Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 14, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | DecisionPoint Systems, Inc. | |
Entity Central Index Key | 1,505,611 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,729,563 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $ 297 | $ 1,616 |
Accounts receivable, net | 4,801 | 10,354 |
Inventory, net | 244 | 1,998 |
Deferred costs | 2,679 | 2,532 |
Deferred tax assets | 13 | 19 |
Prepaid expenses and other current assets | 206 | 79 |
Assets of discontinued operations | 1,829 | |
Total current assets | 8,240 | 18,427 |
Property and equipment, net | 192 | 145 |
Other assets, net | 34 | 109 |
Deferred costs, net of current portion | 1,037 | 1,004 |
Goodwill | $ 5,304 | 7,524 |
Intangible assets, net | 1,414 | |
Assets of discontinued operations | 1,634 | |
Total assets | $ 14,807 | 30,257 |
Current liabilities | ||
Accounts payable | 7,205 | 9,736 |
Accrued expenses and other current liabilities | 2,083 | 2,028 |
Lines of credit | 2,697 | 5,811 |
Current portion of debt | 1,833 | 813 |
Due to related parties | 142 | 73 |
Unearned revenue | 4,254 | 5,915 |
Liabilities related to discontinued operations | 1,993 | |
Total current liabilities | 18,214 | 26,369 |
Long term liabilities | ||
Unearned revenue, net of current portion | $ 1,516 | 1,560 |
Debt, net of current portion and discount | 1,580 | |
Deferred tax liabilities | $ 185 | 461 |
Warrant liability | 287 | 519 |
Other long term liabilities | 181 | 194 |
Liabilities related to discontinued operations | 487 | |
Total liabilities | $ 20,383 | $ 31,170 |
Commitments and contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Cumulative Convertible Preferred stock, $0.001 par value, 10,000,000 shares authorized, 1,547,845 shares issued and outstanding, including cumulative and imputed preferred dividends of $2,349 and $2,295, and with a liquidation preference of $14,181 and $13,640 at June 30, 2015 and December 31, 2014, respectively | $ 12,876 | $ 12,822 |
Common stock, $0.001 par value, 100,000,000 shares authorized, 12,883,446 issued and 12,729,563 outstanding as of June 30, 2015, and as of December 31, 2014 | 13 | 13 |
Additional paid-in capital | 17,261 | 17,252 |
Treasury stock, 153,883 shares of common stock | (205) | (205) |
Accumulated deficit | (35,114) | (30,292) |
Unearned ESOP shares | $ (407) | (484) |
Accumulated other comprehensive income | (19) | |
Total stockholders' deficit | $ (5,576) | (913) |
Total liabilities and stockholders' deficit | $ 14,807 | $ 30,257 |
Unaudited Condensed Consolidat3
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shared authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 1,547,845 | 1,547,845 |
Preferred stock, shares outstanding | 1,547,845 | 1,547,845 |
Preferred stock, dividends (in dollars) | $ 2,349 | $ 2,295 |
Preferred Stock, Liquidation preference (in dollars) | $ 14,181 | $ 13,640 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shared authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 12,883,446 | 12,729,563 |
Common stock, shares outstanding | 12,883,446 | 12,729,563 |
Treasury stock, shares | 153,883 | 153,883 |
Unaudited Condensed Consolidat4
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 9,370 | $ 12,990 | $ 19,171 | $ 26,350 |
Cost of sales | 7,607 | 10,185 | 15,286 | 20,669 |
Gross profit | 1,763 | 2,805 | 3,885 | 5,681 |
Selling, general and administrative expense | 2,070 | $ 2,703 | 4,430 | $ 5,827 |
Goodwill and intangible asset impairment | 3,047 | 3,047 | ||
Operating (loss) income | (3,354) | $ 102 | (3,592) | $ (146) |
Other expense: | ||||
Interest expense | 219 | 222 | 401 | 429 |
Fair market value adjustment of warrant liabilities | (311) | 84 | (232) | (166) |
Other (income) expense, net | (14) | (21) | 49 | (30) |
Total other (income) expense | (106) | 285 | 218 | 233 |
Net loss from continuing operations, before income taxes | (3,248) | (183) | (3,810) | (379) |
Provision (benefit) for income taxes from continuing operations | 63 | (51) | 35 | (20) |
Net loss from continuing operations | (3,311) | (132) | (3,845) | (359) |
Discontinued operations: | ||||
Loss on sale of discontinued operations, net of tax | (89) | (89) | ||
(Loss) income from discontinued operations, net of tax | (48) | 112 | (94) | 227 |
Net loss | (3,448) | (20) | (4,028) | (132) |
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) | $ (609) | ||
Accrued paid-in-kind dividends on Series D and Series E preferred stock | $ (380) | $ (740) | ||
Net loss attributable to common shareholders | $ (3,855) | $ (354) | $ (4,822) | $ (795) |
Basic and diluted net (loss) income per common share: | ||||
Continuing operations | $ (0.30) | $ (0.04) | $ (0.38) | $ (0.08) |
Discontinued operations | (0.01) | 0.01 | (0.01) | 0.02 |
Net loss per share | $ (0.31) | $ (0.03) | $ (0.39) | $ (0.06) |
Weighted average shares outstanding -Basic and diluted | 12,452,853 | 12,342,169 | 12,439,094 | 12,328,410 |
Other comprehensive loss, net of tax | ||||
Net loss | $ (3,448) | $ (20) | $ (4,028) | $ (132) |
Foreign currency translation adjustment | 1 | 19 | (24) | |
Comprehensive loss | $ (3,447) | $ (20) | $ (4,009) | $ (156) |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss from continuing operations | $ (3,845) | $ (359) |
Net (loss) income from discontinued operations | (183) | $ 227 |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Loss on sale of discontinued operations, net of tax | 89 | |
Depreciation and amortization | 390 | $ 688 |
Amortization of deferred financing costs and note discount | 43 | 79 |
Employee and Director stock-based compensation | 70 | 50 |
Change in fair value of warrants | (232) | (166) |
ESOP compensation expense | 17 | $ 26 |
Goodwill and intangible asset impairment charges | 3,047 | |
Allowance for doubtful accounts | 1 | $ (25) |
Deferred taxes. net | (249) | (152) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 5,534 | 1,048 |
Due from related party | 188 | |
Inventory, net | 1,754 | 445 |
Deferred costs | (181) | 249 |
Prepaid expenses and other current assets | (53) | 136 |
Other assets, net | 62 | 10 |
Accounts payable | (2,527) | (932) |
Accrued expenses and other current liabilities | (422) | (395) |
Due to related parties | 69 | 37 |
Unearned revenue | (1,674) | (667) |
Operating activities from discontinued operations | 616 | 582 |
Net cash provided by operating activities | 2,326 | 1,069 |
Cash flows from investing activities | ||
Purchases of property and equipment | (68) | $ (37) |
Proceeds from the sale of CMAC | 302 | |
Net cash provided by (used in) investing activities | 234 | $ (37) |
Cash flows from financing activities | ||
(Repayments) borrowings from lines of credit, net | (3,109) | 758 |
Repayment of debt | (446) | (546) |
Paid financing costs | (100) | (100) |
Dividends paid | $ (252) | (247) |
Payments for contingent aquisition liability | (84) | |
Net cash used in by financing activities | $ (3,907) | (219) |
Effect on cash of foreign currency translation | 28 | (34) |
Net (decrease) increase in cash | (1,319) | 779 |
Cash at beginning of period | 1,616 | 641 |
Cash at end of period | 297 | 1,420 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 388 | 456 |
Income taxes paid | 73 | 31 |
Supplemental disclosure of non-cash financing activities: | ||
Accrued and imputed dividends on preferred stock | 54 | $ 663 |
Accrued PIK dividends on Series D and Series E preferred stock | 740 | |
Liabilities forgiven by CMAC purchaser | $ 348 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2015 | |
Description of Business [Abstract] | |
DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS Description of Business DecisionPoint Systems, Inc., (“DecisionPoint”, “Company”) 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 the latest technologies to empower the mobile worker in many areas including merchandising, sales and delivery; field service; logistics and transportation; and warehouse management. On June 30, 2015, the Company completed the sale of 100% of the issued and outstanding share capital of CMAC, Inc. (“CMAC”) and recorded a loss on sale of $157,000, which is classified as loss on sale of discontinued operations in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. The Company’s unaudited condensed consolidated financial statements and accompanying notes for current and prior periods have been restated to present the results of operations of CMAC as discontinued operations. In addition, the assets and liabilities have been treated and classified as discontinued operations in the accompanying condensed consolidated balance sheets as of June 30, 2015 and have been restated at December 31, 2014 to provide a comparable presentation, see Note 3. |
Basis of Presentation, Liquidit
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015, are not necessarily indicative of results for the full 2015 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 one wholly-owned subsidiary, DecisionPoint Systems Group, Inc. (“DPS Group”). All significant intercompany accounts and transactions have been eliminated in consolidation. 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 accompanying 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, 2014, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 18, 2015. 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 raise 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, avoid further unforeseen expenses, improve liquidity and working capital, and potentially raise additional equity or debt capital. There can be no assurance that the Company will be able to achieve sustainable positive operating results or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. The Company is currently in default on certain obligations as of June 30, 2015. The Company has not made the final payment on the Royal Bank of Canada (“RBC”) Term Loan was originally scheduled to be paid in June 2015. The payment has been rescheduled with RBC for September 2015. Such agreement has not been documented in writing and is based on a verbal agreement with RBC. The Company also did not pay interest due on the BDC, Inc. (“BDC”) Term Loan due for July 2015. BDC has advised the Company on July 30, 2015 that the financing is in arrears on interest and the Company also expects to not pay the August interest payment on this obligation. The failure to pay interest due is a violation of the terms of the financing agreement. The Company is currently in default on the Apex seller Note as of the date of this filing. The seller of Apex has demanded payment in full including certain monitoring and administrative fees. The Company has accrued $51,000 as of June 30, 2015 for certain fees related to the demand payment. Between April 2015 and June 2015, Apex had been delinquent on its lease obligations to Harvester Properties of Burlington, Inc. In June 2015, Harvester Properties gave notice of termination of the lease agreement. Since that time, Apex has relocated its operations. There is $72,000 relating to these rent obligations including interest and other fees at June 30, 2015. Due to the technical default with the BDC term loan discussed above, the Company is technically in default due to the subordinated debt provisions of the Amended Silicon Valley Bank (“SVB”) Loan Agreement. The Company has had discussions with SVB regarding this technical default and is working with SVB to cure. A SVB lending officer has verbally indicated they do not intend on exercising legal rights under the Amended SVB Loan Agreement for this default, however, this is not evidenced in writing and thus is not enforceable. If the Company does not achieve sustained 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) defaults under the Company’s various loan agreements (for a description of past defaults, see the discussion below). If such events were to occur, they would have material adverse effects on the Company. There can be no assurance that the Company will successfully improve its liquidity position. The consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty. 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, 2015. See Note 2 of the Company's consolidated financial statements included in the Company's 2014 Annual Report on Form 10-K filed with the SEC on March 18, 2015, for a comprehensive description of the Company's significant accounting policies. Revenue Recognition - 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; and (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. 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 - 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 13% and 16% of the Company’s revenue for the six months ended June 30, 2015 and 2014, respectively. The Company had three customers, one of which were not the same, who represented 32% and 29% of its revenue for the six months ended June 30, 2015 and 2014, respectively. The Company’s accounts receivable was concentrated with two customers, which were not the same, representing 37% and 36% of gross accounts receivable at June 30, 2015 and 2014, respectively. 