Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 08, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | THESTREET, INC. | |
Entity Central Index Key | 1,080,056 | |
Document Type | 10-Q | |
Trading Symbol | TST | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 35,660,286 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 22,661,634 | $ 21,371,122 |
Accounts receivable, net of allowance for doubtful accounts of $316,250 as of March 31, 2017 and $316,204 as of December 31, 2016 | 5,052,019 | 5,119,959 |
Other receivables, net | 376,761 | 358,266 |
Prepaid expenses and other current assets | 1,459,160 | 1,416,956 |
Total current assets | 29,549,574 | 28,266,303 |
Noncurrent Assets: | ||
Property and equipment, net of accumulated depreciation and amortization of $5,951,293 as of March 31, 2017 and $5,682,286 as of December 31, 2016 | 3,234,397 | 3,550,007 |
Marketable securities | 1,443,000 | 1,550,000 |
Other assets | 306,972 | 285,843 |
Goodwill | 29,308,594 | 29,183,141 |
Other intangible assets, net of accumulated amortization of $20,953,514 as of March 31, 2017 and $20,134,178 as of December 31, 2016 | 14,922,730 | 15,127,818 |
Restricted cash | 500,000 | 500,000 |
Total Assets | 79,265,267 | 78,463,112 |
Current Liabilities: | ||
Accounts payable | 2,594,444 | 2,526,034 |
Accrued expenses | 3,500,680 | 5,115,558 |
Deferred revenue | 25,306,705 | 22,476,962 |
Other current liabilities | 986,992 | 983,799 |
Total current liabilities | 32,388,821 | 31,102,353 |
Noncurrent Liabilities: | ||
Deferred tax liability | 2,184,759 | 2,036,487 |
Other noncurrent liabilities | 3,195,367 | 3,274,816 |
Total liabilities | 37,768,947 | 36,413,656 |
Stockholders' Equity: | ||
Preferred stock; $0.01 par value; 10,000,000 shares authorized; 5,500 issued and outstanding as of March 31, 2017 and December 31, 2016; the aggregate liquidation preference totals $55,000,000 as of March 31, 2017 and December 31, 2016 | 55 | 55 |
Common stock; $0.01 par value; 100,000,000 shares authorized; 43,144,093 shares issued and 35,628,317 shares outstanding as of March 31, 2017, and 42,936,906 shares issued and 35,421,217 shares outstanding as of December 31, 2016 | 431,441 | 429,369 |
Additional paid-in capital | 271,538,200 | 271,143,445 |
Accumulated other comprehensive loss | (5,720,753) | (5,898,305) |
Treasury stock at cost; 7,515,776 shares as of March 31, 2017 and 7,515,689 shares as of December 31, 2016 | (13,211,216) | (13,211,141) |
Accumulated deficit | (211,541,407) | (210,413,967) |
Total stockholders' equity | 41,496,320 | 42,049,456 |
Total liabilities and stockholders' equity | $ 79,265,267 | $ 78,463,112 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts on accounts receivable | $ 316,250 | $ 316,204 |
Accumulated depreciation and amortization on property and equipment | 5,951,293 | 5,682,286 |
Accumulated amortization on other intangibles | $ 20,953,514 | $ 20,134,178 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 5,500 | 5,500 |
Preferred stock, outstanding | 5,500 | 5,500 |
Preferred stock, aggregate liquidation preference | $ 55,000,000 | $ 55,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 43,144,093 | 42,936,906 |
Common stock, oustanding | 35,628,317 | 35,421,217 |
Treasury stock, shares | 7,515,776 | 7,515,689 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Business to business | $ 7,387,239 | $ 7,132,800 |
Business to consumer | 7,893,198 | 8,936,632 |
Total revenue | 15,280,437 | 16,069,432 |
Operating expense: | ||
Cost of services (exclusive of depreciation and amortization shown separately below) | 7,281,429 | 7,886,556 |
Sales and marketing | 3,543,352 | 3,884,426 |
General and administrative | 4,026,052 | 5,113,906 |
Depreciation and amortization | 1,179,532 | 943,156 |
Restructuring and other charges | 198,979 | 1,380,052 |
Total operating expense | 16,229,344 | 19,208,096 |
Operating loss | (948,907) | (3,138,664) |
Net interest income (expense) | 7,771 | (495) |
Net loss before income taxes | (941,136) | (3,139,159) |
Provision for income taxes | 186,304 | 305,128 |
Net loss attributable to common stockholders | $ (1,127,440) | $ (3,444,287) |
Basic and diluted net loss per share: | ||
Net loss attributable to common stockholders (in dollars per share) | $ (0.03) | $ (0.10) |
Weighted average basic and diluted shares outstanding | 35,558,371 | 35,197,955 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (1,127,440) | $ (3,444,287) |
Foreign currency translation gain (loss) | 284,552 | (655,541) |
Unrealized loss on marketable securities | (107,000) | (100,000) |
Comprehensive loss | $ (949,888) | $ (4,199,828) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (1,127,440) | $ (3,444,287) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 396,242 | 363,128 |
Provision for (recovery of) doubtful accounts | 25,861 | (56,454) |
Depreciation and amortization | 1,179,532 | 943,156 |
Deferred taxes | 148,272 | 280,726 |
Restructuring and other charges | 105,113 | |
Deferred rent | (131,306) | 31,830 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 50,934 | 1,661,128 |
Other receivables | (18,360) | 210,202 |
Prepaid expenses and other current assets | (38,485) | 40,331 |
Other assets | (10,521) | 4,602 |
Accounts payable | 67,479 | 403,023 |
Accrued expenses | (1,575,459) | 386,873 |
Deferred revenue | 2,818,539 | 1,385,980 |
Other current liabilities | 18,080 | (148,288) |
Other liabilities | 11,052 | 33,159 |
Net cash provided by operating activities | 1,814,420 | 2,200,222 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (553,109) | (718,818) |
Net cash used in investing activities | (553,109) | (718,818) |
Cash Flows from Financing Activities: | ||
Cash dividends paid on common stock | (68,245) | (10,221) |
Shares withheld on RSU vesting to pay for withholding taxes | (74) | (1,188) |
Net cash used in financing activities | (68,319) | (11,409) |
Effect of foreign exchange rate changes on cash and cash equivalents | 97,520 | (83,653) |
Net increase in cash and cash equivalents | 1,290,512 | 1,386,342 |
Cash and cash equivalents, beginning of period | 21,371,122 | 28,445,416 |
Cash and cash equivalents, end of period | $ 22,661,634 | $ 29,831,758 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION TheStreet, Inc. is a leading financial news and information provider. Our business-to-business (B2B) and business-to-consumer (B2C) content and products provide individual and institutional investors, advisors and dealmakers with actionable information from the worlds of finance and business. Our B2B business products have helped diversify our business from primarily serving retail investors to also providing an indispensable source of business intelligence for both high net worth individuals and executives in the top firms in the world. The Deal delivers sophisticated news and analysis on changes in corporate control including mergers and acquisitions, private equity, corporate activism and restructuring. BoardEx is an institutional relationship capital management database and platform which holds in-depth profiles of almost 1 million of the world's most important business leaders. Our third B2B business product, RateWatch, publishes bank rate market information including competitive deposit, loan and fee rate data. Our B2B business derives revenue primarily from subscription products, events/conferences and information services. Our B2C business is led by our namesake website, TheStreet.com, and includes free content and houses our premium subscription products, such as RealMoney, RealMoney Pro and Actions Alerts PLUS, that target varying segments of the retail investing public. Our B2C business primarily generates revenue from subscription products and advertising revenue. Unaudited Interim Financial Statements The interim consolidated balance sheet as of March 31, 2017, the consolidated statements of operations, comprehensive income and statements of cash flows for the three months ended March 31, 2017 and 2016 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company’s financial position as of March 31, 2017 and its results of consolidated operations, comprehensive income and cash flows for the three months ended March 31, 2017 and 2016. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2017 or for any other future annual or interim period. There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on March 20, 2017. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The Company has evaluated subsequent events for recognition or disclosure. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 2016). When effective, ASU 2014-09 prescribes either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Based upon our revenue streams of subscription and advertising, we do not believe that adoption of ASU 2014-09 will have a significant impact on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17 (Topic 740), “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires deferred tax liabilities and assets to be classified as noncurrent in the Consolidated Balance Sheet. We adopted ASU 2016-09 in the first quarter of 2017. The adoption of this standard did not have a material impact on our consolidated balance sheet. In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Restricted Cash In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles — Goodwill and Other Simplifying the Test for goodwill Impairment |
CASH AND CASH EQUIVALENTS, MARK
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH | 2. CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH The Company’s cash and cash equivalents and restricted cash primarily consist of checking accounts and money market funds. As of March 31, 2017 and December 31, 2016, marketable securities consist of two municipal auction rate securities (“ARS”) issued by the District of Columbia with a cost basis of approximately $1.9 million and a fair value of approximately $1.4 million and $1.6 million, respectively. With the exception of the ARS, Company policy limits the maximum maturity for any investment to three years. The ARS mature in the year 2038. The Company accounts for its marketable securities in accordance with the provisions of ASC 320-10. The Company classifies these securities as available for sale and the securities are reported at fair value. Unrealized gains and losses are recorded as a component of accumulated other comprehensive loss and excluded from net loss as they are deemed temporary. Additionally, as of March 31, 2017 and December 31, 2016, the Company has a total of approximately $500 thousand of cash that serves as collateral for outstanding letters of credit, and which cash is therefore restricted. The letters of credit serve as security deposits for the Company’s office space in New York City. March 31, 2017 December 31, 2016 Cash and cash equivalents $ 22,661,634 $ 21,371,122 Marketable securities 1,443,000 1,550,000 Current and noncurrent restricted cash 500,000 500,000 Total cash and cash equivalents, marketable securities and current and noncurrent restricted cash $ 24,604,634 $ 23,421,122 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS The Company measures the fair value of its financial instruments in accordance with ASC 820-10, which refines the definition of fair value, provides a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The statement establishes consistency and comparability by providing a fair value hierarchy that prioritizes the inputs to valuation techniques into three broad levels, which are described below: • Level 1: Inputs are quoted market prices in active markets for identical assets or liabilities (these are observable market inputs). • Level 2: Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability (includes quoted market prices for similar assets or identical or similar assets in markets in which there are few transactions, prices that are not current or vary substantially). • Level 3: Inputs are unobservable inputs that reflect the entity’s own assumptions in pricing the asset or liability (used when little or no market data is available). Financial assets and liabilities included in our financial statements and measured at fair value are classified based on the valuation technique level in the table below: As of March 31, 2017 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 22,661,634 $ 22,661,634 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,443,000 — — 1,443,000 Contingent earn-out (3) 918,709 — — 918,709 Total at fair value $ 25,523,343 $ 23,161,634 $ — $ 2,361,709 As of December 31, 2016 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 21,371,122 $ 21,371,122 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,550,000 — — 1,550,000 Contingent earn-out (3) 907,657 — — 907,657 Total at fair value $ 24,328,779 $ 21,871,122 $ — $ 2,457,657 (1) Cash and cash equivalents and restricted cash, totaling approximately $23.2 million and $21.9 million as of March 31, 2017 and December 31, 2016, respectively, consist primarily of checking accounts and money market funds for which we determine fair value through quoted market prices. (2) Marketable securities include two municipal ARS issued by the District of Columbia having a fair value totaling approximately $1.4 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively. Historically, the fair value of ARS investments approximated par value due to the frequent resets through the auction process. Due to events in credit markets, the auction events, which historically have provided liquidity for these securities, have been unsuccessful. The result of a failed auction is that these ARS holdings will continue to pay interest in accordance with their terms at each respective auction date; however, liquidity of the securities will be limited until there is a successful auction, the issuer redeems the securities, the securities mature or until such time as other markets for these ARS holdings develop. For each of our ARS, we evaluate the risks related to the structure, collateral and liquidity of the investment, and forecast the probability of issuer default, auction failure and a successful auction at par, or a redemption at par, for each future auction period. Temporary impairment charges are recorded in accumulated other comprehensive loss, whereas other-than-temporary impairment charges are recorded in our consolidated statement of operations. As of March 31, 2017, the Company determined there was a decline in the fair value of its ARS investments of $407 thousand from its cost basis, which was deemed temporary and was included within accumulated other comprehensive loss. (3) Contingent earn-out represents additional purchase consideration payable to the former shareholders of Management Diagnostics Limited based upon the achievement of specific 2017 audited revenue benchmarks. The probability of achieving each benchmark is based on Management’s assessment of the projected 2017 revenue. The present value of each probability weighted payment was calculated by discounting the probability weighted payment by the corresponding present value factor. The following tables provide a reconciliation of the beginning and ending balance for the Company’s assets and liabilities measured at fair value using significant unobservable inputs (Level 3): Marketable Balance December 31, 2016 $ 1,550,000 Change in fair value of investment (107,000 ) Balance March 31, 2017 $ 1,443,000 Contingent Balance December 31, 2016 $ 907,657 Accretion to net present value 11,052 Balance March 31, 2017 $ 918,709 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | 4. STOCK-BASED COMPENSATION Stock-based compensation expense recognized in the Company’s consolidated statements of operations for the three months ended March 31, 2017 and 2016 includes compensation expense for all share-based payment awards based upon the estimated grant date fair value. The Company recognizes compensation expense for share-based payment awards on a straight-line basis over the requisite service period of the award. As stock-based compensation expense is based upon awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company estimates forfeitures at the time of grant which are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company estimates the value of stock option awards on the date of grant using the Black-Scholes option-pricing model. This determination is affected by the Company’s stock price as well as assumptions regarding expected volatility, risk-free interest rate, and expected dividends. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted-average value of the applicable assumption used to value stock option awards at their grant date. In determining the volatility assumption, the Company used a historical analysis of the volatility of the Company’s share price for the preceding period equal to the expected option lives. The expected option lives, which represent the period of time that options granted are expected to be outstanding, were estimated based upon the “simplified” method for “plain-vanilla” options. The risk-free interest rate assumption was based upon observed interest rates appropriate for the term of the Company’s stock option awards. The dividend yield assumption was based on the history and expectation of future dividend payouts. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods. The Company’s estimate of pre-vesting forfeitures is primarily based on historical experience and is adjusted to reflect actual forfeitures as the options vest. The weighted-average grant date fair value per share of stock option awards granted during the three months ended March 31, 2017 and 2016 was $0.23 and $0.39, respectively, using the Black-Scholes model with the following weighted-average assumptions: For the Three Months Ended 2017 2016 Expected option lives 3.0 years 4.4 years Expected volatility 36.68 % 32.52 % Risk-free interest rate 1.46 % 1.34 % Expected dividend yield 0.00 % 0.00 % The value of each restricted stock unit awarded is equal to the closing price per share of the Company’s Common Stock on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods. The weighted-average grant date fair value per share of restricted stock units granted during the three months ended March 31, 2017 and 2016 was $0.85 and $1.45, respectively. As of March 31, 2017, there remained 1.6 million shares available for future awards under the Company’s 2007 Performance Incentive Plan (the “2007 Plan”). In connection with awards under both the 2007 Plan and awards issued outside of the Plan as inducement grants to new hires, the Company recorded approximately $396 thousand and $468 thousand (inclusive of approximately $105 thousand included in restructuring and other charges) of noncash stock-based compensation expense for the three months ended March 31, 2017 and 2016, respectively. A summary of the activity of the 2007 Plan, and awards issued outside of the Plan pertaining to stock option grants is as follows: Shares Weighted Aggregate Weighted Awards outstanding at December 31, 2016 5,900,731 $ 1.52 Options granted 45,000 $ 0.85 Options exercised - N/A Options forfeited (23,032 ) $ 1.14 Options expired (574,477 ) $ 1.81 Awards outstanding at March 31, 2017 5,348,222 $ 1.48 $ 0 4.01 Awards vested and expected to vest at March 31, 2017 5,287,684 $ 1.48 $ 0 3.99 Awards exercisable at March 31, 2017 2,479,491 $ 1.78 $ 0 1.69 A summary of the activity of the 2007 Plan pertaining to grants of restricted stock units is as follows: Shares Aggregate Weighted Awards outstanding at December 31, 2016 717,995 Restricted stock units granted 200,004 Restricted stock units settled by delivery of Common Stock upon vesting (207,187 ) Restricted stock units forfeited (40,000 ) Awards outstanding at March 31, 2017 670,812 $ 510 0.88 Awards expected to vest at March 31, 2017 664,312 $ 505 0.81 A summary of the status of the Company’s unvested share-based payment awards as of March 31, 2017 and changes in the three months then ended, is as follows: Unvested Awards Number of Shares Weighted Shares underlying awards unvested at December 31, 2016 3,936,427 $ 0.62 Shares underlying options granted 45,000 $ 0.23 Shares underlying restricted stock units granted 200,004 $ 0.85 Shares underlying options vested (371,669 ) $ 0.39 Shares underlying restricted stock units settled by delivery of Common Stock upon vesting (207,187 ) $ 1.43 Shares underlying options forfeited (23,032 ) $ 0.36 Shares underlying restricted stock units cancelled (40,000 ) $ 1.20 Shares underlying awards unvested at March 31, 2017 3,539,543 $ 0.60 For the three months ended March 31, 2017 and 2016, the total fair value of share-based awards vested was approximately $323 thousand and $296 thousand, respectively. For the three months ended March 31, 2017 and 2016, the total intrinsic value of options exercised was $0 and $0, respectively (there were no options exercised during the three months ended March 31, 2017 and 2016). For the three months ended March 31, 2017 and 2016, approximately 45 thousand and 840 thousand stock options, respectively, were granted, and no stock options were exercised in either period yielding $0 of cash proceeds to the Company. Additionally, for the three months ended March 31, 2017 and 2016, approximately 200 thousand and 232 thousand restricted stock units, respectively, were granted, and approximately 207 thousand and 114 thousand shares, respectively, were issued under restricted stock unit grants. For the three months ended March 31, 2017 and 2016, the total intrinsic value of restricted stock units that vested was approximately $176 thousand and $169 thousand, respectively. As of March 31, 2017, there was approximately $1.6 million of unrecognized stock-based compensation expense remaining to be recognized over a weighted-average period of 1.5 years. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 5. STOCKHOLDERS’ EQUITY Treasury Stock In December 2000, the Company’s Board of Directors authorized the repurchase of up to $10 million of the Company’s Common Stock, from time to time, in private purchases or in the open market. In February 2004, the Company’s Board of Directors approved the resumption of the stock repurchase program (the “Program”) under new price and volume parameters, leaving unchanged the maximum amount available for repurchase under the Program. However, the affirmative vote of the holders of a majority of the outstanding shares of Series B Preferred Stock, voting separately as a single class, is necessary for the Company to repurchase its Common Stock (except for the purchase or redemption from employees, directors and consultants pursuant to agreements providing us with repurchase rights upon termination of their service with us), unless after such purchase we have unrestricted cash (net of all indebtedness for borrowed money, purchase money obligations, promissory notes or bonds) equal to at least two times the product obtained by multiplying the number of shares of Series B Preferred Stock outstanding at the time such dividend is paid by the liquidation preference. During the three months ended March 31, 2017 and 2016, the Company did not purchase any shares of Common Stock under the Program. Since inception of the Program, the Company has purchased a total of 5,453,416 shares of Common Stock at an aggregate cost of approximately $7.3 million. In addition, pursuant to the terms of the Company’s 2007 Plan, and certain procedures adopted by the Compensation Committee of the Board of Directors, in connection with the exercise of stock options by certain of the Company’s employees, and the issuance of shares of Common Stock