Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 15, 2014 | Mar. 31, 2014 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 30-Sep-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | JOB | ||
Entity Registrant Name | GENERAL EMPLOYMENT ENTERPRISES INC | ||
Entity Central Index Key | 40570 | ||
Current Fiscal Year End Date | -21 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 25,899,675 | ||
Entity Public Float | $2,271,464 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $168 | $361 |
Accounts receivable, less allowances (2014 - $395; 2013 - $272) | 4,907 | 6,697 |
Other current assets | 1,650 | 416 |
Assets of discontinued operations, less allowances (2014 - $265; 2013 - $35) | 238 | |
Total current assets | 6,725 | 7,712 |
Property and equipment, net | 453 | 530 |
Goodwill | 1,106 | 1,106 |
Intangible assets, net | 1,560 | 1,884 |
TOTAL ASSETS | 9,844 | 11,232 |
CURRENT LIABILITIES: | ||
Short-term debt | 2,711 | 3,734 |
Accounts payable | 910 | 1,015 |
Accrued compensation | 2,633 | 2,733 |
Convertible note payable - current portion, net of discount | 35 | |
Derivative liability | 131 | |
Other current liabilities | 1,214 | 981 |
Liabilities from discontinued operations | 30 | |
Total current liabilities | 7,634 | 8,493 |
Convertible note payable, net of discount | 132 | |
Other long-term liabilities | 13 | 126 |
Total long-term liabilities | 145 | 126 |
Commitments and contingencies | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock; no par value; authorized - 20,000 shares; issued and outstanding - none | ||
Common stock, no-par value; authorized - 200,000 shares; issued and outstanding - 25,899 shares at September 30, 2014 and 22,799 shares at September 30, 2013 | 0 | 0 |
Additional paid in capital | 11,658 | 10,851 |
Accumulated deficit | -9,593 | -8,238 |
Total shareholders' equity | 2,065 | 2,613 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $9,844 | $11,232 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $395 | $272 |
Assets of discontinued operations, allowances | $265 | $35 |
Preferred stock, par value | $0 | $0 |
Preferred stock, share authorized | 20,000,000 | 20,000,000 |
Preferred stock, share issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0 | $0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 25,899,000 | 22,799,000 |
Common stock, shares outstanding | 25,899,000 | 22,799,000 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
NET REVENUES: | ||
Contract staffing services | $32,723 | $39,187 |
Direct hire placement services | 7,088 | 7,317 |
NET REVENUES | 39,811 | 46,504 |
Cost of contract services | 26,417 | 32,318 |
Selling, general and administrative expenses | 13,709 | 15,173 |
Amortization of intangible assets | 326 | 320 |
LOSS FROM OPERATIONS | -641 | -1,307 |
Gain on change in derivative liability | 47 | |
Interest expense | -507 | -251 |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX PROVISION | -1,101 | -1,558 |
Provision for income tax | -24 | -8 |
LOSS FROM CONTINUING OPERATIONS | -1,125 | -1,566 |
Loss from discontinued operations | -230 | -324 |
NET LOSS | ($1,355) | ($1,890) |
BASIC AND DILUTED LOSS PER SHARE | ||
From continuing operations | ($0.05) | ($0.07) |
From discontinued operations | ($0.01) | ($0.01) |
Total net loss per share | ($0.06) | ($0.09) |
WEIGHTED AVERAGE NUMBER OF SHARES - BASIC AND DILUTED | 24,360 | 21,969 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholder's Equity (USD $) | Total | Common Stock [Member] | Accumulated Deficit [Member] |
In Thousands | |||
Beginning Balance at Sep. 30, 2012 | $4,105 | $10,453 | ($6,348) |
Beginning Balance, shares at Sep. 30, 2012 | 21,699 | ||
Issuance of common stock | 330 | 330 | |
Issuance of common stock, shares | 1,100 | ||
Stock compensation expense | 68 | 68 | |
Net loss | -1,890 | -1,890 | |
Ending Balance at Sep. 30, 2013 | 2,613 | 10,851 | -8,238 |
Ending Balance, shares at Sep. 30, 2013 | 22,799 | 22,799 | |
Issuance of common stock | 470 | 470 | |
Issuance of common stock, shares | 3,000 | ||
Stock compensation expense | 98 | 98 | |
Stock issued for services | 20 | 20 | |
Stock issued for services, Shares | 100 | ||
Issuance of warrants related to debt | 219 | 219 | |
Net loss | -1,355 | -1,355 | |
Ending Balance at Sep. 30, 2014 | $2,065 | $11,658 | ($9,593) |
Ending Balance, shares at Sep. 30, 2014 | 25,899 | 25,899 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($1,355) | ($1,890) |
Loss from discontinued operations | -230 | -324 |
Loss from continuing operations | -1,125 | -1,566 |
Adjustments to reconcile loss from continuing operations to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 498 | 485 |
Stock issued for services | 20 | |
Stock option expense | 98 | 68 |
Provision for doubtful accounts | 322 | 142 |
Loss on abandonment of fixed assets | 49 | 78 |
Changes in operating assets and liabilities - | ||
Accounts receivable | 1,468 | -675 |
Accounts payable | -105 | 842 |
Accrued compensation | -100 | -300 |
Other current assets | -1,234 | -324 |
Other current liabilities | 530 | 265 |
Long-term liabilities | -113 | -127 |
Net cash provided by (used in) operating activities - Continuing Operations | 308 | -1,112 |
Net cash (used in) provided by operating activities - Discontinued Operations | -22 | 41 |
Net cash provided by (used in) operating activities | 286 | -1,071 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of property and equipment | -146 | -191 |
Partial payment of earn-out | -225 | -150 |
Net cash used in investing activities - Continuing Operations | -371 | -341 |
Net cash used in investing activities - Discontinued Operations | -4 | |
Net cash used in investing activities | -371 | -345 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale lease back | 122 | |
Proceeds from short-term related party debt | 185 | |
Payments on short-term related party debt | -185 | |
Proceeds from the issuance of equity, net | 470 | |
Proceeds from the issuance of debt, net | 517 | |
Payments on capital lease | -72 | -39 |
Net proceeds from short-term debt | -1,023 | 1,330 |
Net cash (used in) provided by financing activities | -108 | 1,413 |
Net change in cash and cash equivalents - Continuing Operations | -171 | -40 |
Net change in cash and cash equivalents - Discontinued Operations | -22 | 37 |
Cash and cash equivalents at beginning of year - Continuing Operations | 361 | 364 |
Cash and cash equivalents at end of year | 168 | 361 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 461 | 248 |
Cash paid for taxes | 24 | 8 |
NON-CASH FROM INVESTING AND FINANCING ACTIVITIES: | ||
Property and equipment additions purchased by capital lease | 194 | |
Non-cash payment of earn-out | $330 | $330 |
Description_of_Business
Description of Business | 12 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | |
Description of Business | 1. Description of Business |
General Employment Enterprises, Inc. (the “Company”, “us”, “our” or “we”) was incorporated in the State of Illinois in 1962 and is the successor to employment offices doing business since 1893 and provides staffing services through a network of branch offices located in major metropolitan areas throughout the United States. The Company’s professional staffing services provide information technology, engineering and accounting professionals to clients on either a regular placement basis or a temporary contract basis. The Company’s agricultural staffing services provided agricultural workers for farms and groves, until July 7, 2013, when the Company ceased operations within its Agricultural Division, terminated all the division’s employees and began the process of liquidating all assets of this Division. The Company’s industrial staffing business provides weekly temporary staffing for light industrial clients in Ohio and Pennsylvania. | |
The Company has experienced significant losses in the past. Management has implemented a strategy which included cost reduction efforts, closure of the Agricultural Division as well as identifying strategic acquisitions, financed primarily through the issuance of stock and convertible debt, to improve the overall profitability and cash flows of the Company. The Company entered into a three year revolving credit agreement with ACF Finco I LP (formerly Keltic) to provide working capital financing. The agreement allows ACF Finco I LP to advance the Company funds based on a percentage of eligible invoices. Management believes with current cash flow from operations, the preferred offering and the availability under the ACF Finco I LP loan agreement, the Company will have sufficient liquidity for the next 12 months. |
Significant_Accounting_Policie
Significant Accounting Policies and Estimates | 12 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Estimates | 2. Significant Accounting Policies and Estimates |
Basis of Presentation | |
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts and transactions of the Company and its wholly-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. | |
Estimates and Assumptions | |
Management makes estimates and assumptions that can affect the amounts of assets and liabilities reported as of the date of the condensed consolidated financial statements, as well as the amounts of reported revenues and expenses during the periods presented. Those estimates and assumptions typically involve expectations about events to occur subsequent to the balance sheet date, and it is possible that actual results could ultimately differ from the estimates. If differences were to occur in a subsequent period, the Company would recognize those differences when they became known. Significant matters requiring the use of estimates and assumptions include, but may not be limited to, deferred income tax valuation allowances, accounts receivable allowances, accounting for acquisitions, accounting for derivatives and evaluation of impairment. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. | |
Revenue Recognition | |
Direct hire placement service revenues are recognized when applicants accept offers of employment, less a provision for estimated losses due to applicants not remaining employed for the Company’s guarantee period. Contract staffing service revenues are recognized when services are rendered. | |
The provision for falloffs and refunds, which is reflected in the consolidated statements of operations as a reduction of placement service revenues, was $939,000 in fiscal 2014 and $969,000 in fiscal 2013. | |
Cost of Contract Staffing Services | |
The cost of contract services includes the wages and the related payroll taxes and employee benefits of the Company’s employees while they work on contract assignments. | |
Cash and Cash Equivalents | |
Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. At September 30, 2014, and September 30, 2013, there were no cash equivalents. The Company maintains deposits in financial institutions in excess of amounts guaranteed by the Federal Deposit Insurance Corporation. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Beginning 2013, insurance coverage reverted to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. | |
Accounts Receivable | |
The Company extends credit to its various customers based on evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment terms. An allowance for placement fall-offs is recorded, as a reduction of revenues, for estimated losses due to applicants not remaining employed for the Company’s guarantee period. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect management’s estimate of the potential losses inherent in the accounts receivable balances, based on historical loss statistics and known factors impacting its customers. The nature of the contract service business, where companies are dependent on employees for the production cycle allows for a small accounts receivable allowance. Based on management’s review of accounts receivable, an allowance for doubtful accounts of approximately $395,000 and $272,000 is considered necessary as of September 30, 2014, and September 30, 2013, respectively. The Company charges uncollectible accounts against the allowance once the invoices are deemed unlikely to be collectible. Based on management’s review of accounts receivables related to discontinued operations, an allowance of approximately $265,000 and $35,000 are considered necessary as of September 30, 2014 and September 30, 2013, respectively. | |
Property and Equipment | |