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 four primary vendors for the six months ended June 30, 2015, all of which was the same when compared to the similar period in 2014. For the six months ended June 30, 2015, the Company had purchases from these four vendors that collectively represented 59% of total purchases and 57% of the total outstanding accounts payable at June 30, 2015. For the six months ended June 30, 2014, the Company had purchases from these four vendors that collectively represented 61% of total purchases and 61% of the total outstanding accounts payable at June 30, 2014. The same two vendors represented 49% and 47% of the total purchases for the six months ended June 30, 2015 and 2014, 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 - Fair Value Measurement - ● 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 fiscal six months ended June 30, 2015. The Company is obligated to pay bonus consideration to the former 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). The Company reassessed the fair value of the contingent consideration liability at December 31, 2014 and determined the amount to be $0. The Company continues to recognize no bonus consideration obligation in 2015. 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. For prior periods, the Company reassessed the fair value of the warrant liabilities on a quarterly basis using a Monte Carlo option pricing model. For June 30, 2015, the Company assessed the fair value of the warrants using a linear regression model based on observable prices of the known components and their relationship to historical prices. Based on that assessment, the Company recognized a $311,000 decrease and an $84,000 increase to the fair value of the warrants during the three months ended June 30, 2015 and 2014, respectively. The Company recognized a $232,000 and $166,000 decrease to the fair value of the warrants during the six months ended June 30, 2015 and 2014, respectively. The following table summarizes the financial liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 (in thousands): Quoted Significant Significant active observable unobservable Total Level 1 Level 2 Level 3 Liabilities Fair value of warrants issued in connection with share purchase agreement $ 287 $ - $ - $ 287 Balance at June 30, 2015 $ 287 $ - $ - $ 287 Quoted Significant Significant other active observable unobservable Total Level 1 Level 2 Level 3 Liabilities Fair value of warrants issued in connection with share purchase agreement $ 519 $ - $ - $ 519 Balance at December 31, 2014 $ 519 $ - $ - $ 519 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 Derivative warrants Balance at December 31, 2014 $ 519 Adjustments to fair value of warrants (reflected in other income) (232 ) Balance at June 30, 2015 $ 287 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. The Company evaluates goodwill, at a minimum, on an annual basis on December 31 and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. There was no impairment of goodwill as a result of the annual impairment review performed during December 31, 2014. The Company's goodwill impairment analysis is sensitive to changes in key assumptions used in its analysis, such as expected future cash flows, the degree of volatility in equity and debt markets, and its stock price. For the quarter ended June 30, 2015, the Company concluded there were indicators of potential goodwill impairment for the Company’s Apex business based on changes in the Company’s long-term strategy and outlook for Apex. As a result of identifying indicators of impairment, the Company performed an impairment review of goodwill and intangible assets as of June 30, 2015. Based on the analysis, the Company recorded an impairment charge to goodwill of $2.1 million and intangible assets of $0.9 million in the second quarter of 2015. This impairment was reported as part of the continuing operations results for the three and six months ended June 30, 2015. As a result, the Company has no goodwill or intangible assets remaining related to the Apex business (see Note 6). Income Taxes Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU 2014-09, “Revenue from Contracts with Customers (Topic 606) ” In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability instead of being presented as an asset. This guidance is effective for public companies for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those years. For all other entities, this guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The new guidance is to be applied on a retrospective basis, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance and represents a change in accounting principle. Management is currently evaluating the impact of the adoption of this accounting standard update on its financial statements. In April 2015, the FASB issued ASU 2015-05, “Intangibles–Goodwill and Other–Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This update provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. This guidance is effective for public companies for fiscal years and interim periods beginning after December 15, 2015. For all other entities, this guidance is effective for annual periods beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted for all entities. The new guidance is to be applied either prospectively to new cloud computing arrangements or retrospectively. Management is currently evaluating the impact of the adoption of this accounting standard update on its financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations[Abstract] | |
DISCONTINUED OPERATIONS | NOTE 3 – DISCONTINUED OPERATIONS As part of the Company’s efforts to evaluate its liquidity and capital resource needs for 2015 and focus on core value-added segments of its business, the Company decided in the second quarter to consider discontinuing the CMAC, Inc. (“CMAC”) business after the recent loss of a significant customer of the business unit. Thereafter, the opportunity arose to sell the business to its former owner, the Company’s former Senior Vice President. On June 30, 2015, the Company completed the sale of 100% of the issued and outstanding share capital of CMAC, Inc. (“CMAC”) and recorded a loss on sale of $157,000, which is classified as loss on sale of discontinued operations in the accompanying condensed consolidated statements of operations and comprehensive loss. The agreement provided for the sale of substantially all of the assets and liabilities of CMAC for $302,000 in cash consideration and $348,000 in liabilities forgiven by the CMAC purchaser. The Company has accounted for this business as discontinued operations and accordingly, the Company’s unaudited condensed consolidated financial statements and accompanying notes for current and prior periods have been restated to present the results of operations of CMAC as discontinued operations. In addition, the assets and liabilities have been treated and classified as discontinued operations in the accompanying condensed consolidated balance sheets as of June 30, 2015 and have been restated at December 31, 2014 to provide a comparable presentation. The loss on sale of CMAC was determined as follows (in thousands): Assets sold Deferred costs $ 506 Other current assets 81 Intangible assets 459 Goodwill 678 Other long term assets 208 Total assets 1,932 Liabilities assumed by purchaser Unearned revenue - current 782 Other current liabilities 19 Unearned revenue - long term 296 Other long term liabilities 28 Total liabilities 1,125 Net assets sold 807 Cash received (302 ) Non-cash consideration-liabilities forgiven by CMAC purchaser (348 ) Net loss on sale of discontinued operations, before income tax 157 Income tax benefit on loss on sale (68 ) Net loss on sale of discontinued operations, net of tax $ 89 The carrying amounts of the major classes of CMAC assets and liabilities that are classified as discontinued operations on the accompanying condensed consolidated balance sheets are as follows (in thousands): June 30, December 31, 2015 2014 ASSETS Current assets Accounts receivable, net $ - $ 1,144 Inventory, net 37 Deferred costs - 645 Deferred tax asset - 2 Prepaid expenses and other current assets - 1 Total current assets of discontinued operations - 1,829 Noncurrent assets Other assets, net - 15 Deferred costs, net of current portion - 310 Goodwill - 678 Intangible assets, net - 631 Total noncurrent assets of discontinued operations . - 1,634 Total assets of discontinued operations $ - $ 3,463 LIABILITIES Current liabilities Accounts payable $ - $ 263 Accrued expenses and other current liabilities - 727 Unearned revenue - 1,003 Total current liabilities of discontinues operations - 1,993 Noncurrent liabilities Unearned revenue, net of current portion - 455 Other long term liabilities - 32 Total noncurrent liabilities of discontinued operations - 487 Total liabilities of discontinued operations $ - $ 2,480 The reconciliation of the major classes of income and expense constituting income (loss) from discontinued operations on the Company’s unaudited condensed consolidated statements of operations and comprehensive loss are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 Net sales $ 1,207 $ 3,524 $ 3,156 $ 6,873 Cost of sales 944 2,547 2,432 5,197 Selling, general & administrative expenses 315 714 812 1,307 Operating (loss) income from discontinued operations (52 ) 263 (88 ) 369 Other expense (income) Interest expense 4 - 6 - Other income (1 ) - - - Total other expense from discontinued operations 3 - 6 - (Loss) income from operations, before income tax (55 ) 263 (94 ) 369 Income tax (benefit) provision on operations (7 ) 151 - 142 (Loss) income from discontinued operations, net of tax $ (48 ) $ 112 $ (94 ) $ 227 Net loss on sale of discontinued operations, before income tax $ (157 ) - $ (157 ) - Income tax benefit on loss on sale of discontinued operations 68 - 68 - Loss on sale of discontinued operations, net of tax $ (89 ) $ - $ (89 ) $ - |
Loss Per Common Share
Loss Per Common Share | 6 Months Ended |
Jun. 30, 2015 | |
Loss Per Common Share [Abstract] | |
LOSS PER COMMON SHARE | NOTE 4 – 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, 2015 and 2014, exclude approximately 0.3 million and 0.4 million, respectively, of ESOP shares 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): As of 2015 2014 Convertible preferred stock - Series A 270 270 Convertible preferred stock - Series B 131 131 Convertible preferred stock - Series D * 10,287 10,287 Convertible preferred stock - Series E ** 8,331 8,331 Warrants to purchase common stock 3,279 3,555 Options to purchase common stock 1,625 736 Total potentially dilutive securities 23,923 23,310 * Excludes accrued paid-in-kind (“PIK”) dividends on Series D Preferred Stock of 34,318 shares and 150,090 shares for the first and second quarter of 2015, respectively (see Note 9). ** Excludes accrued PIK dividends on Series E Preferred Stock of 16,065 shares and 69,738 shares for the first and second quarter of 2015, respectively (see Note 9). |
Warrant Liability
Warrant Liability | 6 Months Ended |
Jun. 30, 2015 | |
Warrant Liability [Abstract] | |