in settlement of vested restricted stock units, the Company may withhold shares in lieu of payment of the exercise price and/or the minimum amount of applicable withholding taxes then due. Through March 31, 2017, the Company had withheld an aggregate of 1,850,752 shares which have been recorded as treasury stock. In addition, the Company received an aggregate of 211,608 shares in treasury stock resulting from prior acquisitions. These shares have also been recorded as treasury stock. Dividends During the three months ended March 31, 2017 and 2016, we did not declare any cash dividends on our Common Stock or Series B Preferred Stock. We do not expect to declare and pay dividends in the foreseeable future. The declaration, amount and payment of any future dividends will be at the sole discretion of our Board of Directors. When determining whether to declare a dividend in the future, our Board of Directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders, and such other factors as our Board of Directors may deem relevant. The Certificate of Designations for the Series B Preferred Stock currently prohibits the Company from paying cash dividends in excess of $0.10 per share per annum without the prior approval of the holder of the Series B Preferred Stock. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | 6. LEGAL PROCEEDINGS The Company is party to legal proceedings arising in the ordinary course of business or otherwise, none of which is deemed material. |
NET LOSS PER SHARE OF COMMON ST
NET LOSS PER SHARE OF COMMON STOCK | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE OF COMMON STOCK | 7. NET LOSS PER SHARE OF COMMON STOCK Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares and potential common shares outstanding during the period, so long as the inclusion of potential common shares does not result in a lower net loss per share. Potential common shares consist of restricted stock units (using the treasury stock method), the incremental common shares issuable upon the exercise of stock options (using the treasury stock method), and the conversion of the Company’s convertible preferred stock (using the if-converted method). For the three months ended March 31, 2017 and 2016, approximately 666 thousand and 908 thousand unvested restricted stock units, and vested and unvested stock options, respectively, were excluded from the calculation, as their effect would result in a lower net loss per share. The following table reconciles the numerator and denominator for the calculation. For the Three Months Ended March 31, 2017 2016 Basic and diluted net loss per share: Numerator: Net loss $ (1,127,440 ) $ (3,444,287 ) Numerator for basic and diluted earnings per share Net loss attributable to common stockholders $ (1,127,440 ) $ (3,444,287 ) Denominator: Weighted average basic shares outstanding 35,558,371 35,197,955 Basic and diluted net loss per share: Net loss attributable to common stockholders $ (0.03 ) $ (0.10 ) |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES Income tax expense for the three months ended March 31, 2017 and 2016 was approximately $186 thousand and $305 thousand, respectively, and reflects an effective tax rate of -20% and -10%, respectively. Income tax expense for the three months ended March 31, 2017 and 2016 primarily relates to the recognition of $148 thousand and $281 thousand, respectively, of a deferred tax liability associated with goodwill that is tax deductible but constitutes an indefinite lived intangible asset for financial reporting purposes, as well as the recognition of $38 thousand and $24 thousand, respectively, of income tax expense in certain jurisdictions where there are no net operating losses available to offset taxable income. The Company accounts for its income taxes in accordance with ASC 740-10, Income Taxes The Company had approximately $160 million of federal and state net operating loss carryforwards (“NOL”) as of December 31, 2016, which results in deferred tax assets of approximately $75 million. The Company has a full valuation allowance against its deferred tax assets as management concluded that it was more likely than not that the Company would not realize the benefit of its deferred tax assets by generating sufficient taxable income in future years. The Company expects to continue to provide a full valuation allowance until, or unless, it can sustain a level of profitability that demonstrates its ability to utilize these assets. The ability of the Company to utilize its NOL in full to reduce future taxable income may become subject to various limitations under Section 382 of the Internal Revenue Code of 1986 (“IRC”). The utilization of such carryforwards may be limited upon the occurrence of certain ownership changes, including the purchase and sale of stock by 5% shareholders and the offering of stock by the Company during any three-year period resulting in an aggregate change of more than 50% of the beneficial ownership of the Company. In the event of an ownership change, Section 382 imposes an annual limitation on the amount of these carryforwards that can reduce future taxable income. Subject to potential Section 382 limitations, the federal losses are available to offset future taxable income through 2036 and expire from 2019 through 2036. Since the Company does business in various states and each state has its own rules with respect to the number of years losses may be carried forward, the state net operating loss carryforwards expire through 2036. The net operating loss carryforward as of December 31, 2016 includes approximately $16 million related to windfall tax benefits for which a benefit would be recorded to additional paid in capital when realized. Upon adoption of ASU 2016-09, all tax effects related to share based payments will be recognized through earnings subject to valuation allowance considerations so we expect that any potential tax benefits from the adoption of ASU 2016-09 would increase our deferred tax asset which would be offset by a valuation allowance. |
BUSINESS CONCENTRATIONS AND CRE
BUSINESS CONCENTRATIONS AND CREDIT RISK | 3 Months Ended |
Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
BUSINESS CONCENTRATIONS AND CREDIT RISK | 9. BUSINESS CONCENTRATIONS AND CREDIT RISK Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. The Company maintains all of its cash, cash equivalents and restricted cash in seven financial institutions, and performs periodic evaluations of the relative credit standing of these institutions. We are currently in the process of centralizing our banking relationships with fewer institutions. As of March 31, 2017, the Company’s cash, cash equivalents and restricted cash primarily consisted of money market funds and checking accounts. For the three months ended March 31, 2017 and 2016, no individual client accounted for 10% or more of consolidated revenue. As of March 31, 2017 and December 31, 2016, no individual client accounted for more than 10% of our gross accounts receivable balance. The Company’s customers are primarily concentrated in the United States and Europe, and we carry accounts receivable balances. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of customers, historical trends and other information. To date, actual losses have been within management’s expectations. |
RESTRUCTURING AND OTHER CHARGES