Property and equipment are recorded at cost. Depreciation expense is calculated on a straight-line basis over estimated useful lives of five years for computer equipment and two to ten years for office equipment, furniture and fixtures. The Company capitalizes computer software purchased or developed for internal use and amortizes it over an estimated useful life of five years. The carrying value of property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If the carrying amount of an asset group is greater than its estimated future undiscounted cash flows, the carrying value is written down to the estimated fair value. There was no impairment of property and equipment for the years ended September 30, 2014 and 2013. For property and equipment included in current asset of discontinued operations in the accompanying balance sheet the Company has ceased recording depreciation expense. | |
Goodwill | |
Goodwill represents the excess of cost over the fair value of the net assets acquired in the acquisitions of DMCC Staffing, LLC, RFFG of Cleveland, LLC, and Ashley Ellis, LLC (“Ashley Ellis”). The Company assesses goodwill for impairment at least annually. Testing Goodwill for Impairment, which allows the Company to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the entity determines that this threshold is not met, then performing the two-step impairment test is unnecessary. An impairment loss would be recognized to the extent the carrying value of goodwill exceeds its implied fair value. | |
Fair Value Measurement | |
The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. | |
The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: | |
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |
The fair value of the Company’s current assets and current liabilities, excluding the derivative liability, approximate their carrying values due to their short term nature. The carrying value of the Company’s long-term liabilities and the derivative liability represents their fair value based on level 3 inputs, as discussed in Notes 6 and 8. The Company’s goodwill and other intangible assets are measured at fair value on a non-recurring basis using level 3 inputs, as discussed in Note 4. | |
Derivative Financial Instruments | |
The Company does not use derivative instruments to hedge exposure to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 “Derivative and Hedging” (ASC 815) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether fair value of warrants issued is required to be classified as equity or as a derivative liability. | |
Earnings (loss) per Share | |
Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Common share equivalents of approximately 468,000 and 47,000 were excluded from the computation of diluted earnings per share for the years ended September 30, 2014 and 2013, respectively, because their effect is anti-dilutive. | |
Reclassification | |
Certain reclassifications have been made to the financial statements as of and for the year ended September 30, 2013 to conform to the presentation as of and for the year ended September 30, 2014. | |
Advertising Expenses | |
The majority of the Company’s advertising expense budget is used to support the Company’s business. Most of the advertisements are in print or internet media, with expenses recorded as they are incurred. For the years ended September 30, 2014 and 2013, included in selling, general and administrative expenses was advertising expense totaling approximately $718,000 and $733,000, respectively. | |
Intangible Assets | |
Customer lists, non-compete agreements, customer relationships, management agreements and trade names were recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives ranging from two to ten years using both accelerated and straight-line methods. | |
Impairment of Long-lived Assets | |
The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. | |
Stock-Based Compensation | |
The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. | |
Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. | |
See Note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares. | |
Income Taxes | |
We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. | |
Due to the private sale of shares of common stock to LEED HR during fiscal 2012 and the resulting change in control, the Company may be limited by Section 382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future years. | |
We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. | |
Discontinued Operations | |
A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographical area of operations and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations. In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities and activity of our agricultural business have been reclassified as a discontinued operation for all periods presented. | |
Segment Data | |
The Company has two operating business segments a) Contract staffing services, and b) Direct hire placement. These operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including type of business, type of employee, length of employment and revenue recognition are considered in determining these operating segments. | |
Recent Accounting Pronouncements | |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those years. Early adoption is not permitted. The Company is currently assessing the impact of ASU 2014-09. | |
In August 2014, the FASB issued Accounting Standards Update 2014–15 (“ASU 2014-15), “Presentation of Financial Statements – Going Concern (Subtopic 205 – 40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The Company does not expect this ASU to have a significant impact on its financial position or results of operations. | |
In November 2014, FASB issued ASU No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force. The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle in accordance with Topic 250, Accounting Changes and Error Corrections. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. The amendments in this Accounting Standards Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of ASU 2014-17 did not have a material impact on the Company’s consolidated financial statements. | |
Other recent accounting pronouncements issued by FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
Property and Equipment | 3. Property and Equipment | ||||||||||
Property and equipment consisted of the following as of September 30: | |||||||||||
(In thousands) | Useful Lives | 2014 | 2013 | ||||||||
Computer software | 5 years | $ | 1,447 | $ | 1,447 | ||||||
Office equipment, furniture and fixtures and leasehold improvements | 2 to 10 years | 1,413 | 2,325 | ||||||||
Total property and equipment, at cost | 2,860 | 3,772 | |||||||||
Accumulated depreciation and amortization | (2,407 | ) | (3,242 | ) | |||||||
Property and equipment, net | $ | 453 | $ | 530 | |||||||
Disposals of property and equipment, consisting primarily of fully-depreciated office furniture, a vehicle and equipment, had an original cost of approximately $49,000 and $28,000 in fiscal 2014 and 2013, respectively. Leasehold improvements are amortized over the term of the lease. | |||||||||||
During the year ended September 30, 2013, the Company sold vehicles with a value of approximately $225,000 and leased them back under a 30 month agreement at an interest rate of approximately 23%. At September 30, 2014, approximately $72,000 is current and included in other current liabilities and approximately $7,000 is included in other long term liabilities. | |||||||||||
Depreciation expense for the year ended September 30, 2014 and 2013 was approximately $174,000 and $165,000, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets | ||||||||||||||||
Goodwill | |||||||||||||||||
Goodwill represents the excess of cost over the fair value of the net assets acquired from various acquisitions. Goodwill is not amortized. The Company performs a goodwill impairment test annually, by reporting unit, in the fourth quarter of the fiscal year, or whenever potential impairment triggers occur. Should the two-step process be necessary, the first step of the impairment test identifies potential impairment by comparing the fair value of a reporting unit to its carrying value including goodwill. In applying a fair-value-based test, estimates are made of the expected future cash flows to be derived from the reporting unit. Similar to the review for impairment of other long-lived assets, the resulting fair value determination is significantly impacted by estimates of future margins, capital needs, economic trends and other factors. If the carrying value of the reporting unit exceeds its fair value, the second step of the impairment test is performed to measure the amount of impairment loss, if any. The second step of the impairment test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. An impairment loss would be recognized to the extent the carrying value of goodwill exceeds its implied fair value. No impairment loss was recorded in fiscal year 2014 or 2013. | |||||||||||||||||
Intangible Assets | |||||||||||||||||
As of September 30, 2014 | |||||||||||||||||
(In Thousands) | Cost | Accumulated | Loss on | Net | |||||||||||||
Amortization | Impairment | Book | |||||||||||||||
of | Value | ||||||||||||||||
Intangible | |||||||||||||||||
Assets | |||||||||||||||||
Customer Relationships | $ | 2,690 | $ | 1,137 | $ | — | $ | 1,553 | |||||||||
Trade Name | 17 | 10 | — | 7 | |||||||||||||
$ | 2,707 | $ | 1,147 | $ | — | $ | 1,560 | ||||||||||
As of September 30, 2013 | |||||||||||||||||
(In Thousands) | Cost | Accumulated | Loss on | Net | |||||||||||||
Amortization | Impairment | Book | |||||||||||||||
of | Value | ||||||||||||||||
Intangible | |||||||||||||||||
Assets | |||||||||||||||||
Customer Relationships | $ | 2,690 | $ | 816 | $ | — | $ | 1,874 | |||||||||
Trade Name | 17 | 7 | — | 10 | |||||||||||||
$ | 2,707 | $ | 823 | $ | — | $ | 1,884 | ||||||||||
Amortization expense was approximately $326,000 and $320,000 for the years ended September 30, 2014 and 2013, respectively. | |||||||||||||||||
The trade names are amortized on a straight – line basis over the estimated useful life of five years. Customer relationships are amortized based on the future undiscounted cash flows over estimated remaining useful lives of three to ten years. Over the next five years, annual amortization expense for these finite life intangible assets will be approximately $320,000 in 2015, $320,000 in 2016, $320,000 in 2017, $320,000 in 2018 and $280,000 in 2019. | |||||||||||||||||
Long-lived assets, such as purchased intangibles subject to amortization, are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company regularly evaluates whether events and circumstances have occurred that indicate possible impairment and relies on a number of factors, including operating results, business plans, economic projections, and anticipated future cash flows. The Company uses an estimate of the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether the assets are recoverable. | |||||||||||||||||
During the year ended September 30, 2014, the Company did not record any impairment of intangible assets. |
Shortterm_Debt
Short-term Debt | 12 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | |
Short-term Debt | 5. Short-term Debt |
On September 27, 2013, the Company entered into agreements with ACF FINCO I LP (successor-in-interest to Keltic Financial Partners II, LP), a limited partnership formed under the laws of the State of Delaware (“ACF”) that provide the Company with long term financing through a six million dollar ($6,000,000) secured revolving note (the “Note”). The Note has a term of three years and has no amortization prior to maturity. The interest rate for the Note is a fluctuating rate that, when annualized, is equal to the greatest of (A) the Prime Rate plus three and one quarter percent (3.25%), (B) the LIBOR Rate plus six and one quarter percent (6.25%), and (C) six and one half percent (6.50%), with the interest paid on a monthly basis. At September 30, 2014 and September 30, 2013 the interest rate was 6.5%. Loan advances pursuant to the Note are based on the accounts receivable balance and other assets. Upon execution of the Note, approximately three million fifty thousand dollars ($3,050,000) was advanced for the full repayment of the AR Credit Facility and fees from Wells Fargo related to the early termination thereof. At the time of close, there was approximately nine hundred thousand ($900,000) of availability under the new Note in excess of amounts paid to extinguish the debt and fees with Wells Fargo. The Company incurred certain cash expense and commitment fees related to obtaining the agreement of approximately $170,000, which has been paid. The Note is secured by all of the Company’s property and assets, whether real or personal, tangible or intangible, and whether now owned or hereafter acquired, or in which it now has or at any time in the future may acquire any right, title or interests. On April 21, 2014, the Company entered into the First Amendment and Waiver to the Loan and Security Agreement with ACF to adjust the covenants. On December 3, 2014 the Company entered into a Second Amendment and Waiver to the Loan and Security Agreement with ACF to adjust the future covenants as outlined below and waived certain defaults. The ACF facility includes certain covenants which require compliance until termination of the agreement. As of the date of this report, the Company was in compliance with all such covenants or had received waivers related thereto. | |
