Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2013 | Feb. 13, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Digital Cinema Destinations Corp. | ' |
Entity Central Index Key | '0001510326 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Dec-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 7,083,528 |
Document Fiscal Period Focus | 'Q2 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $6,992 | $3,607 |
Accounts receivable | 740 | 697 |
Inventories | 148 | 191 |
Deferred financing costs, current portion | 357 | 357 |
Prepaid expenses and other current assets | 1,295 | 1,444 |
Total current assets | 9,532 | 6,296 |
Property and equipment, net | 29,666 | 29,171 |
Goodwill | 3,502 | 3,156 |
Intangible assets, net | 7,012 | 6,186 |
Security deposit | 209 | 205 |
Deferred financing costs, long term portion, net | 1,052 | 1,225 |
Other assets | 107 | 9 |
TOTAL ASSETS | 51,080 | 46,248 |
LIABILITIES AND EQUITY | ' | ' |
Accounts payable | 1,985 | 2,478 |
Accrued expenses and other current liabilities | 3,658 | 3,964 |
Notes payable, current portion | 1,716 | 1,373 |
Capital lease, current portion | 162 | 121 |
Earn out from theater acquisitions | 350 | 296 |
Deferred revenue | 767 | 305 |
Total current liabilities | 8,638 | 8,537 |
Notes payable, long term portion | 8,048 | 8,615 |
Capital lease, net of current portion | 470 | 239 |
Unfavorable leasehold liability, long term portion | 141 | 159 |
Deferred rent expense | 617 | 407 |
Deferred tax liability | 207 | 199 |
TOTAL LIABILITIES | 18,121 | 18,156 |
COMMITMENTS AND CONTINGENCIES | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred Stock, $.01 par value, 10,000,000 shares authorized as of December 31, 2013 and June 30, 2013, 6 shares of Series B Preferred Stock issued and outstanding as of December 31, 2013 and June 30, 2013 , respectively | 0 | 0 |
Class A Common stock, $.01 par value: 20,000,000 shares authorized; and 7,035,058 and 5,511,938 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively | 70 | 55 |
Class B Common stock, $.01 par value, 900,000 shares authorized; 849,000 and 865,000 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively | 9 | 9 |
Additional paid-in capital | 32,959 | 25,816 |
Accumulated deficit | -9,121 | -7,049 |
TOTAL STOCKHOLDERS' EQUITY OF DIGITAL CINEMA DESTINATIONS CORP. | 23,197 | 18,831 |
Noncontrolling interest | 9,042 | 9,261 |
Total equity | 32,959 | 28,092 |
TOTAL LIABILITIES AND EQUITY | $51,080 | $46,248 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
Stockholders' Equity: | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, authorized shares | 10,000,000 | 10,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Commont Stock, par value Class A | $0.01 | $0.01 |
Common stock, authorized shares Class A | 20,000,000 | 20,000,000 |
Common stock, issued shares Class A | 7,035,058 | 5,511,938 |
Common stock, outstanding shares Class A | 7,035,058 | 5,511,938 |
Commont Stock, par value Class B | $0.01 | $0.01 |
Common stock, authorized shares Class B | 900,000 | 900,000 |
Common stock, issued shares Class B | 849,000 | 865,000 |
Common stock, outstanding shares Class B | 849,000 | 865,000 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
REVENUES | ' | ' | ' | ' |
Admissions | $7,590 | $4,752 | $15,347 | $7,761 |
Concessions | 3,166 | 1,929 | 6,504 | 3,128 |
Other | 440 | 189 | 814 | 327 |
Total revenues | 11,196 | 6,870 | 22,665 | 11,216 |
Cost of operations: | ' | ' | ' | ' |
Film rent expense | 3,936 | 2,401 | 7,714 | 3,813 |
Cost of concessions | 581 | 317 | 1,183 | 482 |
Salaries and wages | 1,297 | 710 | 2,747 | 1,224 |
Facility lease expense | 1,450 | 811 | 2,920 | 1,334 |
Utilities and other | 2,099 | 1,157 | 4,484 | 1,923 |
General and administrative | 1,348 | 1,208 | 2,666 | 1,946 |
Change in fair value of earnout | -5 | 0 | 54 | 0 |
Depreciation and amortization | 1,373 | 1,098 | 2,708 | 1,947 |
Total costs and expenses | 12,079 | 7,702 | 24,476 | 12,669 |
OPERATING LOSS | -883 | -832 | -1,811 | -1,453 |
OTHER EXPENSE | ' | ' | ' | ' |
Interest expense | -348 | -272 | -699 | -294 |
Non-cash interest expense | -76 | -75 | -152 | -78 |
Other expense | -40 | -8 | -47 | -8 |
LOSS BEFORE INCOME TAXES | -1,347 | -1,187 | -2,709 | -1,833 |
Income tax expense | 9 | 47 | 18 | 64 |
NET LOSS | -1,356 | -1,234 | -2,727 | -1,897 |
Net loss attributable to non-controlling interest | 331 | 93 | 655 | 93 |
Net loss attributable to Digital Cinema Destinations Corp. | -1,025 | -1,141 | -2,072 | -1,804 |
Preferred stock dividends | -5 | -5 | -10 | -6 |
Net loss attributable to common stockholders | ($1,030) | ($1,146) | ($2,082) | ($1,810) |
Net loss per Class A and Class B common share- basic and diluted attributable to common stockholders | ($0.14) | ($0.21) | ($0.30) | ($0.33) |
Weighted average common shares outstanding: | 7,565,123 | 5,511,765 | 7,014,926 | 5,465,356 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | ' | ' |
Net loss | ($2,727) | ($1,897) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 2,708 | 1,947 |
Deferred tax expense | 8 | 50 |
Change in fair value of earnout liability | 54 | 0 |
Stock-based compensation | 361 | 69 |
Amortization of deferred financing costs included in interest expense | 173 | 17 |
Amortization of unfavorable lease liability | -18 | -14 |
Paid-in-kind interest added to notes payable | 152 | 78 |
Earnings from investment in Diginext | -53 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -43 | -441 |
Inventories | 51 | -15 |
Prepaid expenses and other current assets | 162 | -100 |
Other assets and security deposits | -4 | -57 |
Accounts payable and accrued expenses | -1,293 | 1,734 |
Payable to vender for digital systems | 0 | -3,334 |
Deferred revenue | 462 | 482 |
Deferred rent expense | 210 | 90 |
Net cash provided by (used in) operating activities | 203 | -1,391 |
Investing activities: | ' | ' |
Purchases of property and equipment | -538 | -415 |
Capital contribution of Start Media, LLC to joint venture | 435 | 8,000 |
Investment in Diginext | -45 | -5 |
Theatre acquisitions | -1,229 | -14,122 |
Cash acquired in acquisition | 8 | 40 |
Net cash used in investing activities | -1,369 | -6,502 |
Financing activities: | ' | ' |
Repayment of notes payable | -554 | -1,006 |
Proceeds from notes payable | 0 | 10,000 |
Payment under capital lease obligations | -48 | -4 |
Payment of financing costs | 0 | -369 |
Proceeds from issuance of Class A common stock | 5,704 | 0 |
Proceeds from issuance of preferred stock | 0 | 450 |
Dividends paid on preferred stock | -10 | -6 |
Costs associated with issuance of stock | -541 | -80 |
Net cash provided by financing activities | 4,551 | 8,985 |
Net change in cash and cash equivalents | 3,385 | 1,092 |
Cash and cash equivalents, beginning of year | 3,607 | 2,037 |
Cash and cash equivalents, end of year | $6,992 | $3,129 |
1_THE_COMPANY_AND_BASIS_OF_PRE
1. THE COMPANY AND BASIS OF PRESENTATION | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
1. THE COMPANY AND BASIS OF PRESENTATION | ' |
Digital Cinema Destinations Corp. (“Digiplex”) and together with its subsidiaries (the “Company”) was incorporated in the State of Delaware on July 29, 2010. Digiplex is the parent of wholly owned subsidiaries, DC Westfield Cinema LLC, DC Cranford Cinema LLC, DC Bloomfield Cinema LLC, DC Cinema Centers LLC, and DC Lisbon Cinema LLC, and intends to acquire additional businesses operating in the theater exhibition industry sector. | |
In September 2012, the Company and Nehst Media Enterprises (“Nehst”) formed a joint venture called Diginext. Under the joint venture agreement, Digiplex and Nehst each have a 50% ownership interest. Nehst will supply Diginext with periodic movie content and the Company has the option to display such content at its locations on an exclusive basis, or may choose to allow non-Digiplex venues to also display the content. The Company pays film rent to Diginext as it would any other movie distributor, and any profits of Diginext, from theatrical revenues as well as net revenues from other ancillary sources will be shared equally by the owners. The Company and Nehst have each made capital contributions of $50 since inception, and the Company is using the equity method to account for its share of earnings from the joint venture. For the six months ended December 31, 2013, Digiplex’s share of net income was $53. The balance of the Company’s equity investment at December 31, 2013 is $107 and included in other assets. | |
On December 10, 2012, Digiplex, together with Start Media, LLC (“Start Media”), entered into a joint venture, Start Media/Digiplex, LLC (“JV”), a Delaware limited liability company, to acquire, refit and operate movie theaters. | |
On July 19, 2013, JV acquired a six screen movie theater in Torrington, Connecticut (“Torrington”). Torrington is operated by Digiplex under a management agreement with JV. See Note 3 and Note 4. | |
The Company has determined that JV is a variable interest entity (“VIE”), and that the Company is the primary beneficiary of JV’s operations. Therefore, the Company is presenting JV’s financial statements on a consolidated basis with a non-controlling interest. | |
On December 19, 2013, the Company acquired an eight screen movie theater in Mechanicsburg, Pa. (“Mechanicsburg”). The operating results of the Mechanicsburg acquisition are included in the Company’s consolidated results from the date of acquisition. See Note 3. | |
As of December 31, 2013, the Company operated 20 theaters having 192 screens (the “Theaters”). Although the Company has announced the signing of asset purchase agreements and/or leases for additional locations, all are subject to further diligence, financing and other closing conditions. Therefore, there can be no assurance that the Company will complete these planned transactions. | |
The accompanying unaudited condensed consolidated financial statements of the Company were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on 10-K for the fiscal year ended June 30, 2013 filed with the Securities and Exchange Commission (“ SEC”) on September 18, 2013 (the “Form 10-K”). In the opinion of management, all adjustments, consisting of a normal recurring nature, considered necessary for a fair presentation have been included in the unaudited condensed consolidated financial statements. The operating results for the interim period presented herein are not necessarily indicative of the results expected for the full year ending June 30, 2014. | |
The Company has incurred net losses since inception. The Company also has contractual obligations related to its debt as of December 31, 2013 and beyond. The Company expects to generate net losses for the foreseeable future. Based on the Company’s cash position at December 31, 2013, expected cash flows from operations, and the Company’s October 2013 issuance of Class A common stock for net proceeds of $5,200, management believes that the Company has the ability to meet its obligations through December 31, 2014. Failure to generate additional revenues, raise additional capital or manage discretionary spending could have an adverse effect on the Company’s financial position, results of operations or liquidity. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Notes to Financial Statements | ' | |||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||||
Principles of Consolidation | ||||||||
The unaudited condensed consolidated financial statements of the Company include the accounts of Digiplex and its wholly-owned subsidiaries, and the JV, which is a VIE. All intercompany accounts and transactions have been eliminated in consolidation. | ||||||||
Use of Estimates | ||||||||
The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, those related to film rent expense settlements, depreciation and amortization, impairments, income taxes and assumptions used in connection with acquisition accounting. Actual results could differ from those estimates. | ||||||||
Revenue Recognition | ||||||||
