900 | ||||||||||||||||
3,555,120 | $ | 3,202,721 | $ | 0.9 | |||||||||||||||||
* warrants classified as liabilities |
Stock_Option_Plan_Tables
Stock Option Plan (Tables) | 6 Months Ended | ||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||
Stock Option Plan [Abstract] | ' | ||||||||||||||||||||||||||
Schedule of the summary of the status of the plans and information with respect to the changes in options outstanding | ' | ||||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Options | Average | Aggregate | |||||||||||||||||||||||||
Available | Options | Exercise | Intrinsic | ||||||||||||||||||||||||
for Grant | Outstanding | Price | Value | ||||||||||||||||||||||||
31-Dec-13 | 195,495 | 804,505 | $ | 1.39 | $ | - | |||||||||||||||||||||
Granted | (183,648 | ) | 183,648 | 0.5 | - | ||||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||||
Forfeited | 251,471 | (251,471 | ) | 2.05 | - | ||||||||||||||||||||||
30-Jun-14 | 263,318 | 736,682 | $ | 1.11 | $ | - | |||||||||||||||||||||
Exercisable options at June 30, 2014 | 570,921 | $ | 1.14 | $ | - | ||||||||||||||||||||||
Schedule of summary of the information about stock options outstanding | ' | ||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||||||||||||
Average | Weighted- | Average | Weighted- | ||||||||||||||||||||||||
Range of | Remaining | Average | Remaining | Average | |||||||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Contractual | Exercise | |||||||||||||||||||||
Prices | Outstanding | Life (Years) | Price | Exercisable | Life (Years) | Price | |||||||||||||||||||||
$ | 0.46 - 0.53 | 443,648 | 2.52 | $ | 0.5 | 330,440 | 2.53 | $ | 0.49 | ||||||||||||||||||
$ | 1.33 - 2.03 | 136,272 | 2.51 | 1.9 | 130,176 | 2.51 | 1.9 | ||||||||||||||||||||
$ | 2.06 - 4.34 | 156,762 | 6.84 | 2.16 | 110,305 | 6.78 | 2.16 | ||||||||||||||||||||
Total | 736,682 | 3.44 | $ | 1.11 | 570,921 | 3.35 | $ | 1.14 | |||||||||||||||||||
Schedule of the summary of fair value using the Black-Scholes option pricing model | ' | ||||||||||||||||||||||||||
For the Six Months Ended | |||||||||||||||||||||||||||
June 30, | |||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||
Expected term | 1.50 years | N/A | |||||||||||||||||||||||||
Expected volatility | 143.49 | % | N/A | ||||||||||||||||||||||||
Dividend yield | 0 | % | N/A | ||||||||||||||||||||||||
Risk-free interest rate | 0.27 | % | N/A | ||||||||||||||||||||||||
Basis_of_Presentation_Liquidit3
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details 1) (Warrant [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Contingent consideration liability recorded for business combinations | $385 | $468 |
Fair value of warrants issued in connection with share purchase agreement | 552 | 803 |
Ending Balance | 1,022 | 1,271 |
Quoted prices in active markets (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Contingent consideration liability recorded for business combinations | ' | ' |
Fair value of warrants issued in connection with share purchase agreement | ' | ' |
Ending Balance | ' | ' |
Significant other observable inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Contingent consideration liability recorded for business combinations | ' | ' |
Fair value of warrants issued in connection with share purchase agreement | ' | ' |
Ending Balance | ' | ' |
Significant other unobservable inputs (Level 3) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Contingent consideration liability recorded for business combinations | 385 | 468 |
Fair value of warrants issued in connection with share purchase agreement | 637 | 803 |
Ending Balance | $1,022 | $1,271 |
Basis_of_Presentation_Liquidit4
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | |
Warrant [Member] | Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | |||||
Warrant [Member] | Warrant [Member] | Derivative warrants [Member] | Contingent consideration [Member] | |||||||
Fair Value, Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at December 31, 2013 | ' | ' | ' | ' | $552,000 | $803,000 | $637,000 | $803,000 | $803,000 | $468,000 |
Adjustments to fair value of warrants (reflected in other income) | 84,000 | ' | -166,000 | ' | ' | ' | ' | ' | -166,000 | ' |
Cash paid for contingent acqusition liability | ' | ' | -84,000 | ' | ' | ' | ' | ' | ' | -84,000 |
Effect of currency translation | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 |
Balance at March 31, 2014 | ' | ' | ' | ' | $552,000 | $803,000 | $637,000 | $803,000 | $637,000 | $385,000 |
Basis_of_Presentation_Liquidit5
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details Textuals) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 1 Months Ended | ||||||||||||||||
Aug. 21, 2013 | Aug. 15, 2013 | Aug. 16, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 09, 2014 | Jun. 09, 2014 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 09, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Oct. 31, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Apex | Apex | Apex | Apex | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Fair Value [Member] | Silicon Valley Bank [Member] | RBC Credit Agreement [Member] | RBC Credit Agreement [Member] | Warrant [Member] | Warrant [Member] | Subsequent Event | |
Subsidiary | USD ($) | CAD | USD ($) | CAD | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Convertible promissory note [Member] | Line of Credit [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | USD ($) | Private Placement [Member] | USD ($) | ||||||||
USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | Apex | Line of Credit [Member] | Line of Credit [Member] | USD ($) | ||||||||||||||||
USD ($) | USD ($) | ||||||||||||||||||||||||||
Basis Of Presentation Liquidity and Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of wholly- owned subsidiaries | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid in consideration to Apex | ' | ' | ' | ' | ' | ' | ' | ' | $4,801,000 | 5,000,000 | $713,000 | 735,000 | $84,000 | 89,000 | $1,033,000 | 1,076,000 | $1,033,000 | 1,076,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance on the line of credit with Silicon Valley Bank | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' |