WARRANT LIABILITY | NOTE 5 – 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 evaluated the guidance ASC 480-10 Distinguishing Liabilities from Equity and Contracts in an Entity’s Own Equity. Fair Value Measurement The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities. For December 31, 2014, the estimated fair values were determined using a Monte Carlo option pricing model based on various assumptions. For June 30, 2015, the Company assessed the fair value of the warrants using a linear regression model based on observable prices of the known components and their relationship to historical prices. 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 $286,000 and $519,000, as of June 30, 2015 and December 31, 2014, respectively. The decrease in fair value of the warrant liabilities for the three months ended June 30, 2015 was $311,000 while the increase in fair value of the warrant liabilities for the three months ended June 30, 2014 was $84,000. The decrease in fair value of the warrant liabilities for the six months ended June 30, 2015 was $232,000 while the decrease in the 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 unaudited condensed consolidated statements of operations. The warrant liabilities were valued at the closing dates of the common stock purchase agreement and at December 31, 2014 using a Monte Carlo valuation model and at June 30, 2015 using a linear regression model based on observable prices of the known components and their relationship to historical prices, each with the following assumptions: Placement Agent Warrants Investor Warrants Warrants June 30, December 31, June 30, December 31, Closing price per share of common stock $ 0.20 $ 0.38 $ 0.20 $ 0.38 Exercise price per share (range) 0.50 0.50 0.50 0.50 Expected volatility 173.8 % 138.3 % 173.8 % 138.6 % Risk-free interest rate 1.0 % 1.3 % 1.0 % 1.3 % Dividend yield - - - - Remaining expected term of underlying securities (years) 3.2 3.6 3.2 3.6 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015 (in thousands): Balance at December 31, 2014 $ 8,202 CMAC, Inc. divestiture (678 ) Apex goodwill impairment charge (2,089 ) Effect of currency translation on Apex (131 ) Balance at June 30, 2015 $ 5,304 The Company tests goodwill and amortizable intangible assets at least annually on December 31 of each fiscal year for possible impairment. In addition to its annual test, the Company regularly evaluates whether events or circumstances have occurred that may indicate a potential impairment of goodwill or amortizable intangible assets. The process of testing goodwill for impairment involves the determination of the fair value of the applicable reporting units. The test consists of a two-step process. The first step is the comparison of the fair value to the carrying value of the reporting unit to determine if the carrying value exceeds the fair value. The second step measures the amount of an impairment loss, and is only performed if the carrying value exceeds the fair value of the reporting unit. The Company performed its annual impairment testing for its reporting unit as of December 31, 2014, its annual impairment date for fiscal year 2014. On December 31, 2014, the Company concluded based on the first step of the process that there was no impairment of goodwill. Subsequent to the 2014 annual impairment test, and during the second quarter ended June 30, 2015, the Company concluded there were indicators of potential goodwill impairment for the Company’s Apex business based on changes in the Company’s long-term strategy and outlook for Apex. As a result of identifying indicators of impairment, the Company performed a qualitative impairment review (a valuation was not prepared) of goodwill and intangible assets as of June 30, 2015. Based on the analysis, the Company recorded an impairment charge to goodwill of $2.1 million and intangible assets of $0.9 million in the second quarter of 2015. This impairment was reported as part of the continuing operations results for the three and six months ended June 30, 2015. As a result, the Company has no goodwill or intangible assets remaining related to the Apex business. As of June 30, 2015 and December 31, 2014, the Company’s intangible assets and accumulated amortization consist of the following (in thousands): June 30, 2015 December 31, 2014 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Customer relationships $ 100 $ (100 ) $ - $ 100 $ (100 ) $ - Tradename 130 (130 ) - 130 (130 ) - Internal use software 310 (310 ) - 310 (310 ) - Covenant not to compete 90 (90 ) - 90 (90 ) - Total (1) $ 630 $ (630 ) $ - $ 630 $ (630 ) $ - (1) CMAC’s net intangible assets of $631,000 ($2,729,000 gross and $2,098,000 accumulated amortization) were reclassified and reflected as discontinued operations on the condensed consolidated balance sheet at December 31, 2014. Impairment charges of Apex’s net intangible assets of $958,000 ($3,764,000 gross and $2,806,000 accumulated amortization) were recorded in the second quarter of fiscal 2015. The effect of foreign currency translation on the goodwill and intangible assets for the six months ended June 30, 2015 is approximately ($131,000) and ($86,000). |
Lines of Credit
Lines of Credit | 6 Months Ended |
Jun. 30, 2015 | |
Lines of Credit [Abstract] | |
LINES OF CREDIT | NOTE 7 – LINES OF CREDIT SVB Line of Credit Availability under the line of credit was approximately $0.8 million as of June 30, 2015. 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 Loan Agreement. No letters of credit were outstanding as of June 30, 2015 or December 31, 2014. The February 27, 2015 amendment has certain financial covenant and other non-financial covenants. The minimum Tangible Net Worth requirement of an $8.6 million deficit, which 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) on or after February 1, 2015. Should the Company 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. Due to the technical default with the BDC term loan discussed above, the Company is technically in default due to the subordinated debt provisions of the Amended SVB Loan Agreement. The Company has had discussions with SVB regarding this technical default and is working with SVB to cure. A SVB lending officer has verbally indicated they do not intend on exercising legal rights under the Amended SVB Loan Agreement for this default, however, this is not evidenced in writing and thus is not enforceable. RBC Line of Credit For the three months ended June 30, 2015 and 2014, the Company’s interest expense for the lines of credit, including amortization of deferred financing costs, was approximately $97,000 and $114,000, respectively. For the six months ended June 30, 2015 and 2014, the Company’s interest expense for the lines of credit, including amortization of deferred financing costs, was approximately $200,000 and $211,000, 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. 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, 2015 | |
Term Debt [Abstract] | |
TERM DEBT | NOTE 8 – TERM DEBT Term debt as of June 30, 2015, consists of the following (in thousands): Balance December 31, Additions Payments Amortization Effect of Currency Translation Balance June 30, 2015 RBC term loan $ 358 $ - $ (279 ) $ - $ (23 ) $ 56 BDC term loan 1,462 - - - (86 ) 1,376 SVB term loan 389 - (167 ) - - 222 Note payable seller 200 - - - (12 ) 188 Total note discounts (16 ) - - 7 - (9 ) Total debt $ 2,393 $ - $ (446 ) $ 7 $ (121 ) 1,833 less current portion (1,833 ) Debt, net of current portion $ - 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 $7,000 and $19,000 are included in other assets in the accompanying unaudited condensed consolidated balance sheets as of June 30, 2015 and December 31, 2014, respectively. RBC Term 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 was $0 at December 31, 2014. 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. The Company was in compliance with all of its RBC financial covenants as of June 30, 2015 and December 31, 2014. We expect to continue to meet the requirements of our RBC financial covenants over the remainder of the loan period. The final payment was originally scheduled to be paid in June 2015 and has been rescheduled with RBC for September 2015. BDC Term Loan -- 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 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 its BDC financial covenants as of December 31, 2014. The next testing date for the financial covenants is December 31, 2015. As of June 2015, the Company does not comply with the covenant and is not expected to be in compliance at the December 31, 2015 testing date. The Company did not pay the interest due on the BDC Term Loan due for July 2015. BDC has advised the Company on July 30, 2015 that the financing is in arrears on interest and the Company also expects to not pay the August interest payment on this obligation. The failure to pay interest due is a violation of the terms of the financing agreement. 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 and the terms of the inter-creditor agreement), 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 February 27, 2013, the Company amended the Loan and Security Agreement which provided an additional term loan (the “SVB Term Loan”) 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, 2015 and December 31, 2014, the outstanding balance on the SVB Term Loan was approximately $222,000 and $389,000, respectively. On February 27, 2015, the Company further amended the SVB Loan Agreement to extend the maturity date of the revolving credit line provided thereunder to February 28, 2017. The February 27, 2015 amendment provides for interest at prime plus 3.25% in 2015, and provides for further interest rate reductions upon achievement of certain financial thresholds. The February 27, 2015 amendment contains certain financial covenants (see Note 7). For the three months ended June 30, 2015 and 2014, the Company’s interest expense on the term debt, including amortization of deferred financing costs, was approximately $73,000 and $107,000, respectively. For the six months ended June 30, 2015 and 2014, the Company’s interest expense on the term debt, including amortization of deferred financing costs, was approximately $150,000 and $216,000, respectively. In the event either or both RBC Loan Agreement and/or the BDC Loan Agreement were deemed to be in default (as noted above), 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. Seller Note - |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015, 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, 2015 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 $480 $ 1,455 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 $138 518 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 $7,303 plus accrued PIK dividends of $445; cumulative imputed dividends and beneficial conversion feature of $1,621 7,502 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 $4,165 plus accrued PIK dividends of $295; cumulative imputed dividends of $110 3,401 Total convertible preferred stock $ 12,876 Non-Payment of Required Dividend Payments As discussed below, pursuant to the terms of the Series D and Series E Preferred Stock agreements, dividend payments totaling $445,000 and $295,000, respectively, were to be paid-in-kind stock for the quarter ended March 31, 2015 and the quarter ended June 30, 2015. Neither payment has been made as of the date of this filing and the Company is not in compliance with the specific terms of the related preferred stock agreements. Such amounts have been accrued as of June 30, 2015 and are reflected in the Current Liabilities in the accompanying unaudited condensed consolidated balance sheets. 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. In April 2014, the Company issued 26,157 Series D Preferred Stock PIK dividend shares, for previously accrued dividends. The Board of Directors intends to declare a PIK dividend payable in the form of shares of Series D Preferred Stock. The dividends will be payable to holders of record as of March 31, 2015 for accrued dividends for the period of January 1, 2015 to March 31, 2015 and to holders of record as of June 30, 2015 for accrued dividends for the period of April 1, 2015 to June 30, 2015. As those shares were not issued as of June 30, 2015, they have not been included in the Series D Preferred Stock balance at June 30, 2015. As such, the Company recorded an estimated dividend payable in Current Liabilities in the in the unaudited condensed consolidated balance sheets at June 30, 2015 at an estimated fair value of $445,000. The Company expects to issue accrued PIK dividends in August 2015. 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). 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. In April 2014, the Company issued 7,533 Series E Preferred Stock PIK dividend shares, for previously accrued dividends. The Board of Directors intends to declare a PIK dividend payable in the form of shares of Series E Preferred Stock. The dividends will be payable to holders of record as of March 31, 2015 for accrued dividends for the period of January 1, 2015 to March 31, 2015 and to holders of record as of June 30, 2015 for accrued dividends for the period of April 1, 2015 to June 30, 2015. As those shares were not issued as of June 30, 2015, they have not been included in the Series E Preferred Stock balance June 30, 2015. As such, the Company recorded an estimated dividend payable in Current Liabilities in the unaudited condensed consolidated balance sheets at June 30, 2015 at an estimated fair value of $295,000. The Company expects to issue accrued PIK dividends in August 2015. 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). 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, 2015 There were no common stock issuances for the six months ended June 30, 2015. For the year ended December 31, 2014 There were no common stock issuances for the year ended December 31, 2014. (c) Warrants For the six months ended June 30, 2015 There were no warrant issuances for the six months ended June 30, 2015. For the year ended December 31, 2014 There were no warrant issuances for the year ended December 31, 2014. The following table summarizes information about the Company’s outstanding common stock warrants as of June 30, 2014: Total Warrants Weighted Outstanding Total Average Date Strike and Exercise Exercise Issued Expiration Price Exercisable Price Price Placement Agent Preferred Stock - Class D Dec-12 Dec-17 1.10 704,200 $ 774,620 Common Stock Investor Warrants * Aug-13 Aug-18 0.50 1,463,667 731,834 Placement Agent Warrants - Common Stock * Aug-13 Aug-18 0.50 292,733 146,367 Placement Agent Preferred Stock - Class E Nov-13 Nov-18 0.55 818,000 449,900 3,278,600 $ 2,102,720 $ 0.64 * warrants classified as liabilities |