Revenues are generated principally through admissions on feature film displays and concessions sales, with proceeds received in cash or credit card at the Company’s point of sale terminals at the Theaters. Revenue is recognized at the point of sale. Credit card sales are normally settled in cash within approximately three business days from the point of sale, and any credit card chargebacks have been insignificant. Other revenue consists of theater rentals for parties, camps, civic groups and other activities, advertising revenue under our advertising contract and our portion of game income, ATM fees and internet ticketing fees. Rental revenue is recognized at the time of the rental. Advertising revenue is recorded based on an expected per-patron amount and the number of patrons over the contract period as the advertising is being delivered on screen. Other revenue items are recognized as earned in the period. In addition to traditional feature films, the Company also displays concerts, sporting events, children’s programming and other non-traditional content on its screens (such content referred to herein as “alternative content”). Revenue from alternative content programming also consists of admissions and concession sales. The Company also sells theater admissions in advance of the applicable event, and sells gift cards for patrons’ future use. The Company defers the revenue from such sales until considered redeemed. The Company estimates the gift card breakage rate based on historical redemption patterns. Unredeemed gift cards are recognized as revenue only after such a period of time indicates, based on historical attendance, the likelihood of redemption is remote, and based on applicable laws and regulations, in evaluating the likelihood of redemption, the period outstanding, the level and frequency of activity, and the period of inactivity is evaluated. | ||||||||
Rewards Club Program | ||||||||
In August 2013, the Digiplex Rewards Club was implemented, whereby members earn credits for each dollar spent at one of the Company's theaters and earn concession or ticket awards based on the number of credits accumulated. Because the Company believes that the value of the awards granted is insignificant in relation to the value of the transactions necessary to earn the award, the Company records the estimated cost of providing awards at the time the awards are earned. The Company’s costs of these awards are not significant for the six months ended December 31, 2013. The awards issued under the Digiplex Rewards Club expire 90 days after issuance. | ||||||||
Cash Equivalents | ||||||||
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At December 31, 2013 and June 30, 2013, the Company held substantially all of its cash in bank accounts with major financial institutions, and had cash on hand at the Theaters in the normal course of business. | ||||||||
Accounts receivable | ||||||||
Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company reports accounts receivable net of any allowance for doubtful accounts to represent management’s estimate of the amount that ultimately will be realized in cash. The Company reviews collectability of accounts receivable based on the aging of the accounts and historical collection trends. When the Company ultimately concludes a receivable is uncollectible, the balance is written off. The Company has determined that an allowance for doubtful accounts is not necessary at December 31, 2013 and June 30, 2013. | ||||||||
Inventories | ||||||||
Inventories consist of food and beverage concession products and related supplies. The Company states inventories on the basis of the first-in, first-out method, stated at the lower of cost or market. | ||||||||
Property and Equipment | ||||||||
Property and equipment are stated at cost. Major renewals and improvements are capitalized, while maintenance and repairs that do not improve or extend the lives of the respective assets are expensed currently. | ||||||||
The Company records depreciation and amortization using the straight-line method, over the following estimated useful lives: | ||||||||
Furniture and fixtures | 5 years | |||||||
Leasehold improvements | Lesser of lease term or estimated asset life | |||||||
Building and improvements | 17 years | |||||||
Digital systems and related equipment | 10 years | |||||||
Equipment and computer software | 3 - 5 years | |||||||
Goodwill | ||||||||
The carrying amount of goodwill at December 31, 2013 and June 30, 2013 was $3,502 and $3,156, respectively. The Company evaluates goodwill for impairment annually or more frequently as specific events or circumstances dictate. Under ASC Subtopic 350-20, Intangibles — Goodwill and Other — | ||||||||
Goodwill, the Company has identified its reporting units to be the regions in which the Company conducts its theater operations. | ||||||||
The Company determines fair value by using an enterprise valuation methodology weighing the income approach and market approach by applying multiples to cash flow estimates less any net indebtedness, which the Company believes is an appropriate method to determine fair value. There is considerable management judgment with respect to future cash flow estimates and appropriate multiples and discount rates to be used in determining fair value and such management estimates fall under Level 3 within the fair value measurement hierarchy. | ||||||||
The changes in carrying amounts of goodwill are as follows: | ||||||||
Total | ||||||||
Balance as of June 30, 2013 | $3,156 | |||||||
Goodwill resulting from the Mechanicsburg acquisition | 346 | |||||||
Balance as of December 31, 2013 | $3,502 | |||||||
Concentration of Credit Risk | ||||||||
Financial instruments that could potentially subject the Company to concentration of credit risk, if held, would be included in accounts receivable. Collateral is not required on trade accounts receivables. It is anticipated that in the event of default, normal collection procedures would be followed. | ||||||||
Fair Value of Measurements | ||||||||
The fair value measurement disclosures are grouped into three levels based on valuation factors: | ||||||||
• | Level 1 – quoted prices in active markets for identical investments | |||||||
• | Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) | |||||||
• | Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) | |||||||
Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. | ||||||||
The following tables summarize the levels of fair value measurements of the Company’s financial liabilities as of December 31, 2013 and June 30, 2013: | ||||||||
As of December 31, 2013: | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Earnout from theater acquisitions | - | - | 350 | 350 | ||||
$ - | $ - | $ 350 | $ 350 | |||||
As of June 30, 2013: | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Earnout from theater acquisitions | - | - | 296 | 296 | ||||
$ - | $ - | $ 296 | $ 296 | |||||
Earnout from acquisitions is a liability to the seller of the Lisbon theater and is based upon meeting certain financial performance targets. Estimates of the fair values of the earnout was estimated by a forecast of | ||||||||
theater level cash flow, as defined by the asset purchase agreement. That measure is based on significant inputs that are not observable in the market, which are considered Level 3 inputs. | ||||||||
The following summarized changes in the earnout during the six months ended December 31, 2013: | ||||||||
Total | ||||||||
Balance as of June 30, 2013 | $ 296 | |||||||
Change in fair value of earnout liability for Lisbon acquisition | 54 | |||||||
Balance as of December 31, 2013 | $ 350 | |||||||
Key assumptions underlying the initial Lisbon earnout estimate include a discount rate of 12.5 percent and that Lisbon will achieve its forecasted financial performance target in the one year earnout period ended September 28, 2013. As of December 31, 2013, the Company increased the Lisbon earnout from $296 to $350 based on actual results compared to the threshold in the asset purchase agreement and the final payment. A fair value change of ($5) and $54 for the three and six months ended December 31, 2013 was recognized. The earnout of $350 was paid to the seller in February 2014. | ||||||||
Fair Value of Financial Instruments | ||||||||
The carrying amounts of cash, cash equivalents, accounts receivable, accounts payable and accrued expenses, and note payable approximate their fair values, due to their short term nature. | ||||||||
Deferred Rent Expense | ||||||||
The Company recognizes rent expense on a straight-line basis, after considering the effect of rent escalation provisions resulting in a level monthly rent expense for each lease over its term. | ||||||||
Deferred Financing Costs | ||||||||
Deferred financing costs primarily consist of unamortized debt issuance costs for the note payable, unamortized financing costs related to the formation of JV, and the fair value of warrants issued to Start Media, which are amortized on a straight-line basis over the respective terms. The straight-line basis is not materially different from the effective interest method. | ||||||||
Film Rent Expense | ||||||||
The Company estimates film rent expense and related film rent payable based on management’s best estimate of the ultimate settlement of the film costs with the film distributors. Generally, less than one-quarter of film rent expense is estimated at period-end, with the majority being agreed to under firm terms. The length of time until these costs are known with certainty depends on the ultimate duration of the film’s theatrical run, but is typically “settled” within one to two months of a particular film’s opening release. Upon settlement with the film distributors, film rent expense and the related film rent payable is adjusted to the final film settlement. | ||||||||
The film rent expense on the unaudited condensed consolidated statement of operations of the Company for the three months ended December 31, 2013 and 2012 was reduced by virtual print fees (“VPFs”) of $291 and $259, respectively under a master license agreement exhibitor-buyer arrangement with a third party vendor. VPFs for the six months ended December 31, 2013 and 2012 were $582 and $504, respectively. VPFs represent a reduction in film rent paid to film distributors. Pursuant to this master license agreement, the Company will purchase and own digital projection equipment and the third party vendor, through its agreements with film distributors, will collect and remit VPFs to the Company, net of a 10% administrative fee. VPFs are generated based on initial display of titles on the digital projection equipment. | ||||||||
Stock-Based Compensation | ||||||||
The Company recognizes stock-based compensation expense to employees based on the fair value of the award at the grant date with expense recognized over the service period, or vesting period, using the straight-line recognition method of awards subject to graded vesting. | ||||||||
The Company uses the Black-Scholes valuation model to determine the fair value of warrants. The fair value of the restricted stock awards is determined by the stock fair market value on the award date. The Company recognizes an estimate for forfeitures of unvested awards. These estimates are adjusted as actual forfeitures differ from the estimate. | ||||||||
The Company also issues common stock to non-employees in exchange for services. The Company measures and records stock-based compensation at fair value at the earlier of the date the performance commitment is reached or when the performance is complete. The expense recognized is based on the closing stock price of the Company’s stock issued. | ||||||||
Reclassification | ||||||||
Certain reclassifications have been made to the fiscal period ended December 31, 2012 financial statements to conform to the current fiscal period ended December 31, 2013 presentation. | ||||||||