Increase in revenue | ' | ' | ' | 1,800,000 | ' | 4,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of increase in revenue | ' | ' | ' | ' | 12.20% | ' | 16.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual Savings | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of administrative personnel and reduced staffing | ' | ' | ' | ' | ' | 29.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | -19,000 | -1,116,000 | -132,000 | -3,218,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working capital deficit | ' | ' | ' | ' | ' | 9,500,000 | ' | 9,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in working capital | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | 200,000 | 1,556,400 | 1,756,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stocks, including management and existing shareholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earn out consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 291,000 | 311,000 | ' | 400,000 | 1,033,000 | 1,076,000 | ' | ' | 331,000 | 341,000 | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares issued | ' | ' | ' | 12,883,446 | ' | 12,883,446 | ' | 12,883,446 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,463,667 | 292,833 | ' |
Purchase price per Share | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | $0.60 | ' |
Net proceeds from private placement offering after deductions | ' | ' | ' | ' | ' | 1,502,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease in availability under line of credit | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of additional capital raises in tangible net worth | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' |
Minimum tangible net worth's pro forma effect in capital raise | ' | ' | ' | 1,000,000 | ' | 1,000,000 | ' | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit, covenant terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'The Company was in compliance with the Tangible Net Worth financial covenant and had available a $1.0 million and $0.8 million cushion over the requirement, respectively. | ' | ' | ' | ' | ' |
Adjustment To Earn Out Obligations | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value Adjustment of Warrants | ' | ' | ' | 84,000 | ' | -166,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Line of Credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' |
Percentage of the fair value of the earn-out | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22.22% | 22.22% | ' | ' | ' | ' | ' | ' | 77.78% | ' | ' | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 153,000 | 160,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO, Accrued earn out recognized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $94,000 | 101,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis_of_Presentation_Liquidit6
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Detail Textuals 1) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Customer | Customer | |
Concentration Risk [Line Items] | ' | ' |
Cash, FDIC Insured Amount | 250,000 | ' |
Revenues | Customer One | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 1 | 1 |
Total percent of revenues from various customers | 10.00% | 11.00% |
Revenues | Customer Two | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 3 | 3 |
Total percent of revenues from various customers | 22.00% | 25.00% |
Accounts receivable | Customer One | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 1 | 1 |
Total percent of revenues from various customers | 11.00% | 18.00% |
Accounts receivable | Customer Two | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 1 | 1 |
Total percent of revenues from various customers | 11.00% | 13.00% |
Total purchases | Individual Supplier | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Total percent of revenues from various customers | 21.00% | 18.00% |
Total purchases | Supplier Concentration Risk | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Total percent of revenues from various customers | 58.00% | 55.00% |
Number of vendors | 4,000 | 4,000 |
Accounts Payable | Supplier Concentration Risk | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Total percent of revenues from various customers | 65.00% | 67.00% |
Number of vendors | 4,000 | 4,000 |
Loss_Per_Common_Share_Potentia
Loss Per Common Share - Potential dilutive securities (Details) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 23,310 | 8,968 |
Convertible Preferred stock | Series A | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 270 | 270 |
Convertible Preferred stock | Series B | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 131 | 131 |
Convertible Preferred stock | Series D | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 10,287 | 7,042 |
Convertible Preferred stock | Series E | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 8,330 | ' |
Warrants to purchase common stock | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 3,555 | 981 |
Options to purchase common stock | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 737 | 544 |
Loss_Per_Common_Share_Detail_T
Loss Per Common Share (Detail Textuals) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Shares that have not been committed to be released | 23,310 | 8,968 |
Employee Stock Ownership Plan | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Shares that have not been committed to be released | 400 | 500 |
Warrant_Liability_Details
Warrant Liability (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Placement Agent Warrants [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Closing price per share of common stock | $0.46 | $0.53 |
Exercise price per share (range) | $0.50 | $0.50 |
Expected volatility | 125.20% | 123.50% |
Risk-free interest rate | 1.30% | 1.60% |
Dividend yield | ' | ' |
Remaining expected term of underlying securities (years) | '4 years 1 month 6 days | '4 years 7 months 6 days |
Investor Warrants [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Closing price per share of common stock | $0.46 | $0.53 |
Exercise price per share (range) | $0.50 | $0.50 |
Expected volatility | ' | 123.50% |
Risk-free interest rate | 1.30% | 1.60% |
Dividend yield | ' | ' |
Remaining expected term of underlying securities (years) | '4 years 1 month 6 days | '4 years 7 months 6 days |
Investor Warrants [Member] | Minimum [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Expected volatility | 125.20% | ' |
Investor Warrants [Member] | Maximum [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Expected volatility | 125.40% | ' |
Warrant_Liability_Detail_Textu
Warrant Liability (Detail Textuals) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Warrants Liability (Textual) | ' | ' | ' | ' | ' |
Estimated fair value of the outstanding warrant liabilities | $637 | ' | $637 | ' | $803 |
Fair market value adjustment of warrant liability | $84 | ' | ($166) | ' | ' |
Business_Combinations_Detail_T
Business Combinations (Detail Textuals) (Asset purchase agreement, Illume Mobile, USD $) | 1 Months Ended |
Jul. 31, 2012 | |