RESTRUCTURING AND OTHER CHARGES | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND OTHER CHARGES | 10. RESTRUCTURING AND OTHER CHARGES During the three months ended March 31, 2017, the Company implemented a targeted reduction in force which resulted in restructuring and other charges of approximately $199 thousand. During the three months ended March 31, 2016, the Company announced the resignation of the Company’s President and Chief Executive Officer, who was also a member of the Company’s Board of Directors. In connection with this resignation, the Company paid severance, will provide continuing medical coverage for 18 months, and incurred recruiting fees, resulting in restructuring and other charges of approximately $1.4 million. During the year ended December 31, 2012, the Company implemented a targeted reduction in force. Additionally, in assessing the ongoing needs of the organization, the Company elected to discontinue using certain software as a service, consulting and data providers, and elected to write-off certain previously capitalized software development projects. The actions were taken after a review of the Company’s cost structure with the goal of better aligning the cost structure with the Company’s revenue base. These restructuring efforts resulted in restructuring and other charges of approximately $3.4 million during the year ended December 31, 2012. Additionally, as a result of the Company’s acquisition of The Deal, LLC (“The Deal”) in September 2012, the Company discontinued the use of The Deal’s office space and implemented a reduction in force to eliminate redundant positions, resulting in restructuring and other charges of approximately $3.5 million during the year ended December 31, 2012. In August 2015, the Company received a one year notice of termination under which the landlord elected to terminate The Deal’s office space lease. As a result, the Company was no longer obligated to fulfill the original full lease term and the Company recorded an adjustment to its restructuring reserve totaling approximately $1.2 million. Collectively, these activities are referred to as the “2012 Restructuring”. As of December 31, 2016, there was no remaining balance in the 2012 Restructuring reserve account. The following table displays the activity of the 2012 Restructuring reserve account during the three months ended March 31, 2016. Lease Balance December 31, 2015 $ 99,309 Payments net of sublease receipts (3,759 ) Balance March 31, 2016 $ 95,550 |
OTHER LIABILITIES
OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | 11. OTHER LIABILITIES Other liabilities consist of the following: March 31, 2017 December 31, 2016 Deferred rent $ 1,766,311 $ 1,904,319 Acquisition contingent earn-out 918,709 907,657 Deferred revenue 507,827 460,748 Other 2,520 2,092 Total other liabilities $ 3,195,367 $ 3,274,816 |
STATE AND MUNICIPAL SALES TAX
STATE AND MUNICIPAL SALES TAX | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
STATE AND MUNICIPAL SALES TAX | 12. STATE AND MUNICIPAL SALES TAX In accordance with generally accepted accounting principles, we make a provision for a liability for taxes when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. For a period of time, we did not collect or remit state or municipal sales tax on the charges to our customers for our services in certain states, except that we historically complied with New York sales tax. As such, we had a reserve of $1.2 million as of March 31, 2016 as our best estimate of the potential tax exposure for any retroactive assessment. The Company concluded its review of sales tax exposure during the fourth quarter of 2016 which resulted in a reduced liability of $653 thousand. As of March 31, 2017, no provision remains. |
SEGMENT AND GEOGRAPHIC DATA
SEGMENT AND GEOGRAPHIC DATA | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC DATA | 13. SEGMENT AND GEOGRAPHIC DATA Segments Effective October 1, 2016 as a result of organizational changes related to our new management team, we changed our financial reporting to better reflect how we gather and analyze business and financial information about our businesses. We now report our results in three segments: (i) The Deal / BoardEx and (ii) RateWatch, which comprise our business to business segment, and (iii) business to consumer, which is primarily comprised of the Company’s premium subscription newsletter products and website advertising. We have revised our financial results for the three months ended March 31, 2016 to conform to the segment presentation. For the Three Months Ended March 31, 2017 2016 Revenue: - The Deal / BoardEx $ 5,513,657 $ 5,266,649 - RateWatch 1,873,582 1,866,151 Total business to business 7,387,239 7,132,800 - Business to consumer 7,893,198 8,936,632 Total $ 15,280,437 $ 16,069,432 Operating (loss) income: - The Deal / BoardEx $ (643,949 ) $ (2,001,498 ) - RateWatch 182,006 (376,075 ) Total business to business (461,943 ) (2,377,573 ) - Business to consumer (486,964 ) (761,091 ) Total $ (948,907 ) $ (3,138,664 ) Due to the nature of the Company’s operations, a majority of its assets are utilized across all segments. In addition, segment assets are not reported to, or used by, the Chief Operating Decision Maker to allocate resources or assess performance of the Company’s segments. Accordingly, the Company has not disclosed asset information by segment. Geographic Data During the three months ended March 31, 2017 and 2016, substantially all of the Company’s revenue was from customers in the United States and substantially all of our long-lived assets are located in the United States. The remainder of the Company’s revenue and its long-lived assets are a result of our BoardEx operations outside of the United States, which is headquartered in London, England. |
DESCRIPTION OF THE BUSINESS A20
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The interim consolidated balance sheet as of March 31, 2017, the consolidated statements of operations, comprehensive income and statements of cash flows for the three months ended March 31, 2017 and 2016 are unaudited. The unaudited interim financial statements have been prepared on a basis consistent with the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company’s financial position as of March 31, 2017 and its results of consolidated operations, comprehensive income and cash flows for the three months ended March 31, 2017 and 2016. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2017 or for any other future annual or interim period. There have been no material changes in the significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on March 20, 2017. These financial statements should also be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2016. Certain information and note disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The Company has evaluated subsequent events for recognition or disclosure. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing GAAP. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of ASU 2014-09 is permitted but not before the original effective date (annual periods beginning after December 15, 2016). When effective, ASU 2014-09 prescribes either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Based upon our revenue streams of subscription and advertising, we do not believe that adoption of ASU 2014-09 will have a significant impact on our consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17 (Topic 740), “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires deferred tax liabilities and assets to be classified as noncurrent in the Consolidated Balance Sheet. We adopted ASU 2016-09 in the first quarter of 2017. The adoption of this standard did not have a material impact on our consolidated balance sheet. In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Restricted Cash In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles — Goodwill and Other Simplifying the Test for goodwill Impairment |
CASH AND CASH EQUIVALENTS, MA21