Segments | ||||||||
As of December 31, 2013, the Company managed its business under one reportable segment: theater exhibition operations. All Company operations are located in the United States. |
3_ACQUISITIONS
3. ACQUISITIONS | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
3. ACQUISITIONS | ' | ||||||||||||||||
On December 19, 2013, the Company acquired an eight screen movie theater in Mechanicsburg, Pennsylvania. The provisional purchase price totals $2,756 (assets acquired of $3,076, less an assumed capital lease payable of $320), consisting of $1,258 in cash, and 300,390 shares of the Company’s Class A common stock valued at $1,498, (based on the trading price of $5.54 on the closing date, less a ten percent discount for trading restrictions placed on the stock). On the acquisition date, the Company paid $1,008 in cash and issued 251,850 shares of the Company's Class A common stock. Upon the completion of the Churchville acquisition which the Company has contracted to purchase and is owned by an affiliate of the same seller, the Company will pay the remaining $250 of cash and issue the remaining 48,540 shares of Class A common stock for the Mechanicsburg location. If the Churchville acquisition does not close by March 14, 2014, the Company will not be required to pay and issue these amounts and the purchase price will be adjusted accordingly. The purchase price was provisionally allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The provisional allocation of the provisional purchase price is based on management’s judgment after evaluating several factors, using assumptions for the income and royalty rate approaches and the discounted earnings approach, and projections determined by Company management. The Company is in the process of finalizing the fair values of the assets acquired and liabilities assumed, including evaluation of the operating lease. The Company incurred approximately $20 in acquisition costs which was expensed and included in general and administrative expenses in the unaudited condensed consolidated statement of operations for the six months ended December 31, 2013. | |||||||||||||||||
The provisional allocation of the purchase price for the Mechanicsburg theater was as follows: | |||||||||||||||||
Mechanicsburg | |||||||||||||||||
Theater | |||||||||||||||||
ASSETS | |||||||||||||||||
Cash | $ 4 | ||||||||||||||||
Inventory | 4 | ||||||||||||||||
Property and equipment | 1,313 | ||||||||||||||||
Favorable leasehold interest | 937 | ||||||||||||||||
Covenants not to compete | 472 | ||||||||||||||||
Goodwill | 346 | ||||||||||||||||
Total assets acquired | 3,076 | ||||||||||||||||
LIABILITIES AND OTHER | |||||||||||||||||
Consideration to be paid for theater acquisition | 492 | ||||||||||||||||
Capital lease liability assumed | 320 | ||||||||||||||||
Issuance of Class A common stock | 1256 | ||||||||||||||||
Total purchase price paid in cash | $ 1,008 | ||||||||||||||||
On July 19, 2013, JV acquired a six screen movie theater in Torrington, Connecticut. The purchase price totals $612 (assets acquired of $790, less an assumed promissory note of $178), consisting of $221 in cash, and 73,770 shares of the Company’s Class A common stock valued at $391, (based on the trading price of $5.89 on the closing date, less a ten percent discount for trading restrictions placed on the stock). Accordingly, the purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The allocation of the purchase price is based | |||||||||||||||||
on management’s judgment after evaluating several factors, using assumptions for the income and royalty rate approaches and the discounted earnings approach, and projections determined by Company management. The Company incurred approximately $4 in acquisition costs which was expensed and included in general and administrative expenses in the unaudited condensed consolidated statement of operations for the six months ended December 31, 2013. The Company finalized the Torrington purchase price allocation as of December 31, 2013. | |||||||||||||||||
The allocation of the purchase price for the Torrington theater was as follows: | |||||||||||||||||
Torrington | |||||||||||||||||
Theater | |||||||||||||||||
ASSETS | |||||||||||||||||
Cash | $ 4 | ||||||||||||||||
Prepaid expenses | 13 | ||||||||||||||||
Inventory | 4 | ||||||||||||||||
Property and equipment | 385 | ||||||||||||||||
Favorable leasehold interest | 299 | ||||||||||||||||
Covenants not to compete | 85 | ||||||||||||||||
Total assets acquired | 790 | ||||||||||||||||
LIABILITIES AND OTHER | |||||||||||||||||
Notes payable assumed | 178 | ||||||||||||||||
Issuance of Class A common stock | 391 | ||||||||||||||||
Total purchase price paid in cash | $ 221 | ||||||||||||||||
The results of operations of Mechanicsburg and Torrington are included in the unaudited condensed consolidated statement of operations from their respective acquisition dates. The following are the unaudited pro forma results of operations of the Company for the three and six months ended December 31, 2013 and 2012, respectively, as if the acquisitions were completed on July 1, 2012. | |||||||||||||||||
These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations. | |||||||||||||||||
Three Months ended December 31, | Six Months ended December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | $ | 11,607 | $ | 7,668 | $ | 23,800 | $ | 12,812 | |||||||||
Net loss | (1,398 | ) | $ | (1,304 | ) | (2,810 | ) | $ | (1,978 | ) |
4_START_MEDIA_DIGIPLEX_JOINT_V
4. START MEDIA/ DIGIPLEX JOINT VENTURE | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
4. START MEDIA/ DIGIPLEX JOINT VENTURE | ' |
As of June 30, 2013, Digiplex contributed 887,623 shares of Class A Common Stock to the JV, and Start Media contributed $10,000 in cash. In July 2013, Start Media contributed $300 in cash and Digiplex contributed 73,770 shares of the Company’s Class A common stock valued at $391, to fund the Torrington acquisition, and both Start Media’s and Digiplex’s interest in the JV was adjusted accordingly. In November 2013, Start Media and Digiplex contributed $135 and $100 in cash, respectively. JV is managed by a four person board of managers, two of whom Digiplex designates and two of whom are designated by Start Media. Majority vote is required for JV actions. At December 31, 2013, Digiplex and Start Media owned 34% and 66% of the equity of JV, respectively. | |
JV has a first right of refusal to acquire any theaters which the Company wishes to acquire, except for any theaters within a ten mile radius of existing Digiplex owned theaters. If JV does not exercise its right of first refusal, the Company has the right to make the acquisition independently. The right of first refusal does not apply to or restrict the Company’s ability to manage theaters owned by unaffiliated third-parties. | |
Digiplex has entered into agreements with JV (the “Management Agreements") to manage the theaters it acquires and receives 5% of the total revenue of the JV theaters’ operations annually as management fees. | |
Management fees earned by Digiplex for the three months ended December 31, 2013 and 2012 were $275 and $52, respectively. Management fees earned by Digiplex for the six months ended December 31, 2013 and 2012 were $560 and $52, respectively. JV records these fees as general and administrative expenses, and Digiplex records an offset to general and administrative expenses. These fees are eliminated in consolidation. | |
Under the Management Agreements, Digiplex has full day-to-day authority to operate the theaters owned by JV including: staffing, banking, content selection, vendor selection and all purchasing decisions. Digiplex is required to submit an annual operating budget to JV for each fiscal year ending June 30 for approval by the JV board of managers. In the event of any disagreements regarding the budget, there are dispute resolution procedures contained in the operating agreement (“JV Operating Agreement”). | |
Digiplex’s and Start Media’s respective percentage ownerships in JV will depend upon their respective aggregate capital contributions, in each case denominated in units of membership interests. Start Media has committed to contribute up to $20,000 to JV, inclusive of approximately $10,435 of capital contributions, for theater acquisitions and budgeted expenses. Start Media will receive additional membership units in consideration for capital contributions in excess of its initial contribution as additional capital is required, based on the fair market value of JV determined under a formula set forth in the JV Operating Agreement (the “Formula”). Digiplex has a right, but not the obligation, to contribute additional capital to JV, which under certain circumstances may be made by the issuance and delivery of shares of Digiplex’s Class A common stock to sellers of theaters acquired by JV, and thereby acquire additional membership units based on the Formula, provided that our percentage interest does not exceed 50% as the result of our acquisition of additional units. While Start Media has the right to participate in future theater acquisitions, it is not obligated to do so. | |
Distributions of JV cash flow from operations will be made to the members at such time as determined by the JV board of managers. Start Media is entitled to a 6% preferred return on its capital contributions made to date, after which Digiplex receives a 6% preferred return on its capital contributions. Thereafter, distributions of cash flow from operations will be made pro rata in accordance with the respective membership units of the members. In the case of liquidating distributions, Start Media will receive a 6% preferred return on and the return of its capital contributions prior to the Company’s receipt of a 6% | |
preferred return on and the return of the Company’s capital contributions, with further distributions pro rata to the respective membership units of the members. | |
Digiplex and Start Media have agreed not to transfer their membership interests, except for certain permitted transfers for a three-year period and any subsequent transfers of membership interests are subject to the right of JV and the other member to acquire the interests on such terms as a third party is willing to do so. In the event the Company experiences a change in control, as defined in the JV Operating Agreement, Start Media has a right to require the Company to acquire its membership interest in JV. | |
Digiplex is considered the primary beneficiary of the JV because it controls the operation of each JV owned theater on a day to day basis in all material respects, including: the selection of content, all staffing decisions, all cash management and paying vendors, financial reporting, obtaining all necessary permits, insurances, and to plan and perform capital improvements, to the extent such expenditures do not exceed certain levels as specified in the Management Agreements. Digiplex is also the guarantor of six of the ten leases entered into with third party landlords in the JV-owned theaters, and is using its brand name to promote the theaters. Because JV is a VIE, and Digiplex is deemed the primary beneficiary, the Company has consolidated the operations of JV. | |
Net loss attributable to the non-controlling interest on the statement of operations represents the portion of net loss attributable to the economic and legal interest in JV held by Start Media. |
5_ACCOUNTS_RECEIVABLE
5. ACCOUNTS RECEIVABLE | 6 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Notes to Financial Statements | ' | ||||||||||
5. ACCOUNTS RECEIVABLE | ' | ||||||||||
Accounts receivable consisted of the following: | |||||||||||
December 31, | June 30, | ||||||||||
2013 | 2013 | ||||||||||
VPFs | $ | 560 | $ | 470 | |||||||
Advertising | 149 | 180 | |||||||||
Other | 31 | 47 | |||||||||
Total | $ | 740 | $ | 697 |
6_PREPAID_EXPENSES_AND_OTHER_C
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6 Months Ended | |||