Esop Plan
Esop Plan | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015, was $89,000 representing approximately $76,000 for the ESOP principal payment and $13,000 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, 2015 was approximately $32,000. The fair value of the shares was $0.30 per share, based on the average of the daily market closing share price. |
Stock Option Plan
Stock Option Plan | 6 Months Ended |
Jun. 30, 2015 | |
Stock Option Plan [Abstract] | |
STOCK OPTION PLAN | NOTE 11 - STOCK OPTION PLAN In December 2010, the Company established the 2010 Stock Option Plan (the “2010 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. Under the 2010 Plan, common stock incentives may be granted to officers, employees, directors, consultants, and advisors. Incentives under the 2010 Plan may be granted only in the form of non-statutory stock options and all stock options of Old DecisionPoint that were assumed by the Company became non-statutory options on the date of the assumption. The 2010 Plan is administered by the Company’s Board of Directors, or a committee appointed by the Board of Directors, which determines recipients and the number of shares subject to the awards, the exercise price and the vesting schedule. The term of stock options granted under the 2010 Plan 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. In October 2014, the Company established the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan authorizes the issuance of 2,500,000 shares of common stock. Under the 2014 Plan, common stock incentives may be granted to officers, employees, directors, consultants, and advisors (and prospective directors, officers, managers, employees, consultants and advisors) of the Company and its affiliates can acquire and maintain an equity interest in the Company, or be paid incentive compensation, which may (but need not) be measured by reference to the value of our common stock. The 2014 Plan permits the Company to provide equity-based compensation in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock and other stock bonus awards and performance compensation awards. For the six months ended June 30, 2015, the Company granted 239,148 stock options under the 2014 Plan. The 2014 Plan is administered by the Company’s Board of Directors, or a committee appointed by the Board of Directors, which determines recipients and the number of shares subject to the awards, the exercise price and the vesting schedule. The term of stock options granted under the 2014 Plan 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, 2015, 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 December 31, 2014 2,114,106 1,385,894 $ 0.56 $ - Granted (239,148 ) 239,148 0.50 - Exercised - - - - Forfeited - - - - June 30, 2015 1,874,958 1,625,042 $ 0.55 $ - Exercisable options at June 30, 2015 1,028,511 $ 0.68 $ - The following table summarizes information about stock options outstanding as of June 30, 2015: 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 $0.31 - 0.53 1,481,889 2.95 $ 0.41 890,889 2.09 $ 0.47 $1.33 - 2.03 88,874 1.51 1.90 88,874 1.51 1.90 $2.06 - 4.34 54,279 5.96 2.17 48,748 5.96 2.17 Total 1,625,042 2.97 $ 0.55 1,028,511 2.23 $ 0.68 No awards were exercised during the six months ended June 30, 2015 and 2014, respectively. The total fair value of awards vested for the six months ended June 30, 2015 and 2014 was $47,000 and $52,000, 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 three and six months ended June 30, 2015, was $21,000 and $39,000, respectively. The fair value of options granted during the three and six months ended June 30, 2014 was $19,000 and $58,000, respectively. The fair values were estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Expected term 1.5 years 1.5 years 1.5 years 1.5 years Expected volatility 197.2 % 129.5 % 176.90 % 143.49 % Dividend yield 0 % 0 % 0 % 0 % Risk-free interest rate 0.46 % 0.29 % 0.44 % 0.27 % 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 three and six months ended June 30, 2015 and 2014, was $37,000 and $70,000 and $40,000 and $50,000, respectively, and is included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. As of June 30, 2015, total unrecognized estimated employee and director compensation cost related to stock options granted prior to that date was $132,000 which is expected to be recognized over a weighted-average vesting period of 2.3 years. The weighted-average fair value on the date of grant of options granted during the six months ended June 30, 2015 and 2014 was $0.16 and $0.31, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Leases - Rent expense for the six months ended June 31, 2015 and 2014, was $259,000 and $263,000, respectively. Apex Lease - Between April 2015 and June 2015, Apex had been delinquent on its lease obligations to Harvester Properties of Burlington, Inc. In June 2015, Harvester Properties gave notice of termination of the lease agreement. Since that time, Apex has relocated its operations. There is $72,000 relating to these rent obligations including interest and other fees at June 30, 2015. Apex Employment Agreement - Contingencies – Wells Notice - On August 15, 2014, Mr. Toms resigned from his positions as Chief Executive Officer, President and member of the Company’s board of directors. On February 11, 2015, the SEC commenced a formal administrative proceeding against Mr. Toms. On March 26, 2015, the proceeding was stayed pending review by the SEC of Mr. Tom’s signed Offer of Settlement. In regards to the administrative proceeding against Mr. Toms, indemnification agreements are provided to the Company’s Directors and Executive Officers to minimize potential personal liability for actions taken in their capacity as Directors and Officers. The Company previously accrued $175,000 as a potential obligation related to the Company’s indemnification of Mr. Toms. As of June 30, 2015, $125,000 is included as part of Accrued Expenses in the unaudited condensed consolidated balance sheets. During the second quarter of 2015, $50,000 has been placed in escrow as payment under these agreements. |
Basis of Presentation, Liquid18
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
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, 2015, are not necessarily indicative of results for the full 2015 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 one wholly-owned subsidiary, DecisionPoint Systems Group, Inc. (“DPS Group”). All significant intercompany accounts and transactions have been eliminated in consolidation. 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 accompanying 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, 2014, included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 18, 2015. |
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 raise 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, avoid further unforeseen expenses, improve liquidity and working capital, and potentially raise additional equity or debt capital. There can be no assurance that the Company will be able to achieve sustainable positive operating results or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. The Company is currently in default on certain obligations as of June 30, 2015. The Company has not made the final payment on the Royal Bank of Canada (“RBC”) Term Loan was originally scheduled to be paid in June 2015. The payment has been rescheduled with RBC for September 2015. Such agreement has not been documented in writing and is based on a verbal agreement with RBC. The Company also did not pay interest due on the BDC, Inc. (“BDC”) Term Loan due for July 2015. BDC has advised the Company on July 30, 2015 that the financing is in arrears on interest and the Company also expects to not pay the August interest payment on this obligation. The failure to pay interest due is a violation of the terms of the financing agreement. The Company is currently in default on the Apex seller Note as of the date of this filing. The seller of Apex has demanded payment in full including certain monitoring and administrative fees. The Company has accrued $51,000 as of June 30, 2015 for certain fees related to the demand payment. Between April 2015 and June 2015, Apex had been delinquent on its lease obligations to Harvester Properties of Burlington, Inc. In June 2015, Harvester Properties gave notice of termination of the lease agreement. Since that time, Apex has relocated its operations. There is $72,000 relating to these rent obligations including interest and other fees at June 30, 2015. Due to the technical default with the BDC term loan discussed above, the Company is technically in default due to the subordinated debt provisions of the Amended Silicon Valley Bank (“SVB”) Loan Agreement. The Company has had discussions with SVB regarding this technical default and is working with SVB to cure. A SVB lending officer has verbally indicated they do not intend on exercising legal rights under the Amended SVB Loan Agreement for this default, however, this is not evidenced in writing and thus is not enforceable. If the Company does not achieve sustained 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) defaults under the Company’s various loan agreements (for a description of past defaults, see the discussion below). If such events were to occur, they would have material adverse effects on the Company. There can be no assurance that the Company will successfully improve its liquidity position. The consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty. |
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, 2015. See Note 2 of the Company's consolidated financial statements included in the Company's 2014 Annual Report on Form 10-K filed with the SEC on March 18, 2015, for a comprehensive description of the Company's significant accounting policies. |
Revenue Recognition | Revenue Recognition - 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; and (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. 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 | Concentration of Credit Risk - 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 13% and 16% of the Company’s revenue for the six months ended June 30, 2015 and 2014, respectively. The Company had three customers, one of which were not the same, who represented 32% and 29% of its revenue for the six months ended June 30, 2015 and 2014, respectively. The Company’s accounts receivable was concentrated with two customers, which were not the same, representing 37% and 36% of gross accounts receivable at June 30, 2015 and 2014, respectively. 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 four primary vendors for the six months ended June 30, 2015, all of which was the same when compared to the similar period in 2014. For the six months ended June 30, 2015, the Company had purchases from these four vendors that collectively represented 59% of total purchases and 57% of the total outstanding accounts payable at June 30, 2015. For the six months ended June 30, 2014, the Company had purchases from these four vendors that collectively represented 61% of total purchases and 61% of the total outstanding accounts payable at June 30, 2014. The same two vendors represented 49% and 47% of the total purchases for the six months ended June 30, 2015 and 2014, 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 - |