Asset purchase agreement | Illume Mobile | ' |
Acquisition Of Illume Mobile [Line Items] | ' |
Total purchase consideration | $1,000,000 |
Purchase consideration, cash paid | 250,000 |
Purchase consideration, value of shares issued | 750,000 |
Purchase consideration, number of shares issued | 617,284 |
Value of shares issued in conjunction with the acquisition | 697,531 |
Additional earn out payment to be paid | $500,000 |
Percentage of additional payment to be paid in cash | 50.00% |
Percentage of additional payment to be paid in form of shares | 50.00% |
Business_Combinations_Detail_T1
Business Combinations (Detail Textuals 1) (Apex) | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | |||||||||||
Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 09, 2014 | Jun. 09, 2014 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 09, 2014 | Jun. 09, 2014 | |
USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | |
USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | |||||||
USD ($) | CAD | |||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid in consideration to Apex | $4,801,000 | 5,000,000 | $713,000 | 735,000 | ' | ' | $84,000 | 89,000 | $1,033,000 | 1,076,000 | $1,033,000 | 1,076,000 | ' | ' | ' | ' |
Percentage of the fair value of the earn-out | ' | ' | ' | ' | ' | ' | 22.22% | 22.22% | ' | ' | ' | ' | ' | ' | 77.78% | 77.78% |
Undiscounted payment in consideration for Apex achieving certain levels of EBITDA | 3,360,700 | 3,500,000 | ' | ' | 331,000 | 341,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Earn out consideration | ' | ' | 291,000 | 311,000 | ' | ' | ' | 400,000 | 1,033,000 | 1,076,000 | ' | ' | 331,000 | 341,000 | ' | ' |
Amount payable in form of convertible promissory note | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 291,000 | 311,000 |
Potential additional purchase consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 291,000 | 311,000 | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO | ' | ' | 153,000 | 160,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO, Accrued earn out recognized | ' | ' | $94,000 | 101,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Schedule of transactions effecting goodwill (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Goodwill [Roll Forward] | ' |
Balance at December 31, 2013 | $8,395 |
Effect of currency translation on Apex | 6 |
Balance at June 30, 2014 | $8,401 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Schedule of intangible assets and accumulated amortization (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | $7,717 | $7,707 |
Accumulated Amortization | -4,688 | -3,800 |
Net | 3,029 | 3,907 |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 3,267 | 3,264 |
Accumulated Amortization | -1,912 | -1,654 |
Net | 1,355 | 1,610 |
Contractor and resume databases | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 675 | 675 |
Accumulated Amortization | -473 | -405 |
Net | 202 | 270 |
Tradename | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 864 | 862 |
Accumulated Amortization | -462 | -364 |
Net | 402 | 498 |
Internal use software | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 2,807 | 2,802 |
Accumulated Amortization | -1,737 | -1,299 |
Net | 1,070 | 1,503 |
Covenant not to compete | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 104 | 104 |
Accumulated Amortization | -104 | -78 |
Net | ' | $26 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Detail Textuals) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Goodwill and Intangible Assets [Abstract] | ' |
Effect of foreign currency translation on goodwill | $6 |
Effect of foreign currency translation on intangible assets | ($8) |
Lines_of_Credit_Detail_Textual
Lines of Credit (Detail Textuals) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
USD ($) | USD ($) | Silicon Valley Bank ("SVB") | SVB Loan Agreement | SVB Loan Agreement | SVB Loan Agreement | RBC Credit Agreement [Member] | RBC Credit Agreement [Member] | RBC Credit Agreement [Member] | |
Line of credit | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | |||
USD ($) | Line of credit | Line of credit | Line of credit | Line of credit | Line of credit | Line of credit | |||
USD ($) | USD ($) | USD ($) | USD ($) | CAD | USD ($) | ||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of credit facility | ' | ' | ' | $10,000,000 | ' | ' | ' | 200,000 | ' |
Outstanding balance on the line of credit | ' | ' | ' | 4,600,000 | ' | 3,900,000 | 0 | ' | 0 |
Minimum Tangible Net Worth | ' | ' | 8,700,000 | ' | ' | ' | ' | ' | ' |
Percentage of additional capital raises in tangible net worth | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' |
Minimum tangible net worth's pro forma effect in capital raise | 1,000,000 | 800,000 | ' | ' | ' | ' | ' | ' | ' |
Line of credit, covenant terms | ' | ' | 'The Company was in compliance with the Tangible Net Worth financial covenant and had available a $1.0 million and $0.8 million cushion over the requirement, respectively. | ' | ' | ' | ' | ' | ' |
The Company was in compliance with the Tangible Net Worth financial covenant under the SVB line of credit and had available a $1.0 million cushion over the covenant requirement. | |||||||||
Annual Interest Rate | ' | ' | ' | 7.00% | ' | ' | 4.50% | 4.50% | 4.50% |
Annual interest rate, Additional percentage | ' | ' | ' | ' | ' | ' | 1.50% | 1.50% | 1.50% |
Availability under the line of credit | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' |
Interest expense for the lines of credit, including amortization of deferred financing costs | ' | ' | ' | $211,000 | $171,000 | ' | ' | ' | ' |
Line of Credit Facility, Expiration Date | ' | ' | ' | 28-Feb-15 | ' | ' | ' | ' | ' |
Term_Debt_Summary_of_long_term
Term Debt - Summary of long term debt (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | $3,435,000 | ' |
Additions | ' | ' |
Payments | -546,000 | ' |
Amortization of Note Discount | 15,000 | ' |
Effect of Currency Translation | -4,000 | ' |
Ending Balance | 2,900,000 | ' |
less current portion | -1,095,000 | ' |
Debt, net of current portion | 1,805,000 | 1,961,000 |
RBC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 1,169,000 | ' |
Additions | ' | ' |
Payments | -380,000 | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | -8,000 | ' |
Ending Balance | 781,000 | ' |
BDC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 1,589,000 | ' |
Additions | ' | ' |
Payments | ' | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | 4,000 | ' |
Ending Balance | 1,593,000 | ' |
SVB term loan-2 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 722,000 | ' |