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents marketable securities and restricted cash | The letters of credit serve as security deposits for the Company’s office space in New York City. March 31, 2017 December 31, 2016 Cash and cash equivalents $ 22,661,634 $ 21,371,122 Marketable securities 1,443,000 1,550,000 Current and noncurrent restricted cash 500,000 500,000 Total cash and cash equivalents, marketable securities and current and noncurrent restricted cash $ 24,604,634 $ 23,421,122 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurements based on valuation technique | Financial assets and liabilities included in our financial statements and measured at fair value are classified based on the valuation technique level in the table below: As of March 31, 2017 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 22,661,634 $ 22,661,634 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,443,000 — — 1,443,000 Contingent earn-out (3) 918,709 — — 918,709 Total at fair value $ 25,523,343 $ 23,161,634 $ — $ 2,361,709 As of December 31, 2016 Description: Total Level 1 Level 2 Level 3 Cash and cash equivalents (1) $ 21,371,122 $ 21,371,122 $ — $ — Restricted cash (1) 500,000 500,000 — — Marketable securities (2) 1,550,000 — — 1,550,000 Contingent earn-out (3) 907,657 — — 907,657 Total at fair value $ 24,328,779 $ 21,871,122 $ — $ 2,457,657 (1) Cash and cash equivalents and restricted cash, totaling approximately $23.2 million and $21.9 million as of March 31, 2017 and December 31, 2016, respectively, consist primarily of checking accounts and money market funds for which we determine fair value through quoted market prices. (2) Marketable securities include two municipal ARS issued by the District of Columbia having a fair value totaling approximately $1.4 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively. Historically, the fair value of ARS investments approximated par value due to the frequent resets through the auction process. Due to events in credit markets, the auction events, which historically have provided liquidity for these securities, have been unsuccessful. The result of a failed auction is that these ARS holdings will continue to pay interest in accordance with their terms at each respective auction date; however, liquidity of the securities will be limited until there is a successful auction, the issuer redeems the securities, the securities mature or until such time as other markets for these ARS holdings develop. For each of our ARS, we evaluate the risks related to the structure, collateral and liquidity of the investment, and forecast the probability of issuer default, auction failure and a successful auction at par, or a redemption at par, for each future auction period. Temporary impairment charges are recorded in accumulated other comprehensive loss, whereas other-than-temporary impairment charges are recorded in our consolidated statement of operations. As of March 31, 2017, the Company determined there was a decline in the fair value of its ARS investments of $407 thousand from its cost basis, which was deemed temporary and was included within accumulated other comprehensive loss. (3) Contingent earn-out represents additional purchase consideration payable to the former shareholders of Management Diagnostics Limited based upon the achievement of specific 2017 audited revenue benchmarks. The probability of achieving each benchmark is based on Management’s assessment of the projected 2017 revenue. The present value of each probability weighted payment was calculated by discounting the probability weighted payment by the corresponding present value factor. |
Schedule of assets and liabilities fair value using significant unobservable inputs (Level 3) | The following tables provide a reconciliation of the beginning and ending balance for the Company’s assets and liabilities measured at fair value using significant unobservable inputs (Level 3): Marketable Balance December 31, 2016 $ 1,550,000 Change in fair value of investment (107,000 ) Balance March 31, 2017 $ 1,443,000 Contingent Balance December 31, 2016 $ 907,657 Accretion to net present value 11,052 Balance March 31, 2017 $ 918,709 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of valuation assumptions | The weighted-average grant date fair value per share of stock option awards granted during the three months ended March 31, 2017 and 2016 was $0.23 and $0.39, respectively, using the Black-Scholes model with the following weighted-average assumptions: For the Three Months Ended 2017 2016 Expected option lives 3.0 years 4.4 years Expected volatility 36.68 % 32.52 % Risk-free interest rate 1.46 % 1.34 % Expected dividend yield 0.00 % 0.00 % |
Schedule of stock option activity | A summary of the activity of the 2007 Plan, and awards issued outside of the Plan pertaining to stock option grants is as follows: Shares Weighted Aggregate Weighted Awards outstanding at December 31, 2016 5,900,731 $ 1.52 Options granted 45,000 $ 0.85 Options exercised - N/A Options forfeited (23,032 ) $ 1.14 Options expired (574,477 ) $ 1.81 Awards outstanding at March 31, 2017 5,348,222 $ 1.48 $ 0 4.01 Awards vested and expected to vest at March 31, 2017 5,287,684 $ 1.48 $ 0 3.99 Awards exercisable at March 31, 2017 2,479,491 $ 1.78 $ 0 1.69 |
Schedule of restricted stock units | A summary of the activity of the 2007 Plan pertaining to grants of restricted stock units is as follows: Shares Aggregate Weighted Awards outstanding at December 31, 2016 717,995 Restricted stock units granted 200,004 Restricted stock units settled by delivery of Common Stock upon vesting (207,187 ) Restricted stock units forfeited (40,000 ) Awards outstanding at March 31, 2017 670,812 $ 510 0.88 Awards expected to vest at March 31, 2017 664,312 $ 505 0.81 |
Schedule of unvested awards | A summary of the status of the Company’s unvested share-based payment awards as of March 31, 2017 and changes in the three months then ended, is as follows: Unvested Awards Number of Shares Weighted Shares underlying awards unvested at December 31, 2016 3,936,427 $ 0.62 Shares underlying options granted 45,000 $ 0.23 Shares underlying restricted stock units granted 200,004 $ 0.85 Shares underlying options vested (371,669 ) $ 0.39 Shares underlying restricted stock units settled by delivery of Common Stock upon vesting (207,187 ) $ 1.43 Shares underlying options forfeited (23,032 ) $ 0.36 Shares underlying restricted stock units cancelled (40,000 ) $ 1.20 Shares underlying awards unvested at March 31, 2017 3,539,543 $ 0.60 |
NET LOSS PER SHARE OF COMMON 24
NET LOSS PER SHARE OF COMMON STOCK (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per share | The following table reconciles the numerator and denominator for the calculation. For the Three Months Ended March 31, 2017 2016 Basic and diluted net loss per share: Numerator: Net loss $ (1,127,440 ) $ (3,444,287 ) Numerator for basic and diluted earnings per share Net loss attributable to common stockholders $ (1,127,440 ) $ (3,444,287 ) Denominator: Weighted average basic shares outstanding 35,558,371 35,197,955 Basic and diluted net loss per share: Net loss attributable to common stockholders $ (0.03 ) $ (0.10 ) |
RESTRUCTURING AND OTHER CHARG25
RESTRUCTURING AND OTHER CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve account | The following table displays the activity of the 2012 Restructuring reserve account during the three months ended March 31, 2016. Lease Balance December 31, 2015 $ 99,309 Payments net of sublease receipts (3,759 ) Balance March 31, 2016 $ 95,550 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Schedule of other liabilities | Other liabilities consist of the following: March 31, 2017 December 31, 2016 Deferred rent $ 1,766,311 $ 1,904,319 Acquisition contingent earn-out 918,709 907,657 Deferred revenue 507,827 460,748 Other 2,520 2,092 Total other liabilities $ 3,195,367 $ 3,274,816 |
SEGMENT AND GEOGRAPHIC DATA (Ta