Dec. 31, 2013 | ||||
Notes to Financial Statements | ' | |||
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||
Prepaid expenses and other current assets consisted of the following: | ||||
December 31, | June 30, | |||
2013 | 2013 | |||
Insurance | $ 126 | $ 215 | ||
Projector and other equipment maintenance | 238 | 246 | ||
Real estate taxes | 71 | 82 | ||
Note receivable (1) | 74 | 89 | ||
Due from former theater owners (1) | 293 | 299 | ||
Due from Start Media | 225 | 290 | ||
Other theater operating | 114 | 84 | ||
Other expenses | 154 | 139 | ||
Total | $ 1,295 | $ 1,444 | ||
(1) The note receivable of $74 and $55 of the due from theater owner was from the former owner of the Lisbon theater, and was paid in February 2014 in connection with the finalization of the Lisbon earnout. |
7_PROPERTY_AND_EQUIPMENT
7. PROPERTY AND EQUIPMENT | 6 Months Ended | |||
Dec. 31, 2013 | ||||
Notes to Financial Statements | ' | |||
7. PROPERTY AND EQUIPMENT | ' | |||
Property and equipment, net was comprised of the following: | ||||
December 31, | June 30, | |||
2013 | 2013 | |||
Furniture and fixtures | $ 5,556 | $ 4,931 | ||
Leasehold improvements | 13,427 | 12,820 | ||
Building and improvements | 4,636 | 4,627 | ||
Digital systems and related equipment | 6,619 | 6,071 | ||
Equipment and computer software | 4,423 | 3,976 | ||
34,661 | 32,425 | |||
Less: accumulated depreciation and amortization | (4,995) | (3,254) | ||
Total property and equipment, net | $ 29,666 | $ 29,171 |
8_INTANGIBLE_ASSETS
8. INTANGIBLE ASSETS | 6 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Notes to Financial Statements | ' | |||||||
8. INTANGIBLE ASSETS | ' | |||||||
Intangible assets, net consisted of the following as of December 31, 2013: | ||||||||
Gross | Useful | |||||||
Carrying | Accumulated | Net | Life | |||||
Amount | Amortization | Amount | (years) | |||||
Trade names | $ 3,016 | $ 1,768 | $ 1,248 | 5-Mar | ||||
Covenants not to compete | 2,463 | 798 | 1,665 | 3 | ||||
Favorable leasehold interest | 4,607 | 508 | 4,099 | Remaining lease term | ||||
$ 10,086 | $ 3,074 | $ 7,012 | ||||||
Intangible assets, net consisted of the following as of June 30, 2013: | ||||||||
Gross | Useful | |||||||
Carrying | Accumulated | Net | Life | |||||
Amount | Amortization | Amount | (years) | |||||
Trade names | $ 3,016 | $ 1,302 | $ 1,714 | 5-Mar | ||||
Covenants not to compete | 1,906 | 493 | 1,413 | 3 | ||||
Favorable leasehold interest | 3,371 | 312 | 3,059 | Remaining lease term | ||||
$ 8,293 | $ 2,107 | $ 6,186 | ||||||
The weighted average remaining useful life of the Company’s trade names, covenants not to compete, and favorable leasehold interests is 3.07 years, 2.28 years and 15.92 years, respectively, as of December 31, 2013. | ||||||||
Expected amortization of intangible assets over the next five fiscal years is as follows: | ||||||||
June 30, | Total | |||||||
2014 (remaining six months) | $ 1,127 | |||||||
2015 | 1,996 | |||||||
2016 | 923 | |||||||
2017 | 492 | |||||||
2018 | 393 | |||||||
2019 | 393 | |||||||
9_LEASES
9. LEASES | 6 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
9. LEASES | ' | ||||
The Company accounts for all of its facility leases as operating leases. Minimum lease payments under all non-cancelable operating leases with terms in excess of one year as of December 31, 2013, are summarized for the following fiscal years: | |||||
June 30, | Total | ||||
2014 (remaining six months) | $ 3,076 | ||||
2015 | 6,278 | ||||
2016 | 6,162 | ||||
2017 | 5,525 | ||||
2018 | 5,015 | ||||
2019 | 4,742 | ||||
Thereafter | 23,937 | ||||
Total | $ 54,735 | ||||
Certain of the Company’s Theater leases require the payment of percentage rent if certain revenue targets are exceeded. For the three months ended December 31, 2013 and 2012, the Company recorded $22 and $73, respectively, of percentage rent expense in the unaudited condensed consolidated statements of operations. The Company recorded $45 and $88 for the six months ended December 31, 2013 and 2012 respectively. | |||||
CAPITAL LEASES | |||||
The Company leases certain theater equipment under capital leases that expire to fiscal year 2018, with imputed interest rates of 5.0% to 8.0% per annum. Repayment of the capital lease obligation is based on a percentage of revenue generated from the usage of the underlying theater equipment. The assets are being amortized over the shorter of their lease terms or their estimated useful lives. The applicable amortization is included in depreciation and amortization expense in the accompanying unaudited condensed consolidated statement of operations. Amortization of assets under capital leases during the three months ended December 31, 2013 and 2012 was $28 and $5 respectively. Amortization of assets under capital leases during the six months ended December 31, 2013 and 2012 was $49 and $5 respectively. | |||||
The following is a summary of property held under capital leases included in property and equipment: | |||||
December 31, | June 30, | ||||
2013 | 2013 | ||||
Equipment | $ 729 | $ 409 | |||
Less: accumulated amortization | (103) | (54) | |||
Net | $ 626 | $ 355 | |||
Future maturities of capital lease payments as of December 31, 2013 for each of the lease lives and in the aggregate are: | |||||
December 31, | Total | ||||
2014 | $ 200 | ||||
2015 | 176 | ||||
2016 | 176 | ||||
2017 | 168 | ||||
2018 | - | ||||
Total minimum payments | 720 | ||||
Less: amount representing interest | (88) | ||||
Present value of minimum payments | 632 | ||||
Less: current portion | (162) | ||||
$ 470 |
10_COMMITMENTS_AND_CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
10. COMMITMENTS AND CONTINGENCIES | ' |
The Company believes that it is in substantial compliance with all relevant laws and regulations, and is not aware of any current, pending or threatened litigation that could materially impact the Company. | |
The Company has entered into employment contracts, to which we refer to as the “employment contracts”, with four of its current executive officers. Under the employment contracts, each executive officer is entitled to severance payments in connection with the termination of the executive officer’s employment by the Company “without cause”, by the executive officer for “good reason”, or as a result of a “change in control” of the Company (as such terms are defined in the employment contracts). Pursuant to the employment contracts, the maximum amount of payments and benefits in the aggregate, if such executives were terminated (in the event of a change of control) would be approximately $1,240. | |
A. Dale Mayo, the Company’s Chief Executive Officer (“CEO”), is entitled to additional compensation based on the amount of revenues the Company generates, as specified in his employment contract. For the three months ended December 31, 2013 and 2012, the Company recorded $65 and $60 of compensation expense under this arrangement. For the six months ended December 31, 2913 and 2012, the Company recorded $140 and $120 under this arrangement. | |
All of the Company’s operations as of December 31, 2013, are located in Pennsylvania, New Jersey, Connecticut, California, Arizona and Ohio, with the customer base being public attendance. The Company’s main suppliers are the major movie studios, primarily located in the greater Los Angeles area. Any events impacting the regions the Company operates in, or impacting the movie studios, who supply movies to the Company, could significantly impact the Company’s financial condition and results of operations. |
11_STOCKHOLDERS_EQUITY_AND_SHA
11. STOCKHOLDERS EQUITY AND SHARE BASED COMPENSATION | 6 Months Ended | |||||
Dec. 31, 2013 | ||||||
Notes to Financial Statements | ' | |||||
11. STOCKHOLDERS EQUITY AND SHARE BASED COMPENSATION | ' | |||||
Capital Stock | ||||||
As of December 31, 2013, the Company’s authorized capital stock consisted of: | ||||||
• 20 million shares of Class A common stock, par value $0.01 per share; | ||||||
• 900,000 shares of Class B common stock, par value $0.01 per share; | ||||||
• 10 million shares preferred stock, par value $0.01 per share; | ||||||
Of the authorized shares of Class A common stock, 7,083,598 shares were issued and outstanding as of December 31, 2013. Of the authorized shares of Class B common stock, 849,000 shares were issued and outstanding as of December 31, 2013, all of which are held by the Company’s CEO. In August 2013, 16,000 shares of Class B common stock previously outstanding automatically converted into 16,000 shares of Class A common stock on transfer by the holder (as bona fide gifts) and cannot be reissued. Of the authorized shares of preferred stock, 6 shares of Series B Preferred Stock were issued and outstanding as of December 31, 2013. The material terms and provisions of the Company’s capital stock are described below. | ||||||
Common Stock | ||||||
The Class A and the Class B common stock of the Company are identical in all respects, except for voting rights and except that each share of Class B common stock is convertible at the option of the holder into one share of Class A common stock. Each holder of Class A common stock will be entitled to one vote for each outstanding share of Class A common stock owned by that stockholder on every matter submitted to the stockholders for their vote. Each holder of Class B common stock will be entitled to ten votes for each outstanding share of Class B common stock owned by that stockholder on every matter submitted to the stockholders for their vote. Except as required by law, the Class A and the Class B common stock will vote together on all matters. Upon any transfer of Class B common stock by the Company’s CEO, such transferred shares will be converted to Class A shares and the converted Class B shares shall be retired and are not available for reissuance. Subject to the dividend rights of holders of any outstanding preferred stock, holders of common stock are entitled to any dividend declared by the board of directors out of funds legally available for this purpose, and, subject to the liquidation preferences of any outstanding preferred stock, holders of common stock are entitled to receive, on a pro rata basis, all the Company’s remaining assets available for distribution to the stockholders in the event of the Company’s liquidation, dissolution or winding up. No dividend can be declared on the Class A or Class B common stock unless at the same time an equal dividend is paid on each share of Class B or Class A common stock, as the case may be. Dividends paid in shares of common stock must be paid, with respect to a particular class of common stock, in shares of that class. Holders of common stock do not have any preemptive right to become subscribers or purchasers of additional shares of any class of the Company’s capital stock. The outstanding shares of common stock are, when issued and paid for, fully paid and nonassessable. The rights, preferences and privileges of holders of common stock may be adversely affected by the rights of the holders of shares of any series of preferred stock that the Company may designate and issue in the future. | ||||||
In October 2013, the Company sold 1,141,000 shares of Class A common stock to several investors for $5.00 per share and received net proceeds of $5,200. Such issuance took place pursuant to a May 2013 shelf registration statement the Company had filed with the SEC. | ||||||
During the six months ended December 31, 2013, the Company issued 25,000 shares of Class A common stock to vendors for services rendered in the ordinary course of business. | ||||||
Preferred Stock | ||||||
The Company’s certificate of incorporation allows the Company to issue, without stockholder approval, preferred stock having rights senior to those of the common stock. The Company’s board of directors is | ||||||
authorized, without further stockholder approval, to issue up to 10,000,000 shares of preferred stock and to fix the rights, preferences, privileges and restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, and to fix the number of shares constituting any series and the designations of these series. The issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of common stock or could adversely affect the rights and powers, including voting rights, of the holders of common stock. The issuance of preferred stock could also have the effect of decreasing the market price of the Class A common stock. | ||||||
Dividends | ||||||
No dividends were declared on the Company’s common stock during the period and management does not anticipate doing so. The Company pays a quarterly dividend on its Series B preferred stock in an amount equal to 4.5% per annum. | ||||||
Stock-Based Compensation and Expenses | ||||||
During the six months ended December 31, 2013, the Company issued restricted stock awards totaling 137,000 shares of its Class A common stock to employees, which vests over a period of three years and a non-employee that vested when performance was complete. | ||||||
The total stock-based compensation was $122 and $26 for the three months ended December 31, 2013 and 2012, respectively, and is included in general and administrative expense in the unaudited condensed consolidated statement of operations. Total stock- based compensation was $361 and $69 for the six months ended December 31, 2013 and 2012, respectively. | ||||||
The following summarizes the activity of the unvested share awards for the three months ended December 31, 2013: | ||||||
Unvested balance at June 30, 2013 | 88,869 | |||||
Issuance of awards | 137,000 | |||||
Vesting of awards | (15,500) | |||||
Unvested balance at December 31, 2013 | 210,369 | |||||
The weighted average remaining vesting period as of December 31, 2013 is 1.41. As of December 31, 2013, there was $1,041 of remaining expense associated with unvested share awards. |
12_NOTES_PAYABLE
12. NOTES PAYABLE | 6 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes to Financial Statements | ' | ||||
12. NOTES PAYABLE | ' | ||||
On September 28, 2012, the Company entered into a loan agreement with Northlight Trust I for $10,000 due September 28, 2017, at an interest rate equal to 30 day LIBOR plus 10.50% per annum, with a 2.5% floor (the “Northlight loan”). The Company expects the 2.5% floor to be applicable due to the current LIBOR rates. During the first 18 months from the closing date, all interest in excess of 10.00% per annum that would otherwise be paid in cash during the 18-month period may, at the Company’s option, may be paid in kind (“PIK interest”), and thereafter all interest due is payable in cash. PIK interest, if any, will be added to the principal balance of the loan. The Company primarily used the net proceeds from the Northlight loan to acquire certain assets and assume certain liabilities of Lisbon, pay the obligation to a vendor for digital systems, pay fees and expenses associated with the Northlight loan and the Lisbon acquisition, and to provide working capital. Interest and principal payments under the terms of the Northlight loan commenced on October 31, 2012. The Northlight loan is collateralized by, among other things, the Company’s membership interest in each of the Company’s operating subsidiaries and all of the operating subsidiaries’ assets, including the theater leases, and requires meeting certain financial covenant ratios. As of December 31, 2013, the Company was in compliance with all financial covenants. For the three months ended December 31, 2013 and 2012, $13 and $17 of amortization of deferred financing costs for the Northlight loan were included in interest expense on the unaudited condensed consolidated statement of operations. For the six months ended December 31, 2013 and 2012, $33 and $17 of amortization of deferred financing costs for the Northlight loan were included in interest expense on the unaudited condensed consolidated statement of operations. | |||||
The principal payments due as of December 31, 2013 over the remainder of the term of the Northlight loan are summarized as follows, in years: | |||||
December 31, | Total | ||||
2014 | $ 1,671 | ||||
2015 | 1,671 | ||||
2016 | 1,671 | ||||
2017 (includes PIK interest accrued to date of $381) | 4,590 | ||||
Total | 9,603 | ||||
Less: current portion | (1,671) | ||||
$ 7,932 | |||||
The Northlight loan is mandatorily prepayable from 25% of the Company’s Excess Cash Flow (earnings before interest, taxes, depreciation, as adjusted, as further defined in the Northlight loan agreement) beginning on September 30, 2013 and annually thereafter. No payment was due in connection with the September 30, 2013 calculation. | |||||
In connection with the acquisition of Torrington, the Company assumed a promissory note for certain digital projection equipment, with an outstanding balance as of December 31, 2013 of $161. The note is payable monthly, is due March 2017 and has an interest rate of 7%. | |||||
The principal payments due as of December 31, 2013 over the remainder of the term of the Torrington promissory note are summarized as follows, in fiscal years: | |||||
December 31, | Total | ||||
2014 | $ 45 | ||||
2015 | 49 | ||||
2016 | 52 | ||||
2017 | 15 | ||||
Total | 161 | ||||
Less: current portion | (45) | ||||
$ 116 |
13_INCOME_TAXES
13. INCOME TAXES | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
13. INCOME TAXES | ' |
The Company recorded income tax expense of approximately $9 and $47 for the three months ended December 31, 2013 and 2012, respectively and approximately $18 and $64 for the six months ended Decermber 31, 2013 and 2012, respectively. The Company's tax provision for all periods had an unusual relationship to pretax loss mainly because of the existence of a full deferred tax asset valuation allowance at the beginning of each period. This circumstance generally results in a zero net tax provision since the income tax expense or benefit that would otherwise be recognized is offset by the change to the valuation allowance. However, tax expense recorded for the six months ended December 31, 2013 and 2012 included the accrual of non-cash tax expense of approximately $12 and $15, respectively of changes in the valuation allowance in connection with the tax amortization of our indefinite-lived intangible assets that was not available to offset existing deferred tax assets (termed a “naked credit”). The Company expects the naked credit to result in approximately $25 of additional non-cash income tax expense over the remainder of the year ending June 30, 2014. | |
The Company calculates income tax expense based upon an annual effective tax rate forecast, including estimates and assumptions that could change during the year. For the six months ended December 31, 2013 and 2012, the differences between the effective tax rate of (0.9)% and (3.3)%, respectively, and the U.S. federal statutory rate of 35% principally resulted from state and local taxes, graduated federal tax rate reductions, non-deductible expenses and changes to the valuation allowance. |
14_RELATED_PARTY_TRANSACTIONS
14. RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
14. RELATED PARTY TRANSACTIONS | ' |
The total rent expense under operating leases with a landlord that owns the Rialto and Cranford premises and owns shares of the Company’s Class A common stock was $100 and $130 for the three months ended December 31, 2013 and 2012, respectively, and $199 and $220 for the six months ended December 31, 2013 and 2012, respectively. |
15_NET_LOSS_PER_SHARE
15. NET LOSS PER SHARE | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
15. NET LOSS PER SHARE | ' | ||||||||
Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares and, if dilutive, common stock equivalents outstanding during the period. | |||||||||
The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A and Class B common stock are identical, except with respect to voting. Each share of Class B common stock is convertible into one share of Class A common stock at any time, at the option of the holder of the Class B common stock. | |||||||||
The following table sets forth the computation of basic net loss per share of Class A and Class B common stock of the Company (in millions, except share and per share data): | |||||||||
Three Months Ended | Six Months Ended | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Numerator for basic and diluted loss per share | |||||||||
Net loss attributable to Digital Cinema Destinations Corp. | $ (1,025) | $ (1,141) | $ (2,072) | $ (1,804) | |||||
Preferred dividends | (5) | (5) | (10) | (6) | |||||
Net loss attributable to common stockholders | $ (1,030) | $ (1,146) | $ (2,082) | $ (1,810) | |||||
Denominator | |||||||||
Weighted average shares of common stock outstanding (1) | 7,565,123 | 5,511,765 | 7,014,976 | 5,465,356 | |||||
Basic and diluted net loss per share of common stock | $ (0.14) | $ (0.21) | $ (0.30) | $ (0.33) | |||||
(1)The Company has incurred net losses and, therefore, the impact of dilutive potential common stock equivalents totaling 820,402 and 613,173 shares for the three and six months ended December 31, 2013 and 2012, respectively has been excluded from the loss per share calculations. |
16_SUPPLEMENTAL_CASH_FLOW_DISC
16. SUPPLEMENTAL CASH FLOW DISCLOSURE | 6 Months Ended | ||
Dec. 31, 2013 | |||
Notes to Financial Statements | ' | ||
16. SUPPLEMENTAL CASH FLOW DISCLOSURE | ' | ||
Six Months Ended | |||
December 31, | |||
2013 | 2012 | ||
Fair value of earnout recorded at acquisition | $ - | $ 550 | |
Cash paid for interest | 381 | 296 | |
Amount offset on note repayment | - | 168 | |
Common stock issued for Ultrastar theaters | - | 4,714 | |
Issuance of warrants to Start Media | - | 954 | |
Common stock issued for acquisition of Torrington theater | 391 | - | |
Common stock issued for acquisition of Mechanicsburg theater | 1,256 | - | |
Consideration to be paid for Mechanicsburg acquisition | 492 | - | |
Conversion of Class B common stock into Class A | 1 | - |
17_SUBSEQUENT_EVENTS
17. SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2013 | |
Notes to Financial Statements | ' |
17. SUBSEQUENT EVENTS | ' |
In February 2014, JV and an Ultrastar entity signed an asset purchase agreement to sell JV's 7-screen Mission Valley theater in San Diego, CA that it originally purchased from UltraStar in December 2012 for 361,599 shares of the Company's Class A common stock and $37,500 in cash. JV had been operating the theater under a lease in which the landlord had an early termination option. Primarily for that reason, 342,000 of the share consideration paid in the 2012 transaction was being held under a long-term escrow arrangement, and those shares will now be transferred to JV as part of the purchase price for the theater, along with consideration for cash and inventory, which will result in a gain on the sale. Since there was no agreement or plan of disposition regarding the theater as of December 31, 2013, and various uncertainties then existed as to whether any transaction would occur, the Company has concluded that the theater should not be classified as having been held for sale as of that date. The intended closing date of the sale is February 14, 2014. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Notes to Financial Statements | ' | |||||||
Principles of Consolidation | ' | |||||||
The unaudited condensed consolidated financial statements of the Company include the accounts of Digiplex and its wholly-owned subsidiaries, and the JV, which is a VIE. All intercompany accounts and transactions have been eliminated in consolidation. | ||||||||
Use of Estimates | ' | |||||||
The preparation of unaudited condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include, but are not limited to, those related to film rent expense settlements, depreciation and amortization, impairments, income taxes and assumptions used in connection with acquisition accounting. Actual results could differ from those estimates. | ||||||||
Revenue Recognition | ' | |||||||
Revenues are generated principally through admissions on feature film displays and concessions sales, with proceeds received in cash or credit card at the Company’s point of sale terminals at the Theaters. Revenue is recognized at the point of sale. Credit card sales are normally settled in cash within approximately three business days from the point of sale, and any credit card chargebacks have been insignificant. Other revenue consists of theater rentals for parties, camps, civic groups and other activities, advertising revenue under our advertising contract and our portion of game income, ATM fees and internet ticketing fees. Rental revenue is recognized at the time of the rental. Advertising revenue is recorded based on an expected per-patron amount and the number of patrons over the contract period as the advertising is being delivered on screen. Other revenue items are recognized as earned in the period. In addition to traditional feature films, the Company also displays concerts, sporting events, children’s programming and other non-traditional content on its screens (such content referred to herein as “alternative content”). Revenue from alternative content programming also consists of admissions and concession sales. The Company also sells theater admissions in advance of the applicable event, and sells gift cards for patrons’ future use. The Company defers the revenue from such sales until considered redeemed. The Company estimates the gift card breakage rate based on historical redemption patterns. Unredeemed gift cards are recognized as revenue only after such a period of time indicates, based on historical attendance, the likelihood of redemption is remote, and based on applicable laws and regulations, in evaluating the likelihood of redemption, the period outstanding, the level and frequency of activity, and the period of inactivity is evaluated. | ||||||||
Rewards Club Program | ' | |||||||
In August 2013, the Digiplex Rewards Club was implemented, whereby members earn credits for each dollar spent at one of the Company's theaters and earn concession or ticket awards based on the number of credits accumulated. Because the Company believes that the value of the awards granted is insignificant in relation to the value of the transactions necessary to earn the award, the Company records the estimated cost of providing awards at the time the awards are earned. The Company’s costs of these awards are not significant for the six months ended December 31, 2013. The awards issued under the Digiplex Rewards Club expire 90 days after issuance. | ||||||||
Cash Equivalents | ' | |||||||
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At December 31, 2013 and June 30, 2013, the Company held substantially all of its cash in bank accounts with major financial institutions, and had cash on hand at the Theaters in the normal course of business. | ||||||||
Accounts receivable | ' | |||||||
Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company reports accounts receivable net of any allowance for doubtful accounts to represent management’s estimate of the amount that ultimately will be realized in cash. The Company reviews collectability of accounts receivable based on the aging of the accounts and historical collection trends. When the Company ultimately concludes a receivable is uncollectible, the balance is written off. The Company has determined that an allowance for doubtful accounts is not necessary at December 31, 2013 and June 30, 2013. | ||||||||
Inventories | ' | |||||||
Inventories consist of food and beverage concession products and related supplies. The Company states inventories on the basis of the first-in, first-out method, stated at the lower of cost or market. | ||||||||
Property and Equipment | ' | |||||||
Property and equipment are stated at cost. Major renewals and improvements are capitalized, while maintenance and repairs that do not improve or extend the lives of the respective assets are expensed currently. | ||||||||
The Company records depreciation and amortization using the straight-line method, over the following estimated useful lives: | ||||||||
Furniture and fixtures | 5 years | |||||||
Leasehold improvements | Lesser of lease term or estimated asset life | |||||||
Building and improvements | 17 years | |||||||
Digital systems and related equipment | 10 years | |||||||
Equipment and computer software | 3 - 5 years | |||||||
Goodwill | ' | |||||||
The carrying amount of goodwill at December 31, 2013 and June 30, 2013 was $3,502 and $3,156, respectively. The Company evaluates goodwill for impairment annually or more frequently as specific events or circumstances dictate. Under ASC Subtopic 350-20, Intangibles — Goodwill and Other — | ||||||||
Goodwill, the Company has identified its reporting units to be the regions in which the Company conducts its theater operations. | ||||||||
The Company determines fair value by using an enterprise valuation methodology weighing the income approach and market approach by applying multiples to cash flow estimates less any net indebtedness, which the Company believes is an appropriate method to determine fair value. There is considerable management judgment with respect to future cash flow estimates and appropriate multiples and discount rates to be used in determining fair value and such management estimates fall under Level 3 within the fair value measurement hierarchy. | ||||||||
The changes in carrying amounts of goodwill are as follows: | ||||||||
Total | ||||||||
Balance as of June 30, 2013 | $3,156 | |||||||
Goodwill resulting from the Mechanicsburg acquisition | 346 | |||||||
Balance as of December 31, 2013 | $3,502 | |||||||
Concentration of Credit Risk | ' | |||||||
Financial instruments that could potentially subject the Company to concentration of credit risk, if held, would be included in accounts receivable. Collateral is not required on trade accounts receivables. It is anticipated that in the event of default, normal collection procedures would be followed. | ||||||||
Fair Value of Measurements | ' | |||||||
The fair value measurement disclosures are grouped into three levels based on valuation factors: | ||||||||
• | Level 1 – quoted prices in active markets for identical investments | |||||||
• | Level 2 – other significant observable inputs (including quoted prices for similar investments and market corroborated inputs) | |||||||
• | Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) | |||||||
Assets and liabilities measured at fair value on a recurring basis use the market approach, where prices and other relevant information are generated by market transactions involving identical or comparable assets or liabilities. | ||||||||
The following tables summarize the levels of fair value measurements of the Company’s financial liabilities as of December 31, 2013 and June 30, 2013: | ||||||||
As of December 31, 2013: | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Earnout from theater acquisitions | - | - | 350 | 350 | ||||
$ - | $ - | $ 350 | $ 350 | |||||
As of June 30, 2013: | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Earnout from theater acquisitions | - | - | 296 | 296 | ||||
$ - | $ - | $ 296 | $ 296 | |||||
Earnout from acquisitions is a liability to the seller of the Lisbon theater and is based upon meeting certain financial performance targets. Estimates of the fair values of the earnout was estimated by a forecast of | ||||||||
theater level cash flow, as defined by the asset purchase agreement. That measure is based on significant inputs that are not observable in the market, which are considered Level 3 inputs. | ||||||||
The following summarized changes in the earnout during the six months ended December 31, 2013: | ||||||||
Total | ||||||||
Balance as of June 30, 2013 | $ 296 | |||||||
Change in fair value of earnout liability for Lisbon acquisition | 54 | |||||||
Balance as of December 31, 2013 | $ 350 | |||||||
Key assumptions underlying the initial Lisbon earnout estimate include a discount rate of 12.5 percent and that Lisbon will achieve its forecasted financial performance target in the one year earnout period ended September 28, 2013. As of December 31, 2013, the Company increased the Lisbon earnout from $296 to $350 based on actual results compared to the threshold in the asset purchase agreement and the final payment. A fair value change of ($5) and $54 for the three and six months ended December 31, 2013 was recognized. The earnout of $350 was paid to the seller in February 2014. | ||||||||
Fair Value of Financial Instruments | ' | |||||||
The carrying amounts of cash, cash equivalents, accounts receivable, accounts payable and accrued expenses, and note payable approximate their fair values, due to their short term nature. | ||||||||
Deferred Rent Expense | ' | |||||||
The Company recognizes rent expense on a straight-line basis, after considering the effect of rent escalation provisions resulting in a level monthly rent expense for each lease over its term. | ||||||||
Deferred Financing Costs | ' | |||||||
Deferred financing costs primarily consist of unamortized debt issuance costs for the note payable, unamortized financing costs related to the formation of JV, and the fair value of warrants issued to Start Media, which are amortized on a straight-line basis over the respective terms. The straight-line basis is not materially different from the effective interest method. | ||||||||
Film Rent Expense | ' | |||||||
The Company estimates film rent expense and related film rent payable based on management’s best estimate of the ultimate settlement of the film costs with the film distributors. Generally, less than one-quarter of film rent expense is estimated at period-end, with the majority being agreed to under firm terms. The length of time until these costs are known with certainty depends on the ultimate duration of the film’s theatrical run, but is typically “settled” within one to two months of a particular film’s opening release. Upon settlement with the film distributors, film rent expense and the related film rent payable is adjusted to the final film settlement. | ||||||||
The film rent expense on the unaudited condensed consolidated statement of operations of the Company for the three months ended December 31, 2013 and 2012 was reduced by virtual print fees (“VPFs”) of $291 and $259, respectively under a master license agreement exhibitor-buyer arrangement with a third party vendor. VPFs for the six months ended December 31, 2013 and 2012 were $582 and $504, respectively. VPFs represent a reduction in film rent paid to film distributors. Pursuant to this master license agreement, the Company will purchase and own digital projection equipment and the third party vendor, through its agreements with film distributors, will collect and remit VPFs to the Company, net of a 10% administrative fee. VPFs are generated based on initial display of titles on the digital projection equipment. | ||||||||
Stock-Based Compensation | ' | |||||||
The Company recognizes stock-based compensation expense to employees based on the fair value of the award at the grant date with expense recognized over the service period, or vesting period, using the straight-line recognition method of awards subject to graded vesting. | ||||||||
The Company uses the Black-Scholes valuation model to determine the fair value of warrants. The fair value of the restricted stock awards is determined by the stock fair market value on the award date. The Company recognizes an estimate for forfeitures of unvested awards. These estimates are adjusted as actual forfeitures differ from the estimate. | ||||||||
The Company also issues common stock to non-employees in exchange for services. The Company measures and records stock-based compensation at fair value at the earlier of the date the performance commitment is reached or when the performance is complete. The expense recognized is based on the closing stock price of the Company’s stock issued. | ||||||||
Reclassification | ' | |||||||
Certain reclassifications have been made to the fiscal period ended December 31, 2012 financial statements to conform to the current fiscal period ended December 31, 2013 presentation. | ||||||||
Segments | ' | |||||||
As of December 31, 2013, the Company managed its business under one reportable segment: theater exhibition operations. All Company operations are located in the United States. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Summary Of Significant Accounting Policies Tables | ' | |||||||
Property and Equipment | ' | |||||||
Furniture and fixtures | 5 years | |||||||
Leasehold improvements | Lesser of lease term or estimated asset life | |||||||
Building and improvements | 17 years | |||||||
Digital systems and related equipment | 10 years | |||||||
Equipment and computer software | 3 - 5 years | |||||||
Goodwill | ' | |||||||
Total | ||||||||
Balance as of June 30, 2013 | $3,156 | |||||||
Goodwill resulting from the Mechanicsburg acquisition | 346 | |||||||
Balance as of December 31, 2013 | $3,502 | |||||||
Fair value measurement | ' | |||||||
As of December 31, 2013: | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Earnout from theater acquisitions | - | - | 350 | 350 | ||||
$ - | $ - | $ 350 | $ 350 | |||||
As of June 30, 2013: | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
Earnout from theater acquisitions | - | - | 296 | 296 | ||||
$ - | $ - | $ 296 | $ 296 | |||||
Schedule of changes in earn out | ' | |||||||
Total | ||||||||
Balance as of June 30, 2013 | $ 296 | |||||||
Change in fair value of earnout liability for Lisbon acquisition | 54 | |||||||
Balance as of December 31, 2013 | $ 350 |
3_ACQUISITIONS_Tables
3. ACQUISITIONS (Tables) | 6 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Mechanicsburg theater acquisition | ' | ||||||||||||||||
Mechanicsburg | |||||||||||||||||
Theater | |||||||||||||||||
ASSETS | |||||||||||||||||
Cash | $ 4 | ||||||||||||||||
Inventory | 4 | ||||||||||||||||
Property and equipment | 1,313 | ||||||||||||||||
Favorable leasehold interest | 937 | ||||||||||||||||
Covenants not to compete | 472 | ||||||||||||||||
Goodwill | 346 | ||||||||||||||||
Total assets acquired | 3,076 | ||||||||||||||||
LIABILITIES AND OTHER | |||||||||||||||||
Consideration to be paid for theater acquisition | 492 | ||||||||||||||||
Capital lease liability assumed | 320 | ||||||||||||||||
Issuance of Class A common stock | 1256 | ||||||||||||||||
Total purchase price paid in cash | $ 1,008 | ||||||||||||||||
Schedule of Acquisitions of Theaters | ' | ||||||||||||||||
Torrington | |||||||||||||||||
Theater | |||||||||||||||||
ASSETS | |||||||||||||||||
Cash | $ 4 | ||||||||||||||||
Prepaid expenses | 13 | ||||||||||||||||
Inventory | 4 | ||||||||||||||||
Property and equipment | 385 | ||||||||||||||||
Favorable leasehold interest | 299 | ||||||||||||||||
Covenants not to compete | 85 | ||||||||||||||||
Total assets acquired | 790 | ||||||||||||||||
LIABILITIES AND OTHER | |||||||||||||||||
Notes payable assumed | 178 | ||||||||||||||||
Issuance of Class A common stock | 391 | ||||||||||||||||
Total purchase price paid in cash | $ 221 | ||||||||||||||||
Results of operations | ' | ||||||||||||||||
Three Months ended December 31, | Six Months ended December 31, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | $ | 11,607 | $ | 7,668 | $ | 23,800 | $ | 12,812 | |||||||||
Net loss | (1,398 | ) | $ | (1,304 | ) | (2,810 | ) | $ | (1,978 | ) |
5_ACCOUNTS_RECEIVABLE_Tables
5. ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Notes to Financial Statements | ' | ||||||||||
Accounts receivable | ' | ||||||||||
December 31, | June 30, | ||||||||||
2013 | 2013 | ||||||||||
VPFs | $ | 560 | $ | 470 | |||||||
Advertising | 149 | 180 | |||||||||
Other | 31 | 47 | |||||||||
Total | $ | 740 | $ | 697 |
6_PREPAID_EXPENSES_AND_OTHER_C1
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 6 Months Ended | |||
Dec. 31, 2013 | ||||
Notes to Financial Statements | ' | |||
Prepaid expenses and other current assets | ' | |||
December 31, | June 30, | |||
2013 | 2013 | |||
Insurance | $ 126 | $ 215 | ||
Projector and other equipment maintenance | 238 | 246 | ||
Real estate taxes | 71 | 82 | ||
Note receivable (1) | 74 | 89 | ||
Due from former theater owners (1) | 293 | 299 | ||
Due from Start Media | 225 | 290 | ||
Other theater operating | 114 | 84 | ||
Other expenses | 154 | 139 | ||
Total | $ 1,295 | $ 1,444 |
7_PROPERTY_AND_EQUIPMENT_Table
7. PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended | |||
Dec. 31, 2013 | ||||
Property, Plant and Equipment [Abstract] | ' | |||
Property and equipment | ' | |||
December 31, | June 30, | |||
2013 | 2013 | |||
Furniture and fixtures | $ 5,556 | $ 4,931 | ||
Leasehold improvements | 13,427 | 12,820 | ||
Building and improvements | 4,636 | 4,627 | ||
Digital systems and related equipment | 6,619 | 6,071 | ||
Equipment and computer software | 4,423 | 3,976 | ||
34,661 | 32,425 | |||
Less: accumulated depreciation and amortization | (4,995) | (3,254) | ||
Total property and equipment, net | $ 29,666 | $ 29,171 |
8_INTANGIBLE_ASSETS_Tables
8. INTANGIBLE ASSETS (Tables) | 6 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Intangible assets | ' | |||||||
Intangible assets, net consisted of the following as of December 31, 2013: | ||||||||
Gross | Useful | |||||||
Carrying | Accumulated | Net | Life | |||||
Amount | Amortization | Amount | (years) | |||||
Trade names | $ 3,016 | $ 1,768 | $ 1,248 | 5-Mar | ||||
Covenants not to compete | 2,463 | 798 | 1,665 | 3 | ||||
Favorable leasehold interest | 4,607 | 508 | 4,099 | Remaining lease term | ||||
$ 10,086 | $ 3,074 | $ 7,012 | ||||||
Intangible assets, net consisted of the following as of June 30, 2013: | ||||||||
Gross | Useful | |||||||
Carrying | Accumulated | Net | Life | |||||
Amount | Amortization | Amount | (years) | |||||
Trade names | $ 3,016 | $ 1,302 | $ 1,714 | 5-Mar | ||||
Covenants not to compete | 1,906 | 493 | 1,413 | 3 | ||||
Favorable leasehold interest | 3,371 | 312 | 3,059 | Remaining lease term | ||||
$ 8,293 | $ 2,107 | $ 6,186 | ||||||
Amortization of intangible assets | ' | |||||||
June 30, | Total | |||||||
2014 (remaining six months) | $ 1,127 | |||||||
2015 | 1,996 | |||||||
2016 | 923 | |||||||
2017 | 492 | |||||||
2018 | 393 | |||||||
2019 | 393 |
9_LEASES_Tables
9. LEASES (Tables) | 6 Months Ended | ||||
Dec. 31, 2013 | |||||
Leases [Abstract] | ' | ||||
Schedule of Operating Leases Minimum rentals payable | ' | ||||
June 30, | Total | ||||
2014 (remaining six months) | $ 3,076 | ||||
2015 | 6,278 | ||||
2016 | 6,162 | ||||
2017 | 5,525 | ||||
2018 | 5,015 | ||||
2019 | 4,742 | ||||
Thereafter | 23,937 | ||||
Total | $ 54,735 | ||||
Summary of property held under capital leases | ' | ||||
December 31, | June 30, | ||||
2013 | 2013 | ||||
Equipment | $ 729 | $ 409 | |||
Less: accumulated amortization | (103) | (54) | |||
Net | $ 626 | $ 355 | |||
Future maturities of capital lease payments | ' | ||||
December 31, | Total | ||||
2014 | $ 200 | ||||
2015 | 176 | ||||
2016 | 176 | ||||
2017 | 168 | ||||
2018 | - | ||||
Total minimum payments | 720 | ||||
Less: amount representing interest | (88) | ||||
Present value of minimum payments | 632 | ||||
Less: current portion | (162) | ||||
$ 470 |
11_STOCKHOLDERS_EQUITY_AND_SHA1
11. STOCKHOLDERS EQUITY AND SHARE BASED COMPENSATION (Tables) | 6 Months Ended | |||||
Dec. 31, 2013 | ||||||
Equity [Abstract] | ' | |||||
Summary of the activity of unvested share awards | ' | |||||
Unvested balance at June 30, 2013 | 88,869 | |||||
Issuance of awards | 137,000 | |||||
Vesting of awards | (15,500) | |||||
Unvested balance at December 31, 2013 | 210,369 |
12_NOTES_PAYABLE_Tables
12. NOTES PAYABLE (Tables) | 6 Months Ended | ||||
Dec. 31, 2013 | |||||
Notes Payable Tables | ' | ||||
Schedule of principal payments due | ' | ||||
The principal payments due as of December 31, 2013 over the remainder of the term of the Northlight loan are summarized as follows, in years: | |||||
December 31, | Total | ||||
2014 | $ 1,671 | ||||
2015 | 1,671 | ||||
2016 | 1,671 | ||||
2017 (includes PIK interest accrued to date of $381) | 4,590 | ||||
Total | 9,603 | ||||
Less: current portion | (1,671) | ||||
$ 7,932 | |||||
The principal payments due as of December 31, 2013 over the remainder of the term of the Torrington promissory note are summarized as follows, in fiscal years: | |||||
December 31, | Total | ||||
2014 | $ 45 | ||||
2015 | 49 | ||||
2016 | 52 | ||||
2017 | 15 | ||||
Total | 161 | ||||
Less: current portion | (45) | ||||
$ 116 |
15_NET_LOSS_PER_SHARE_Tables
15. NET LOSS PER SHARE (Tables) | 6 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of Earnings Per Share | ' | ||||||||
Three Months Ended | Six Months Ended | ||||||||
December 31, | December 31, | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Numerator for basic and diluted loss per share | |||||||||
Net loss attributable to Digital Cinema Destinations Corp. | $ (1,025) | $ (1,141) | $ (2,072) | $ (1,804) | |||||
Preferred dividends | (5) | (5) | (10) | (6) | |||||
Net loss attributable to common stockholders | $ (1,030) | $ (1,146) | $ (2,082) | $ (1,810) | |||||
Denominator | |||||||||
Weighted average shares of common stock outstanding (1) | 7,565,123 | 5,511,765 | 7,014,976 | 5,465,356 | |||||
Basic and diluted net loss per share of common stock | $ (0.14) | $ (0.21) | $ (0.30) | $ (0.33) | |||||
16_SUPPLEMENTAL_CASH_FLOW_DISC1
16. SUPPLEMENTAL CASH FLOW DISCLOSURE (Tables) | 6 Months Ended | ||
Dec. 31, 2013 | |||
Supplemental Cash Flow Elements [Abstract] | ' | ||
Schedule of Supplemental Cash Flow Disclosure | ' | ||
Six Months Ended | |||
December 31, | |||
2013 | 2012 | ||
Fair value of earnout recorded at acquisition | $ - | $ 550 | |
Cash paid for interest | 381 | 296 | |
Amount offset on note repayment | - | 168 | |
Common stock issued for Ultrastar theaters | - | 4,714 | |
Issuance of warrants to Start Media | - | 954 | |
Common stock issued for acquisition of Torrington theater | 391 | - | |
Common stock issued for acquisition of Mechanicsburg theater | 1,256 | - | |
Consideration to be paid for Mechanicsburg acquisition | 492 | - | |
Conversion of Class B common stock into Class A | 1 | - |
2_SUMMARY_OF_SIGNIFICANT_ACCOU3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Dec. 31, 2013 | |
Furniture and Fixtures [Member] | ' |
Estimated useful life of proprerty plant and equipment | '5 years |
Leasehold Improvements [Member] | ' |
Estimated useful life of proprerty plant and equipment | 'B Lesser of lease term or estimated asset life |
Building and Improvements [Member] | ' |
Estimated useful life of proprerty plant and equipment | '17 years (end of initial lease term) |
Digital Systems and Related Equipment [Member] | ' |
Estimated useful life of proprerty plant and equipment | 'B 10 years |
Equipment and Computer Software [Member] | Minimum [Member] | ' |
Estimated useful life of proprerty plant and equipment | '3 years |
Equipment and Computer Software [Member] | Maximum [Member] | ' |
Estimated useful life of proprerty plant and equipment | '5 years |
2_SUMMARY_OF_SIGNIFICANT_ACCOU4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Summary Of Significant Accounting Policies Tables | ' |
Balance as of June 30, 2013 | $3,156 |
Goodwill resulting from the Mechanicsburg acquisition | 346 |
Balance as of December 31, 2013 | $3,502 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Earn-out from theater acquisitions | $350 | $296 |
Financial assets fair value disclosure | 350 | 296 |
Level 1 [Member] | ' | ' |
Earn-out from theater acquisitions | 0 | 0 |
Financial assets fair value disclosure | 0 | 0 |
Level 2 [Member] | ' | ' |
Earn-out from theater acquisitions | 0 | 0 |
Financial assets fair value disclosure | 0 | 0 |
Level 3 [Member] | ' | ' |
Earn-out from theater acquisitions | 350 | 296 |
Financial assets fair value disclosure | $350 | $296 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Summary Of Significant Accounting Policies Details 3 | ' |
Balance as of June 30, 2013 | $296 |
Change in fair value of earnout liability for Lisbon acquisition | 54 |
Balance as of September 30, 2013 | $350 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 |
Notes to Financial Statements | ' | ' | ' | ' | ' |
Goodwill | $3,502 | ' | $3,502 | ' | $3,156 |
Change in fair value | -5 | ' | 54 | ' | ' |
Virtual print fees reduction to Film rent expenses | $291 | $259 | $582 | $504 | ' |
Earn out estimate key assumption: discount rate | ' | ' | 12.50% | ' | ' |
3_ACQUISITIONS_Details
3. ACQUISITIONS (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
LIABILITIES AND OTHER | ' | ' |
Issuance of Class A common stock | $391 | $0 |
Total purchase price paid in cash | 1,229 | 14,122 |
Torrington Theater | ' | ' |
ASSETS | ' | ' |
Cash | 4 | ' |
Prepaid expenses | 13 | ' |
Inventory | 4 | ' |
Property and equipment | 455 | ' |
Favorable leasehold interest | 229 | ' |
Covenants not to compete | 85 | ' |
Total assets acquired | 790 | ' |
LIABILITIES AND OTHER | ' | ' |
Notes payable assumed | 178 | ' |
Issuance of Class A common stock | 391 | ' |
Total purchase price paid in cash | 221 | ' |
Mechanicsburg Theater | ' | ' |
ASSETS | ' | ' |
Cash | 4 | ' |
Inventory | 4 | ' |
Property and equipment | 1,313 | ' |
Favorable leasehold interest | 937 | ' |
Covenants not to compete | 472 | ' |
Goodwill | 346 | ' |
Total assets acquired | 3,076 | ' |
LIABILITIES AND OTHER | ' | ' |
Consideration to be paid for theater acquisition | 492 | ' |
Capital Lease Obligation assumed | 320 | ' |
Issuance of Class A common stock | 1,256 | ' |
Total purchase price paid in cash | $1,008 | ' |
3_ACQUISITIONS_Details_1
3. ACQUISITIONS (Details 1) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Acquisitions Details 1 | ' | ' | ' | ' |
Revenues | $11,607 | $7,668 | $23,800 | $12,812 |
Net loss | ($1,398) | ($1,304) | ($2,810) | ($1,978) |
4_JOINT_VENTURE_Details_Narrat
4. JOINT VENTURE (Details Narrative) (Digiplex [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Digiplex [Member] | ' | ' | ' | ' |
Percent of ownership interest in Joint Venture | ' | ' | 34.00% | ' |
Management fees earned | $275 | $52 | $560 | $52 |
5_ACCOUNTS_RECEIVABLE_Details
5. ACCOUNTS RECEIVABLE (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Notes to Financial Statements | ' | ' |
VPFs | $560 | $470 |
Advertising | 149 | 180 |
Other | 31 | 47 |
Total | $740 | $697 |
6_PREPAID_EXPENSES_AND_OTHER_C2
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 | ||
In Thousands, unless otherwise specified | ||||
Notes to Financial Statements | ' | ' | ||
Insurance | $126 | $215 | ||
Projector and other equipment maintenance | 238 | 246 | ||
Real estate taxes | 71 | 82 | ||
Note receivable | 74 | [1] | 89 | [1] |
Due from former theater owners | 293 | [1] | 299 | [1] |
Due from Start Media | 225 | 290 | ||
Other theater operating | 114 | 84 | ||
Other expenses | 154 | 139 | ||
Total | $1,295 | $1,444 | ||
[1] | The note receivable of $74 and $55 of the due from theater owner was from the former owner of the Lisbon theater, and was paid in February 2014 in connection with the finalization of the Lisbon earnout. |
7_PROPERTY_AND_EQUIPMENT_Detai
7. PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Gross Value of property plant and equipment | $34,661 | $32,425 |
Less: accumulated depreciation and amortization | -4,995 | -3,254 |
Total property and equipment, net | 29,666 | 29,171 |
Furniture and Fixtures [Member] | ' | ' |
Gross Value of property plant and equipment | 5,556 | 4,931 |
Leasehold Improvements [Member] | ' | ' |
Gross Value of property plant and equipment | 13,427 | 12,820 |
Building and Improvements [Member] | ' | ' |
Gross Value of property plant and equipment | 4,636 | 4,627 |
Digital systems and related equipment | ' | ' |
Gross Value of property plant and equipment | 6,619 | 6,071 |
Equipment and computer software | ' | ' |
Gross Value of property plant and equipment | 4,423 | ' |
Equipment and Computer Software [Member] | ' | ' |
Gross Value of property plant and equipment | ' | $3,976 |
8_INTANGIBLE_ASSETS_Details
8. INTANGIBLE ASSETS (Details) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Gross Carrying Amount | $10,086 | $8,293 |
Accumulated Amortization | 3,074 | 2,107 |
Net Amount | 7,012 | 6,186 |
Trade Names [Member] | ' | ' |
Gross Carrying Amount | 3,016 | 3,016 |
Accumulated Amortization | 1,768 | 1,302 |
Net Amount | 1,248 | 1,714 |
Trade Names [Member] | Minimum [Member] | ' | ' |
Useful Life (years) | '3 years | '3 years |
Trade Names [Member] | Maximum [Member] | ' | ' |
Useful Life (years) | '5 years | '5 years |
Covenants Not To Compete [Member] | ' | ' |
Gross Carrying Amount | 2,463 | 1,906 |
Accumulated Amortization | 798 | 493 |
Net Amount | 1,665 | 1,413 |
Useful Life (years) | '3 years | '3 years |
Favorable Leasehold Interest [Member] | ' | ' |
Gross Carrying Amount | 4,607 | 3,371 |
Accumulated Amortization | 508 | 312 |
Net Amount | $4,099 | $3,059 |
Useful Life (years) | 'Remaining lease term | 'Remaining lease term |
8_INTANGIBLE_ASSETS_Details_1
8. INTANGIBLE ASSETS (Details 1) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Intangible Assets Details 1 | ' |
2014 (remaining six months) | $1,127 |
2015 | 1,996 |
2016 | 923 |
2017 | 492 |
2018 | 393 |
2019 | $393 |
8_INTANGIBLE_ASSETS_Details_Na
8. INTANGIBLE ASSETS (Details Narrative) | Dec. 31, 2013 |
Trade Names [Member] | ' |
Weighted average life of intangible assets | '3 years 25 days |
Covenants Not To Compete [Member] | ' |
Weighted average life of intangible assets | '2 years 3 months 11 days |
Favorable Leasehold Interest [Member] | ' |
Weighted average life of intangible assets | '15 years 11 months 1 day |
9_LEASES_Details
9. LEASES (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Leases Details | ' |
2014 (remaining six months) | $3,076 |
2015 | 6,278 |
2016 | 6,162 |
2017 | 5,525 |
2018 | 5,015 |
2019 | 4,742 |
Thereafter | 23,937 |
Total | $54,735 |
9_LEASES_Details_1
9. LEASES (Details 1) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Leases Details 1 | ' | ' |
Equipment | $729 | $409 |
Less: accumulated amortization | -103 | -54 |
Net | $626 | $355 |
9_LEASES_Details_2
9. LEASES (Details 2) (USD $) | Dec. 31, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Leases [Abstract] | ' | ' |
2014 | $200 | ' |
2015 | 176 | ' |
2016 | 176 | ' |
2017 | 168 | ' |
2018 | 0 | ' |
Total minimum payments | 720 | ' |
Less: amount representing interest | -88 | ' |
Present value of minimum payments | 632 | ' |
Less: current portion | -162 | -121 |
Total | $470 | $239 |
9_LEASES_Details_Narrative
9. LEASES (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Leases [Abstract] | ' | ' | ' | ' |
Rent expense | $22 | $73 | $45 | $88 |
Amortization of assets under capital leases | $28 | $5 | $49 | $5 |
10_COMMITMENTS_AND_CONTINGENCI1
10. COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments And Contingencies Details Narrative | ' | ' | ' | ' |
Compensation Expense | $65 | $60 | $140 | $120 |
11_STOCKHOLDERS_EQUITY_AND_SHA2
11. STOCKHOLDERS EQUITY AND SHARE BASED COMPENSATION (Details) (USD $) | 6 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 |
Stockholders Equity And Share Based Compensation Details | ' |
Unvested balance at June 30, 2013 | 88,869 |
Issuance of awards | $137,000 |
Vesting of awards | ($15,500) |
Unvested balance at September 30, 2013 | 210,369 |
11_STOCKHOLDERS_EQUITY_AND_SHA3
11. STOCKHOLDERS EQUITY AND SHARE BASED COMPENSATION (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 |
Preferred stock, authorized shares | 10,000,000 | ' | 10,000,000 | ' | 10,000,000 |
Preferred stock, par value | $0.01 | ' | $0.01 | ' | $0.01 |
Preferred stock, issued shares | 0 | ' | 0 | ' | 0 |
Preferred stock, outstanding shares | 0 | ' | 0 | ' | 0 |
Stock-based compensation | $122 | $26 | $361 | $69 | ' |
Weighted average remaining vesting period | ' | ' | '1 year 4 months 28 days | ' | ' |
Remaining expense associated with unvested share awards | $1,041 | ' | $1,041 | ' | ' |
Class A [Member] | ' | ' | ' | ' | ' |
Common stock shares authorized | 20,000,000 | ' | 20,000,000 | ' | ' |
Common stock shares par value | $0.01 | ' | $0.01 | ' | ' |
Common stock shares issued | 7,083,598 | ' | 7,083,598 | ' | ' |
Common stock shares outstanding | 7,083,598 | ' | 7,083,598 | ' | ' |
Issued restricted stock awards to employee and non-employee | ' | ' | 25,000 | ' | ' |
Class A [Member] | Minimum [Member] | ' | ' | ' | ' | ' |
Restricted stock awards vesting period | ' | ' | '3 years | ' | ' |
Class A [Member] | Maximum [Member] | ' | ' | ' | ' | ' |
Restricted stock awards vesting period | ' | ' | '3 years | ' | ' |
Class B [Member] | ' | ' | ' | ' | ' |
Common stock shares authorized | 900,000 | ' | 900,000 | ' | ' |
Common stock shares par value | $0.01 | ' | $0.01 | ' | ' |
Common stock shares issued | 849,000 | ' | 849,000 | ' | ' |
Common stock shares outstanding | 849,000 | ' | 849,000 | ' | ' |
Series B preferred [Member] | ' | ' | ' | ' | ' |
Preferred stock, issued shares | 6 | ' | 6 | ' | 0 |
Preferred stock, outstanding shares | 6 | ' | 6 | ' | 0 |
12_NOTES_PAYABLE_Details
12. NOTES PAYABLE (Details) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Northlight loan | ' |
2014 | $1,671 |
2015 | 1,671 |
2016 | 1,671 |
2017 | 4,590 |
Total | 9,603 |
Less: current portion | -1,671 |
Total | 7,932 |
Torrington promissory note | ' |
2014 | 45 |
2015 | 49 |
2016 | 52 |
2017 | 15 |
Total | 161 |
Less: current portion | -45 |
Total | $116 |
12_NOTES_PAYABLE_Details_Narra
12. NOTES PAYABLE (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Notes Payable Details Narrative | ' | ' | ' | ' |
Amortization of deferred financing costs | $13 | $17 | $33 | $17 |
13_INCOME_TAXES_Details_Narrat
13. INCOME TAXES (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes Details Narrative | ' | ' | ' | ' |
Income tax expense | $9 | $47 | $18 | $64 |
Accrual of non-cash tax expense | ' | ' | $12 | $15 |
Effective tax rate | ' | ' | -0.90% | -3.30% |
U.S. federal statutory rate | ' | ' | 35.00% | ' |
14_RELATED_PARTY_TRANSACTIONS_
14. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transactions Details Narrative | ' | ' | ' | ' |
Rent expense for operating leases | $100 | $130 | $199 | $220 |
15_NET_LOSS_PER_SHARE_Details
15. NET LOSS PER SHARE (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator for basic and diluted loss per share | ' | ' | ' | ' |
Net loss attributable to Digital Cinema Destinations Corp. | ($1,025) | ($1,141) | ($2,072) | ($1,804) |
Preferred dividends | -5 | -5 | -10 | -6 |
Net loss attributable to common shareholders | ($1,030) | ($1,146) | ($2,082) | ($1,810) |
Denominator | ' | ' | ' | ' |
Weighted average shares of common stock outstanding | 7,565,123 | 5,511,765 | 7,014,926 | 5,465,356 |
Basic and diluted net loss per share of common stock | ($0.14) | ($0.21) | ($0.30) | ($0.33) |
15_NET_LOSS_PER_SHARE_Details_
15. NET LOSS PER SHARE (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Anti-dilutive shares not included in the weighted shares | 820,402 | 613,173 | 820,402 | 613,173 |
16_SUPPLEMENTAL_CASH_FLOW_DISC2
16. SUPPLEMENTAL CASH FLOW DISCLOSURE (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Disclosure Details | ' | ' |
Fair value of earnout recorded at acquisition | $0 | $550 |
Cash paid for interest | 381 | 296 |
Amount offset on Note repayment | 0 | 168 |
Common stock issued for Ultrastar theaters | 0 | 4,714 |
Issuance of warrants to Start Media | 0 | 954 |
Common stock issued for acquisition of Torrington theater | 391 | 0 |
Common stock issued for acquisition of Mechanicsburg theater | 1,256 | 0 |
Consideration to be paid for Mechanicsburg acquisition | 492 | 0 |
Conversion of Class B common stock into Class A | $1 | $0 |