Additions | ' | ' |
Payments | -166,000 | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | ' | ' |
Ending Balance | 556,000 | ' |
Note discount | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | -45,000 | ' |
Additions | ' | ' |
Payments | ' | ' |
Amortization of Note Discount | 15,000 | ' |
Effect of Currency Translation | ' | ' |
Ending Balance | -30,000 | ' |
Note discount | RBC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | ' | -38,000 |
Ending Balance | -19,000 | -38,000 |
Note discount | BDC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | ' | -31,000 |
Ending Balance | -25,000 | -31,000 |
Note discount | SVB term loan-2 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | ' | ' |
Ending Balance | ($13,000) | ' |
Term_Debt_RBC_Term_Loan_Detail
Term Debt - RBC Term Loan (Detail Textuals) | 6 Months Ended | 1 Months Ended | 0 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jul. 31, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Dec. 31, 2013 | Oct. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |
USD ($) | USD ($) | RBC term loan | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Other assets | Other assets | |
RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | USD ($) | USD ($) | ||||
Line of credit | Line of credit | Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||||
CAD | CAD | USD ($) | CAD | USD ($) | USD ($) | USD ($) | |||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized deferred financing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $34,000 | $48,000 |
Aggregate amount of credit facility | ' | ' | ' | ' | 2,750,000 | ' | 2,401,000 | 2,500,000 | ' | ' | ' | ' | ' |
Term Loan, Interest percentage | ' | ' | ' | ' | ' | 7.00% | 4.00% | 4.00% | ' | ' | ' | ' | ' |
Principal and interest payable period | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Fixed principal amount | ' | ' | ' | 70,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Frequency of repayment | ' | ' | ' | ' | ' | ' | ' | ' | 'Monthly | ' | ' | ' | ' |
Financing costs paid | 100,000 | 119,000 | ' | ' | ' | ' | ' | ' | 120,000 | ' | ' | ' | ' |
Period of payment for mandatory repayments | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' |
Estimated amount of term loan included in current portion of debt | ($1,095,000) | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $0 | ' | ' |
Term loan and financial covenant, Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ended December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. |
Term_Debt_BDC_Term_Loan_Detail
Term Debt - BDC Term Loan (Detail Textuals 1) | 6 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2012 | Jun. 04, 2012 | |
USD ($) | USD ($) | BDC term loan | BDC term loan | Apex | Apex | Apex | Apex | Apex | |
Term credit facility | BDC term loan | BDC term loan | BDC term loan | BDC term loan | BDC term loan | ||||
USD ($) | Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||
CAD | USD ($) | CAD | CAD | USD ($) | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of credit facility | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | $1,632,000 |
Interest rate per annum | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% |
Maturity date | ' | ' | ' | ' | 23-Jun-16 | ' | ' | ' | ' |
Debt instrument interest extention period | ' | ' | ' | ' | '1 year | ' | ' | ' | ' |
Line of credit facility extension fee percentage | ' | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Line of credit facility additional periodic interest payment | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' |
Percentage of Apex's free cash flow for mandatory repayments of term loan | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Maximum annual cash flow sweep | ' | ' | ' | ' | ' | ' | 425,000 | 425,000 | ' |
Financing costs paid | 100,000 | 119,000 | ' | ' | ' | 70,000 | ' | ' | ' |
Terms of loan agreement, description | ' | ' | 'The terms of the BDC loan agreement also provide for a fee to BDC in the event of the occurrence of any of the following:(a) if 50% or more of any company comprising Apex or the Company (consolidated assets or shares) is sold or merged with an unrelated entity; or (b) if there is a change of control of Apex and/or the Company prior to the Maturity Date or any extended maturity date of the BDC Term Loan, | ' | ' | ' | ' | ' | ' |
Deferred finance costs | ' | ' | ' | 18,000 | ' | 35,000 | ' | ' | ' |
Note discount | ' | ' | ' | $18,000 | ' | $35,000 | ' | ' | ' |
Percentage of value of company and acquiree paid as bonus on fulfillment of terms | ' | ' | 2.00% | ' | ' | ' | ' | ' | ' |
Term loan and financial covenant, Description | ' | ' | 'On August 22, 2013, the BDC Term Loan was amended and certain financial covenants were modified. Pursuant to the amended loan agreement, the Company is required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised yearly 120 days after each year end. The Company was in compliance with all of our BDC financial covenants as of December 31, 2013. | ' | ' | ' | ' | ' | ' |
Term_Debt_SVB_Term_Loan_Detail
Term Debt - SVB Term Loan (Detail Textuals 2) (Silicon Valley Bank ("SVB"), USD $) | 1 Months Ended | 6 Months Ended | ||||
Feb. 27, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Feb. 01, 2011 | Dec. 31, 2010 | |
Installment | Installment | |||||
31-Oct-13 | ' | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Outstanding balance on the line of credit | ' | ' | ' | ' | ' | ' |
Nov-13 | ' | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Gross proceeds from sale of preferred stock | ' | ' | ' | ' | ' | ' |
Issuance costs, Net | ' | ' | ' | ' | ' | ' |
November 2013 | Preferred Stock | ' | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Gross proceeds from sale of preferred stock | ' | ' | ' | ' | ' | ' |
Term credit facility | ' | ' | ' | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' |
Outstanding balance on the line of credit | ' | 556,000 | ' | 722,000 | ' | 3,000,000 |
Number of equal monthly installments | 36 | ' | ' | ' | 36 | ' |
Percent of aggregate amount of the term loan equal to final payment | ' | 2.00% | ' | ' | ' | ' |
Interest rate | 7.50% | 9.00% | ' | ' | ' | ' |
Final payment recorded as discount | ' | 60,000 | ' | ' | ' | ' |
Excess tangible assets net worth | ' | 1,000,000 | ' | ' | ' | ' |
Gross proceeds from sale of preferred stock | ' | ' | ' | ' | ' | ' |
Additional term loan | 1,000,000 | ' | ' | ' | ' | ' |
Interest expense for the lines of credit, including amortization of deferred financing costs | ' | $216,000 | $301,000 | ' | ' | ' |
Stockholders_Equity_Preferred_