SEGMENT AND GEOGRAPHIC DATA (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting | We have revised our financial results for the three months ended March 31, 2016 to conform to the segment presentation. For the Three Months Ended March 31, 2017 2016 Revenue: - The Deal / BoardEx $ 5,513,657 $ 5,266,649 - RateWatch 1,873,582 1,866,151 Total business to business 7,387,239 7,132,800 - Business to consumer 7,893,198 8,936,632 Total $ 15,280,437 $ 16,069,432 Operating (loss) income: - The Deal / BoardEx $ (643,949 ) $ (2,001,498 ) - RateWatch 182,006 (376,075 ) Total business to business (461,943 ) (2,377,573 ) - Business to consumer (486,964 ) (761,091 ) Total $ (948,907 ) $ (3,138,664 ) |
CASH AND CASH EQUIVALENTS, MA28
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 22,661,634 | $ 21,371,122 | $ 29,831,758 | $ 28,445,416 |
Marketable securities | 1,443,000 | 1,550,000 | ||
Current and noncurrent restricted cash | 500,000 | 500,000 | ||
Total cash and cash equivalents, marketable securities and current and noncurrent restricted cash | $ 24,604,634 | $ 23,421,122 |
CASH AND CASH EQUIVALENTS, MA29
CASH AND CASH EQUIVALENTS, MARKETABLE SECURITIES AND RESTRICTED CASH (Details Narrative) | 3 Months Ended | |
Mar. 31, 2017USD ($)Securities | Dec. 31, 2016USD ($) | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Marketable securities, fair value basis | $ 1,443,000 | $ 1,550,000 |
Restricted cash collateral for outstanding letters of credit | $ 500,000 | 500,000 |
Municipal Auction Rate Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Securities | Securities | 2 | |
Marketable securities,cost basis | $ 1,900,000 | 1,900,000 |
Marketable securities, fair value basis | $ 1,443,000 | $ 1,550,000 |
Maturity year | 2,038 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | |
Restricted cash | $ 500,000 | $ 500,000 | |
Marketable securities | 1,443,000 | 1,550,000 | |
Total [Member] | |||
Cash and cash equivalents | [1] | 22,661,634 | 21,371,122 |
Restricted cash | [1] | 500,000 | 500,000 |
Marketable securities | [2] | 1,443,000 | 1,550,000 |
Contingent earn-out | [3] | 918,709 | 907,657 |
Total at fair value | 25,523,343 | 24,328,779 | |
Level 1 [Member] | |||
Cash and cash equivalents | [1] | 22,661,634 | 21,371,122 |
Restricted cash | [1] | 500,000 | 500,000 |
Marketable securities | [2] | ||
Contingent earn-out | [3] | ||
Total at fair value | 23,161,634 | 21,871,122 | |
Level 2 [Member] | |||
Cash and cash equivalents | [1] | ||
Restricted cash | [1] | ||
Marketable securities | [2] | ||
Contingent earn-out | [3] | ||
Total at fair value | |||
Level 3 [Member] | |||
Cash and cash equivalents | [1] | ||
Restricted cash | [1] | ||
Marketable securities | [2] | 1,443,000 | 1,550,000 |
Contingent earn-out | [3] | 918,709 | 907,657 |
Total at fair value | $ 2,361,709 | $ 2,457,657 | |
[1] | Cash and cash equivalents and restricted cash, totaling approximately $23.2 million and $21.9 million as of March 31, 2017 and December 31, 2016, respectively, consist primarily of checking accounts and money market funds for which we determine fair value through quoted market prices. | ||
[2] | Marketable securities include two municipal ARS issued by the District of Columbia having a fair value totaling approximately $1.4 million and $1.6 million as of March 31, 2017 and December 31, 2016, respectively. Historically, the fair value of ARS investments approximated par value due to the frequent resets through the auction process. Due to events in credit markets, the auction events, which historically have provided liquidity for these securities, have been unsuccessful. The result of a failed auction is that these ARS holdings will continue to pay interest in accordance with their terms at each respective auction date; however, liquidity of the securities will be limited until there is a successful auction, the issuer redeems the securities, the securities mature or until such time as other markets for these ARS holdings develop. For each of our ARS, we evaluate the risks related to the structure, collateral and liquidity of the investment, and forecast the probability of issuer default, auction failure and a successful auction at par, or a redemption at par, for each future auction period. Temporary impairment charges are recorded in accumulated other comprehensive loss, whereas other-than-temporary impairment charges are recorded in our consolidated statement of operations. As of March 31, 2017, the Company determined there was a decline in the fair value of its ARS investments of $407 thousand from its cost basis, which was deemed temporary and was included within accumulated other comprehensive loss. | ||
[3] | Contingent earn-out represents additional purchase consideration payable to the former shareholders of Management Diagnostics Limited based upon the achievement of specific 2017 audited revenue benchmarks. The probability of achieving each benchmark is based on Management's assessment of the projected 2017 revenue. The present value of each probability weighted payment was calculated by discounting the probability weighted payment by the corresponding present value factor. |
FAIR VALUE MEASUREMENTS (Deta31
FAIR VALUE MEASUREMENTS (Details 1) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Contingent Earn-Out [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of the period | $ 907,657 |
Accretion of net present value | 11,052 |
Balance at end of the period | 918,709 |
Marketable Securities [Member] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of the period | 1,550,000 |
Change in fair value | (107,000) |
Balance at end of the period | $ 1,443,000 |
FAIR VALUE MEASUREMENTS (Deta32
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cash and cash equivalents and restricted cash | $ 23,900,000 | $ 21,900,000 |
Marketable securities, fair value | 1,443,000 | 1,550,000 |
Municipal Auction Rate Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Marketable securities, fair value | 1,443,000 | $ 1,550,000 |
Decline in fair value of ARS | $ 407,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected option lives | P3Y | P4Y4M28D |
Expected volatility | 36.68% | 32.52% |
Risk-free interest rate | 1.46% | 1.34% |
Expected dividend yield | 0.00% | 0.00% |
STOCK-BASED COMPENSATION (Det34
STOCK-BASED COMPENSATION (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options granted | 45,000 | |
2007 Performance Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Awards outstanding at beginning | 5,900,731 | |
Options granted | 45,000 | 840,000 |
Options forfeited | (23,032) | |
Options expired | (574,477) | |
Awards outstanding at ending | 5,348,222 | |
Awards vested and expected to vest at ending | 5,287,684 | |
Awards exercisable at ending | 2,479,491 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Awards outstanding at beginning | $ 1.52 | |
Options granted | 0.85 | |
Options exercised | ||
Options forfeited | 1.14 | |
Options expired | 1.81 | |
Awards outstanding at ending | 1.48 | |
Awards vested and expected to vest at ending | 1.48 | |
Awards exercisable at ending | $ 1.78 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value [Roll Forward] | ||
Awards outstanding at ending | $ 0 | |
Awards vested and expected to vest at ending | 0 | |
Awards exercisable at ending | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward] | ||
Awards outstanding at ending | 4 years 1 month 6 days | |
Awards vested and expected to vest at ending | 3 years 11 months 26 days | |
Awards exercisable at ending | 1 year 8 months 8 days |
STOCK-BASED COMPENSATION (Det35
STOCK-BASED COMPENSATION (Details 2) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Restricted stock units granted | 200,004 | |
Restricted stock units settled by delivery of Common Stock upon vesting | (207,187) | |
Restricted stock units forfeited | (40,000) | |
2007 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Awards outstanding at beginning | 717,995 | |
Restricted stock units granted | 200,004 | 232,000 |
Restricted stock units settled by delivery of Common Stock upon vesting | (207,187) | (114,000) |
Restricted stock units forfeited | (40,000) | |
Awards outstanding at ending | 670,812 | |
Awards expected to vest at ending | 664,312 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Intrinsic Value [Roll Forward] | ||
Awards outstanding at ending | $ 510 | |
Awards expected to vest at ending | $ 505 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Remaining Contractual Life [Roll Foward] | ||
Awards outstanding at ending | 10 months 17 days | |
Awards expected to vest at ending | 9 months 22 days |
STOCK-BASED COMPENSATION (Det36
STOCK-BASED COMPENSATION (Details 3) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Shares underlying awards unvested at beginning | 3,936,427 | |
Shares underlying options granted | 45,000 | |
Shares underlying restricted stock units granted | 200,004 | |
Shares underlying options vested | (371,669) | |
Shares underlying restricted stock units settled by delivery of Common Stock upon vesting | (207,187) | |
Shares underlying options forfeited | (23,032) | |
Shares underlying restricted stock units cancelled | (40,000) | |
Shares underlying awards unvested at ending | 3,539,543 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Shares underlying awards unvested at beginning | $ 0.62 | |
Shares underlying options granted | 0.23 | $ .39 |
Shares underlying restricted stock units granted | 0.85 | $ 1.45 |
Shares underlying options vested | 0.39 | |
Shares underlying restricted stock units settled by delivery of Common Stock upon vesting | 1.43 | |
Shares underlying options forfeited | 0.36 | |
Shares underlying restricted stock units cancelled | 1.2 | |
Shares underlying awards unvested at ending | $ 0.6 |
STOCK-BASED COMPENSATION (Det37
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Weighted-average grant date fair value of stock option (in dollars per share) | $ 0.23 | $ .39 |
Weighted-average grant date fair value per share (in dollars per share) | $ 0.85 | $ 1.45 |
Noncash share-based compensation | $ 396,242 | $ 363,128 |
Restructuring and other charges | 105,113 | |
Total fair value of share-based awards vested | 323,000 | 296,000 |
Total intrinsic value of options exercised | $ 0 | 0 |
Number of stock option granted | 45,000 | |
Number of RSU granted | 200,004 | |
Number of shares issued for settled by delivery of common stock upon vesting | 207,187 | |
2007 Performance Incentive Plan [Member] | ||
Number of remaining shares available for future grants | 1,600,000 | |
Noncash share-based compensation | $ 396,000 | 468,000 |
Restructuring and other charges | $ 105,000 | |
Number of stock option granted | 45,000 | 840,000 |
Proceeds from the exercise of stock options | $ 0 | |
Unrecognized stock-based compensation expense | $ 1,600,000 | |
Weighted average period of recognization | 1 year 6 months | |
2007 Performance Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||
Total fair value of share-based awards vested | $ 176,000 | $ 169,000 |
Number of RSU granted | 200,004 | 232,000 |
Number of shares issued for settled by delivery of common stock upon vesting | 207,187 | 114,000 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2000 | |
Number of treasury shares purchased | 211,608 | |
Cash dividend paid to common shares (Series B Preferred Stock on a converted common share basis) (in dollars per share) | $ 0.10 | |
2007 Performance Incentive Plan [Member] | ||
Number of shares for withholding taxes | 1,850,752 | |
Share Repurchase Program [Member] | Common Stock [Member] | ||
Number of authorized shares repurchased | $ 10,000,000 | |
Number of treasury shares purchased | 5,453,416 | |
Value of treasury shares purchased | $ 7,300,000 |
NET LOSS PER SHARE OF COMMON 39
NET LOSS PER SHARE OF COMMON STOCK (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator: | ||
Net loss | $ (1,127,440) | $ (3,444,287) |
Numerator for basic and diluted earnings per share | ||
Net loss attributable to common stockholders | $ (1,127,440) | $ (3,444,287) |
Denominator: | ||
Weighted average basic shares outstanding | 35,558,371 | 35,197,955 |
Basic and diluted net loss per share: | ||
Net loss attributable to common stockholders | $ (0.03) | $ (0.10) |
NET LOSS PER SHARE OF COMMON 40
NET LOSS PER SHARE OF COMMON STOCK (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Number of restricted stock units and option excluded from calculation | 666,000 | 908,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax expense | $ 186,304 | $ 305,128 | |
Effective tax rate | (20.00%) | (10.00%) | |
Income tax expense recognised as deferred tax liabilities, goodwill and intangible assets | $ 148,000 | $ 281,000 | |
Windfall tax net operating loss carryforward | $ 16,000,000 | ||
Certain Jurisdictions Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax expense | $ 38,000 | $ 24,000 | |
Federal And State Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 160,000,000 | ||
Deferred tax assets | $ 75,000,000 | ||
Description of operating loss carry forward expiration year | Expire from 2019 through 2036 | ||
Description of operating loss carryforwards limitations on use | The utilization of such carryforwards may be limited upon the occurrence of certain ownership changes, including the purchase and sale of stock by 5% shareholders and the offering of stock by the Company during any three-year period resulting in an aggregate change of more than 50% of the beneficial ownership of the Company. |
BUSINESS CONCENTRATIONS AND C42
BUSINESS CONCENTRATIONS AND CREDIT RISK (Details Narrative) - Number | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Number of financial institutuions | 7 | ||
Exceeds 10% Revenue [Member] | Customer Concentration Risk [Member] | |||
Number of customers | 0 | 0 | |
Exceeds 10% Accounts Receivables [Member] | Customer Concentration Risk [Member] | |||
Number of customers | 0 | 0 |
RESTRUCTURING AND OTHER CHARG43
RESTRUCTURING AND OTHER CHARGES (Details) - Restructuring Reserve 2012 [Member] - Lease Termination [Member] | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 99,309 |
Payments net of sublease receipts | (3,759) |
Ending balance | $ 95,550 |
RESTRUCTURING AND OTHER CHARG44
RESTRUCTURING AND OTHER CHARGES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2012 | |
Restructuring and other charges | $ 198,979 | $ 1,380,052 | |
2012 Restructuring Reserve Account [Member] | |||
Restructuring reserve | $ (1,200,000) | ||
Employee Severance [Member] | |||
Restructuring and other charges | $ 1,400,000 | ||
Software [Member] | 2012 Restructuring Reserve Account [Member] | |||
Restructuring and other charges | $ 3,400,000 | ||
Office Space [Member] | 2012 Restructuring Reserve Account [Member] | The Deal, LLC [Member] | |||
Restructuring and other charges | $ 3,500,000 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 1,766,311 | $ 1,904,319 |
Acquisition contingent earn-out | 918,709 | 907,657 |
Deferred revenue | 507,827 | 460,748 |
Other | 2,520 | 2,092 |
Total other liabilities | $ 3,195,367 | $ 3,274,816 |
STATE AND MUNICIPAL SALES TAX (
STATE AND MUNICIPAL SALES TAX (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2016 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Reserve for state and municipal sales tax | $ 1,200,000 | |
Reduction in liablity | $ 653,000 |
SEGMENT AND GEOGRAPHIC DATA (De
SEGMENT AND GEOGRAPHIC DATA (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Total business to business | $ 7,387,239 | $ 7,132,800 |
Business to consumer | 7,893,198 | 8,936,632 |
Total | 15,280,437 | 16,069,432 |
Operating (loss) income: | ||
Total business to business | (461,943) | (2,377,573) |
Business to consumer | (486,964) | (761,091) |
Total | (948,907) | (3,138,664) |
The Deal / BoardEx [Member] | ||
Revenue: | ||
Total business to business | 5,513,657 | 5,266,649 |
Operating (loss) income: | ||
Total business to business | (643,949) | (2,001,498) |
RateWatch [Member] | ||
Revenue: | ||
Total business to business | 1,873,582 | 1,866,151 |
Operating (loss) income: | ||
Total business to business | $ 182,006 | $ (376,075) |