The Company has several administrative covenants and the following financial covenant: | |
The Company must maintain the following EBITDA: | |
(a) The three (3) consecutive calendar month period ending on December 31, 2014, to be a negative number exceeding negative Two Hundred Fifty Thousand and 00/100 Dollars ($250,000); | |
(b) The six (6) consecutive calendar month period ending on March 31, 2015, to be a negative number exceeding negative Five Hundred Thousand and 00/100 Dollars ($500,000); | |
(c) The nine (9) consecutive calendar month period ending on June 30, 2015, to be a negative number exceeding negative Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000); | |
(d) The twelve (12) consecutive calendar month period ending on September 30, 2015, to be a negative number exceeding negative One Million and 00/100 Dollars ($1,000,000); and | |
(e) For any period commencing on or after October 1, 2015, no less than such amounts as are established by Lender for such period in Lender’s permitted discretion based on the annual financial projections including such period delivered by Borrower pursuant to Section 6.6, above. | |
The agreement includes certain covenants which require compliance until termination of the agreement. As of the September 30, 2014 the Company was not in compliance with the EBITDA covenant or other administrative covenants, however as of the date of this report, the Company was in compliance with the above EBITDA covenant and had received a waiver from the Lender for other administrative covenants. At September 30, 2014 there was approximately $730,000 available on the line of credit. |
Other_Current_Liabilities
Other Current Liabilities | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Other Liabilities Disclosure [Abstract] | |||||||||
Other Current Liabilities | 7. Other Current Liabilities | ||||||||
Other current liabilities consisted of the following: | |||||||||
September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Accrued expenses | $ | 174 | $ | 256 | |||||
Accrued sales tax | 762 | 226 | |||||||
Capital lease – short-term | 72 | 72 | |||||||
Earn-out liability | 201 | 350 | |||||||
Deferred rent | 5 | 77 | |||||||
Total other current liabilities | $ | 1,214 | $ | 981 | |||||
LongTerm_Liabilities
Long-Term Liabilities | 12 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | |
Long-Term Liabilities | 8. Long-Term Liabilities |
In connection with the completion of the sale of shares of common stock to PSQ in fiscal year 2009, the Company’s then Chairman, Chief Executive Officer and President (the “former CEO”) retired from those positions and his employment agreement with the Company was replaced by a new consulting agreement. Under the consulting agreement, the Company became obligated to pay an annual consulting fee of $180,000 over a five-year period and to issue 500,000 shares of common stock to the former CEO for no additional consideration. During fiscal year 2009, the Company recorded a liability for the net present value of the future payments in the amount of $790,000 and recorded a charge to operations in the amount of $280,000 based on a quoted market price of $0.56 per share on the date of the award. On January 31, 2013, the former CEO retired from all positions with the Company, however he will continue to receive his monthly payments required under his consulting agreement. As of September 30, 2014 and September 30, 2013, the liability for future payments was reflected on the consolidated balance sheet as short term accrued compensation of $60,000 and $135,000, respectively. | |
Included in long-term liabilities as of September 30, 2013 are capital leases as disclosed in Note 3 and deferred rent. |
Common_Stock
Common Stock | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Common Stock | 9. Common Stock | ||||||||||||
In 2013, the Company executed an Amended and Restated Purchase agreement with RFFG that required the issuance of 1.1 million shares of common stock. The stock was officially issued on July 2, 2013. The stock price on July 2, 2013 was $0.2999 and there were shares traded that day at that price. The value related to the transaction on July 2, 2013 was $329,890. | |||||||||||||
On September 9, 2013, the shareholders approved the increase of common shares authorized to be issued by the Company from 50,000,000 to 200,000,000 and preferred shares from 1,000,000 to 20,000,000. | |||||||||||||
On March 31, 2014, the Company and Aracle SPF I, LLC, a New York based fund (“Aracle”) entered into a Securities Purchase Agreement (the “SPA”) pursuant to which Aracle has the right to acquire up to 12 units (the “Units”), for $50,000 per Unit, with each Unit consisting of 250,000 shares of common stock of the Company and 125,000 common stock purchase warrants. The warrants are exercisable 6 months after issuance, have a term of 4 years, and have an exercise price of $0.25 per warrant share. The SPA contains standard representations, warranties, and covenants. In addition, the SPA contains a price adjustment mechanism that requires the Company, with certain exceptions, to issue additional shares of common stock to the investor in the event the Company, within 12 months of the initial closing under the SPA, issues certain equity securities at a price per share less than $0.20, provided, however, as long as the Company is listed on the NYSE MKT the total number of shares issuable under the foregoing adjustment provision may not exceed 19.9% of the Company’s outstanding shares of common stock on March 30, 2014. Further, in the event the Company is delisted from NYSE MKT while Aracle owns at least 51% of the shares issued to it under the SPA, the Company shall issue an additional 3,000,000 shares to Aracle, and the 12 month price adjustment period shall be extended to 36 months. The Company agreed to appoint two new members to the Company’s Board of Directors within 60 days of the initial closing, which new members are subject to the prior approval of Aracle. The Company granted Aracle piggyback registration rights with respect to the shares and the shares of common stock underlying the warrants. The warrants do not include any price protection clause. | |||||||||||||
Concurrently with the execution of the SPA the Company and Aracle conducted an initial closing thereunder, in which Aracle purchased 9.5 Units for $475,000. The Units and the securities underlying the Units were issued to Aracle, an accredited investor, pursuant to the exemption from registration provided by Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, and other applicable exemptions. The issued securities contain a standard restricted legend. | |||||||||||||
On April 16, 2014, the Company, Aracle and a second institutional investor entered into certain Securities Purchase Agreements (“SPA”) pursuant to which the Investors purchased 2.5 Units for $125,000. | |||||||||||||
The Company incurred certain expenses related to the SPA of approximately $130,000, which were paid from the proceeds, for a net proceeds of approximately $470,000. | |||||||||||||
The shares and securities underlying the warrants were issued to the investors, pursuant to the exemption from registration provided by Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as amended, and other applicable exemptions. The issued securities contain a standard restricted legend. | |||||||||||||
Warrants | |||||||||||||
(Number of Warrants in Thousands) | Number of Shares | Exercise | Expiration | ||||||||||
Price | |||||||||||||
Outstanding at September 30, 2013 | — | ||||||||||||
Warrants Granted | |||||||||||||
Aracle Warrants | 1,500 | $ | 0.25 | 3/31/18 | |||||||||
Brio Warrants | 2,372 | $ | 0.25 | 2/7/20 | |||||||||
Outstanding at September 30, 2014 | 3,872 | ||||||||||||
The weighted average exercise price of outstanding warrants was $0.25 at September 30, 2014, with expiration dates ranging from March 31, 2018 to February 7, 2020. |
Stock_Option_Plans
Stock Option Plans | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Stock Option Plans | 10. Stock Option Plans | ||||||||||||||||||||
As of September 30, 2014, there were stock options outstanding under the Company’s 1995 Stock Option Plan, Second Amended and Restated 1997 Stock Option Plan, 1999 Stock Option Plan and the 2011 Company Incentive Plan. All four plans were approved by the shareholders. The 1995 Stock Option Plan and the 1999 Stock Option Plan have expired, and no further options may be granted under those plans. During fiscal 2009, the Second Amended and Restated 1997 Stock Option Plan was amended to make an additional 592,000 options available for granting and as of September 30, 2013 there were no shares available for issuance under the Amended and Restated 1997 Stock Option Plan. As of September 30, 2014, there were no shares available for issuance under the 2011 Company Incentive Plan. The plans granted specified numbers of options to non-employee directors, and they authorized the Compensation Committee of the Board of Directors to grant either incentive or non-statutory stock options to employees. Vesting periods are established by the Compensation Committee at the time of grant. All stock options outstanding as of September 30, 2014 and September 30, 2013 were non-statutory stock options, had exercise prices equal to the market price on the date of grant, and had expiration dates ten years from the date of grant. | |||||||||||||||||||||
On July 23, 2013, the Board of Directors approved the Company’s 2013 Incentive Stock Plan (the “2013 Plan”), and resolved to cease issuing securities under all prior Company equity compensation plans. The 2013 Plan was approved by the Company’s shareholders at the Annual Meeting of Stockholders on September 9, 2013. The purpose of the 2013 Plan is to provide additional incentives to select persons who can make, are making, and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons, and to encourage and reward such contributions, by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restricted stock. The 2013 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2013 Plan (the “Committee”). The Committee has full authority to administer and interpret the provisions of the 2013 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2013 Plan. The maximum number of shares that may be granted under the 2013 Plan is 10,000,000. This number is subject to adjustment to reflect changes in the capital structure or organization of the Company. | |||||||||||||||||||||
A summary of stock option activity is as follows: | |||||||||||||||||||||
Year Ended September 30, | |||||||||||||||||||||
(Number of Options in Thousands) | 2014 | 2013 | |||||||||||||||||||
Number of options outstanding: | |||||||||||||||||||||
Beginning of year | 1,478 | 1,747 | |||||||||||||||||||
Granted | 2,595 | 108 | |||||||||||||||||||
Exercised | — | — | |||||||||||||||||||
Terminated | (654 | ) | (377 | ) | |||||||||||||||||
End of year | 3,419 | 1,478 | |||||||||||||||||||
Number of options exercisable at end of year | 1,470 | 1,418 | |||||||||||||||||||
Number of options available for grant at end of year | 7,408 | 10,000 | |||||||||||||||||||
Weighted average option prices per share: | |||||||||||||||||||||
Granted during the year | $ | 0.28 | $ | 0.49 | |||||||||||||||||
Exercised during the year | — | — | |||||||||||||||||||
Terminated during the year | 0.42 | 0.4 | |||||||||||||||||||
Outstanding at end of year | 0.32 | 0.4 | |||||||||||||||||||
Exercisable at end of year | 0.38 | 0.41 | |||||||||||||||||||
Stock options outstanding as of September 30, 2014 were as follows (number of options in thousands): | |||||||||||||||||||||
Range of Exercise Prices | Number | Weighted | Number | Weighted | Average | ||||||||||||||||
Outstanding | Average | Exercisable | Average | Remaining | |||||||||||||||||
Price | Price | Life | |||||||||||||||||||
(Years) | |||||||||||||||||||||
Under $1.00 | 3,404 | $ | 0.32 | 1,455 | $ | 0.38 | 8.5 | ||||||||||||||
$1.01 to 2.39 | 15 | $ | 2.39 | 15 | $ | 2.39 | 3 | ||||||||||||||
As of September 30, 2014, the aggregate intrinsic value of outstanding stock options and exercisable stock options was approximately $0.21 per share. | |||||||||||||||||||||