Stockholders' Equity - Preferred Stock Outstanding (Details) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | $12,649 |
Cumulative Convertible Preferred Stock | Series A Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | 1,377 |
Cumulative Convertible Preferred Stock | Series B Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | 488 |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | 7,439 |
Cumulative Convertible Preferred Stock | Series E Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | $3,345 |
Stockholders_Equity_Preferred_1
Stockholders' Equity - Preferred Stock Outstanding (Parentheticals) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | $0.00 |
Shares designated | 10,000,000 | 10,000,000 |
Shares issued | 1,547,845 | 1,514,155 |
Shares outstanding | 1,547,845 | 1,514,155 |
Cumulative preferred dividends | $2,122 | $1,956 |
Cumulative Convertible Preferred Stock | Series A Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 500,000 | ' |
Shares issued | 269,608 | ' |
Shares outstanding | 269,608 | ' |
Liquidation preference | 975 | ' |
Cumulative preferred dividends | 402 | ' |
Cumulative Convertible Preferred Stock | Series B Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 500,000 | ' |
Shares issued | 131,347 | ' |
Shares outstanding | 131,347 | ' |
Liquidation preference | 380 | ' |
Cumulative preferred dividends | 108 | ' |
Cumulative Convertible Preferred Stock | Series C Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Shares designated | 5,000,000 | ' |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 4,000,000 | ' |
Shares issued | 730,357 | ' |
Shares outstanding | 730,357 | ' |
Liquidation preference | 7,449 | ' |
Cumulative preferred dividends | 1,558 | ' |
Preferred stock, issuance costs | 1,374 | ' |
Cumulative Convertible Preferred Stock | Series E Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 2,000,000 | ' |
Shares issued | 416,533 | ' |
Shares outstanding | 416,533 | ' |
Liquidation preference | 4,269 | ' |
Cumulative preferred dividends | 54 | ' |
Preferred stock, issuance costs | $875 | ' |
Stockholders_Equity_Outstandin
Stockholders' Equity - Outstanding Common Stock Warrants (Details) (Warrants, USD $) | Jun. 30, 2014 | Aug. 16, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | ||
Senior Subordinated Notes Strike Price 3.62 | Senior Subordinated Notes Strike Price 4.34 | Placement Agent Preferred Stock Class D | Common Stock Investor Warrants One | Placement Agent Warrants - Common Stock | Placement Agent Preferred Stock - Class E | |||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding common stock warrants, date issued | ' | ' | '2009 December | '2009 December | '2012 December | '2013 August | [1] | '2013 August | [1] | '2013 November |
Outstanding common stock warrants expiration date | ' | ' | '2014 December | '2014 December | '2017 December | '2018 August | [1] | '2018 August | [1] | '2018 November |
Outstanding common stock warrants strike price | ' | ' | $3.62 | $4.34 | $1.10 | $0.50 | [1] | $0.50 | [1] | $0.55 |
Outstanding common stock warrants, total warrants outstanding and exercisable | $3,555,120 | ' | $138,260 | $138,260 | $704,200 | $1,463,667 | [1] | $292,733 | [1] | $818,000 |
Outstanding common stock warrants total exercise price | $3,202,721 | ' | $500,000 | $600,000 | $774,620 | $731,834 | [1] | $146,367 | [1] | $449,900 |
Outstanding common stock warrants weighted average exercise price | $0.90 | $1 | ' | ' | ' | ' | ' | ' | ||
[1] | * warrants classified as liabilities |
Stockholders_Equity_Detail_Tex
Stockholders' Equity (Detail Textuals) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ' | ' |
Total number of authorized shares | 110,000,000 | ' |
Number of common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Number of preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares issued | 1,547,845 | 1,514,155 |
Preferred stock, shares outstanding | 1,547,845 | 1,514,155 |
Preferred Stock | Series A Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 500,000 | ' |
Preferred stock, shares issued | 269,608 | ' |
Preferred stock, shares outstanding | 269,608 | ' |
Preferred Stock | Series B Preferred Stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 500,000 | ' |
Preferred stock, shares issued | 131,347 | ' |
Preferred stock, shares outstanding | 131,347 | ' |
Preferred Stock | Series D Preferred Stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 4,000,000 | ' |
Preferred stock, shares issued | 730,357 | ' |
Preferred stock, shares outstanding | 730,357 | ' |
Preferred Stock | Series E Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 2,000,000 | ' |
Preferred stock, shares issued | 416,533 | ' |
Preferred stock, shares outstanding | 416,533 | ' |
Stockholders_Equity_Cumulative
Stockholders' Equity - Cumulative convertible preferred stock (Detail Textuals 1) (USD $) | 6 Months Ended | 0 Months Ended | 1 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Dec. 31, 2013 | Nov. 12, 2013 | Nov. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Apr. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Nov. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Series E Preferred Stock | Warrants | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | |||
Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | |||||
Minimum | Maximum | On the date of issue | After the date of issue | Minimum | Maximum | |||||||||||||
Dividends Payable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated value of the Preferred per share | ' | ' | ' | ' | $4 | $3.20 | ' | ' | $10 | ' | ' | ' | $8 | ' | ' | $10 | ' | ' |
Dividend Rate | ' | ' | ' | ' | 8.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' |
Conversion Price per Share | ' | ' | $0.50 | ' | $4 | $3.20 | ' | ' | $1 | ' | ' | ' | ' | ' | ' | $0.50 | ' | ' |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | ' | ' | 500,000 | 500,000 | 5,000,000 | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' |
Reduced Conversion Price per share | ' | ' | ' | ' | ' | ' | ' | ' | $0.90 | ' | $0.71 | ' | ' | ' | ' | ' | ' | ' |