Fair Value Measurement | Fair Value Measurement - ● 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 fiscal six months ended June 30, 2015. The Company is obligated to pay bonus consideration to the former 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). The Company reassessed the fair value of the contingent consideration liability at December 31, 2014 and determined the amount to be $0. The Company continues to recognize no bonus consideration obligation in 2015. 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. For prior periods, the Company reassessed the fair value of the warrant liabilities on a quarterly basis using a Monte Carlo option pricing model. For June 30, 2015, the Company assessed the fair value of the warrants using a linear regression model based on observable prices of the known components and their relationship to historical prices. Based on that assessment, the Company recognized a $311,000 decrease and an $84,000 increase to the fair value of the warrants during the three months ended June 30, 2015 and 2014, respectively. The Company recognized a $232,000 and $166,000 decrease to the fair value of the warrants during the six months ended June 30, 2015 and 2014, respectively. The following table summarizes the financial liabilities measured at fair value on a recurring basis as of June 30, 2015 and December 31, 2014 (in thousands): Quoted Significant Significant active observable unobservable Total Level 1 Level 2 Level 3 Liabilities Fair value of warrants issued in connection with share purchase agreement $ 287 $ - $ - $ 287 Balance at June 30, 2015 $ 287 $ - $ - $ 287 Quoted Significant Significant other active observable unobservable Total Level 1 Level 2 Level 3 Liabilities Fair value of warrants issued in connection with share purchase agreement $ 519 $ - $ - $ 519 Balance at December 31, 2014 $ 519 $ - $ - $ 519 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 Derivative warrants Balance at December 31, 2014 $ 519 Adjustments to fair value of warrants (reflected in other income) (232 ) Balance at June 30, 2015 $ 287 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. The Company evaluates goodwill, at a minimum, on an annual basis on December 31 and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. There was no impairment of goodwill as a result of the annual impairment review performed during December 31, 2014. The Company's goodwill impairment analysis is sensitive to changes in key assumptions used in its analysis, such as expected future cash flows, the degree of volatility in equity and debt markets, and its stock price. For the quarter ended June 30, 2015, the Company concluded there were indicators of potential goodwill impairment for the Company’s Apex business based on changes in the Company’s long-term strategy and outlook for Apex. As a result of identifying indicators of impairment, the Company performed an impairment review of goodwill and intangible assets as of June 30, 2015. Based on the analysis, the Company recorded an impairment charge to goodwill of $2.1 million and intangible assets of $0.9 million in the second quarter of 2015. This impairment was reported as part of the continuing operations results for the three and six months ended June 30, 2015. As a result, the Company has no goodwill or intangible assets remaining related to the Apex business (see Note 6). |
Income Taxes | Income Taxes |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) ASU 2014-09, “Revenue from Contracts with Customers (Topic 606) ” In April 2015, the FASB issued ASU 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability instead of being presented as an asset. This guidance is effective for public companies for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those years. For all other entities, this guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The new guidance is to be applied on a retrospective basis, wherein the balance sheet of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance and represents a change in accounting principle. Management is currently evaluating the impact of the adoption of this accounting standard update on its financial statements. In April 2015, the FASB issued ASU 2015-05, “Intangibles–Goodwill and Other–Internal Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This update provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. This guidance is effective for public companies for fiscal years and interim periods beginning after December 15, 2015. For all other entities, this guidance is effective for annual periods beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. Early adoption is permitted for all entities. The new guidance is to be applied either prospectively to new cloud computing arrangements or retrospectively. Management is currently evaluating the impact of the adoption of this accounting standard update on its financial statements. |
Basis of Presentation, Liquid19
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies [Abstract] | |
Summary of warrant liability measured at fair value on a recurring basis | Quoted Significant Significant active observable unobservable Total Level 1 Level 2 Level 3 Liabilities Fair value of warrants issued in connection with share purchase agreement $ 287 $ - $ - $ 287 Balance at June 30, 2015 $ 287 $ - $ - $ 287 Quoted Significant Significant other active observable unobservable Total Level 1 Level 2 Level 3 Liabilities Fair value of warrants issued in connection with share purchase agreement $ 519 $ - $ - $ 519 Balance at December 31, 2014 $ 519 $ - $ - $ 519 |
Summarizes changes to the fair value of the contingent consideration and derivative warrants | Level 3 Derivative warrants Balance at December 31, 2014 $ 519 Adjustments to fair value of warrants (reflected in other income) (232 ) Balance at June 30, 2015 $ 287 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Discontinued Operations[Abstract] | |
Schedule of sale price allocated | Assets sold Deferred costs $ 506 Other current assets 81 Intangible assets 459 Goodwill 678 Other long term assets 208 Total assets 1,932 Liabilities assumed by purchaser Unearned revenue - current 782 Other current liabilities 19 Unearned revenue - long term 296 Other long term liabilities 28 Total liabilities 1,125 Net assets sold 807 Cash received (302 ) Non-cash consideration-liabilities forgiven by CMAC purchaser (348 ) Net loss on sale of discontinued operations, before income tax 157 Income tax benefit on loss on sale (68 ) Net loss on sale of discontinued operations, net of tax $ 89 |
Schedule of consolidated balance sheets | June 30, December 31, 2015 2014 ASSETS Current assets Accounts receivable, net $ - $ 1,144 Inventory, net 37 Deferred costs - 645 Deferred tax asset - 2 Prepaid expenses and other current assets - 1 Total current assets of discontinued operations - 1,829 Noncurrent assets Other assets, net - 15 Deferred costs, net of current portion - 310 Goodwill - 678 Intangible assets, net - 631 Total noncurrent assets of discontinued operations . - 1,634 Total assets of discontinued operations $ - $ 3,463 LIABILITIES Current liabilities Accounts payable $ - $ 263 Accrued expenses and other current liabilities - 727 Unearned revenue - 1,003 Total current liabilities of discontinues operations - 1,993 Noncurrent liabilities Unearned revenue, net of current portion - 455 Other long term liabilities - 32 Total noncurrent liabilities of discontinued operations - 487 Total liabilities of discontinued operations $ - $ 2,480 |
Schedule of consolidated operations and comprehensive loss | Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2015 2014 2015 2014 Net sales $ 1,207 $ 3,524 $ 3,156 $ 6,873 Cost of sales 944 2,547 2,432 5,197 Selling, general & administrative expenses 315 714 812 1,307 Operating (loss) income from discontinued operations (52 ) 263 (88 ) 369 Other expense (income) Interest expense 4 - 6 - Other income (1 ) - - - Total other expense from discontinued operations 3 - 6 - (Loss) income from operations, before income tax (55 ) 263 (94 ) 369 Income tax (benefit) provision on operations (7 ) 151 - 142 (Loss) income from discontinued operations, net of tax $ (48 ) $ 112 $ (94 ) $ 227 Net loss on sale of discontinued operations, before income tax $ (157 ) - $ (157 ) - Income tax benefit on loss on sale of discontinued operations 68 - 68 - Loss on sale of discontinued operations, net of tax $ (89 ) $ - $ (89 ) $ - |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Loss Per Common Share [Abstract] | |
Schedule of potentially dilutive securities | As of 2015 2014 Convertible preferred stock - Series A 270 270 Convertible preferred stock - Series B 131 131 Convertible preferred stock - Series D * 10,287 10,287 Convertible preferred stock - Series E ** 8,331 8,331 Warrants to purchase common stock 3,279 3,555 Options to purchase common stock 1,625 736 Total potentially dilutive securities 23,923 23,310 * Excludes accrued paid-in-kind (“PIK”) dividends on Series D Preferred Stock of 34,318 shares and 150,090 shares for the first and second quarter of 2015, respectively (see Note 9). ** Excludes accrued PIK dividends on Series E Preferred Stock of 16,065 shares and 69,738 shares for the first and second quarter of 2015, respectively (see Note 9). |
Warrant Liability (Tables)
Warrant Liability (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Warrant Liability [Abstract] | |
Schedule of warrant liabilities valued at the closing dates of common stock purchase agreement | Placement Agent Warrants Investor Warrants Warrants June 30, December 31, June 30, December 31, Closing price per share of common stock $ 0.20 $ 0.38 $ 0.20 $ 0.38 Exercise price per share (range) 0.50 0.50 0.50 0.50 Expected volatility 173.8 % 138.3 % 173.8 % 138.6 % Risk-free interest rate 1.0 % 1.3 % 1.0 % 1.3 % Dividend yield - - - - Remaining expected term of underlying 3.2 3.6 3.2 3.6 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets [Abstract] | |
Schedule of transactions effecting goodwill | Balance at December 31, 2014 $ 8,202 CMAC, Inc. divestiture (678 ) Apex goodwill impairment charge (2,089 ) Effect of currency translation on Apex (131 ) Balance at June 30, 2015 $ 5,304 |
Schedule of intangible assets and accumulated amortization | June 30, 2015 December 31, 2014 Accumulated Accumulated Gross Amortization Net Gross Amortization Net Customer relationships $ 100 $ (100 ) $ - $ 100 $ (100 ) $ - Tradename 130 (130 ) - 130 (130 ) - Internal use software 310 (310 ) - 310 (310 ) - Covenant not to compete 90 (90 ) - 90 (90 ) - Total (1) $ 630 $ (630 ) $ - $ 630 $ (630 ) $ - (1) CMAC’s net intangible assets of $631,000 ($2,729,000 gross and $2,098,000 accumulated amortization) were reclassified and reflected as discontinued operations on the condensed consolidated balance sheet at December 31, 2014. Impairment charges of Apex’s net intangible assets of $958,000 ($3,764,000 gross and $2,806,000 accumulated amortization) were recorded in the second quarter of fiscal 2015. |
Term Debt (Tables)
Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Term Debt [Abstract] | |
Schedule of term debt | Balance December 31, Additions Payments Amortization Effect of Currency Translation Balance June 30, 2015 RBC term loan $ 358 $ - $ (279 ) $ - $ (23 ) $ 56 BDC term loan 1,462 - - - (86 ) 1,376 SVB term loan 389 - (167 ) - - 222 Note payable seller 200 - - - (12 ) 188 Total note discounts (16 ) - - 7 - (9 ) Total debt $ 2,393 $ - $ (446 ) $ 7 $ (121 ) 1,833 less current portion (1,833 ) Debt, net of current portion $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
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 $480 $ 1,455 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 $138 518 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 $7,303 plus accrued PIK dividends of $445; cumulative imputed dividends and beneficial conversion feature of $1,621 7,502 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 $4,165 plus accrued PIK dividends of $295; cumulative imputed dividends of $110 3,401 Total convertible preferred stock $ 12,876 |
Schedule of outstanding common stock warrants | Total Warrants Weighted Outstanding Total Average Date Strike and Exercise Exercise Issued Expiration Price Exercisable Price Price Placement Agent Preferred Stock - Class D Dec-12 Dec-17 1.10 704,200 $ 774,620 Common Stock Investor Warrants * Aug-13 Aug-18 0.50 1,463,667 731,834 Placement Agent Warrants - Common Stock * Aug-13 Aug-18 0.50 292,733 146,367 Placement Agent Preferred Stock - Class E Nov-13 Nov-18 0.55 818,000 449,900 3,278,600 $ 2,102,720 $ 0.64 * warrants classified as liabilities |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Stock Options 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 December 31, 2014 2,114,106 1,385,894 $ 0.56 $ - Granted (239,148 ) 239,148 0.50 - Exercised - - - - Forfeited - - - - June 30, 2015 1,874,958 1,625,042 $ 0.55 $ - Exercisable options at June 30, 2015 1,028,511 $ 0.68 $ - |
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 $0.31 - 0.53 1,481,889 2.95 $ 0.41 890,889 2.09 $ 0.47 $1.33 - 2.03 88,874 1.51 1.90 88,874 1.51 1.90 $2.06 - 4.34 54,279 5.96 2.17 48,748 5.96 2.17 Total 1,625,042 2.97 $ 0.55 1,028,511 2.23 $ 0.68 |
Schedule of the summary of fair value using the Black-Scholes option pricing model | For the Three Months Ended For the Six Months Ended June 30, June 30, 2015 2014 2015 2014 Expected term 1.5 years 1.5 years 1.5 years 1.5 years Expected volatility 197.2 % 129.5 % 176.90 % 143.49 % Dividend yield 0 % 0 % 0 % 0 % Risk-free interest rate 0.46 % 0.29 % 0.44 % 0.27 % |
Description of Business (Detail
Description of Business (Details) - Jun. 30, 2015 - USD ($) $ in Thousands | Total | Total |
Description of Business (Textual) | ||
Ownership percentage | 100.00% | 100.00% |
Loss on sale of discontinued operations, net of tax | $ (89) | $ (89) |
Basis of Presentation, Liquid28
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details) - Recurring basis [Member] - Warrants [Member] - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrants issued in connection with share purchase agreement | $ 287 | $ 519 |
Ending Balance | $ 287 | $ 519 |
Quoted prices inactive markets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrants issued in connection with share purchase agreement | ||
Ending Balance | ||
Significant other observable inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrants issued in connection with share purchase agreement | ||
Ending Balance | ||