The average fair value of stock options granted was estimated to be $0.21 per share in fiscal 2014 and $0.43 per share in fiscal 2013. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions: | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Expected option life (years) | 9 | 10 | |||||||||||||||||||
Expected stock price volatility | 95 | % | 94% | ||||||||||||||||||
Expected dividend yield | — | % | — % | ||||||||||||||||||
Risk-free interest rate | 2.75 | % | 2.64% to 1.86% | ||||||||||||||||||
Stock-based compensation expense attributable to stock options was $98,000 and $68,000 in 2014 and 2013, respectively. As of September 30, 2014, there was approximately $422,000 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 1.5 years. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Taxes | 11. Income Taxes | ||||||||
The components of the provision for income taxes are as follows: | |||||||||
Year Ending September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Current tax provision | $ | 24 | $ | 8 | |||||
Deferred tax provision | — | — | |||||||
Provision for income taxes | $ | 24 | $ | 8 | |||||
The differences between income taxes calculated at the statutory U.S. federal income tax rate and the Company’s provision for income taxes are as follows: | |||||||||
Year Ended September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Income tax provision at statutory federal tax rate | $ | 32 | $ | 22 | |||||
Valuation allowance | (8 | ) | (14 | ) | |||||
Provision for income taxes | $ | 24 | $ | 8 | |||||
The net deferred income tax asset balance related to the following: | |||||||||
Year Ended September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Temporary differences | |||||||||
Stock option expense | $ | 461 | $ | 326 | |||||
Deferred compensation expense | 24 | (59 | ) | ||||||
Vacation expense | 64 | 69 | |||||||
Intangible assets | 107 | 107 | |||||||
Allowance for doubtful accounts | 208 | 74 | |||||||
Other | 5 | (49 | ) | ||||||
Net operating loss carryforwards | 4,956 | 4,292 | |||||||
Valuation allowances | (5,825 | ) | (4,760 | ) | |||||
Net deferred income tax asset | $ | — | $ | — | |||||
As of September 30, 2014, there were approximately $12,150,000 of losses available to reduce federal taxable income in future years through 2033, and there were approximately $10,800,000 of losses available to reduce state taxable income in future years, expiring from 2014 through 2033. Due to common stock transactions in the prior years, it is likely that the Company will be limited by Section 382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future years. The Company is currently evaluating the effects of any such limitation. | |||||||||
Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of September 30, 2014 and 2013, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company also considered whether there was any currently available information about future years. Because long-term contracts are not a significant part of the Company’s business, future results cannot be reliably predicted by considering past trends or by extrapolating past results. Moreover, the Company’s earnings are strongly influenced by national economic conditions and have been volatile in the past. Considering these factors, the Company determined that it was not possible to reasonably quantify future taxable income. The Company determined that it is more likely than not that all of the deferred tax assets will not be realized. Accordingly, the Company maintained a full valuation allowance as of September 30, 2014 and 2013. | |||||||||
As a result of continuing losses, we have determined that it is more likely than not that we will not realize the benefits of the deferred tax assets and therefore we have recorded a valuation allowance to reduce the carrying value of the deferred tax assets to zero. The valuation allowance increased by $1,065,000 and $537,000 in 2014 and 2013, respectively. | |||||||||
We file federal and state income tax returns in jurisdictions with varying statutes of limitations. Due to our net operating loss carryforwards, our income tax returns generally remain subject to examination by federal and most state tax authorities. We are not currently under examination in any federal or state jurisdiction. |
Contingencies_and_Commitments
Contingencies and Commitments | 12 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | 12. Contingencies and Commitments |
On April 22, 2013, the Company finalized an Amendment to the Asset Purchase Agreement by and among DMCC Staffing, LLC, an Ohio limited liability company, RFFG of Cleveland, LLC an Ohio limited liability company (each a “Seller” and together, “Sellers”), the Company, and Triad Personnel Services, Inc., an Illinois corporation and wholly owned subsidiary of the Company. | |
The Company agreed to pay Sellers additional cash consideration of between $550,000 and $650,000 depending on the length of payments and 1,100,000 shares of common stock, in full satisfaction of all amounts owed to Seller, related to the Asset Purchase Agreement. The Company issued 1,100,000 shares of common stock on July 2, 2013, which was valued at approximately $330,000. During the year ended September 30, 2013, the Company paid $200,000 of the cash consideration noted above. The Company has accrued $350,000, which is included in other current liabilities on the consolidated balance sheet at September 30, 2013, for the liability, however has elected to pay the remaining amount over two years. The total payments will be approximately $450,000 with additional $100,000 to be recorded as interest expense. During the year ended September 30, 2014, the Company paid approximately $225,000 to the Sellers, $150,000 of principle and approximately $75,000 of interest. The Company had approximately $200,000 accrued at September 30, 2014 related to the remaining liability. | |
During 2013, the Company sold vehicles with a value of approximately $225,000 and leased them back under a 30 month agreement at an interest rate of approximately 23%. At September 30, 2014, approximately $72,000 is included in other current liabilities and approximately $7,000 in other long term liabilities. |
Leases
Leases | 12 Months Ended |
Sep. 30, 2014 | |
Leases [Abstract] | |
Leases | 13. Leases |
The Company leases space for all of its branch offices, which are located either in downtown or suburban business centers, and for its corporate headquarters. Branch offices are generally leased over periods from three to five years. The corporate office lease expires in 2018. The leases generally provide for payment of basic rent plus a share of building real estate taxes, maintenance costs and utilities. | |
Rent expense was $897,000 in fiscal 2014 and $1,087,000 in fiscal 2013. As of September 30, 2014, future minimum lease payments due under non-cancelable lease agreements having initial terms in excess of one year, including certain closed offices, totaled approximately $1,019,000, as follows: fiscal 2015 - $415,000, fiscal 2016 - $323,000, fiscal 2017 - $164,000, fiscal 2018 – 90,000, fiscal 2019 – 27,000 and thereafter - $0. |
Segment_Data
Segment Data | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment Data | 14. Segment Data | ||||||||
The Company provides the following distinctive services: (a) direct hire placement services, (b) temporary professional services staffing in the fields of information technology, engineering, and accounting, and (c) temporary light industrial staffing. Intersegment net service revenues are not significant. Revenues generated from the temporary professional services staffing and light industrial staffing are classified as contract staffing services revenues in the statements of operations. Selling, general and administrative expenses are not separately allocated among agricultural, professional services or industrial staffing services within the contract staffing services sector for internal reporting purposes. | |||||||||
Unallocated Corporate expenses primarily include, corporate legal expenses, consulting expenses, audit fees, corporate rent and facility costs, board fees and interest expense. | |||||||||
Fiscal Year Ended | |||||||||
September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Direct Hire Placement Services | |||||||||
Revenue | $ | 7,088 | $ | 7,317 | |||||
Placement services gross margin | 100 | % | 100 | % | |||||
Operating loss | (983 | ) | (700 | ) | |||||
Depreciation & amortization | 230 | 224 | |||||||
Accounts receivable – net | 805 | 625 | |||||||
Intangible assets | 228 | 347 | |||||||
Goodwill | 24 | 24 | |||||||
Total assets | 2,285 | 4,810 | |||||||
Contract Staffing Services | |||||||||
Industrial services revenue | $ | 25,031 | $ | 29,816 | |||||
Professional services revenue | 7,692 | 9,371 | |||||||
Industrial services gross margin | 15.6 | % | 12.61 | % | |||||
Professional services gross margin | 31.1 | % | 33.19 | % | |||||
Operating income | $ | 1,159 | $ | 890 | |||||
Depreciation and amortization | 268 | 261 | |||||||
Accounts receivable – industrial services | 3,318 | 4,778 | |||||||
Accounts receivable – professional services | 784 | 1,294 | |||||||
Intangible assets | 1,332 | 1,537 | |||||||
Goodwill | 1,082 | 1,082 | |||||||
Total assets | $ | 7,559 | $ | 6,184 | |||||
Unallocated Expenses | |||||||||
Corporate administrative expenses | $ | 541 | $ | 1,160 | |||||
Corporate facility expenses | 160 | 247 | |||||||
Board related expenses | 93 | 98 | |||||||
Interest expense | 507 | 251 | |||||||
Total unallocated expenses | $ | 1,301 | $ | 1,756 | |||||
Consolidated | |||||||||
Total revenue | $ | 39,811 | $ | 46,504 | |||||
Operating loss | (1,125 | ) | (1,566 | ) | |||||
Depreciation and amortization | 498 | 485 | |||||||
Total accounts receivables – net | 4,907 | 6,697 | |||||||
Intangible assets | 1,560 | 1,884 | |||||||
Goodwill | 1,106 | 1,106 | |||||||
Assets from continuing operations | 9,844 | 10,994 | |||||||
Assets from discontinued operations | 0 | 238 | |||||||
Total assets | $ | 9,844 | $ | 11,232 | |||||
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Discontinued Operations | 15. Discontinued Operations | ||||||||
As of July 7, 2013, the Board of Directors of the Company determined that the best course of action related to its Agricultural Division was to terminate operations, to liquidate the Division’s assets, and to focus the business on the light industrial and professional divisions. On July 7, 2013, all staffing was discontinued and the entire operations of the Agricultural Division were discontinued as of August 1, 2013. All employees have been terminated and a one-time expense of approximately $100,000 was recognized as of September 30, 2013. | |||||||||
Years Ended | |||||||||
September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Discontinued Operations | |||||||||
Agricultural services revenue – net | $ | — | $ | 6,801 | |||||
Agricultural services gross margin | — | 3.3 | % | ||||||
Agricultural services net loss | (230 | ) | (324 | ) | |||||
Accounts receivable net – Agricultural services | — | 238 | |||||||
A Fixed assets – Agricultural services | — | — | |||||||
Total assets – Agricultural services | — | 238 | |||||||
Total liabilities – Agricultural services | $ | — | $ | 30 | |||||
The Company has no assets or liabilities related to the discontinued operations as of September 30, 2014. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 16. Related Party Transactions |
The Company contracted with Norco Accounting & Consulting Inc. (“Norco”) to provide accounting and consulting services prior to Andrew J. Norstrud joining the Company. Norco charged approximately $63,000 for consulting services and approximately $13,000 in related expense during the second quarter ended March 31, 2013. Norco is 50% owned by Andrew J. Norstrud, who joined the Company on March 29, 2013, as the Company’s Chief Financial Officer and became the Company’s Chief Executive Officer on March 7, 2014. The Company no longer uses Norco for accounting and consulting services. | |
To ensure the Company has adequate near-term liquidity, the officers of the Company have loaned the Company short-term loans. In most cases, the loans are for less than 30 days and no interest is expensed or paid to the officers. There were no amounts owed to officers of the Company, other than reimbursable expenses, at September 30, 2014. | |
On May 29, 2014, the Company entered into a settlement agreement related to an indemnification agreement with the former Chief Executive Officer of the Company under which the Company agreed to pay a total of $51,850 as settlement in full of certain disputes among the parties. As of September 30, 2014 this has been paid by the Company. | |