Preferred Stock, Dividend Payment Rate, Variable | ' | ' | ' | ' | ' | ' | ' | ' | 'The Series D Preferred Stock entitles the holder to cumulative dividends, payable quarterly, at an annual rate of (i) 8% of the Stated Value during the three year period commencing on the date of issue, and (ii) 12% of the Stated Value commencing three years after the date of issue. We may, at our option, pay dividends in PIK Shares, in which event the applicable dividend rate will be 12% and the number of such PIK Shares issuable as a dividend will be equal to the aggregate dividend payable divided by the lesser of (x) the then effective Conversion Price or (y) the average volume weighted average price of the Company's common stock for the five prior consecutive trading days. | ' | ' | ' | ' | ' | ' | 'The Series E Preferred Stock entitles the holder to cumulative dividends (subject to the prior dividend rights of the Company's Series D Preferred Stock), payable quarterly, at an annual rate of (i) 10% of the Stated Value during the three year period commencing on the date of issue, and (ii) 14% of the Stated Value commencing three years after the date of issue. We may, at our option (subject to certain conditions), pay dividends in PIK shares, in which event the applicable dividend rate will be 14% and the number of shares issuable as a dividend will be equal to the aggregate dividend payable divided by the lesser of (x) the then effective Conversion Price or (y) the average volume weighted average price of our common stock for the five prior consecutive trading days. | ' | ' |
Cash dividend paid | ' | ' | ' | ' | ' | ' | ' | ' | $146,000 | ' | ' | ' | ' | ' | ' | $104,000 | ' | ' |
Liquidation Price per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10 | ' | ' |
Partial liquidated damage percentages of purchase price paid by each investor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.10% | 0.60% | ' | ' | ' | ' | 0.10% | 0.60% |
Minimum closing price of common stock | ' | ' | ' | ' | ' | ' | ' | ' | $2 | ' | ' | ' | ' | ' | ' | $1.35 | ' | ' |
Minimum average daily trading volume | ' | ' | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' |
Liquidated Damages | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000 | ' | ' | ' | ' | ' | ' | ' |
Redemption purchase price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' | ' | ' |
Contingent beneficial conversion feature recorded as coversion price | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend payable, Shares | ' | ' | ' | ' | ' | ' | ' | 26,157 | 26,157 | ' | ' | ' | ' | ' | ' | 7,533 | ' | ' |
Dividend payable estimated fair value | ' | ' | ' | ' | ' | ' | ' | ' | 213,000 | 213,000 | ' | ' | ' | ' | ' | ' | 75,000 | ' |
Accrued Cash Dividends | ' | ' | ' | ' | ' | ' | ' | ' | 351 | ' | ' | ' | ' | ' | ' | ' | 561 | ' |
Number of preferred stock issued for cash consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 409,000 | ' | ' | ' |
Value of preferred stock issued for cash consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,090,000 | ' | ' | ' |
Issuance cost | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 875,000 | ' | ' | ' |
Placement Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 327,000 | ' | ' | ' |
Legal And Other Expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 270,000 | ' | ' | ' |
Number of common stock called for warrants | ' | ' | ' | 818,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | $0.50 | $0.55 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of warrants | ' | ' | ' | $278,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock price | ' | ' | $0.47 | $0.47 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | '2 years 6 months | '2 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | ' | ' | 0.44% | 0.44% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility | ' | ' | 143.00% | 143.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield | ' | ' | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Common_Sto
Stockholders' Equity - Common Stock (Detail Textuals 2) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||||||
Apr. 26, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Aug. 15, 2013 | Jun. 30, 2014 | Aug. 16, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Aug. 16, 2013 | Oct. 31, 2013 | Jun. 30, 2014 | Aug. 21, 2013 | Aug. 15, 2013 | Dec. 10, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Aug. 15, 2013 | Jun. 30, 2014 | Aug. 15, 2013 | Aug. 15, 2013 | Aug. 15, 2013 | Aug. 21, 2013 | Aug. 21, 2013 | Aug. 15, 2013 | Apr. 26, 2013 | |
Employee | Warrant [Member] | Warrant [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Private Placement [Member] | Private Placement [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Series E Preferred Stock [Member] | Series E Preferred Stock [Member] | Series E Preferred Stock [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | Selling, General and Administrative Expenses | |||||||
Warrant [Member] | Warrant [Member] | Subsequent Event [Member] | Private Placement [Member] | Private Placement [Member] | Warrant [Member] | Warrant [Member] | Purchase Agreement [Member] | Warrant [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Common Stock | |||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | ' | 12,883,446 | ' | 12,883,446 | ' | 12,883,446 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 818,000 | ' | ' | ' | 1,463,667 | 292,733 | ' | 292,733 | ' | 1,463,667 | ' |
Common stock issued during period, value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $263,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $83,000 |
Common stock issued during period, Shares | 70,207 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 585,467 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of employees | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate number of common stock sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 333,333 | 2,594,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of stock price per Share | ' | ' | ' | ' | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | $0.60 | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from private placement | ' | ' | ' | 1,502,000 | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 1,556,400 | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | ' | $0.90 | $1 | ' | ' | $0.60 | ' | ' | ' | $1 | ' | $0.50 | $0.55 | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' |
Purchase of aggregate shares by investor warrants sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,297,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '5 years | ' | ' | '5 years | ' | ' | ' | ' |
Investor warrants sold | ' | ' | ' | ' | ' | ' | ' | ' | 1,099,000 | ' | ' | ' | ' | ' | 166,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock purchase price per share, Minimum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shared authorized | ' | 100,000,000 | ' | 100,000,000 | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Placement agent commision, Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,600 | ' | ' | ' | ' | ' | ' | ' |
Placement agent fees percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' |