Significant other unobservable inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of warrants issued in connection with share purchase agreement | $ 287 | $ 519 |
Ending Balance | $ 287 | $ 519 |
Basis of Presentation, Liquid29
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis [Line Items] | ||||
Adjustments to fair value of warrants (reflected in other income) | $ 311 | $ (84) | $ 232 | $ 166 |
Fair Value, Inputs, Level 3 [Member] | Derivative warrants [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis [Line Items] | ||||
Balance at December 31, 2014 | 519 | |||
Adjustments to fair value of warrants (reflected in other income) | (232) | |||
Balance at March 31, 2015 | $ 287 | $ 287 |
Basis of Presentation, Liquid30
Basis of Presentation, Liquidity and Summary of Significant Accounting Policies (Detail Textuals) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)SubsidiaryCustomer | Jun. 30, 2014USD ($)SubsidiaryCustomer | Dec. 31, 2014USD ($)Customer | Jun. 30, 2015CAD | |
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Cash, FDIC insured amount | $ 250,000 | $ 250,000 | ||||
Income tax expense (benefit) | (63,000) | $ 51,000 | (35,000) | $ 20,000 | ||
Pre-tax loss | 3,200,000 | 183,000 | 3,800,000 | 379,000 | ||
Fair value of bonus | 153,000 | 153,000 | CAD 160,000 | |||
Fair value of the contingent consideration liability | $ 0 | |||||
Fair market value adjustment of warrant liabilities | 311,000 | $ (84,000) | 232,000 | $ 166,000 | ||
Impairment charge to goodwill | $ 5,304,000 | $ 5,304,000 | 7,524,000 | |||
Intangible assets | 1,414,000 | |||||
Decrease in revenue | $ 3,600,000 | $ 7,200,000 | ||||
Percentage of decrease in revenue | 27.90% | 27.20% | ||||
Asset Impairment Charges | 3,047,000 | 3,047,000 | ||||
Operating Income (Loss) | (3,354,000) | $ 102,000 | (3,592,000) | $ (146,000) | ||
Substantial working capital deficit | 10,000,000 | $ 7,800,000 | ||||
Accrued certain fees related to demand payment | 51,000 | 51,000 | ||||
Rent obligations including interest | 72,000 | 72,000 | ||||
Apex [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Impairment charge to goodwill | 2,100,000 | 2,100,000 | ||||
Intangible assets | $ 900,000 | $ 900,000 | ||||
Revenues [Member] | Customer One [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Number of customers | Customer | 1 | 1 | ||||
Total percent of revenues from various customers | 13.00% | 16.00% | ||||
Revenues [Member] | Customer Two [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Number of customers | Customer | 3 | 3 | ||||
Total percent of revenues from various customers | 32.00% | 29.00% | ||||
Accounts receivable [Member] | Customer One [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Number of customers | Customer | 2 | 2 | ||||
Total percent of revenues from various customers | 37.00% | 36.00% | ||||
Total purchases [Member] | Individual Supplier [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Total percent of revenues from various customers | 49.00% | 47.00% | ||||
Total purchases [Member] | Supplier Concentration Risk [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Total percent of revenues from various customers | 57.00% | 58.00% | ||||
Number of vendors | Subsidiary | 4 | 4 | ||||
Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||||
Basis of presentation, liquidity and summary of significant accounting policies (Textuals) | ||||||
Total percent of revenues from various customers | 59.00% | 61.00% | ||||
Number of vendors | Subsidiary | 4 | 4 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Jun. 30, 2015 - USD ($) $ in Thousands | Total | Total |
Liabilities assumed by purchaser | ||
Net loss on sale of discontinued operations, before income tax | $ (157) | $ (157) |
Income tax benefit on loss on sale of discontinued operations | (68) | (68) |
Net loss on sale of discontinued operations, net of tax | (89) | (89) |
CMAC [Member] | ||
Assets sold | ||
Deferred costs | 506 | 506 |
Other current assets | 81 | 81 |
Intangible assets | 459 | 459 |
Goodwill | 678 | 678 |
Other long term assets | 208 | 208 |
Total assets | 1,932 | 1,932 |
Liabilities assumed by purchaser | ||
Unearned revenue - current | 782 | 782 |
Other current liabilities | 19 | 19 |
Other long term liabilities | 296 | 296 |
Unearned revenue - long term | 28 | 28 |
Total liabilities | $ 1,125 | 1,125 |
Net assets sold | 807 | |
Cash received | (302) | |
Net loss on sale of discontinued operations, before income tax | 157 | |
Income tax benefit on loss on sale of discontinued operations | (68) | |
Non-cash consideration-liabilities forgiven by CMAC purchaser | 348 | |
Net loss on sale of discontinued operations, net of tax | $ 89 |
Discontinued Operations (Deta32
Discontinued Operations (Details 1) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Total current assets of discontinued operations | $ 1,829 | |
Noncurrent assets | ||
Total noncurrent assets of discontinued operations | 1,634 | |
Current liabilities | ||
Total current liabilities of discontinues operations | 1,993 | |
Noncurrent liabilities | ||
Total noncurrent liabilities of discontinued operations | 487 | |
CMAC [Member] | ||
Current assets | ||
Accounts receiveable, net | 1,144 | |
Inventory, net | 37 | |
Deferred costs | 645 | |
Deferred tax asset | 2 | |
Prepaid expenses and other current assets | 1 | |
Total current assets of discontinued operations | 1,829 | |
Noncurrent assets | ||
Other assets, net | 15 | |
Deferred costs, net of current portion | 310 | |
Goodwill | 678 | |
Intangible assets, net | 631 | |
Total noncurrent assets of discontinued operations | 1,634 | |
Total assets of discontinued operations | 3,855 | |
Current liabilities | ||
Accounts payable | 263 | |
Accrued expenses and other current liabilities | 727 | |
Unearned revenue | 1,003 | |
Total current liabilities of discontinues operations | 1,993 | |
Noncurrent liabilities | ||
Unearned revenue, net of current portion | 455 | |
Other long term liabilities | 32 | |
Total noncurrent liabilities of discontinued operations | 487 | |
Total liabilities of discontinued operations | $ 2,480 |
Discontinued Operations (Deta33
Discontinued Operations (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Net sales | $ 1,207 | $ 3,524 | $ 3,156 | $ 6,873 |
Cost of sales | 944 | 2,547 | 2,432 | 5,197 |
Selling, general & administrative expenses | 315 | 714 | 812 | 1,307 |
Operating (loss) income from discontinued operations | (52) | $ 263 | (88) | $ 369 |
Other expense (income) | ||||
Interest expense | 4 | $ 6 | ||
Other income | (1) | |||
Total other expense from discontinued operations | 3 | $ 6 | ||
(Loss) income from operations, before income tax | (55) | $ 263 | $ (94) | $ 369 |
Income tax (benefit) provision on operations | (7) | 151 | 142 | |
(Loss) income from discontinued operations, net of tax | (48) | $ 112 | $ (94) | $ 227 |
Net loss on sale of discontinued operations, before income tax | (157) | (157) | ||
Income tax benefit on loss on sale of discontinued operations | (68) | (68) | ||
Loss on sale of discontinued operations, net of tax | $ (89) | $ (89) |
Discontinued Operations (Deta34
Discontinued Operations (Details Textuals) - Jun. 30, 2015 - USD ($) | Total | Total |
Discontinued Operations Textual [Abstract] | ||
Ownership percentage | 100.00% | 100.00% |
Loss on sale of discontinued operations, net of tax | $ (89,000) | $ (89,000) |
Cash consideration of discontinued operations | 302,000 | |
Forgiven liabilities of discontinued operations | $ 348,000 | $ 348,000 |
Loss Per Common Share (Details)
Loss Per Common Share (Details) - shares shares in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | 23,923 | 23,310 | |
Convertible Preferred stock [Member] | Series A [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | 270 | 270 | |
Convertible Preferred stock [Member] | Series B [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | 131 | 131 | |
Convertible Preferred stock [Member] | Series D [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | [1] | 10,287 | 10,287 |
Convertible Preferred stock [Member] | Series E [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | [2] | 8,331 | 8,331 |
Warrants to purchase common stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | 3,279 | 3,555 | |
Options to purchase common stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potentially dilutive securities | 1,625 | 736 | |
[1] | Excludes accrued paid-in-kind ("PIK") dividends on Series D Preferred Stock of 34,318 shares and 150,090 shares for the first and second quarter of 2015, respectively (see Note 9). | ||
[2] | Excludes accrued PIK dividends on Series E Preferred Stock of 16,065 shares and 69,738 shares for the first and second quarter of 2015, respectively (see Note 9). |
Loss Per Common Share (Detail T
Loss Per Common Share (Detail Textuals) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | |
Loss Per Common Share (Textual) | ||||||
Excludes accrued PIK dividends | $ 380 | $ 740 | ||||
Series D Preferred Stock [Member] | ||||||
Loss Per Common Share (Textual) | ||||||
Excludes accrued PIK dividends | 150,090 | $ 34,318 | ||||
Series E Preferred Stock [Member] | ||||||
Loss Per Common Share (Textual) | ||||||
Excludes accrued PIK dividends | $ 69,738 | $ 16,065 | ||||
Employee Stock Ownership Plan [Member] | ||||||
Loss Per Common Share (Textual) | ||||||
ESOP shares that have not been committed to be released | 0.3 | 0.3 | 0.4 |
Warrant Liability (Details)
Warrant Liability (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Placement Agent Warrants [Member] | ||
Derivative [Line Items] | ||
Closing price per share of common stock | $ 0.20 | $ 0.38 |
Exercise price per share (range) | $ 0.50 | $ 0.50 |
Expected volatility | 173.80% | 138.30% |
Risk-free interest rate | 1.00% | 1.30% |
Dividend yield | ||
Remaining expected term of underlying securities (years) | 3 years 2 months 12 days | 3 years 7 months 6 days |
Investor Warrants [Member] | ||
Derivative [Line Items] | ||
Closing price per share of common stock | $ 0.20 | $ 0.38 |
Exercise price per share (range) | $ 0.50 | $ 0.50 |
Expected volatility | 173.80% | 138.60% |
Risk-free interest rate | 1.00% | 1.30% |
Dividend yield | ||
Remaining expected term of underlying securities (years) | 3 years 2 months 12 days | 3 years 7 months 6 days |
Warrant Liability (Detail Textu
Warrant Liability (Detail Textuals) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Warrants Liability (Textual) | |||||
Estimated fair value of the outstanding warrant liabilities | $ 287,000 | $ 287,000 | $ 519,000 | ||
Increase/ Decrease in fair value of warrant liabilities | $ 311,000 | $ 84,000 | $ 232,000 | $ 166,000 |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2014 | $ 7,524 |
CMAC, Inc. divestiture | (678) |
Apex goodwill impairment charge | (2,089) |
Effect of currency translation on Apex | (131) |
Balance at March 31, 2015 | $ 5,304 |
Goodwill and Intangible Asset40
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross | [1] | $ 630 | $ 630 |
Accumulated Amortization | [1] | $ (630) | $ (630) |
Net | [1] | ||
Customer relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 100 | $ 100 | |
Accumulated Amortization | $ (100) | $ (100) | |
Net | |||
Tradename [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 130 | $ 130 | |
Accumulated Amortization | $ (130) | $ (130) | |
Net | |||
Internal use software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 310 | $ 310 | |
Accumulated Amortization | $ (310) | $ (310) | |
Net | |||
Covenant not to compete [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 90 | $ 90 | |
Accumulated Amortization | $ (90) | $ (90) | |
Net | |||
[1] | CMAC's net intangible assets of $631,000 ($2,729,000 gross and $2,098,000 accumulated amortization) were reclassified and reflected as discontinued operations on the condensed consolidated balance sheet at December 31, 2014. Impairment charges of Apex's net intangible assets of $958,000 ($3,764,000 gross and $2,806,000 accumulated amortization) were recorded in the second quarter of fiscal 2015. |
Goodwill and Intangible Asset41
Goodwill and Intangible Assets (Detail Textuals) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | ||
Goodwill and Intangible Assets (Textual) | |||
Effect of foreign currency translation on goodwill | $ (131) | ||
Effect of foreign currency translation on intangible assets | $ (86) | ||
Intangible assets | $ 1,414 | ||
Gross | [1] | $ 630 | 630 |
Accumulated amortization | [1] | $ 630 | $ 630 |
Intangible assets, net | [1] | ||
Goodwill impairment charge | $ (2,089) | ||
Apex [Member] | |||
Goodwill and Intangible Assets (Textual) | |||
Intangible assets | 900 | ||
Gross | 3,764 | ||
Accumulated amortization | 2,806 | ||
Intangible assets, net | $ 958 | ||
CMAC [Member] | |||
Goodwill and Intangible Assets (Textual) | |||
Gross | $ 2,729 | ||
Accumulated amortization | 2,098 | ||
Intangible assets, net | $ 631 | ||
[1] | CMAC's net intangible assets of $631,000 ($2,729,000 gross and $2,098,000 accumulated amortization) were reclassified and reflected as discontinued operations on the condensed consolidated balance sheet at December 31, 2014. Impairment charges of Apex's net intangible assets of $958,000 ($3,764,000 gross and $2,806,000 accumulated amortization) were recorded in the second quarter of fiscal 2015. |
Lines of Credit (Detail Textual
Lines of Credit (Detail Textuals) - Line of Credit [Member] | Feb. 27, 2015 | Jun. 04, 2012CAD | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) |
Line of Credit (Textual) | |||||||
Interest expense for the lines of credit, including amortization of deferred financing costs | $ 97,000 | $ 114,000 | $ 200,000 | $ 211,000 | |||
Silicon Valley Bank ("SVB") [Member] | |||||||
Line of Credit (Textual) | |||||||
Minimum tangible net worth | 8,600,000 | $ 8,600,000 | |||||
Percentage of additional capital raises in tangible net worth | 50.00% | ||||||
Line of credit, covenant terms | The Company entered into an agreement to further amend the original SVB Loan Agreement dated December 15, 2006 to extend the maturity date of the revolving credit line provided thereunder to February 28, 2017. The February 27, 2015 amendment provides for interest at prime plus 3.25% in 2015, and provides for further interest rate reductions upon achievement of certain financial thresholds. | ||||||
SVB Loan Agreement [Member] | Silicon Valley Bank ("SVB") [Member] | |||||||
Line of Credit (Textual) | |||||||
Aggregate amount of credit facility | 10,000,000 | $ 10,000,000 | |||||
Outstanding balance on the line of credit | $ 2,700,000 | $ 2,700,000 | $ 5,800,000 | ||||
Annual interest rate | 6.50% | 6.50% | 6.50% | ||||
Availability under the line of credit | $ 800,000 | $ 800,000 | |||||
RBC Credit Agreement [Member] | Royal Bank of Canada [Member] | |||||||
Line of Credit (Textual) | |||||||
Aggregate amount of credit facility | CAD | CAD 200,000 | ||||||
Outstanding balance on the line of credit | $ 42,000 | $ 42,000 | $ 58,000 | ||||
Annual interest rate | 4.35% | 4.35% | 4.35% | ||||
Annual interest rate, Additional percentage | 1.50% |
Term Debt (Details)
Term Debt (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Beginning Balance | $ 2,393 | |
Additions | ||
Payments | $ (446) | |
Amortization of Note Discount | 7 | |
Effect of Currency Translation | (121) | |
Ending Balance | 1,833 | |
less current portion | $ (1,833) | |
Debt, net of current portion | $ 1,580 | |
RBC Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Beginning Balance | $ 358 | |
Additions | ||
Payments | $ (279) | |
Amortization of Note Discount | ||
Effect of Currency Translation | $ (23) | |
Ending Balance | 56 | |
BDC Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Beginning Balance | $ 1,462 | |
Additions | ||
Payments | ||
Amortization of Note Discount | ||
Effect of Currency Translation | $ (86) | |
Ending Balance | 1,376 | |
SVB Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Beginning Balance | $ 389 | |
Additions | ||
Payments | $ (167) | |
Amortization of Note Discount | ||
Effect of Currency Translation | ||
Ending Balance | $ 222 | |
Note payable seller [Member] | ||
Debt Instrument [Line Items] | ||
Beginning Balance | $ 200 | |
Additions | ||
Payments | ||
Amortization of Note Discount | ||
Effect of Currency Translation | $ (12) | |
Ending Balance | 188 | |
Total note discounts [Member] | ||
Debt Instrument [Line Items] | ||
Beginning Balance | $ (16) | |
Additions | ||
Payments | ||
Amortization of Note Discount | $ 7 | |
Effect of Currency Translation | ||
Ending Balance | $ (9) |
Term Debt (Detail Textuals)
Term Debt (Detail Textuals) | Jun. 04, 2012USD ($) | Jul. 31, 2012CAD | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Jun. 04, 2012CAD |
Term Debt (Textual) | ||||||
Financing costs paid | $ 100,000 | $ 100,000 | ||||
Estimated amount of term loan included in current portion of debt | $ (1,833,000) | |||||
RBC Term Loan [Member] | ||||||
Term Debt (Textual) | ||||||
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. | |||||
Apex [Member] | RBC Term Loan [Member] | Line of Credit [Member] | ||||||
Term Debt (Textual) | ||||||
Aggregate amount of credit facility | CAD | CAD 2,750,000 | |||||
Fixed principal amount | CAD | CAD 70,000 | |||||
Apex [Member] | RBC Term Loan [Member] | Term Credit Facility [Member] | ||||||
Term Debt (Textual) | ||||||
Aggregate amount of credit facility | $ 2,401,000 | CAD 2,500,000 | ||||
Term Loan, Interest percentage | 4.00% | 6.85% | ||||
Principal and interest payable period | 3 years | |||||
Frequency of repayment | Monthly | |||||
Financing costs paid | $ 120,000 | |||||
Percentage of Apex's free cash flow for mandatory repayments of term loan | 20.00% | |||||
Period of payment for mandatory repayments | 30 days | |||||
Estimated amount of term loan included in current portion of debt | $ 0 | |||||
Other Assets [Member] | ||||||
Term Debt (Textual) | ||||||
Unamortized deferred financing costs | $ 7,000 | $ 19,000 |
Term Debt (Detail Textuals 1)
Term Debt (Detail Textuals 1) | Jun. 04, 2012CAD | Jun. 30, 2015USD ($) | Jun. 30, 2015CAD | Jun. 30, 2014USD ($) | Jun. 04, 2012USD ($) | Jun. 04, 2012CAD |
Term Debt (Textual) | ||||||
Estimated amount of term loan under mandatory repayments | $ 0 | |||||
Financing costs paid | $ 100,000 | $ 100,000 | ||||
BDC Term Loan [Member] | ||||||
Term Debt (Textual) | ||||||
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. | 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. | ||||
Percentage of value of company and acquiree paid as bonus on fulfillment of terms | 2.00% | 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 its BDC financial covenants as of December 31, 2014. | 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 its BDC financial covenants as of December 31, 2014. | ||||
BDC Term Loan [Member] | Term Credit Facility [Member] | ||||||
Term Debt (Textual) | ||||||
Deferred finance costs | $ 8,000 | |||||
Note discount | 8,000 | |||||
Apex [Member] | BDC Term Loan [Member] | Term Credit Facility [Member] | ||||||
Term Debt (Textual) | ||||||
Aggregate amount of credit facility | $ 1,632,000 | CAD 1,700,000 | ||||
Interest rate per annum | 12.50% | 12.50% | ||||
Maturity date | Jun. 23, 2016 | |||||
Debt instrument interest extention period | 1 year | |||||
Line of credit facility extension fee percentage | 2.00% | |||||
Line of credit facility additional periodic interest payment | CAD | CAD 20,000 | |||||
Percentage of Apex's free cash flow for mandatory repayments of term loan | 50.00% | |||||
Maximum annual cash flow sweep | CAD | CAD 425,000 | CAD 425,000 | ||||
Financing costs paid | 70,000 | |||||
Deferred finance costs | 35,000 | |||||
Note discount | $ 35,000 |
Term Debt (Detail Textuals 2)
Term Debt (Detail Textuals 2) | Feb. 27, 2015 | Feb. 27, 2013USD ($)Subsidiary | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Feb. 01, 2011Subsidiary | Dec. 31, 2010USD ($) |
Term Debt (Textual) | |||||||||
Accrued certain fees related to demand payment | $ 51,000 | $ 51,000 | |||||||
Term Credit Facility [Member] | Silicon Valley Bank ("SVB") [Member] | |||||||||
Term Debt (Textual) | |||||||||
Outstanding balance on the line of credit | $ 222,000 | $ 222,000 | $ 389,000 | $ 3,000,000 | |||||
Number of equal monthly installments | Subsidiary | 36 | 36 | |||||||
Percent of aggregate amount of the term loan equal to final payment | 2.00% | ||||||||
Interest rate | 7.50% | 9.00% | 9.00% | ||||||
Final payment recorded as discount | $ 60,000 | ||||||||
Excess tangible assets net worth | $ 800,000 | $ 800,000 | |||||||
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 | 73,000 | $ 107,000 | $ 150,000 | $ 216,000 | |||||
Line of credit, covenant terms | On February 27, 2015, the Company further amended the SVB Loan Agreement to extend the maturity date of the revolving credit line provided thereunder to February 28, 2017. The February 27, 2015 amendment provides for interest at prime plus 3.25% in 2015, and provides for further interest rate reductions upon achievement of certain financial thresholds. The February 27, 2015 amendment contains certain financial covenants. | The convertible notes accrues interest of 9% per annum for the first year and 11% for year two. | |||||||
Description of interest rate | Canadian Dollar equivalent of the market price of our common stock on the day prior to the conversion using a fixed rate of US$1.00 = CDN$1.04, or the Canadian Dollar equivalent of US$1.00 = CDN$1.04. | ||||||||
Maturity date | Jun. 30, 2016 | ||||||||
Term Credit Facility [Member] | Silicon Valley Bank ("SVB") [Member] | Note payable seller [Member] | |||||||||
Term Debt (Textual) | |||||||||
Outstanding balance on the line of credit | $ 189,000 | $ 189,000 | $ 200,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Cumulative Convertible Preferred Stock [Member] $ in Thousands | Jun. 30, 2015USD ($) |
Cumulative Convertible Preferred Stock [Line Items] | |
Total convertible preferred stock | $ 12,876 |
Series A Preferred Stock [Member] | |
Cumulative Convertible Preferred Stock [Line Items] | |
Total convertible preferred stock | 1,455 |
Series B Preferred Stock [Member] | |
Cumulative Convertible Preferred Stock [Line Items] | |
Total convertible preferred stock | 518 |
Series D Preferred Stock [Member] | |
Cumulative Convertible Preferred Stock [Line Items] | |
Total convertible preferred stock | 7,502 |
Series E Preferred Stock [Member] | |
Cumulative Convertible Preferred Stock [Line Items] | |
Total convertible preferred stock | $ 3,401 |
Stockholders' Equity (Parenthet
Stockholders' Equity (Parenthetical) - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Cumulative Convertible Preferred Stock [Line Items] | ||||
Par value of preferred stock (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Shares designated | 10,000,000 | 10,000,000 | 10,000,000 | |
Shares issued | 1,547,845 | 1,547,845 | 1,547,845 | |
Shares outstanding | 1,547,845 | 1,547,845 | 1,547,845 | |
Preferred Stock, Liquidation preference (in dollars) | $ 14,181 | $ 14,181 | $ 13,640 | |
Cumulative preferred dividends | 2,349 | 2,349 | $ 2,295 | |
Series D Preferred Stock [Member] | ||||
Cumulative Convertible Preferred Stock [Line Items] | ||||
Excludes accrued PIK dividends | 34,318 | 150,090 | ||
Series E Preferred Stock [Member] | ||||
Cumulative Convertible Preferred Stock [Line Items] | ||||
Excludes accrued PIK dividends | $ 16,065 | $ 69,738 | ||
Convertible Preferred stock [Member] | Series A Preferred Stock [Member] | ||||
Cumulative Convertible Preferred Stock [Line Items] | ||||
Par value of preferred stock (in dollars per share) | $ 0.001 | $ 0.001 | ||
Shares designated | 500,000 | 500,000 | ||
Shares issued | 269,608 | 269,608 | ||
Shares outstanding | 269,608 | 269,608 | ||
Cumulative preferred dividends | $ 480 | $ 480 | ||
Convertible Preferred stock [Member] | Series B Preferred Stock [Member] | ||||
Cumulative Convertible Preferred Stock [Line Items] | ||||
Par value of preferred stock (in dollars per share) | $ 0.001 | $ 0.001 | ||
Shares designated | 500,000 | 500,000 | ||
Shares issued | 131,347 | 131,347 | ||
Shares outstanding | 131,347 | 131,347 | ||
Cumulative preferred dividends | $ 138 | $ 138 | ||
Convertible Preferred stock [Member] | Series D Preferred Stock [Member] | ||||
Cumulative Convertible Preferred Stock [Line Items] | ||||
Par value of preferred stock (in dollars per share) | $ 0.001 | $ 0.001 | ||
Shares designated | 4,000,000 | 4,000,000 | ||
Shares issued | 730,357 | 730,357 | ||
Shares outstanding | 730,357 | 730,357 | ||
Cumulative preferred dividends | $ 1,621 | $ 1,621 | ||
Preferred stock, issuance costs | 1,374 | $ 1,374 | ||
Excludes accrued PIK dividends | $ 445 | $ 445 | ||
Convertible Preferred stock [Member] | Series E Preferred Stock [Member] | ||||
Cumulative Convertible Preferred Stock [Line Items] | ||||
Par value of preferred stock (in dollars per share) | $ 0.001 | $ 0.001 | ||
Shares designated | 2,000,000 | 2,000,000 | ||
Shares issued | 416,533 | 416,533 | ||
Shares outstanding | 416,533 | 416,533 | ||
Cumulative preferred dividends | $ 110 | $ 110 | ||
Preferred stock, issuance costs | 875 | $ 875 | ||
Excludes accrued PIK dividends | $ 295 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - Jun. 30, 2015 - Warrants [Member] - USD ($) | Total | |
Class of Warrant or Right [Line Items] | ||
Outstanding common stock warrants, total warrants outstanding and exercisable | $ 3,278,600 | |
Outstanding common stock warrants total exercise price | $ 2,102,720 | |
Outstanding common stock warrants weighted average exercise price | $ 0.64 | |
Placement Agent Preferred Stock Class D [Member] | ||
Class of Warrant or Right [Line Items] | ||
Outstanding common stock warrants, date issued | 2012 December | |
Outstanding common stock warrants expiration date | 2017 December | |
Outstanding common stock warrants strike price | $ 1.10 | |
Outstanding common stock warrants, total warrants outstanding and exercisable | $ 704,200 | |
Outstanding common stock warrants total exercise price | $ 774,620 | |
Common Stock Investor Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Outstanding common stock warrants, date issued | [1] | 2013 August |
Outstanding common stock warrants expiration date | [1] | 2018 August |
Outstanding common stock warrants strike price | [1] | $ 0.50 |
Outstanding common stock warrants, total warrants outstanding and exercisable | [1] | $ 1,463,667 |
Outstanding common stock warrants total exercise price | [1] | $ 731,834 |
Placement Agent Warrants - Common Stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Outstanding common stock warrants, date issued | [1] | 2013 August |
Outstanding common stock warrants expiration date | [1] | 2018 August |
Outstanding common stock warrants strike price | [1] | $ 0.50 |
Outstanding common stock warrants, total warrants outstanding and exercisable | [1] | $ 292,733 |
Outstanding common stock warrants total exercise price | [1] | $ 146,367 |
Placement Agent Preferred Stock - Class E [Member] | ||
Class of Warrant or Right [Line Items] | ||
Outstanding common stock warrants, date issued | 2013 November | |
Outstanding common stock warrants expiration date | 2018 November | |
Outstanding common stock warrants strike price | $ 0.55 | |
Outstanding common stock warrants, total warrants outstanding and exercisable | $ 818,000 | |
Outstanding common stock warrants total exercise price | $ 449,900 | |
[1] | warrants classified as liabilities |
Stockholders' Equity (Detail Te
Stockholders' Equity (Detail Textuals) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' Equity (Textual) | ||
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) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 1,547,845 | 1,547,845 |
Preferred stock, shares outstanding | 1,547,845 | 1,547,845 |
Preferred Stock [Member] | Series A Preferred Stock [Member] | ||
Stockholders' Equity (Textual) | ||
Preferred stock, shares authorized | 500,000 | |
Preferred stock, shares issued | 269,608 | |
Preferred stock, shares outstanding | 269,608 | |
Preferred Stock [Member] | Series B Preferred Stock [Member] | ||
Stockholders' Equity (Textual) | ||
Preferred stock, shares authorized | 500,000 | |
Preferred stock, shares issued | 131,347 | |
Preferred stock, shares outstanding | 131,347 | |
Preferred Stock [Member] | Series D Preferred Stock [Member] | ||
Stockholders' Equity (Textual) | ||
Preferred stock, shares authorized | 4,000,000 | |
Preferred stock, shares issued | 730,357 | |
Preferred stock, shares outstanding | 730,357 | |
Preferred Stock [Member] | Series E Preferred Stock [Member] | ||
Stockholders' Equity (Textual) | ||
Preferred stock, shares authorized | 2,000,000 | |
Preferred stock, shares issued | 416,533 | |
Preferred stock, shares outstanding | 416,533 |
Stockholders' Equity (Detail 51
Stockholders' Equity (Detail Textuals 1) - USD ($) | Apr. 30, 2014 | Nov. 30, 2013 | Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Nov. 12, 2013 |
Stockholders' Equity (Textual) | |||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Series C Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Preferred stock, shares authorized | 5,000,000 | ||||||
Series D Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Excludes accrued PIK dividends | $ 34,318,000 | $ 150,090,000 | |||||
Series E Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Conversion price per share | $ 0.50 | ||||||
Number of common stock called for warrants | 818,000 | ||||||
Exercise price of warrants | $ 0.55 | ||||||
Estimated fair value of warrants | $ 278,000 | ||||||
Stock price | $ 0.47 | ||||||
Expected term | 2 years 6 months | ||||||
Risk-free interest rate | 0.44% | ||||||
Expected volatility | 143.00% | ||||||
Dividend yield | 0.00% | ||||||
Excludes accrued PIK dividends | $ 16,065,000 | $ 69,738,000 | |||||
Convertible Preferred stock [Member] | Series A Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Stated value of the Preferred per share | $ 4 | $ 4 | |||||
Dividend Rate | 8.00% | ||||||
Conversion price per share | $ 4 | $ 4 | |||||
Preferred stock, shares authorized | 500,000 | 500,000 | |||||
Convertible Preferred stock [Member] | Series B Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Stated value of the Preferred per share | $ 3.20 | $ 3.20 | |||||
Dividend Rate | 8.00% | ||||||
Conversion price per share | $ 3.20 | $ 3.20 | |||||
Preferred stock, shares authorized | 500,000 | 500,000 | |||||
Convertible Preferred stock [Member] | Series D Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Stated value of the Preferred per share | $ 10 | $ 10 | |||||
Dividend Rate | 8.00% | ||||||
Conversion price per share | $ 1 | $ 1 | |||||
Preferred stock, shares authorized | 4,000,000 | 4,000,000 | |||||
Reduced conversion price per share | $ 0.90 | $ 0.90 | |||||
Preferred stock dividend payment rate | 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. | ||||||
Minimum closing price of common stock | $ 2 | ||||||
Minimum average daily trading volume | 5,000 | ||||||
Redemption purchase price per share | $ 10 | $ 10 | |||||
Contingent beneficial conversion feature recorded as conversion price | $ 1,300,000 | ||||||
Dividend payable, Shares | 26,157 | ||||||
Dividend payable estimated fair value | $ 445,000 | $ 445,000 | |||||
Excludes accrued PIK dividends | $ 445,000 | $ 445,000 | |||||
Convertible Preferred stock [Member] | Series D Preferred Stock [Member] | Minimum [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Reduced conversion price per share | $ 0.71 | $ 0.71 | |||||
Redemption purchase price per share | 10 | $ 10 | |||||
Convertible Preferred stock [Member] | Series D Preferred Stock [Member] | After the date of issue [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Dividend Rate | 12.00% | ||||||
Convertible Preferred stock [Member] | Series E Preferred Stock [Member] | |||||||
Stockholders' Equity (Textual) | |||||||
Stated value of the Preferred per share | 10 | $ 10 | |||||
Conversion price per share | $ 0.50 | $ 0.50 | |||||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |||||
Preferred stock dividend payment rate | 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. | ||||||
Liquidation price per share | $ 10 | $ 10 | |||||
Minimum closing price of common stock | $ 1.35 | ||||||
Minimum average daily trading volume | 10,000 | ||||||
Dividend payable, Shares | 7,533 | ||||||
Dividend payable estimated fair value | $ 295,000 | $ 295,000 | |||||
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 | ||||||
Excludes accrued PIK dividends | $ 295,000 |
Esop Plan (Detail Textuals)
Esop Plan (Detail Textuals) - Jun. 30, 2015 - Employee Stock Ownership Plan (the "ESOP") [Member] - USD ($) | Total |
Esop Plan (Textual) | |
Contribution expense | $ 89,000 |
ESOP principal payment | 76,000 |
ESOP interest expenses | 13,000 |
ESOP compensation expenses | $ 32,000 |
Fair value of the shares | $ 0.30 |
Stock Option Plan (Details)
Stock Option Plan (Details) - Jun. 30, 2015 - 2010 Stock Option Plan (the "Plan") [Member] - USD ($) None in scaling factor is -9223372036854775296 | Total |
Options Available for Grant | |
Options Available for Grant, December 31, 2014 | 2,114,106 |
Options Available for Grant, Granted | (239,148) |
Options Available for Grant, Exercised | |
Options Available for Grant, Forfeited | |
Options Available for Grant, June 30, 2015 | 1,874,958 |
Options Outstanding | |
Options Outstanding, December 31, 2014 | 1,385,894 |
Options Outstanding, Exercised | |
Options Outstanding, Forfeited | |
Options Outstanding, June 30, 2015 | 1,625,042 |
Exercisable options at June 30, 2015 | 1,028,511 |
Weighted- Average Exercise Price | |
Weighted - Average Exercise Price, December 31, 2014 | $ 0.56 |
Weighted - Average Exercise Price, Granted | $ 0.50 |
Weighted - Average Exercise Price, Exercised | |
Weighted - Average Exercise Price, Forfeited | |
Weighted - Average Exercise Price, June 30, 2015 | $ 0.55 |
Weighted Average Exercise Price, Exercisable options at June 30, 2015 | $ 0.68 |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value, December 31, 2014 | |
Aggregate Intrinsic Value, Granted | |
Aggregate Intrinsic Value, Exercised | |
Aggregate Intrinsic Value, Forfeited | |
Aggregate Intrinsic Value, June 30, 2015 | |
Aggregate Intrinsic Value, Exercisable options at June 30, 2015 |
Stock Option Plan (Details 1)
Stock Option Plan (Details 1) - 2010 Stock Option Plan (the "Plan") [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options Outstanding | 1,625,042 | 1,385,894 |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | 2 years 11 months 19 days | |
Options Outstanding Weighted Average Exercise Price | $ 0.55 | $ 0.56 |
Number of Options Exercisable | 1,028,511 | |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | 2 years 2 months 23 days | |
Options Exercisable Weighted Average Exercise Price | $ 0.68 | |
Exercise Price $ 0.31 - $0.53 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Minimum Range of Exercise Prices | 0.31 | |
Maximum Range of Exercise Prices | $ 0.53 | |
Number of Options Outstanding | 1,481,889 | |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | 2 years 11 months 12 days | |
Options Outstanding Weighted Average Exercise Price | $ 0.41 | |
Number of Options Exercisable | 890,889 | |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | 2 years 1 month 2 days | |
Options Exercisable Weighted Average Exercise Price | $ 0.47 | |
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 | 88,874 | |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | 1 year 6 months 4 days | |
Options Outstanding Weighted Average Exercise Price | $ 1.90 | |
Number of Options Exercisable | 88,874 | |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | 1 year 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 | 54,279 | |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | 5 years 11 months 16 days | |
Options Outstanding Weighted Average Exercise Price | $ 2.17 | |
Number of Options Exercisable | 48,748 | |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | 5 years 11 months 16 days | |
Options Exercisable Weighted Average Exercise Price | $ 2.17 |
Stock Option Plan (Details 2)
Stock Option Plan (Details 2) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock Option Plan [Abstract] | ||||
Expected term | 1 year 6 months | 1 year 6 months | 1 year 6 months | 1 year 6 months |
Expected volatility | 197.20% | 129.50% | 176.90% | 143.49% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate | 0.46% | 0.29% | 0.44% | 0.27% |
Stock Option Plan (Detail Textu
Stock Option Plan (Detail Textuals) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stock Option Plan (Textual) | ||||
Term of stock option granted | 1 year 6 months | 1 year 6 months | 1 year 6 months | 1 year 6 months |
Total fair value of stock option awards vested | $ 47,000 | $ 52,000 | ||
Fair value of options granted to employees | $ 21,000 | $ 19,000 | 39,000 | 58,000 |
Employee stock-based compensation cost | 37,000 | $ 40,000 | 70,000 | $ 50,000 |
Unrecognized estimated employee compensation cost | $ 132,000 | $ 132,000 | ||
Weighted-average vesting period, expected to be recognized | 2 years 3 months 18 days | |||
Weighted-average fair value on the grant date of options granted | $ 0.16 | $ 0.31 | ||
2010 Stock Option Plan (the "Plan") [Member] | ||||
Stock Option Plan (Textual) | ||||
Number of common stock, shares authorized | 1,000,000 | 1,000,000 | ||
Term of stock option granted | 10 years | |||
Percentage of exercise price to market value of common stock | 100.00% | 100.00% | ||
Vested period of stock option | 5 years | |||
Percentage of voting power of common stock | 10.00% | 10.00% | ||
Maximum percentage of fair market of a share of common stock | 110.00% | 110.00% | ||
2014 Stock Option Plan (the "Plan") [Member] | ||||
Stock Option Plan (Textual) | ||||
Number of common stock, shares authorized | 2,500,000 | 2,500,000 | ||
Stock option granted | 239,148 | |||
Term of stock option granted | 10 years | |||
Percentage of exercise price to market value of common stock | 100.00% | 100.00% | ||
Vested period of stock option | 5 years | |||
Percentage of voting power of common stock | 10.00% | 10.00% | ||
Maximum percentage of fair market of a share of common stock | 110.00% | 110.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Textuals) | 6 Months Ended | |||
Jun. 30, 2015USD ($) | Jun. 30, 2015CAD | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies (Textual) | ||||
Rental expense | $ 259,000 | $ 263,000 | ||
Acquire business, percentage of owner Mr.Toms | 10.00% | |||
Potential obligation related to acquire business of Mr. Toms | $ 175,000 | |||
Accrued expenses | 2,083,000 | $ 2,028,000 | ||
Rent obligations including interest | 72,000 | |||
Mr. Toms [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Accrued expenses | 125,000 | |||
Escrow payment | 50,000 | |||
Apex [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Fair value of bonus to be paid to CEO | 153,000 | CAD 160,000 | ||
Fair value of bonus to be paid to CEO, Accrued bonus | $ 0 | CAD 0 |