The above related party transactions are not necessarily indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent parties. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events |
On November 14, 2014, the Company entered into a Securities Purchase Agreement, with 16 individuals who collectively have subscribed to purchase a total of 200,000 shares of Preferred Stock from the Company for a total purchase price of $2,000,000. The purchase price is being held in escrow pending a closing of the transactions set forth in the Agreement. The net proceeds to the Company from the offering will be approximately $2,000,000, with approximately $1,000,000 to be used as working capital and the remaining $1,000,000 for marketing, acquisitions, expansion and to further the operations of the Company. The Preferred Stock was designated by the Company on December 15, 2014 through the filing of a Certificate of Designation of Series A Convertible Preferred Stock with the Illinois Secretary of State. Each share of Preferred Stock is initially convertible, at the election of the holder, into 50 shares of the Company’s Common Stock. The foregoing conversion ratio is subject to standard adjustment mechanisms, as set forth in the Designation. The Company expects to close this offering in early January, 2015. |
Significant_Accounting_Policie1
Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America and the rules of the United States Securities and Exchange Commission. | |
Principles of Consolidation | Principles of Consolidation |
The consolidated financial statements include the accounts and transactions of the Company and its wholly-owned subsidiaries. All significant inter-company accounts and transactions are eliminated in consolidation. | |
Estimates and Assumptions | Estimates and Assumptions |
Management makes estimates and assumptions that can affect the amounts of assets and liabilities reported as of the date of the condensed consolidated financial statements, as well as the amounts of reported revenues and expenses during the periods presented. Those estimates and assumptions typically involve expectations about events to occur subsequent to the balance sheet date, and it is possible that actual results could ultimately differ from the estimates. If differences were to occur in a subsequent period, the Company would recognize those differences when they became known. Significant matters requiring the use of estimates and assumptions include, but may not be limited to, deferred income tax valuation allowances, accounts receivable allowances, accounting for acquisitions, accounting for derivatives and evaluation of impairment. Management believes that its estimates and assumptions are reasonable, based on information that is available at the time they are made. | |
Revenue Recognition | Revenue Recognition |
Direct hire placement service revenues are recognized when applicants accept offers of employment, less a provision for estimated losses due to applicants not remaining employed for the Company’s guarantee period. Contract staffing service revenues are recognized when services are rendered. | |
The provision for falloffs and refunds, which is reflected in the consolidated statements of operations as a reduction of placement service revenues, was $939,000 in fiscal 2014 and $969,000 in fiscal 2013. | |
Cost of Contract Staffing Services | Cost of Contract Staffing Services |
The cost of contract services includes the wages and the related payroll taxes and employee benefits of the Company’s employees while they work on contract assignments. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. At September 30, 2014, and September 30, 2013, there were no cash equivalents. The Company maintains deposits in financial institutions in excess of amounts guaranteed by the Federal Deposit Insurance Corporation. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. Beginning 2013, insurance coverage reverted to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. | |
Accounts Receivable | Accounts Receivable |
The Company extends credit to its various customers based on evaluation of the customer’s financial condition and ability to pay the Company in accordance with the payment terms. An allowance for placement fall-offs is recorded, as a reduction of revenues, for estimated losses due to applicants not remaining employed for the Company’s guarantee period. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect management’s estimate of the potential losses inherent in the accounts receivable balances, based on historical loss statistics and known factors impacting its customers. The nature of the contract service business, where companies are dependent on employees for the production cycle allows for a small accounts receivable allowance. Based on management’s review of accounts receivable, an allowance for doubtful accounts of approximately $395,000 and $272,000 is considered necessary as of September 30, 2014, and September 30, 2013, respectively. The Company charges uncollectible accounts against the allowance once the invoices are deemed unlikely to be collectible. Based on management’s review of accounts receivables related to discontinued operations, an allowance of approximately $265,000 and $35,000 are considered necessary as of September 30, 2014 and September 30, 2013, respectively. | |
Property and Equipment | Property and Equipment |
Property and equipment are recorded at cost. Depreciation expense is calculated on a straight-line basis over estimated useful lives of five years for computer equipment and two to ten years for office equipment, furniture and fixtures. The Company capitalizes computer software purchased or developed for internal use and amortizes it over an estimated useful life of five years. The carrying value of property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If the carrying amount of an asset group is greater than its estimated future undiscounted cash flows, the carrying value is written down to the estimated fair value. There was no impairment of property and equipment for the years ended September 30, 2014 and 2013. For property and equipment included in current asset of discontinued operations in the accompanying balance sheet the Company has ceased recording depreciation expense. | |
Goodwill | Goodwill |
Goodwill represents the excess of cost over the fair value of the net assets acquired in the acquisitions of DMCC Staffing, LLC, RFFG of Cleveland, LLC, and Ashley Ellis, LLC (“Ashley Ellis”). The Company assesses goodwill for impairment at least annually. Testing Goodwill for Impairment, which allows the Company to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the entity determines that this threshold is not met, then performing the two-step impairment test is unnecessary. An impairment loss would be recognized to the extent the carrying value of goodwill exceeds its implied fair value. | |
Fair Value Measurement | Fair Value Measurement |
The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. | |
The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: | |
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |
The fair value of the Company’s current assets and current liabilities, excluding the derivative liability, approximate their carrying values due to their short term nature. The carrying value of the Company’s long-term liabilities and the derivative liability represents their fair value based on level 3 inputs, as discussed in Notes 6 and 8. The Company’s goodwill and other intangible assets are measured at fair value on a non-recurring basis using level 3 inputs, as discussed in Note 4. | |
Derivative Financial Instruments | Derivative Financial Instruments |
The Company does not use derivative instruments to hedge exposure to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under ASC 815 “Derivative and Hedging” (ASC 815) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether fair value of warrants issued is required to be classified as equity or as a derivative liability. | |
Earnings (loss) per Share | Earnings (loss) per Share |
Basic income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Common share equivalents of approximately 468,000 and 47,000 were excluded from the computation of diluted earnings per share for the years ended September 30, 2014 and 2013, respectively, because their effect is anti-dilutive. | |
Reclassification | Reclassification |
Certain reclassifications have been made to the financial statements as of and for the year ended September 30, 2013 to conform to the presentation as of and for the year ended September 30, 2014. | |
Advertising Expenses | Advertising Expenses |
The majority of the Company’s advertising expense budget is used to support the Company’s business. Most of the advertisements are in print or internet media, with expenses recorded as they are incurred. For the years ended September 30, 2014 and 2013, included in selling, general and administrative expenses was advertising expense totaling approximately $718,000 and $733,000, respectively. | |
Intangible Assets | Intangible Assets |
Customer lists, non-compete agreements, customer relationships, management agreements and trade names were recorded at their estimated fair value at the date of acquisition and are amortized over their estimated useful lives ranging from two to ten years using both accelerated and straight-line methods. | |
Impairment of Long-lived Assets | Impairment of Long-lived Assets |
The Company records an impairment of long-lived assets used in operations, other than goodwill, when events or circumstances indicate that the asset might be impaired and the estimated undiscounted cash flows to be generated by those assets over their remaining lives are less than the carrying amount of those items. The net carrying value of assets not recoverable is reduced to fair value, which is typically calculated using the discounted cash flow method. | |
Stock-Based Compensation | Stock-Based Compensation |
The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility, expected term, and forfeiture rate. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. | |
Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model. | |
See Note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation. Upon the exercise of options, it is the Company’s policy to issue new shares rather than utilizing treasury shares. | |
Income Taxes | Income Taxes |
We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. | |
Due to the private sale of shares of common stock to LEED HR during fiscal 2012 and the resulting change in control, the Company may be limited by Section 382 of the Internal Revenue Code as to the amount of net operating losses that may be used in future years. | |
We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We make adjustments to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. | |
Discontinued Operations | Discontinued Operations |
A discontinued operation is a component of an entity that has either been disposed of or that is classified as held for sale, which represents a separate major line of business or geographical area of operations and is part of a single coordinated plan to dispose of a separate line of business or geographical area of operations. In accordance with the rules regarding the presentation of discontinued operations, the assets, liabilities and activity of our agricultural business have been reclassified as a discontinued operation for all periods presented. | |
Segment Data | Segment Data |
The Company has two operating business segments a) Contract staffing services, and b) Direct hire placement. These operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including type of business, type of employee, length of employment and revenue recognition are considered in determining these operating segments. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes or replaces nearly all GAAP revenue recognition guidance. The new guidance establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those years. Early adoption is not permitted. The Company is currently assessing the impact of ASU 2014-09. | |
In August 2014, the FASB issued Accounting Standards Update 2014–15 (“ASU 2014-15), “Presentation of Financial Statements – Going Concern (Subtopic 205 – 40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The Company does not expect this ASU to have a significant impact on its financial position or results of operations. | |
In November 2014, FASB issued ASU No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting (a consensus of the FASB Emerging Issues Task Force. The amendments in this Update provide an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. An acquired entity should determine whether to elect to apply pushdown accounting for each individual change-in-control event in which an acquirer obtains control of the acquired entity. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. An election to apply pushdown accounting in a reporting period after the reporting period in which the change-in-control event occurred should be considered a change in accounting principle in accordance with Topic 250, Accounting Changes and Error Corrections. If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable. The amendments in this Accounting Standards Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The adoption of ASU 2014-17 did not have a material impact on the Company’s consolidated financial statements. | |
Other recent accounting pronouncements issued by FASB and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
Schedule of Property and Equipment | Property and equipment consisted of the following as of September 30: | ||||||||||
(In thousands) | Useful Lives | 2014 | 2013 | ||||||||
Computer software | 5 years | $ | 1,447 | $ | 1,447 | ||||||
Office equipment, furniture and fixtures and leasehold improvements | 2 to 10 years | 1,413 | 2,325 | ||||||||
Total property and equipment, at cost | 2,860 | 3,772 | |||||||||
Accumulated depreciation and amortization | (2,407 | ) | (3,242 | ) | |||||||
Property and equipment, net | $ | 453 | $ | 530 | |||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Intangible Assets | ||||||||||||||||
As of September 30, 2014 | |||||||||||||||||
(In Thousands) | Cost | Accumulated | Loss on | Net | |||||||||||||
Amortization | Impairment | Book | |||||||||||||||
of | Value | ||||||||||||||||
Intangible | |||||||||||||||||
Assets | |||||||||||||||||
Customer Relationships | $ | 2,690 | $ | 1,137 | $ | — | $ | 1,553 | |||||||||
Trade Name | 17 | 10 | — | 7 | |||||||||||||
$ | 2,707 | $ | 1,147 | $ | — | $ | 1,560 | ||||||||||
As of September 30, 2013 | |||||||||||||||||
(In Thousands) | Cost | Accumulated | Loss on | Net | |||||||||||||
Amortization | Impairment | Book | |||||||||||||||
of | Value | ||||||||||||||||
Intangible | |||||||||||||||||
Assets | |||||||||||||||||
Customer Relationships | $ | 2,690 | $ | 816 | $ | — | $ | 1,874 | |||||||||
Trade Name | 17 | 7 | — | 10 | |||||||||||||
$ | 2,707 | $ | 823 | $ | — | $ | 1,884 | ||||||||||
Shortterm_Debt_Tables
Short-term Debt (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Debt Disclosure [Abstract] | |||||
Summary of Convertible Note | To recognize the fair value of the warrants, the Company discounted the note and increased additional paid in capital. The fair value of the conversion feature was approximately $178,000, the Company discounted the note and created a derivative liability, which will be evaluated each quarter and adjusted for any change in value. For the year ended September 30, 2014, the Company recognized interest expense and the amortization of the discount of approximately $36,000. | ||||
(In Thousands) | September 30, | ||||
2014 | |||||
Original principal balance | $ | 633 | |||
Debt discount for issuance costs and original discount | (105 | ) | |||
Debt discount for issuance of warrants | (219 | ) | |||
Debt discount for conversion feature | (178 | ) | |||
Total | 131 | ||||
Interest expense and amortization of debt discount | 36 | ||||
Balance at September 30, 2014 | 167 | ||||
Current portion of convertible debt | (35 | ) | |||
Total long-term portion of convertible debt, net of debt discount | $ | 132 | |||
Convertible Note | 6. Convertible Note | ||||
On August 7, 2014 the Company issued a Convertible Note (the “Note”) with an original principal balance of $632,500 to Brio Capital Master Fund LTD (“Brio”), for a purchase price of $550,000. The Note matures on February 6, 2016, and is payable in thirteen monthly installments of $48,654, commencing in the sixth month post-closing. Brio has the right, however not the obligation, six months after closing, to convert all or any part of the outstanding Note into the Company’s common stock at an initial conversion price of $0.20 per share. After six months from closing, the conversion price will have a one-time reset to the lower of $0.20 or 90% of the average of the 3 lowest closing prices for the previous 10 trading days, subject to a floor of $0.14 per share. The Company can force conversion if the Company’s common stock trades at 250% greater than the conversion price for 20 consecutive trading days. | |||||
In addition to the Note, the Company issued a warrant to purchase up to 2,371,875 shares of the Company common stock. The warrant is exercisable at $0.25 per share, vests 6 months after the closing, and expires 5 years thereafter. | |||||
The Convertible Note contains an embedded conversion feature requiring bifurcation and liability treatment. The Company accounted for this conversion feature and the detachable warrants by allocating the proceeds from issuance of the convertible notes to the conversion feature and the warrants. These were based on a relative fair value and the conversion feature was valued by a third party. | |||||
To recognize the fair value of the warrants, the Company discounted the note and increased additional paid in capital. The fair value of the conversion feature was approximately $178,000, the Company discounted the note and created a derivative liability, which will be evaluated each quarter and adjusted for any change in value. For the year ended September 30, 2014, the Company recognized interest expense and the amortization of the discount of approximately $36,000. | |||||
(In Thousands) | September 30, | ||||
2014 | |||||
Original principal balance | $ | 633 | |||
Debt discount for issuance costs and original discount | (105 | ) | |||
Debt discount for issuance of warrants | (219 | ) | |||
Debt discount for conversion feature | (178 | ) | |||
Total | 131 | ||||
Interest expense and amortization of debt discount | 36 | ||||
Balance at September 30, 2014 | 167 | ||||
Current portion of convertible debt | (35 | ) | |||
Total long-term portion of convertible debt, net of debt discount | $ | 132 | |||
During the period from August 7, 2014 to September 30, 2014 there was a gain on the change of derivative liability of approximately $47,000, which was recorded as a decrease to the derivative liability and in decrease to net loss to the statement of operations. | |||||
Derivative Liability | |||||
Balance at August 7, 2014 | $ | 178,000 | |||
Changes in fair value | (47,000 | ) | |||
Balance at September 30, 2014 | $ | 131,000 | |||
Summary of Change of Derivative Liability | During the period from August 7, 2014 to September 30, 2014 there was a gain on the change of derivative liability of approximately $47,000, which was recorded as a decrease to the derivative liability and in decrease to net loss to the statement of operations. | ||||
Derivative Liability | |||||
Balance at August 7, 2014 | $ | 178,000 | |||
Changes in fair value | (47,000 | ) | |||
Balance at September 30, 2014 | $ | 131,000 | |||
Other_Current_Liabilities_Tabl
Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Other Liabilities Disclosure [Abstract] | |||||||||
Other Current Liabilities | Other current liabilities consisted of the following: | ||||||||
September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Accrued expenses | $ | 174 | $ | 256 | |||||
Accrued sales tax | 762 | 226 | |||||||
Capital lease – short-term | 72 | 72 | |||||||
Earn-out liability | 201 | 350 | |||||||
Deferred rent | 5 | 77 | |||||||
Total other current liabilities | $ | 1,214 | $ | 981 | |||||
Common_Stock_Tables
Common Stock (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Summary of Warrants | Warrants | ||||||||||||
(Number of Warrants in Thousands) | Number of Shares | Exercise | Expiration | ||||||||||
Price | |||||||||||||
Outstanding at September 30, 2013 | — | ||||||||||||
Warrants Granted | |||||||||||||
Aracle Warrants | 1,500 | $ | 0.25 | 3/31/18 | |||||||||
Brio Warrants | 2,372 | $ | 0.25 | 2/7/20 | |||||||||
Outstanding at September 30, 2014 | 3,872 |
Stock_Option_Plans_Tables
Stock Option Plans (Tables) | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Schedule of Stock Option Activity | A summary of stock option activity is as follows: | ||||||||||||||||||||
Year Ended September 30, | |||||||||||||||||||||
(Number of Options in Thousands) | 2014 | 2013 | |||||||||||||||||||
Number of options outstanding: | |||||||||||||||||||||
Beginning of year | 1,478 | 1,747 | |||||||||||||||||||
Granted | 2,595 | 108 | |||||||||||||||||||
Exercised | — | — | |||||||||||||||||||
Terminated | (654 | ) | (377 | ) | |||||||||||||||||
End of year | 3,419 | 1,478 | |||||||||||||||||||
Number of options exercisable at end of year | 1,470 | 1,418 | |||||||||||||||||||
Number of options available for grant at end of year | 7,408 | 10,000 | |||||||||||||||||||
Weighted average option prices per share: | |||||||||||||||||||||
Granted during the year | $ | 0.28 | $ | 0.49 | |||||||||||||||||
Exercised during the year | — | — | |||||||||||||||||||
Terminated during the year | 0.42 | 0.4 | |||||||||||||||||||
Outstanding at end of year | 0.32 | 0.4 | |||||||||||||||||||
Exercisable at end of year | 0.38 | 0.41 | |||||||||||||||||||
Schedule of Stock Options Outstanding | Stock options outstanding as of September 30, 2014 were as follows (number of options in thousands): | ||||||||||||||||||||
Range of Exercise Prices | Number | Weighted | Number | Weighted | Average | ||||||||||||||||
Outstanding | Average | Exercisable | Average | Remaining | |||||||||||||||||
Price | Price | Life | |||||||||||||||||||
(Years) | |||||||||||||||||||||
Under $1.00 | 3,404 | $ | 0.32 | 1,455 | $ | 0.38 | 8.5 | ||||||||||||||
$1.01 to 2.39 | 15 | $ | 2.39 | 15 | $ | 2.39 | 3 | ||||||||||||||
Schedule of Black-Scholes Option Pricing Model and Weighted Average Assumptions | The average fair value of stock options granted was estimated to be $0.21 per share in fiscal 2014 and $0.43 per share in fiscal 2013. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions: | ||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Expected option life (years) | 9 | 10 | |||||||||||||||||||
Expected stock price volatility | 95 | % | 94% | ||||||||||||||||||
Expected dividend yield | — | % | — % | ||||||||||||||||||
Risk-free interest rate | 2.75 | % | 2.64% to 1.86% |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Components of the Provision for Income Taxes | The components of the provision for income taxes are as follows: | ||||||||
Year Ending September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Current tax provision | $ | 24 | $ | 8 | |||||
Deferred tax provision | — | — | |||||||
Provision for income taxes | $ | 24 | $ | 8 | |||||
Schedule of Provision for Income Taxes | The differences between income taxes calculated at the statutory U.S. federal income tax rate and the Company’s provision for income taxes are as follows: | ||||||||
Year Ended September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Income tax provision at statutory federal tax rate | $ | 32 | $ | 22 | |||||
Valuation allowance | (8 | ) | (14 | ) | |||||
Provision for income taxes | $ | 24 | $ | 8 | |||||
Schedule of Deferred Income Tax Asset | The net deferred income tax asset balance related to the following: | ||||||||
Year Ended September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Temporary differences | |||||||||
Stock option expense | $ | 461 | $ | 326 | |||||
Deferred compensation expense | 24 | (59 | ) | ||||||
Vacation expense | 64 | 69 | |||||||
Intangible assets | 107 | 107 | |||||||
Allowance for doubtful accounts | 208 | 74 | |||||||
Other | 5 | (49 | ) | ||||||
Net operating loss carryforwards | 4,956 | 4,292 | |||||||
Valuation allowances | (5,825 | ) | (4,760 | ) | |||||
Net deferred income tax asset | $ | — | $ | — | |||||
Segment_Data_Tables
Segment Data (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Schedule of Segment Reporting Information | Unallocated Corporate expenses primarily include, corporate legal expenses, consulting expenses, audit fees, corporate rent and facility costs, board fees and interest expense. | ||||||||
Fiscal Year Ended | |||||||||
September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Direct Hire Placement Services | |||||||||
Revenue | $ | 7,088 | $ | 7,317 | |||||
Placement services gross margin | 100 | % | 100 | % | |||||
Operating loss | (983 | ) | (700 | ) | |||||
Depreciation & amortization | 230 | 224 | |||||||
Accounts receivable – net | 805 | 625 | |||||||
Intangible assets | 228 | 347 | |||||||
Goodwill | 24 | 24 | |||||||
Total assets | 2,285 | 4,810 | |||||||
Contract Staffing Services | |||||||||
Industrial services revenue | $ | 25,031 | $ | 29,816 | |||||
Professional services revenue | 7,692 | 9,371 | |||||||
Industrial services gross margin | 15.6 | % | 12.61 | % | |||||
Professional services gross margin | 31.1 | % | 33.19 | % | |||||
Operating income | $ | 1,159 | $ | 890 | |||||
Depreciation and amortization | 268 | 261 | |||||||
Accounts receivable – industrial services | 3,318 | 4,778 | |||||||
Accounts receivable – professional services | 784 | 1,294 | |||||||
Intangible assets | 1,332 | 1,537 | |||||||
Goodwill | 1,082 | 1,082 | |||||||
Total assets | $ | 7,559 | $ | 6,184 | |||||
Unallocated Expenses | |||||||||
Corporate administrative expenses | $ | 541 | $ | 1,160 | |||||
Corporate facility expenses | 160 | 247 | |||||||
Board related expenses | 93 | 98 | |||||||
Interest expense | 507 | 251 | |||||||
Total unallocated expenses | $ | 1,301 | $ | 1,756 | |||||
Consolidated | |||||||||
Total revenue | $ | 39,811 | $ | 46,504 | |||||
Operating loss | (1,125 | ) | (1,566 | ) | |||||
Depreciation and amortization | 498 | 485 | |||||||
Total accounts receivables – net | 4,907 | 6,697 | |||||||
Intangible assets | 1,560 | 1,884 | |||||||
Goodwill | 1,106 | 1,106 | |||||||
Assets from continuing operations | 9,844 | 10,994 | |||||||
Assets from discontinued operations | 0 | 238 | |||||||
Total assets | $ | 9,844 | $ | 11,232 | |||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Discontinued Operations | |||||||||
Years Ended | |||||||||
September 30, | |||||||||
(In Thousands) | 2014 | 2013 | |||||||
Discontinued Operations | |||||||||
Agricultural services revenue – net | $ | — | $ | 6,801 | |||||
Agricultural services gross margin | — | 3.3 | % | ||||||
Agricultural services net loss | (230 | ) | (324 | ) | |||||
Accounts receivable net – Agricultural services | — | 238 | |||||||
A Fixed assets – Agricultural services | — | — | |||||||
Total assets – Agricultural services | — | 238 | |||||||
Total liabilities – Agricultural services | $ | — | $ | 30 |
Significant_Accounting_Policie2
Significant Accounting Policies and Estimates - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Segments | ||
Accounting Policies [Abstract] | ||
Provision for falloffs and refunds in connection with placement service revenue | $939,000 | $969,000 |
Insurance coverage limit at each financial institution | 250,000 | |
Cash equivalents | 0 | 0 |
Allowance for doubtful accounts | 395,000 | 272,000 |
Accounts receivables related to discontinued operations | 265,000 | 35,000 |
Number of shares excluded from earnings (loss) per share calculation (in shares) | 468,000 | 47,000 |
Advertising costs | $718,000 | $733,000 |
Number of operating business segments | 2 |
Significant_Accounting_Policie3
Significant Accounting Policies and Estimates (Property and Equipment) - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Asset impairment charges | $0 | $0 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 5 years | |
Office Equipment Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 2 years | |
Office Equipment Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 10 years | |
Capitalized Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 5 years |
Significant_Accounting_Policie4
Significant Accounting Policies and Estimates (Intangible Assets) - Additional Information (Detail) (Finite-Lived Intangible Assets [Member]) | 12 Months Ended |
Sep. 30, 2014 | |
Minimum [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Customer lists, non-compete agreements, customer relationships, management agreements and trade names, estimated useful lives | 2 years |
Maximum [Member] | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Customer lists, non-compete agreements, customer relationships, management agreements and trade names, estimated useful lives | 10 years |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | $2,860 | $3,772 |
Accumulated depreciation and amortization | -2,407 | -3,242 |
Property and equipment, net | 453 | 530 |
Capitalized Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 5 years | |
Total property and equipment, at cost | 1,447 | 1,447 |
Office Equipment, Furniture and Fixtures and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | $1,413 | $2,325 |
Office Equipment, Furniture and Fixtures and Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 2 years | |
Office Equipment, Furniture and Fixtures and Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property and equipment | 10 years |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Current portion of lease | $72,000 | $72,000 |
Depreciation expense | 174,000 | 165,000 |
Office Equipment, Furniture and Fixtures and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Disposals of property and equipment | 49,000 | 28,000 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Disposals of property and equipment | 225,000 | |
Term of leaseback agreement | 30 months | 30 months |
Interest rate of lease | 23.00% | |
Current portion of lease | 72,000 | |
Long term portion of lease | $7,000 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment of goodwill | $0 | $0 |
Amortization of intangible assets | 326,000 | 320,000 |
Amortization expense of finite-lived intangible assets for fiscal year 2015 | 320,000 | |
Amortization expense of finite-lived intangible assets for fiscal year 2016 | 320,000 | |
Amortization expense of finite-lived intangible assets for fiscal year 2017 | 320,000 | |
Amortization expense of finite-lived intangible assets for fiscal year 2018 | 320,000 | |
Amortization expense of finite-lived intangible assets thereafter fiscal year 2018 | 280,000 | |
Impairment of intangible assets | $0 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $2,707 | $2,707 |
Accumulated Amortization | 1,147 | 823 |
Loss on Impairment of Intangible Assets | ||
Net Book Value | 1,560 | 1,884 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 2,690 | 2,690 |
Accumulated Amortization | 1,137 | 816 |
Loss on Impairment of Intangible Assets | ||
Net Book Value | 1,553 | 1,874 |
Trade Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 17 | 17 |
Accumulated Amortization | 10 | 7 |
Loss on Impairment of Intangible Assets | ||
Net Book Value | $7 | $10 |
Shortterm_Debt_Additional_Info
Short-term Debt - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2015 | Sep. 30, 2015 | Sep. 27, 2013 | Sep. 30, 2013 | |
Line of Credit Facility [Line Items] | |||||||
Available line of credit amount | $730,000 | ||||||
Scenario, Forecast [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Financial covenant, maintain EBITDA | 250,000 | 500,000 | 750,000 | 1,000,000 | |||
ACF [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum percentages of credit facility provides for borrowings on revolving basis | 6,000,000 | ||||||
Purchase agreement period | 3 years | ||||||
Variable rate of debt instrument basis rate | 6.50% | ||||||
Interest rate | 6.50% | 6.50% | |||||
Proceeds received from line of credit | 3,050,000 | ||||||
Remaining borrowing capacity availability under this agreement | 900,000 | ||||||
Agreement fees | $170,000 | ||||||
ACF [Member] | Prime Rate [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of debt instrument basis rate | 3.25% | ||||||
ACF [Member] | LIBOR [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of debt instrument basis rate | 6.25% |
Convertible_Note_Additional_In
Convertible Note - Additional Information (Detail) (USD $) | 0 Months Ended | 2 Months Ended | 12 Months Ended |
Aug. 07, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
Debt Conversion [Line Items] | |||
Convertible notes, principal amount | $633,000 | $633,000 | |
Warrant issued to purchase shares of the company common stock | 2,371,875 | ||
Warrant exercisable | $0.25 | ||
Warrant vesting period | 6 months | ||
Warrant expires period | 5 years | ||
Fair value of the warrants | 178,000 | ||
Interest expense and amortization of the discount of note | 36,000 | 36,000 | |
Gain on change in derivative liability | 47,000 | ||
Convertible Notes Payable [Member] | |||
Debt Conversion [Line Items] | |||
Convertible notes, principal amount | 632,500 | ||
Convertible notes, purchase price | 550,000 | ||
Maturity date | 6-Feb-16 | ||
Number of monthly installments payable | 13 | ||
Monthly installment amount payable | $48,654 | ||
Common stock conversion price | $0.20 | ||
Convertible notes, description | After six months from closing, the conversion price will have a one-time reset to the lower of $0.20 or 90% of the average of the 3 lowest closing prices for the previous 10 trading days, subject to a floor of $0.14 per share. | ||
Average of the lowest closing price | 90.00% | ||
Number of trading days | 10 days | ||
Average of the lowest floor rate per share | $0.00 | ||
Conversion of common stock percent trade | 250.00% | ||
Number of trading days | 20 days | ||
Convertible Notes Payable [Member] | Minimum [Member] | |||
Debt Conversion [Line Items] | |||
Conversion price | $0.20 |
Convertible_Note_Summary_of_Co
Convertible Note - Summary of Convertible Note (Detail) (USD $) | 0 Months Ended | 12 Months Ended |
Aug. 07, 2014 | Sep. 30, 2014 | |
Equity Method Investments And Cost Method Investments [Abstract] | ||
Original principal balance | $633,000 | |
Debt discount for issuance costs and original discount | -105,000 | |
Debt discount for issuance of warrants | -219,000 | |
Debt discount for conversion feature | -178,000 | |
Total | 131,000 | |
Interest expense and amortization of debt discount | 36,000 | 36,000 |
Balance at September 30, 2014 | 167,000 | |
Balance at September 30, 2014 | 167,000 | |
Current portion of convertible debt | -35,000 | |
Total long-term portion of convertible debt, net of debt discount | $132,000 |
Convertible_Note_Summary_of_Ch
Convertible Note - Summary of Change of Derivative Liability (Detail) (USD $) | 2 Months Ended |
Sep. 30, 2014 | |
Equity Method Investments And Cost Method Investments [Abstract] | |
Beginning balance | $178,000 |
Changes in fair value | -47,000 |
Ending balance | $131,000 |
Other_Current_Liabilities_Othe
Other Current Liabilities - Other Current Liabilities (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities Disclosure [Abstract] | ||
Accrued expenses | $174 | $256 |
Accrued sales tax | 762 | 226 |
Capital lease - short-term | 72 | 72 |
Earn-out liability | 201 | 350 |
Deferred rent | 5 | 77 |
Total other current liabilities | $1,214 | $981 |
LongTerm_Liabilities_Additiona
Long-Term Liabilities - Additional Information (Detail) (Former CEO [Member], USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2009 | Sep. 30, 2013 | |
Former CEO [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Annual consulting fee | $180,000 | ||
Period within which annual consulting fee is payable | 5 years | ||
Number of shares issued under consulting agreement (in shares) | 500,000 | ||
Liability for future payments under the consulting agreement | 60,000 | 790,000 | 135,000 |
Recorded a charge to operations under the consulting agreement | $280,000 | ||
Quoted market price of stock (in dollars per share) | $0.56 |
Common_Stock_Additional_Inform
Common Stock - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |||
Jul. 02, 2013 | Sep. 30, 2014 | Apr. 16, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Sep. 09, 2013 | |
Unit | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock issued (in shares) | 1,100,000 | |||||
Price per share (in dollars per share) | $0.30 | |||||
Proceeds from issuance of stock | $329,890 | |||||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | ||||
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | ||||
Expenses related to SPA | 130,000 | |||||
Net proceeds from SPA | 470,000 | |||||
Weighted average exercise price of outstanding warrants | $0.25 | |||||
Investor [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units purchased under SPA | 2.5 | |||||
Value of unit issued under SPA | 125,000 | |||||
Aracle SPF I, LLC [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units purchased under SPA | 9.5 | |||||
Value of unit issued under SPA | $475,000 | $50,000 | ||||
Number of shares in an unit under SPA | 250,000 | |||||
Number of purchase warrants under SPA | 125,000 | |||||
Common stock warrant term | 4 years | |||||
Exercise price per warrant share | $0.25 | |||||
Additional shares issued | 3,000,000 | |||||
Weighted average exercise price of outstanding warrants | $0.25 | |||||
Warrants granted, expiration date | 31-Mar-18 | |||||
Minimum [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 50,000,000 | |||||
Preferred stock, shares authorized (in shares) | 1,000,000 | |||||
Warrants granted, expiration date | 31-Mar-18 | |||||
Minimum [Member] | Aracle SPF I, LLC [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Percentage of shares owned | 51.00% | |||||
Maximum [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 200,000,000 | |||||
Preferred stock, shares authorized (in shares) | 20,000,000 | |||||
Warrants granted, expiration date | 7-Feb-20 | |||||
Maximum [Member] | Aracle SPF I, LLC [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of units purchased under SPA | 12 | |||||
Common stock price per share under SPA | $0.20 | |||||
Percentage of shares issued under adjustment provision | 19.90% |
Common_Stock_Summary_of_Warran
Common Stock - Summary of Warrants (Detail) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 |
Class of Warrant or Right [Line Items] | |
Warrants, number of shares, ending balance | 3,872 |
Warrants, exercise price, beginning balance | $0 |
Warrants granted, exercise price | $0.25 |
Warrants, exercise price, ending balance | $0 |
Aracle SPF I, LLC [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants granted, number of shares | 1,500 |
Warrants granted, exercise price | $0.25 |
Warrants granted, expiration date | 31-Mar-18 |
Brio Capital Master Fund LTD [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants granted, number of shares | 2,372 |
Warrants granted, exercise price | $0.25 |
Warrants granted, expiration date | 7-Feb-20 |
Stock_Option_Plans_Additional_
Stock Option Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Jul. 23, 2013 | |
Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of plans approved by shareholders | 4 | ||
Stock option available for grant under the plan (in shares) | 7,408,000 | 10,000,000 | |
Aggregate intrinsic value of stock options exercised and outstanding (in dollars per share) | $0.21 | ||
Estimated average fair value of stock options grant (in dollars per share) | $0.21 | $0.43 | |
Stock option expense | $98,000 | $68,000 | |
Unrecognized compensation expense related to unvested stock options outstanding | $422,000 | ||
Weighted average vesting period of unvested stock options | 1 year 6 months | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period of stock option from the date of grant | 10 years | ||
1997 Stock Option Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option available for grant under the plan (in shares) | 592,000 | ||
Stock option available for issuance under the plan (in shares) | 0 | ||
Incentive Plan 2013 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option available for issuance under the plan (in shares) | 10,000,000 |
Stock_Option_Plans_Schedule_of
Stock Option Plans - Schedule of Stock Option Activity (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Weighted average option prices per share: | ||
Granted during the year (in dollars per share) | $0.28 | $0.49 |
Exercised during the year (in dollars per share) | $0 | $0 |
Terminated during the year (in dollars per share) | $0.42 | $0.40 |
Outstanding at end of year (in dollars per share) | $0.32 | $0.40 |
Exercisable at end of year (in dollars per share) | $0.38 | $0.41 |
Number of options outstanding: | ||
Beginning of year (in shares) | 1,478 | 1,747 |
Granted (in shares) | 2,595 | 108 |
Exercised (in shares) | 0 | 0 |
Terminated (in shares) | -654 | -377 |
End of year (in shares) | 3,419 | 1,478 |
Number of options exercisable at end of year (in shares) | 1,470 | 1,418 |
Number of options available for grant at end of year (in shares) | 7,408 | 10,000 |
Stock_Option_Plans_Schedule_of1
Stock Option Plans - Schedule of Stock Options Outstanding (Detail) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 |
Under $1.00 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Minimum | $0 |
Range of Exercise Prices, Maximum | $1 |
Number Outstanding | 3,404 |
Weighted Average Price | $0.32 |
Number Exercisable | 1,455 |
Weighted Average Price | $0.38 |
Average Remaining Life | 8 years 6 months |
$1.01 to $2.39 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices, Minimum | $1.01 |
Range of Exercise Prices, Maximum | $2.39 |
Number Outstanding | 15 |
Weighted Average Price | $2.39 |
Number Exercisable | 15 |
Weighted Average Price | $2.39 |
Average Remaining Life | 3 years |
Stock_Option_Plans_Schedule_of2
Stock Option Plans - Schedule of Black-Scholes Option Pricing Model and Weighted Average Assumptions (Detail) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option life (years) | 9 years | 10 years |
Expected stock price volatility | 95.00% | 94.00% |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.75% | |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.64% | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.86% |
Income_Taxes_Schedule_of_Compo
Income Taxes - Schedule of Components of the Provision for Income Taxes (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Income Tax Disclosure [Abstract] | ||
Current tax provision | $24 | $8 |
Deferred tax provision | 0 | 0 |
Provision for income taxes | $24 | $8 |
Income_Taxes_Schedule_of_Provi
Income Taxes - Schedule of Provision for Income Taxes (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Income Tax Disclosure [Abstract] | ||
Income tax provision at statutory federal tax rate | $32 | $22 |
Valuation allowance | -8 | -14 |
Provision for income taxes | $24 | $8 |
Income_Taxes_Schedule_of_Defer
Income Taxes - Schedule of Deferred Income Tax Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Temporary differences | ||
Stock option expense | $461,000 | $326,000 |
Deferred compensation expense | 24,000 | -59,000 |
Vacation expense | 64,000 | 69,000 |
Intangible assets | 107,000 | 107,000 |
Allowance for doubtful accounts | 208,000 | 74,000 |
Other | 5,000 | -49,000 |
Net operating loss carryforwards | 4,956,000 | 4,292,000 |
Valuation allowances | -5,825,000 | -4,760,000 |
Net deferred income tax asset | $0 | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Carrying value of deferred tax assets | $0 | $0 |
Change in valuation allowance for net deferred tax assets | 1,065,000 | 537,000 |
Federal Tax [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Losses available to reduce taxable income in future years | 12,150,000 | |
State Tax [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Losses available to reduce taxable income in future years | $10,800,000 |
Contingencies_and_Commitments_
Contingencies and Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Sale Leaseback Transaction [Line Items] | ||
Cash payment of contingent consideration | $200,000 | |
Additional contingent consideration | 1,100,000 | |
Additional contingent consideration | 330,000 | 330,000 |
Accrued charges in other current liabilities | 201,000 | 350,000 |
Period contingent consideration will be paid | 2 years | |
Expected earn-out liability | 450,000 | |
Contingent consideration interest expense | 100,000 | |
interest paid | 75,000 | |
Accrued charges in other current liabilities | 200,000 | |
Current portion of lease | 72,000 | 72,000 |
Seller One [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Cash payment of contingent consideration to sellers | 225,000 | |
Principal [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Cash payment of contingent consideration to sellers | 150,000 | |
Vehicles [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Disposals of property and equipment | 225,000 | |
Term of leaseback agreement | 30 months | 30 months |
Interest rate of lease | 23.00% | |
Current portion of lease | 72,000 | |
Long term portion of lease | 7,000 | |
Minimum [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Cash payment of contingent consideration | 550,000 | |
Maximum [Member] | ||
Sale Leaseback Transaction [Line Items] | ||
Cash payment of contingent consideration | $650,000 |
Leases_Additional_Information_
Leases - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Vehicles [Member] | ||
Lease Rental Expenses [Line Items] | ||
Rent expense | $897,000 | $1,087,000 |
Minimum initial terms of payments due under non-cancelable lease agreements | 1 year | |
Future minimum lease payments, total | 1,019,000 | |
Future minimum lease payments on fiscal year 2015 | 415,000 | |
Future minimum lease payments on fiscal year 2016 | 323,000 | |
Future minimum lease payments on fiscal year 2017 | 164,000 | |
Future minimum lease payments on fiscal year 2018 | 90,000 | |
Future minimum lease payments on fiscal year 2019 | 27,000 | |
Future minimum lease payments on fiscal year Thereafter | $0 | |
Minimum [Member] | ||
Lease Rental Expenses [Line Items] | ||
Leased period of branch offices | 3 years | |
Maximum [Member] | ||
Lease Rental Expenses [Line Items] | ||
Leased period of branch offices | 5 years |
Segment_Data_Schedule_of_Segme
Segment Data - Schedule of Segment Reporting Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ||
Total revenue | $39,811 | $46,504 |
Operating income (loss) | -1,125 | -1,566 |
Depreciation and amortization | 498 | 485 |
Accounts receivable - net | 4,907 | 6,697 |
Intangible assets | 1,560 | 1,884 |
Goodwill | 1,106 | 1,106 |
Total assets | 9,844 | 11,232 |
Operating Segments [Member] | Direct Hire Placement Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 7,088 | 7,317 |
Gross margin | 100.00% | 100.00% |
Operating income (loss) | -983 | -700 |
Depreciation and amortization | 230 | 224 |
Accounts receivable - net | 805 | 625 |
Intangible assets | 228 | 347 |
Goodwill | 24 | 24 |
Total assets | 2,285 | 4,810 |
Operating Segments [Member] | Contract Staffing Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating income (loss) | 1,159 | 890 |
Depreciation and amortization | 268 | 261 |
Intangible assets | 1,332 | 1,537 |
Goodwill | 1,082 | 1,082 |
Total assets | 7,559 | 6,184 |
Operating Segments [Member] | Contract Staffing Services [Member] | Industrial Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 25,031 | 29,816 |
Gross margin | 15.60% | 12.61% |
Accounts receivable - net | 3,318 | 4,778 |
Operating Segments [Member] | Contract Staffing Services [Member] | Professional Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 7,692 | 9,371 |
Gross margin | 31.10% | 33.19% |
Accounts receivable - net | 784 | 1,294 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Corporate administrative expenses | 541 | 1,160 |
Corporate facility expenses | 160 | 247 |
Board related expenses | 93 | 98 |
Interest expense | 507 | 251 |
Total unallocated expenses | 1,301 | 1,756 |
Continuing Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,844 | 10,994 |
Discontinued Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total assets | $0 | $238 |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Severance costs | $100,000 | |
Agricultural Services [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Asset or liabilities related to discontinued operations | $0 |
Discontinued_Operations_Discon
Discontinued Operations - Discontinued Operations (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net loss | ($230) | ($324) |
Total liabilities | 30 | |
Agricultural Services [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue - net | 0 | 6,801 |
Gross margin | 0.00% | 3.30% |
Net loss | -230 | -324 |
Accounts receivable net | 0 | 238 |
Fixed assets | 0 | |
Total assets | 0 | 238 |
Total liabilities | $0 | $30 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2013 | Sep. 30, 2014 | |
Related Party Transaction [Line Items] | ||
Interest paid to officers | $0 | $0 |
Amount owed to officers | 0 | 0 |
Related party transaction indemnification agreement | On MayB 29, 2014, the Company entered into a settlement agreement related to an indemnification agreement with the former Chief Executive Officer of the Company under which the Company agreed to pay a total of $51,850 as settlement in full of certain disputes among the parties. | |
payment of settlement | 51,850 | |
Maximum [Member] | ||
Related Party Transaction [Line Items] | ||
Short-term loan maturity period | 30 days | |
Chief Financial Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Consulting services expenses due to related parties | 63,000 | |
Related parties expense | $13,000 | |
Related parties, ownership percentage | 50.00% |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Subsequent Event [Member], USD $) | 0 Months Ended | |
Dec. 15, 2014 | Nov. 14, 2014 | |
Individual | ||
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Preferred stock share Subscribed | 200,000 | |
Number of individuals entered into Securities Purchase Agreement | 16 | |
Proceeds from issuance of preferred stock | $2,000,000 | |
Net proceeds to company | 2,000,000 | |
Contribution to working capital | 1,000,000 | |
Preferred Stock Contributed to operations | $1,000,000 | |
Conversion of preferred stock to common stock shares | 50 |