Common stock purchased by Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 292,733 | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from warrants offering | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance costs, Net | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
fair value of the warrant liability | ' | 84,000 | ' | -166,000 | ' | ' | ' | 637,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 278,000 | ' | ' | ' | ' | ' | 803,000 | ' | ' | ' | ' |
Balance of warrant liability recorded as equity | ' | ' | ' | ' | ' | ' | ' | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Warrants_D
Stockholders' Equity - Warrants (Detail Textuals 3) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 6 Months Ended | ||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Nov. 12, 2013 | Jun. 30, 2014 | Aug. 15, 2013 | Aug. 21, 2013 | Aug. 15, 2013 | Jun. 30, 2014 | Aug. 16, 2013 | Nov. 12, 2013 | Aug. 15, 2013 | Aug. 21, 2013 | |
Series E Preferred Stock [Member] | Placement Agent Warrants [Member] | Investor Warrants [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | ||||||
Series E Preferred Stock [Member] | Placement Agent Warrants [Member] | Investor Warrants [Member] | |||||||||||||
Common Stock, Shares, Issued | 12,883,446 | ' | 12,883,446 | ' | 12,883,446 | 818,000 | ' | ' | ' | ' | ' | ' | ' | 1,463,667 | 292,733 |
Warrants issued in connection with common stock private placement | ' | ' | $1,099,000 | ' | ' | ' | ' | ' | $1,099,000 | $1,099,000 | ' | ' | ' | ' | ' |
Fair Value Adjustment of Warrants | $84,000 | ' | ($166,000) | ' | ' | $278,000 | ' | $803,000 | ' | ' | $637,000 | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | $0.50 | $0.60 | ' | ' | ' | $0.90 | $1 | $0.55 | ' | ' |
Stock price | ' | ' | ' | ' | ' | $0.47 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | ' | ' | ' | '2 years 6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | ' | 0.44% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | 143.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend yield | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Esop_Plan_Detail_Textuals
Esop Plan (Detail Textuals) (Employee Stock Ownership Plan (the "ESOP"), USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Employee Stock Ownership Plan (the "ESOP") | ' |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ' |
Contribution expense | $89,000 |
ESOP principal payment | 73,000 |
ESOP interest expenses | 16,000 |
ESOP compensation expenses | $46,000 |
Fair value of the shares | $0.47 |
Stock_Option_Plan_Summary_of_s
Stock Option Plan - Summary of status of Plans (Details) (2010 Stock Option Plan (the "Plan"), USD $) | 6 Months Ended |
Jun. 30, 2014 | |
2010 Stock Option Plan (the "Plan") | ' |
Number Of Options Available For Grant [Roll Forward] | ' |
Options Available for Grant, December 31, 2013 | 195,495 |
Options Available for Grant, Granted | -183,648 |
Options Available for Grant, Exercised | ' |
Options Available for Grant, Forfeited | 251,471 |
Options Available for Grant, June 30, 2014 | 263,318 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Options Outstanding, December 31, 2013 | 804,505 |
Options Outstanding, Granted | 183,648 |
Options Outstanding, Exercised | ' |
Options Outstanding, Forfeited | -251,471 |
Options Outstanding, June 30, 2014 | 736,682 |
Exercisable options at June 30, 2014 | 570,921 |
Share Based Compensation Arrangement By Share Based Payment Award, Weighted Average Exercise Price [Roll Forward] | ' |
Weighted - Average Exercise Price, December 31, 2013 | $1.39 |
Weighted - Average Exercise Price, Granted | $0.50 |
Weighted - Average Exercise Price, Exercised | ' |
Weighted - Average Exercise Price, Forfeited | $2.05 |
Weighted - Average Exercise Price, June 30, 2014 | $1.11 |
Weighted Average Exercise Price, Exercisable options at June 30, 2014 | $1.14 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' |
Aggregate Intrinsic Value, December 31, 2013 | ' |
Aggregate Intrinsic Value, Granted | ' |
Aggregate Intrinsic Value, Exercised | ' |
Aggregate Intrinsic Value, Forfeited | ' |
Aggregate Intrinsic Value, June 30, 2014 | ' |
Aggregate Intrinsic Value, Exercisable options at June 30, 2014 | ' |
Stock_Option_Plan_Summary_of_i
Stock Option Plan - Summary of information about stock options outstanding (Details 1) (2010 Stock Option Plan (the "Plan"), USD $) | 6 Months Ended | |
Jun. 30, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 736,682 | 804,505 |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '3 years 5 months 9 days | ' |
Options Outstanding Weighted Average Exercise Price | $1.11 | $1.39 |
Number Of Options Exercisable | 570,921 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '3 years 4 months 6 days | ' |
Options Exercisable Weighted Average Exercise Price | $1.14 | ' |
Exercise Price $ 0.46 - 0.53 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Minimum Range of Exercise Prices | $0.46 | ' |
Maximum Range of Exercise Prices | $0.53 | ' |
Number Of Options Outstanding | 260,000 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '2 years 6 months 7 days | ' |
Options Outstanding Weighted Average Exercise Price | $0.50 | ' |
Number Of Options Exercisable | 260,000 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '2 years 6 months 11 days | ' |
Options Exercisable Weighted Average Exercise Price | $0.50 | ' |
Exercise Price $ 1.33 - 2.03 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Minimum Range of Exercise Prices | $1.33 | ' |
Maximum Range of Exercise Prices | $2.03 | ' |
Number Of Options Outstanding | 136,272 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '2 years 6 months 4 days | ' |
Options Outstanding Weighted Average Exercise Price | $1.90 | ' |
Number Of Options Exercisable | 130,176 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '2 years 6 months 4 days | ' |
Options Exercisable Weighted Average Exercise Price | $1.90 | ' |
Exercise price $ 2.06 - 4.34 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Minimum Range of Exercise Prices | $2.06 | ' |
Maximum Range of Exercise Prices | $4.34 | ' |
Number Of Options Outstanding | 156,762 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '6 years 10 months 2 days | ' |
Options Outstanding Weighted Average Exercise Price | $2.16 | ' |
Number Of Options Exercisable | 110,305 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '6 years 9 months 11 days | ' |
Options Exercisable Weighted Average Exercise Price | $2.16 | ' |
Stock_Option_Plan_Summary_of_B
Stock Option Plan - Summary of Black-Scholes Option-Pricing Model Assumption Used to Estimate Fair Value (Details 2) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' |
Expected term | '1 year 6 months | ' |
Expected volatility | 143.49% | ' |
Dividend yield | 0.00% | ' |
Risk-free interest rate | 0.27% | ' |
Stock_Option_Plan_Detail_Textu
Stock Option Plan (Detail Textuals) (USD $) | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2010 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Number of common stock, shares authorized | ' | ' | 1,000,000 |
Term of stock option granted | '1 year 6 months | ' | ' |
Percentage of exercise price to market value of common stock | 100.00% | ' | ' |
Vested period of stock option | '5 years | ' | ' |
Percentage of voting power of common stock | 10.00% | ' | ' |
Maximum percentage of fair market of a share of common stock | 110.00% | ' | ' |
Total fair value of stock option awards vested | $52,000 | $40,000 | ' |
Fair value of options granted to employees | 58,000 | ' | ' |
2010 Stock Option Plan (the "Plan") | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Term of stock option granted | '10 years | ' | ' |
Unrecognized estimated employee compensation cost | 83,000 | ' | ' |
Weighted-average vesting period | '1 year 7 months 13 days | ' | ' |
2010 Stock Option Plan (the "Plan") | Selling, General and Administrative Expenses | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Employee stock-based compensation cost | $50,000 | $21,000 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textuals) | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 0 Months Ended | 1 Months Ended | 6 Months Ended | |||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 09, 2014 | Jun. 09, 2014 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 09, 2014 | Jul. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
USD ($) | USD ($) | Apex | Apex | Apex | Apex | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Apex Earn Out Obligation | Apex Earn Out Obligation | Apex Earn Out Obligation | Apex Earn Out Obligation | |
USD ($) | CAD | USD ($) | CAD | Apex | Apex | Apex | Apex | Apex | Apex | Convertible Notes Payable [Member] | CAD | CAD | Note | Note | |||
USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | Apex | USD ($) | CAD | |||||||||
Installment | Installment | ||||||||||||||||
Commitment and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rental expense | $263,000 | $348,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threashold value of EBITDA defined in agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' |
Basic earn out amount defined in agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' |
Maximum Basic earn out amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' |
Percentage of cash to be paid of basic earn out amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22.22% | ' | ' | ' |
Number of quarterly payment for principal sum due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | 8 |
Interest rate on notes payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.00% | 9.00% |
Interest rate on notes payable after October 31, 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | 11.00% |
Minimum net equity capital raised during the term of note payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' |
Increase rate of interest due to raises in net equity capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | 15.00% |
Increase rate of interest after first anniversary of raises in net equity capital | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | 20.00% |
Maximum Conversion price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | 1.04 |
Potential additional purchase consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 291,000 | 311,000 | ' | ' | ' | ' | ' |
Fair value for earn out payment consideration description | ' | ' | ' | ' | 'On June 9, 2014, the accounting expert issued their final report and the fair value of the Apex Earn-Out Payment was calculated to be CDN$400,000 of which CDN$89,000 (US$84,000) (22.22%) was paid in cash and CDN$311,000 (US$291,000) (77.78%) payable in the form of a convertible promissory note. | 'On June 9, 2014, the accounting expert issued their final report and the fair value of the Apex Earn-Out Payment was calculated to be CDN$400,000 of which CDN$89,000 (US$84,000) (22.22%) was paid in cash and CDN$311,000 (US$291,000) (77.78%) payable in the form of a convertible promissory note. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of the fair value of the earn-out | ' | ' | ' | ' | ' | ' | 22.22% | 22.22% | ' | ' | ' | ' | 77.78% | ' | ' | ' | ' |
Amount paid in consideration to Apex | ' | ' | $4,801,000 | 5,000,000 | $713,000 | 735,000 | $84,000 | 89,000 | $1,033,000 | 1,076,000 | $1,033,000 | 1,076,000 | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details Textuals 1) | 6 Months Ended | 0 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2014 | Aug. 31, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Nov. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2012 | Jun. 09, 2014 | Jun. 09, 2014 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | |
Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | ||
USD ($) | USD ($) | CAD | USD ($) | USD ($) | CAD | Convertible Preferred stock | Convertible Preferred stock | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | Estimate of Fair Value Measurement [Member] | ||
Series D Preferred Stock | Series D Preferred Stock | USD ($) | CAD | USD ($) | CAD | USD ($) | CAD | ||||||||
USD ($) | USD ($) | ||||||||||||||
Employment Agreement [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Escrow percentage of any equity capital raised | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' |
Equity capital raised in excess | ' | ' | ' | ' | ' | ' | ' | $500,000 | ' | ' | ' | ' | ' | ' | ' |
Issuance of convertible series D preferred stock | ' | 1,756,000 | ' | ' | 4,090,000 | ' | ' | ' | 7,042,000 | ' | ' | ' | ' | ' | ' |
Amount paid in consideration to Apex | ' | ' | 4,801,000 | 5,000,000 | ' | 713,000 | 735,000 | ' | ' | 84,000 | 89,000 | 1,033,000 | 1,076,000 | 1,033,000 | 1,076,000 |
Fair value of bonus to be paid to CEO | ' | ' | ' | ' | ' | 153,000 | 160,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO, Accrued earn out recognized | ' | ' | ' | ' | ' | $94,000 | 101,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Description of Conversion price | 'Canadian Dollar equivalent of the market price of our common stock on the day prior to the conversion using a fixed rate of US$1.00MN$1.04, or the Canadian Dollar equivalent of US$1.00 =DN$1.04. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |