Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Sep. 30, 2013 | Jan. 31, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Jul-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'EONC | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 2,891,613 | ' |
Entity Registrant Name | 'EON COMMUNICATIONS CORP | ' | ' |
Entity Central Index Key | '0001084752 | ' | ' |
Current Fiscal Year End Date | '--07-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $1,868,416 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $1,778 | $2,162 |
Trade accounts receivable, net of allowance of $285 and $555, respectively | 4,521 | 4,370 |
Inventories | 5,026 | 5,261 |
Prepaid and other current assets | 257 | 387 |
Total current assets | 11,582 | 12,180 |
Property and equipment, net | 503 | 352 |
Other non current assets | 40 | 84 |
Investments | 990 | 990 |
Total assets | 13,115 | 13,606 |
Current liabilities: | ' | ' |
Trade accounts payable | 2,297 | 2,059 |
Current maturities of notes payable | 37 | 37 |
Current maturities of notes payable - related parties | 330 | 709 |
Accrued expenses and other | 1,182 | 1,622 |
Total current liabilities | 3,846 | 4,427 |
Notes payable, net of current maturities | 37 | 74 |
Notes payable - related parties, net of current maturities | 2,859 | 2,959 |
Total liabilities | 6,742 | 7,460 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.001 par value, (10,000,000 shares authorized, no shares issued and outstanding) | 0 | 0 |
Common stock, $0.005 par value (10,000,000 shares authorized, 3,016,758 shares issued) | 15 | 15 |
Additional paid-in capital | 56,305 | 56,304 |
Treasury stock, at cost (139,084 and 139,404 shares, respectively) | -1,497 | -1,501 |
Accumulated deficit | -49,237 | -49,305 |
Total eOn Communications Corp. stockholders' equity | 5,586 | 5,513 |
Noncontrolling interest | 787 | 633 |
Total stockholders' equity | 6,373 | 6,146 |
Total liabilities and stockholders' equity | $13,115 | $13,606 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Trade accounts receivable, allowance | $285 | $555 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,016,758 | 3,016,758 |
Treasury stock, shares | 139,084 | 139,404 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
REVENUE | ' | ' |
Products | $17,396 | $17,325 |
Services | 3,190 | 3,346 |
Net revenue | 20,586 | 20,671 |
COST OF REVENUE | ' | ' |
Products | 13,854 | 13,424 |
Services | 1,926 | 2,255 |
Cost of revenue | 15,780 | 15,679 |
Gross profit | 4,806 | 4,992 |
OPERATING EXPENSE | ' | ' |
Selling, general and administrative | 4,902 | 4,730 |
Other | 24 | 25 |
Total operating expense | 4,926 | 4,755 |
Income (loss) from operations | -120 | 237 |
OTHER INCOME (EXPENSE) | ' | ' |
Interest income (expense), net | 306 | -160 |
Total other income (expense) | 306 | -160 |
Income from continuing operations before income taxes | 186 | 77 |
Income tax expense from continuing operations | 20 | 20 |
Income from continuing operations | 166 | 57 |
DISCONTINUED OPERATIONS | ' | ' |
Income from discontinued operations | 56 | 455 |
Net income | 222 | 512 |
Less: Net income attributable to the noncontrolling interest | 154 | 48 |
Net income attributable to common shareholders | 68 | 464 |
Weighted average shares outstanding: | ' | ' |
Basic | 2,877 | 2,873 |
Diluted | 2,877 | 2,873 |
Basic and diluted income per share | ' | ' |
Continuing operations | $0 | $0 |
Discontinued operations | $0.02 | $0.16 |
Total | $0.02 | $0.16 |
Comprehensive income | ' | ' |
Net income | 222 | 512 |
Other comprehensive loss | 0 | -5 |
Comprehensive income | $222 | $507 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $222 | $512 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Loss on sale of discontinued operations | 286 | 0 |
Stock-based compensation expense | 4 | 7 |
Depreciation and amortization | 134 | 105 |
Provision for doubtful trade accounts receivable | 23 | 46 |
Provision for obsolete inventory | 40 | 119 |
Loss (gain) on disposal of fixed assets | 3 | -2 |
Imputed interest expense on notes payable | -306 | 158 |
Other | 0 | -5 |
Changes in net assets and liabilities, net of effects of business acquisition | ' | ' |
Trade accounts receivable | -126 | 759 |
Inventories | -191 | 136 |
Prepaid and other assets | 174 | -155 |
Trade accounts payable | 238 | -601 |
Accrued expenses and other | -388 | -77 |
Net cash provided by operating activities | 113 | 1,002 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -288 | -232 |
Net cash used in investing activities | -288 | -232 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repayment of note payable | -210 | -168 |
Proceeds from sale of treasury stock | 1 | 0 |
Proceeds from employee stock purchase plan | 0 | 18 |
Net cash used in financing activities | -209 | -150 |
Net increase (decrease) in cash and cash equivalents | -384 | 620 |
Cash and cash equivalents, beginning of period | 2,162 | 1,542 |
Cash and cash equivalents, end of period | 1,778 | 2,162 |
Non cash investing and financing activity: | ' | ' |
Note payable for purchase of equipment | 0 | 111 |
Receivable from sale of business | 48 | 0 |
Supplemental cash flow information: | ' | ' |
Income taxes paid | $12 | $60 |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Noncontrolling Interest [Member] |
In Thousands, except Share data, unless otherwise specified | |||||||
Beginning Balance at Jul. 31, 2011 | $5,614 | $15 | $56,281 | ($1,503) | ($49,769) | $5 | $585 |
Beginning Balance at (in shares) at Jul. 31, 2011 | ' | 3,003,985 | ' | -139,580 | ' | ' | ' |
Issuance of common stock under employee stock purchase plan | 18 | ' | 18 | ' | ' | ' | ' |
Issuance of common stock under employee stock purchase plan (in shares) | ' | 12,773 | ' | ' | ' | ' | ' |
Stock-based compensation expense, stock options and ESPP | 7 | ' | 7 | ' | ' | ' | ' |
Reissuance of treasury stock | 0 | ' | -2 | 2 | ' | ' | ' |
Reissuance of treasury stock (in shares) | ' | ' | ' | 176 | ' | ' | ' |
Comprehensive income: | ' | ' | ' | ' | ' | ' | ' |
Other | -5 | ' | ' | ' | ' | -5 | ' |
Net income | 512 | ' | ' | ' | 464 | ' | 48 |
Comprehensive income | 507 | ' | ' | ' | ' | ' | ' |
Balance at Jul. 31, 2012 | 6,146 | 15 | 56,304 | -1,501 | -49,305 | 0 | 633 |
Balance (in shares) at Jul. 31, 2012 | ' | 3,016,758 | ' | -139,404 | ' | ' | ' |
Stock-based compensation expense, stock options and ESPP | 4 | ' | 4 | ' | ' | ' | ' |
Reissuance of treasury stock | 1 | ' | -3 | 4 | ' | ' | ' |
Reissuance of treasury stock (in shares) | ' | ' | ' | 320 | ' | ' | ' |
Comprehensive income: | ' | ' | ' | ' | ' | ' | ' |
Net income | 222 | ' | ' | ' | 68 | ' | 154 |
Comprehensive income | 222 | ' | ' | ' | ' | ' | ' |
Balance at Jul. 31, 2013 | $6,373 | $15 | $56,305 | ($1,497) | ($49,237) | $0 | $787 |
Balance (in shares) at Jul. 31, 2013 | ' | 3,016,758 | ' | -139,084 | ' | ' | ' |
Description_of_Business
Description of Business | 12 Months Ended | |
Jul. 31, 2013 | ||
Description of Business [Abstract] | ' | |
Description of Business | ' | |
1 | Description of Business | |
eOn Communications Corporation™ and subsidiaries (“eOn” or the “Company”) is a provider of communications solutions. Backed with over 20 years of telecommunications expertise, the Company’s solutions enable customers to use its technologies in order to communicate more effectively. Through its wholly-owned subsidiary, Cortelco Systems Holding Corp. (“Cortelco”), the Company provides commercial grade telephone products primarily for use in businesses, government agencies, colleges and universities, telephone companies, and utilities. Cortelco sells primarily through large national distributors with whom it has long-term relationships. Through its majority-owned subsidiary, Cortelco Systems Puerto Rico (“CSPR”), the Company provides sales and service of integrated communications systems, data equipment, security products, and telephony billing services. | ||
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Jul. 31, 2013 | ||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
2 | Summary of Significant Accounting Policies | |||||||||||||
(a) | Principles of Consolidation | |||||||||||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, and include the accounts of eOn Communications Corporation, Cortelco acquired on April 1, 2009, and CSPR control of which was acquired on June 9, 2010. All significant inter-company accounts and transactions have been eliminated in consolidation. | ||||||||||||||
(b) | Cash and Cash Equivalents | |||||||||||||
All highly liquid investments with a maturity date of three months or less when purchased are considered to be cash equivalents. | ||||||||||||||
(c) | Trade Accounts Receivable | |||||||||||||
Trade accounts receivable are stated net of allowances for doubtful accounts. The Company typically grants standard credit terms to customers in good credit standing. As a result, the Company must estimate the portion of accounts receivable that are uncollectible and record any necessary valuation reserves. The Company generally reserves for estimated uncollectible accounts on a customer-by-customer basis, which requires judgment about each individual customer’s ability and intention to fully pay account balances. The Company makes these judgments based on knowledge of and relationships with customers and current economic trends, and updates estimates on a monthly basis. Any changes in estimate, which can be significant, are included in earnings in the period in which the change in estimate occurs. | ||||||||||||||
(d) | Inventories | |||||||||||||
Inventories consist of phones and component parts and are valued at the lower of cost or market with cost determined utilizing standard cost which approximates the first-in, first-out (FIFO) method. The Company performs an analysis of slow-moving or obsolete inventory on a quarterly basis and any changes in valuation reserves, which could potentially be significant, are included in earnings in the period in which the evaluations are completed. | ||||||||||||||
(e) | Property and Equipment | |||||||||||||
Property and equipment are stated at cost. Depreciation is provided using the straight-line method for financial reporting purposes and accelerated methods for income tax reporting purposes over the estimated useful lives of the assets, generally three to five years. Maintenance and repair costs are charged to expense as incurred. | ||||||||||||||
(f) | Investments | |||||||||||||
The equity method of accounting is used when the Company has a 20% to 50% interest in other entities or when we exercise significant influence over the entity. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities. Investments in which the Company has less than a 20% interest and in which it does not have the ability to exercise significant influence over the investee are initially recorded at cost, and periodically reviewed for impairment. | ||||||||||||||
The Company evaluates its cost method investments for impairment on a quarterly basis in accordance with ASC 325, Cost Method Investments (“ASC 325”), which specifically addresses accounting for cost method investments subsequent to initial measurement. An impairment charge is recognized whenever a decline in value of an investment below its carrying amount is determined to be other-than-temporary. In determining if a decline is other-than-temporary, factors such as the length of time and extent to which the fair value of the investment has been less than the carrying amount of the investment, the near-term and longer-term operating and financial prospects of the affiliate and the intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery are considered. | ||||||||||||||
(g) | Stock Compensation Plans | |||||||||||||
The Company accounts for stock-based compensation under ASC Topic 718, Stock Compensation (“Topic 718”). Topic 718 requires the measurement and recognition of compensation expense for all share-based payment awards based on estimated fair values. Topic 718 also required the benefits of tax deductions in excess of recognized compensation cost to be recorded as financing cash flows. | ||||||||||||||
(h) | Product Warranties | |||||||||||||
Warranties for the Cortelco and CSPR product lines range from one to five years based upon the product purchased. The Company estimates the costs of satisfying warranty claims based on analysis of past claims experience and provides for these future claims in the period that revenue is recognized. The cost of satisfying warranty claims, which approximates 0.5% - 1.0% of product revenues, has historically been comprised of materials and direct labor costs. The Company performs quarterly evaluations of these estimates and any changes in estimates, which could potentially be significant, are included in earnings in the period in which the evaluations are completed. | ||||||||||||||
(i) | Income Taxes | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets when management is unable to conclude that it is more likely than not that the asset will be realized. | ||||||||||||||
The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company classifies interest and penalties, if any, as a component of its income tax provision. | ||||||||||||||
(j) | Revenue Recognition | |||||||||||||
The Company’s revenues from its three product lines are the result of separate, individual deliverables: | ||||||||||||||
Type of Revenues Earned | ||||||||||||||
Professional | Maintenance | |||||||||||||
Product Line | Equipment/Software | Services | Contracts | |||||||||||
Cortelco Products | Individual sale | - | - | |||||||||||
CSPR Products | Individual sale | Individual sale | Individual sale | |||||||||||
CSPR Telephony Billing | - | Individual sale | - | |||||||||||
Cortelco sells corded and cordless analog and digital telephones capable of operating in the multiple PBX, Key System and Centrex environments primarily through stocking distributors. | ||||||||||||||
Telephony billing revenues from the resale of Puerto Rico Telephone services are recognized monthly as services are provided to the customers. | ||||||||||||||
The Company records shipping and handling fees billed to customers as revenue, and shipping and handling costs incurred with the delivery of products as cost of sales. | ||||||||||||||
Revenues from our products are recognized only when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the customer is fixed or determinable, and collectibility is reasonably assured. Generally, revenue is recognized (1) upon shipment for equipment and software, (2) as work is performed for professional services and (3) in equal periodic amounts over the term of the contract for software and hardware maintenance. The Company’s revenue recognition policies are in accordance with SEC Staff Accounting Bulletin No. 104, Revenue Recognition and ASC Topic 985, Software. | ||||||||||||||
(k) | Earnings Per Share | |||||||||||||
Basic EPS is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares, such as options, had been issued. | ||||||||||||||
(l) | Fair Value of Financial Instruments | |||||||||||||
Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact, and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non performance. | ||||||||||||||
Accounting standards have established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting standards have established three levels of inputs that may be used to measure fair value: | ||||||||||||||
⋅ | Level 1: Quoted prices in active markets for identical assets and liabilities. | |||||||||||||
⋅ | Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||
⋅ | Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | |||||||||||||
The carrying amounts of financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable approximate their fair value due to the short-term nature of the instruments. | ||||||||||||||
The following table presents information about the liabilities recorded at fair value at July 31, 2013, in the balance sheets (in thousands): | ||||||||||||||
Fair Value Measurements at July 31, 2013 | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
In Active | Other | Significant | ||||||||||||
Markets for | Observable | Unobservable | Total at | |||||||||||
Identical Assets | Inputs | Inputs | July 31, | |||||||||||
(Level 1) | (Level 2) | (Level 3) | 2013 | |||||||||||
Notes payable-related parties | $ | - | $ | - | $ | 3,189 | $ | 3,189 | ||||||
Total | $ | - | $ | - | $ | 3,189 | $ | 3,189 | ||||||
The following table presents information about the liabilities recorded at fair value at July 31, 2012, in the balance sheets (in thousands): | ||||||||||||||
Fair Value Measurements at July 31, 2012 | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
In Active | Other | Significant | ||||||||||||
Markets for | Observable | Unobservable | Total at | |||||||||||
Identical Assets | Inputs | Inputs | July 31, | |||||||||||
(Level 1) | (Level 2) | (Level 3) | 2012 | |||||||||||
Notes payable-related parties | $ | - | $ | - | $ | 3,668 | $ | 3,668 | ||||||
Total | $ | - | $ | - | $ | 3,668 | $ | 3,668 | ||||||
As of July 31, 2013 the Company owns approximately four percent of Symbio Investment Corp. Symbio Investment Corp. is a holding company whose primary asset is an approximate twenty percent investment in Symbio S.A. Symbio S.A.’s principal business is to provide outsourced information technology and research and development services globally at sites located in the United States, Finland, Sweden, China and Taiwan. The Company believes, based on recent stock issuances by Symbio S.A. in 2012, that the fair value of the Company’s investment in Symbio may be less than the Company’s cost of $990,000. There are no quoted market prices for the Company’s investment in Symbio Investment Corp., and sufficient information is not readily available for the Company to utilize a valuation model to determine its fair value without incurring excessive costs relative to the materiality of the investment. Accordingly, the Company has not estimated the fair value of its investment in Symbio Investment Corp. at July 31, 2013. Based on the Company’s evaluation of the near-term prospects of Symbio Investment Corp. and the Company’s ability and intent to hold the investment for a reasonable period of time sufficient for a forecasted recovery of fair value, the Company does not consider any potential impairment to be other-than-temporary at July 31, 2013. | ||||||||||||||
The notes payable – related parties is primarily due to the note payable to former Cortelco shareholders (See Note 8) which is valued using a discounted cash flow analysis of the projected future payments of Cortelco using a discount rate of 15.22%. The note is classified within Level 3 of the fair value hierarchy. | ||||||||||||||
The following represents transactions related to the note payable for the years ended July 31, 2013 and 2012 (in thousands). | ||||||||||||||
2013 | 2012 | |||||||||||||
Beginning fair value | $ | 3,486 | $ | 3,504 | ||||||||||
Imputed interest | 487 | 518 | ||||||||||||
Change in estimates | -796 | -368 | ||||||||||||
Interest (income) expense | -309 | 150 | ||||||||||||
Payments | -173 | -168 | ||||||||||||
Ending fair value - July 31 | $ | 3,004 | $ | 3,486 | ||||||||||
(m) | Estimates | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||
(n) | Advertising Expense | |||||||||||||
The Company expenses advertising costs as incurred. Advertising expenses for fiscal years 2013 and 2012 were not significant. | ||||||||||||||
(o) | Segment Reporting | |||||||||||||
The Company operates in two business segments: Telephony Products and Puerto Rico. Segment information is consistent with how management reviews its businesses, makes investing and resource allocation decisions and assesses operating performance. | ||||||||||||||
(p) | Reclassification | |||||||||||||
Certain amounts in the July 31, 2012 consolidated financial statements have been reclassed to conform to the July 31, 2013 consolidated financial statement presentation. | ||||||||||||||
Concentrations_of_Credit_Risk_
Concentrations of Credit Risk, Major Customers, Major Suppliers and Geographic Information | 12 Months Ended |
Jul. 31, 2013 | |
Concentrations of Credit Risk, Major Customers, Major Suppliers and Geographic Information [Abstract] | ' |
Concentrations of Credit Risk, Major Customers, Major Suppliers and Geographic Information | ' |
3. Concentrations of Credit Risk, Major Customers, Major Suppliers and Geographic Information | |
Financial instruments, which potentially subject the Company to a concentration of credit risk, consist principally of cash and trade accounts receivable. The Company maintains its cash balances primarily with large regional U.S. financial institutions and has not experienced losses. The Company’s products are sold principally to dealers, distributors, value added resellers, national accounts, the U.S. government and foreign telecommunications companies. The Company’s credit risk is limited principally to trade accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. No additional risk beyond amounts provided for collection losses is believed inherent in the Company’s trade accounts receivable. | |
Revenue from four major distributors of Cortelco was $8,708,000 or 42% of revenue during fiscal year 2013 and $10,105,000 or 45% of revenue for the fiscal year ended July 31, 2012. Revenues from two of these distributors were $3,358,000 and $2,904,000 or 16% and 14%, respectively of the net revenue for the year ended July 31, 2013. Revenues from three of these distributors were $3,518,000, $3,157,000 and $2,314,572 or 17%, 15% and 11%, respectively of the net revenue for the year ended July 31, 2012. As of July 31, 2013 and 2012, the Company had receivables from the federal government of $42,000 and $185,000, respectively. As of July 31, 2013 and 2012, the Company had receivables from four major distributors of $1,461,000 and $1,604,000, respectively. Two of these distributors accounted for 18% and 21% of trade accounts receivable at July 31, 2013 and 2012, respectively. | |
The Company purchases approximately 39% of its Cortelco phones from two major suppliers. A change in suppliers could cause a delay in manufacturing and a possible loss of sales, which could adversely affect operating results. During fiscal year 2013 and 2012, purchases from these two suppliers totaled approximately $3,100,000 and $3,441,000, respectively. As of July 31, 2013 and 2012, the balances payable to these two suppliers were $126,000 and $227,000, respectively. | |
Inventories
Inventories | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Inventories [Abstract] | ' | |||||||
Inventories | ' | |||||||
4 | Inventories | |||||||
Inventories consist of the following as of July 31, 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Raw materials and purchased components | $ | 791 | $ | 1,151 | ||||
Work in process | 749 | 894 | ||||||
Finished goods | 4,029 | 5,355 | ||||||
Total | 5,569 | 7,400 | ||||||
Inventory obsolescence reserve | -543 | -2,139 | ||||||
Total inventories | $ | 5,026 | $ | 5,261 | ||||
Prepaid_and_Other_Current_Asse
Prepaid and Other Current Assets | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Prepaid and Other Current Assets | ' | |||||||
5 | Prepaid and Other Current Assets | |||||||
Prepaid and other current assets consist of the following as of July 31, 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Refundable facility deposits | $ | 15 | $ | 13 | ||||
Prepaid expenses | 238 | 363 | ||||||
Other | 4 | 11 | ||||||
Total | $ | 257 | $ | 387 | ||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Property and Equipment [Abstract] | ' | |||||||
Property and Equipment | ' | |||||||
6 | Property and Equipment | |||||||
Property and equipment consist of the following as of July 31, 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Leasehold improvements | $ | 69 | $ | 65 | ||||
Equipment | 595 | 663 | ||||||
Furniture and fixtures | 151 | 151 | ||||||
Total | 815 | 879 | ||||||
Less: accumulated depreciation | -312 | -527 | ||||||
Property and equipment, net | $ | 503 | $ | 352 | ||||
Accrued_Expenses_and_Other
Accrued Expenses and Other | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Accrued Expenses and Other [Abstract] | ' | |||||||
Accrued Expenses and Other | ' | |||||||
7 | Accrued Expenses and Other | |||||||
Accrued expenses and other consist of the following as of July 31, 2013 and 2012 | ||||||||
(in thousands): | ||||||||
2013 | 2012 | |||||||
Employee compensation | $ | 208 | $ | 213 | ||||
Vacation | 31 | 56 | ||||||
Deferred income | 76 | 467 | ||||||
Warranty reserve | 156 | 166 | ||||||
Professional fees | 137 | 147 | ||||||
Other | 574 | 573 | ||||||
Total | $ | 1,182 | $ | 1,622 | ||||
The following table summarizes the activity related to the product warranty liability during fiscal years 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Balance at beginning of period | $ | 166 | $ | 185 | ||||
Accruals for warranty liability | 94 | 99 | ||||||
Warranty charges | -104 | -118 | ||||||
Balance at end of period | $ | 156 | $ | 166 | ||||
Notes_Payable_and_Lines_of_Cre
Notes Payable and Lines of Credit | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Notes Payable and Lines of Credit [Abstract] | ' | ||||
Notes Payable and Lines of Credit | ' | ||||
8 | Notes Payable and Lines of Credit | ||||
Cortelco has a line of credit with available borrowings based on an asset formula involving accounts receivable and inventories up to a maximum of $1,000,000, none of which was drawn on as of July 31, 2013. The line of credit expires December 15, 2013 and is secured by substantially all of Cortelco’s assets. The loan’s interest rate, with a floor of 4%, is floating based on LIBOR. | |||||
CSPR has a $800,000 revolving line of credit, none of which was drawn on as of July 31, 2013, secured by trade accounts receivable and bears interest at 2% over Citibank’s base rate. The agreement has certain covenant requirements and expires November 30, 2013. | |||||
Included in notes payable is a note payable to a major supplier of CSPR, Cisco Systems, Inc., in the amount of $74,000 for the purchase of equipment. The note is non interest bearing and is to be paid monthly for the three year term of the note. | |||||
Included in notes payable – related parties is the note payable to Cortelco’s former shareholders (the “Cortelco Note”) for the acquisition of Cortelco on April 1, 2009. The Cortelco Note balance totaled $3,004,000 at July 31, 2013 and $3,486,000 at July 31, 2012. The fair value of the Cortelco Note was approximately $4,430,000 at the April 1, 2009 Cortelco acquisition date using a discounted cash flow analysis of the projected future payments and a discount rate of 15.22%. Actual payments under the Cortelco Note, which are to be based on future earnings of Cortelco, may differ significantly from the projected payments estimated at the Cortelco Note’s inception. These differences may result in significant fluctuations in periodic interest expense in order to properly reflect interest expense over the actual life of the Cortelco Note. | |||||
On June 9, 2010 pursuant to a Stock Purchase Agreement, the Company recorded a note payable to David S. Lee, eOn’s Chairman, for the principal amount of $185,511 payable in three annual installments beginning June 9, 2011. Mr. Lee requested deferral of the payment due on June 9, 2011, 2012 and 2013; therefore, the the total principal amount of the note is included in short-term notes payable. The present value of the note payable at July 31, 2013 is approximately $185,511. | |||||
The following table represents the present value of projected payouts for notes payable based on current assumptions (in thousands): | |||||
Fiscal year ending July 31, | |||||
2014 | $ | 366 | |||
2015 | 448 | ||||
2016 | 443 | ||||
2017 | 366 | ||||
2018 | 287 | ||||
Thereafter | 1,353 | ||||
$ | 3,263 | ||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Taxes | ' | |||||||
9 | Income Taxes | |||||||
Income tax expense consisted of the following for the fiscal years ended July 31, 2013 and 2012 (in thousands): | ||||||||
Fiscal year ended | ||||||||
31-Jul-13 | 31-Jul-12 | |||||||
Current | ||||||||
Federal | $ | - | $ | - | ||||
State | 20 | 20 | ||||||
20 | 20 | |||||||
Deferred | ||||||||
Federal | - | - | ||||||
State | - | - | ||||||
- | - | |||||||
$ | 20 | $ | 20 | |||||
A reconciliation between the income tax expense recognized in the Company's consolidated statements of operations and the income tax expense (benefit) computed by applying the domestic federal statutory income tax rate to income before income taxes for fiscal years 2013 and 2012 is as follows (in thousands): | ||||||||
2013 | 2012 | |||||||
Income tax expense at federal statutory rate (35%) | $ | 85 | $ | 186 | ||||
State income taxes | 13 | 13 | ||||||
Change in valuation allowance | 382 | -160 | ||||||
Effect of tax rate differences and newly enacted tax rates in Puerto Rico | -245 | - | ||||||
Imputed interest expense on notes payable - related parties | -193 | -32 | ||||||
Other, net | -22 | 13 | ||||||
Total income tax expense | $ | 20 | $ | 20 | ||||
The deferred tax effects of the Company's principal temporary differences at July 31, 2013 and 2012 are as follows (in thousands): | ||||||||
2013 | 2012 | |||||||
Allowance for doubtful receivables | $ | 105 | $ | 177 | ||||
Inventories | 227 | 858 | ||||||
Basis difference in property and equipment | -12 | -5 | ||||||
Accrued warranty costs | 87 | 50 | ||||||
Accrued expenses and other | 123 | 115 | ||||||
Deferred revenue | - | -42 | ||||||
Net operating loss carry-forwards | 10,668 | 9,663 | ||||||
Valuation allowance | -11,198 | -10,816 | ||||||
Total deferred tax asset | $ | - | $ | - | ||||
Due to uncertainties surrounding the timing of realizing the benefits of its net favorable tax attributes in future tax returns; to the extent that it is more likely than not that the deferred tax assets may not be realized, the Company has recorded a valuation allowance against its deferred tax assets at July 31, 2013 and 2012. | ||||||||
At July 31, 2013, the Company has federal and state net operating loss carry-forwards of approximately $28 million which expire on various dates through 2033. As a Puerto Rico corporation not doing business in the United States, CSPR is subject to Puerto Rico income taxes but is exempt from U.S. federal income taxes. CSPR has net operating loss carry-forwards totaling approximately $500,000 available to offset future taxable income of CSPR expiring at various dates through 2022. | ||||||||
Approximately $450,000 of CSPR’s net operating loss carry-forwards were generated in its assembly of telecommunication equipment business which is subject to a reduced income tax rate pursuant to an exemption granted under the tax code of the Commonwealth of Puerto Rico. Such NOL is limited in availability to offset future taxable income of CSPR’s assembly operations. | ||||||||
Tax periods for all years after fiscal 2009 remain open to examination by the federal and state taxing jurisdictions to which the Company is subject. | ||||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Stock-Based Compensation [Abstract] | ' | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
10 | Stock-Based Compensation | ||||||||||||||||
The Company's Equity Incentive Plans, adopted in fiscal years 1997, 1999 and 2001, authorize the granting of incentive stock options, supplemental stock options, stock bonuses, and restricted stock purchase agreements to officers, directors, and employees of the Company and to non-employee consultants. Incentive stock options are granted only to employees and are issued at prices not less than the fair market value of the stock at the date of grant. The options generally vest over a four-year period and the term of any option cannot be greater than ten years from the date of grant. Stock bonuses and restricted stock purchase agreements are issued at prices not less than 85% of the fair market value of the stock at the date of grant. | |||||||||||||||||
Equity Incentive Plans | |||||||||||||||||
No grants were made under the 1997 Equity Incentive Plan during fiscal years 2013 and 2012. The Board of Directors has declared that no future grants will be made under this plan. | |||||||||||||||||
During fiscal year 1999, the Board of Directors authorized up to an aggregate of 400,000 shares of the Company's common stock for issuance under the 1999 Equity Incentive Plan. No grants were made under the 1999 Equity Incentive Plan during fiscal years 2013 and 2012. | |||||||||||||||||
During fiscal year 2001, the Board of Directors authorized up to an aggregate of 100,000 shares of the Company’s common stock for issuance under the 2001 Equity Incentive Plan. Grants to officers or directors are prohibited under the terms of this plan. No options were issued under this plan during fiscal years 2013 and 2012. | |||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||
During 1999, the board of directors adopted an Employee Stock Purchase Plan, which permits employees to purchase up to 50,000 shares of the Company's common stock. The plan was amended in 2005 to increase the number of shares available under the plan to 200,000. The purchase price under this plan is 85% of the fair market value of the common stock at the beginning of an offering period or on a purchase date, whichever is less. Offering periods generally last one year with purchase dates six and twelve months from the beginning of an offering period. During fiscal years 2013 and 2012, employees purchased -0- and 12,773 shares of common stock, respectively, under this plan. | |||||||||||||||||
Stock Compensation | |||||||||||||||||
Stock-based compensation is calculated on the date of grant using the fair value of the option as determined using the Black-Scholes option pricing model. The compensation cost is then amortized on a straight-line basis over the vesting period. The Black-Scholes valuation calculation requires the Company to estimate key assumptions such as expected term, volatility and forfeiture rates to determine the stock options fair value. The estimate of these key assumptions is based on historical information and judgment regarding market factors and trends. | |||||||||||||||||
Expected volatilities are based on historical daily closing prices adjusted for expected future volatility. The Company believes that implied volatility is more reflective of market conditions and a better indicator of expected volatility than historical volatility. The Company uses historical information to calculate expected life of option grants. The Company believes that historical information is currently reflective of the economic life of outstanding option grants. The dividend yield is determined by dividing the expected per share dividend during the coming year by the average fair market value of the stock during the quarter. The Company has not historically declared any cash dividends on its common stock, and currently intends to retain any retained earnings to finance the operation and expansion of the business and therefore does not expect to pay cash dividends on the common stock in the foreseeable future. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. | |||||||||||||||||
Total stock-based compensation recognized for the year ended July 31, 2013 and 2012, related to stock options vested, stock grants and ESPP shares issued during the year totaled $4,000 and $7,000, respectively. | |||||||||||||||||
As of July 31, 2013, the Company has no unrecognized compensation costs related to unvested stock options outstanding under the Plans. | |||||||||||||||||
Activity in the Company’s stock option plans during fiscal years 2013 and 2012 is as follows: | |||||||||||||||||
2013 | |||||||||||||||||
Weighted | |||||||||||||||||
Shares | Average | ||||||||||||||||
Available | Shares | Exercise | |||||||||||||||
for Grant | Outstanding | Price | |||||||||||||||
Beginning of year | 307,344 | 68,933 | $ | 11.19 | |||||||||||||
Granted | - | - | - | ||||||||||||||
Exercised | - | - | - | ||||||||||||||
Cancelled | 8,600 | -8,600 | 7.07 | ||||||||||||||
End of year | 315,944 | 60,333 | $ | 11.78 | |||||||||||||
2012 | |||||||||||||||||
Weighted | |||||||||||||||||
Shares | Average | ||||||||||||||||
Available | Shares | Exercise | |||||||||||||||
for Grant | Outstanding | Price | |||||||||||||||
Beginning of year | 302,756 | 73,521 | $ | 10.8 | |||||||||||||
Granted | - | - | - | ||||||||||||||
Exercised | - | - | - | ||||||||||||||
Cancelled | 4,588 | -4,588 | 5.03 | ||||||||||||||
End of year | 307,344 | 68,933 | $ | 11.19 | |||||||||||||
Information regarding the stock options outstanding under the Company’s stock option plans at July 31, 2013 is summarized as follows: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | Weighted | Weighted | |||||||||||||||
Outstanding | Remaining | Average | Exercisable | Average | |||||||||||||
at July 31, | Contractual | Exercise | at July 31, | Exercise | |||||||||||||
Range of Exercise Prices | 2013 | Life | Price | 2013 | Price | ||||||||||||
$ 5.01 — $10.00 | 30,000 | 2.9 years | 7.15 | 30,000 | 7.15 | ||||||||||||
$15.01 — $20.00 | 30,333 | 0.6 years | 16.35 | 30,333 | 16.35 | ||||||||||||
60,333 | 1.7 years | $ | 11.78 | 60,333 | $ | 11.78 | |||||||||||
The aggregate intrinsic value of both options outstanding and options exercisable as of July 31, 2013 was approximately $0. | |||||||||||||||||
Related_Parties
Related Parties | 12 Months Ended | |
Jul. 31, 2013 | ||
Related Parties [Abstract] | ' | |
Related Parties | ' | |
11 | Related Parties | |
Symbio Investment Corp. | ||
On August 1, 2007 and August 27, 2007, the Company made strategic investments in Symbio Investment Corp. of $500,000 and $400,000 for 250,000 and 200,000 shares, respectively, or approximately 4% of Symbio Investment Corp. Symbio Investment Corp. is a holding company whose primary asset is an approximate twenty percent investment in Symbio S.A. Symbio S.A.'s principal business is to provide outsourced information technology and research and development services globally at sites located in the United States, Finland, Sweden, China and Taiwan. Symbio Investment Corp. is a privately held entity and the Company accounts for its investment by the cost method. | ||
At the time of the second investment in Symbio Investment Corp. for $400,000, the Company received a put option from David Lee, Chairman of the Company, effective beginning January 1, 2008 and expiring January 1, 2011. In December 2010, the expiration of the put option was extended to January 1, 2013. In December 2012, the expiration of the put option was extended until January 1, 2015. The put option allows the Company to sell to David Lee a maximum aggregate of 200,000 shares of its investment in Symbio Investment Corp. for a per share price of $2.00. | ||
In consideration of the put option, in the event that the 200,000 shares are sold without exercise of the put option before January 1, 2015, the Company has agreed to pay David Lee 50% of the proceeds in excess of $1,000,000. | ||
In conjunction with the purchase of these shares in 2007, David Lee was appointed to the board of directors of Symbio S.A. and has been elected chairman. eOn was granted 45,000 shares of Symbio Investment Corp. as compensation for Mr. Lee's services. These shares were valued at $90,000, and were recorded as an increase in investments and a capital contribution by David Lee, in 2009. | ||
Discontinued_Operations
Discontinued Operations | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Discontinued Operations [Abstract] | ' | |||||||
Discontinued Operations | ' | |||||||
12 | Discontinued Operations | |||||||
On July 31, 2013, the Company sold the rights for the purchase, sale and licensing of its Millennium, eQueue and eConn product lines and related inventories to PiOn, Incorporated (“PiOn”) located in Manchester, New Hampshire. The divestiture is consistent with the Company’s plan to discontinue marketing efforts in the PBX and call center telecommunications systems segment and focus on IP voice and security endpoints within its Cortelco business segment. Under terms of the sale, the Company received cash proceeds of approximately $48,000 (received in August 2013), assigned approximately $52,000 in deferred revenue liabilities to the buyer and will receive up to three years of royalty payments based on future sales of products included in the Millennium, eQueue, and eConn product lines. Royalty payments over the contractual period are to be received 30 days after each calendar quarter with royalty revenue recognized when earned. The transaction resulted in a loss on sale of approximately $286,000, which is included in the consolidated statements of income in income from discontinued operations. Due to the full valuation allowance and historical net losses experienced by the communications systems and services business segment, no income tax expense has been attributed to this segment. | ||||||||
The Company will continue to fulfill product orders and provide repair and refurbishment services for PiOn as part of an orderly transition from the Company’s Corinth, Mississippi warehouse to PiOn’s warehouse in Manchester, New Hampshire. The transition period will be no less than six months and can be extended indefinitely. The net cash flows expected to be received and paid by the Company related to the fulfillment, repair and refurbishment services during the transition period are not expected to be significant. | ||||||||
In accordance with the Company’s decision to exit the communications systems and services business segment, the results of operations and cash flows from these businesses have been classified as discontinued operations for all periods presented. Further, assets and liabilities related to the discontinued operations in the accompanying consolidated balance sheets are as follows (in thousands): | ||||||||
July 31, | July 31, | |||||||
2013 | 2012 | |||||||
Assets of Discontinued Operations | $ | |||||||
Accounts receivable | 106 | $ | 294 | |||||
Inventories | - | 543 | ||||||
Prepaid and other current assets | 26 | 23 | ||||||
Property and equipment, net | 20 | 25 | ||||||
$ | 152 | $ | 885 | |||||
Liabilities of Discontinued Operations | ||||||||
Accounts payable | 4 | 23 | ||||||
Accrued expenses and other | 215 | 393 | ||||||
$ | 219 | $ | 416 | |||||
Condensed results of operations for the discontinued operations for the years ended July 31, 2013 and 2012 are as follows (in thousands): | ||||||||
For the Years Ended July 31, | ||||||||
2013 | 2012 | |||||||
Revenues | $ | 1,223 | $ | 1,826 | ||||
Income from discontinued operations | 342 | 455 | ||||||
Loss on sale of discontinued operations | -286 | - | ||||||
Net income from discontinued operations | $ | 56 | $ | 455 | ||||
Employee_Savings_Plan
Employee Savings Plan | 12 Months Ended |
Jul. 31, 2013 | |
Employee Savings Plan [Abstract] | ' |
Employee Savings Plan | ' |
13. Employee Savings Plan | |
Substantially all U.S. employees of the Company can participate in the Section 401(k) Safe Harbor Profit Sharing Plan and Trust (the “Plan”), a tax-qualified retirement plan. Under the provisions of the Plan, participants may contribute a percentage of their compensation, subject to limitations established by the Internal Revenue Service. The Company contributes 3% of employee compensation to the Plan. Discretionary contributions by the Company may be made to the profit sharing portion of the Plan in an amount specified by management annually. The Company maintained the eOn Communications Corporation Profit Sharing Savings Plan, which qualified under Section 401 of the Internal Revenue Code until January 31, 2011, when the assets were merged with the Plan. Company contributions made under both plans during fiscal 2013 and 2012 were $51,000 and $65,000, respectively. | |
CSPR provides its employees a savings plan. Under the terms of the savings plan, employees may contribute from 1% to 10% of pretax annual compensation not to exceed $9,000. No employer contributions are made to the savings plan. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
14. Commitments and Contingencies | |||||
(a) Operating Leases | |||||
The Company is obligated under non-cancelable operating lease agreements for its warehouse, office facilities and certain office equipment. Future minimum annual lease payments at July 31, 2013 under non-cancelable operating lease agreements with remaining terms greater than one year are as follows (dollars in thousands): | |||||
Amount | |||||
2014 | $ | 110 | |||
2015 | 116 | ||||
2016 | 112 | ||||
2017 | 111 | ||||
2018 | 111 | ||||
Thereafter | 112 | ||||
Total | $ | 672 | |||
Rent expense for operating leases for the years ended July 31, 2013 and 2012 totaled $248,000 and $242,000, respectively. | |||||
The Company currently shares office space and personnel with Symbio S.A. in San Jose, California. The Company is not assessed facility rent in exchange for utilization of shared employees. | |||||
The Company leases approximately 77,000 sq. ft. of office and warehouse space in Corinth, Mississippi. The lease has monthly rent of approximately $12,000 and expired in December 2010. The Company now leases the property on a month-to-month basis. | |||||
The Company leases approximately 17,236 sq. ft. of office and warehouse space in Caguas, Puerto Rico from the Puerto Rico Industrial Development Company, under an amended lease agreement that expires in August 2019. | |||||
(b) Litigation | |||||
The Company is involved in various matters of litigation, claims, and assessments arising in the ordinary course of business. In the opinion of management, the eventual disposition of these matters will not have a material adverse effect on the financial statements. | |||||
The Municipal Revenue Collection Center of Puerto Rico (“CRIM”) conducted a personal property tax audit for the years 1999 and 2000 which resulted in assessments of approximately $320,000 (approximately $551,000 as of August 21, 2013, including interest and penalties). The assessments arose from CRIM’s disallowances of certain credits for overpayments from 1999 and 2000, claimed in the 2001 through 2005 personal property tax returns. During the audit process, CRIM alleged that some components of the inventory reported as exempt should be taxable. The parties met several times and an informal administrative hearing was held on September 27, 2006. CSPR submitted its position in writing within the time period provided by CRIM. CSPR believes it has strong arguments to support its position that the components of inventory qualify as raw material. However, management believes a settlement may be reached for an amount less than the assessment. Accordingly, the Company has recorded a liability of $96,000 as of July 31, 2013 and 2012. | |||||
Segments
Segments | 12 Months Ended | |||||||||||||
Jul. 31, 2013 | ||||||||||||||
Segments [Abstract] | ' | |||||||||||||
Segments | ' | |||||||||||||
15. Segments | ||||||||||||||
The Company’s reportable segments in fiscal year 2013 are Telephony Products and Puerto Rico, each of which offers different products and services in different geographic areas. The Telephony Products segment provides telephone products, service and support to businesses and organizations. The Puerto Rico segment provides the sale and service of integrated communications systems, data equipment, security products and telephony billing services to Puerto Rico and the Virgin Islands. Performance of each segment is assessed independently. During fiscal 2013, the Company disposed of its Communications Systems and Services segment and has reclassified its consolidated statements of income for fiscal year 2013 and 2012 to reflect operations of this segment as discontinued. Income from discontinued operations for fiscal 2012 totaled $455,000, which excludes approximately $920,000 of ongoing operating costs and expenses which were allocated to the Communications Systems and Services fiscal 2012 segment information disclosed below. For fiscal 2013, such ongoing operating costs and expenses are included in the Telephony Products operating segment. | ||||||||||||||
Segment reporting for activity for the fiscal year ended and balances as of July 31, 2013 follows (in thousands): | ||||||||||||||
Telephony Products | Puerto Rico | Total | ||||||||||||
Revenue | $ | 11,129 | $ | 9,457 | $ | 20,586 | ||||||||
Income (loss) from operations | -440 | 320 | -120 | |||||||||||
Total assets | 8,768 | 4,347 | 13,115 | |||||||||||
Capital expenditures | 129 | 159 | 288 | |||||||||||
Allowance for doubtful accounts | 123 | 162 | 285 | |||||||||||
Depreciation and amortization | 49 | 85 | 134 | |||||||||||
Income tax expense | 20 | - | 20 | |||||||||||
Segment reporting for activity for the fiscal year ended and balances as of July 31, 2012 follows (in thousands): | ||||||||||||||
Communications | Telephony Products | Puerto Rico | Total | |||||||||||
Systems and Services | ||||||||||||||
Revenue | $ | 1,826 | $ | 12,807 | $ | 7,864 | $ | 22,497 | ||||||
Income (loss) from operations | -465 | 1,057 | 100 | 692 | ||||||||||
Total assets | 2,178 | 7,616 | 3,812 | 13,606 | ||||||||||
Capital expenditures | - | 100 | 132 | 232 | ||||||||||
Allowance for doubtful accounts | 342 | 16 | 197 | 555 | ||||||||||
Depreciation and amortization | 6 | 37 | 62 | 105 | ||||||||||
Income tax expense | - | 20 | - | 20 | ||||||||||
Substantially all of the Company’s revenues are earned in the United States and the Commonwealth of Puerto Rico. | ||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Jul. 31, 2013 | ||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||||||||||
Principles of Consolidation | ' | |||||||||||||
(a) | Principles of Consolidation | |||||||||||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, and include the accounts of eOn Communications Corporation, Cortelco acquired on April 1, 2009, and CSPR control of which was acquired on June 9, 2010. All significant inter-company accounts and transactions have been eliminated in consolidation. | ||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||
(b) | Cash and Cash Equivalents | |||||||||||||
All highly liquid investments with a maturity date of three months or less when purchased are considered to be cash equivalents. | ||||||||||||||
Trade Accounts Receivable | ' | |||||||||||||
(c) | Trade Accounts Receivable | |||||||||||||
Trade accounts receivable are stated net of allowances for doubtful accounts. The Company typically grants standard credit terms to customers in good credit standing. As a result, the Company must estimate the portion of accounts receivable that are uncollectible and record any necessary valuation reserves. The Company generally reserves for estimated uncollectible accounts on a customer-by-customer basis, which requires judgment about each individual customer’s ability and intention to fully pay account balances. The Company makes these judgments based on knowledge of and relationships with customers and current economic trends, and updates estimates on a monthly basis. Any changes in estimate, which can be significant, are included in earnings in the period in which the change in estimate occurs. | ||||||||||||||
Inventories | ' | |||||||||||||
(d) | Inventories | |||||||||||||
Inventories consist of phones and component parts and are valued at the lower of cost or market with cost determined utilizing standard cost which approximates the first-in, first-out (FIFO) method. The Company performs an analysis of slow-moving or obsolete inventory on a quarterly basis and any changes in valuation reserves, which could potentially be significant, are included in earnings in the period in which the evaluations are completed. | ||||||||||||||
Property and Equipment | ' | |||||||||||||
(e) | Property and Equipment | |||||||||||||
Property and equipment are stated at cost. Depreciation is provided using the straight-line method for financial reporting purposes and accelerated methods for income tax reporting purposes over the estimated useful lives of the assets, generally three to five years. Maintenance and repair costs are charged to expense as incurred. | ||||||||||||||
Investments | ' | |||||||||||||
(f) | Investments | |||||||||||||
The equity method of accounting is used when the Company has a 20% to 50% interest in other entities or when we exercise significant influence over the entity. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities. Investments in which the Company has less than a 20% interest and in which it does not have the ability to exercise significant influence over the investee are initially recorded at cost, and periodically reviewed for impairment. | ||||||||||||||
The Company evaluates its cost method investments for impairment on a quarterly basis in accordance with ASC 325, Cost Method Investments (“ASC 325”), which specifically addresses accounting for cost method investments subsequent to initial measurement. An impairment charge is recognized whenever a decline in value of an investment below its carrying amount is determined to be other-than-temporary. In determining if a decline is other-than-temporary, factors such as the length of time and extent to which the fair value of the investment has been less than the carrying amount of the investment, the near-term and longer-term operating and financial prospects of the affiliate and the intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery are considered. | ||||||||||||||
Stock Compensation Plans | ' | |||||||||||||
(g) | Stock Compensation Plans | |||||||||||||
The Company accounts for stock-based compensation under ASC Topic 718, Stock Compensation (“Topic 718”). Topic 718 requires the measurement and recognition of compensation expense for all share-based payment awards based on estimated fair values. Topic 718 also required the benefits of tax deductions in excess of recognized compensation cost to be recorded as financing cash flows. | ||||||||||||||
Product Warranties | ' | |||||||||||||
(h) | Product Warranties | |||||||||||||
Warranties for the Cortelco and CSPR product lines range from one to five years based upon the product purchased. The Company estimates the costs of satisfying warranty claims based on analysis of past claims experience and provides for these future claims in the period that revenue is recognized. The cost of satisfying warranty claims, which approximates 0.5% - 1.0% of product revenues, has historically been comprised of materials and direct labor costs. The Company performs quarterly evaluations of these estimates and any changes in estimates, which could potentially be significant, are included in earnings in the period in which the evaluations are completed. | ||||||||||||||
Income Taxes | ' | |||||||||||||
(i) | Income Taxes | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets when management is unable to conclude that it is more likely than not that the asset will be realized. | ||||||||||||||
The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company classifies interest and penalties, if any, as a component of its income tax provision. | ||||||||||||||
Revenue Recognition | ' | |||||||||||||
(j) | Revenue Recognition | |||||||||||||
The Company’s revenues from its three product lines are the result of separate, individual deliverables: | ||||||||||||||
Type of Revenues Earned | ||||||||||||||
Professional | Maintenance | |||||||||||||
Product Line | Equipment/Software | Services | Contracts | |||||||||||
Cortelco Products | Individual sale | - | - | |||||||||||
CSPR Products | Individual sale | Individual sale | Individual sale | |||||||||||
CSPR Telephony Billing | - | Individual sale | - | |||||||||||
Cortelco sells corded and cordless analog and digital telephones capable of operating in the multiple PBX, Key System and Centrex environments primarily through stocking distributors. | ||||||||||||||
Telephony billing revenues from the resale of Puerto Rico Telephone services are recognized monthly as services are provided to the customers. | ||||||||||||||
The Company records shipping and handling fees billed to customers as revenue, and shipping and handling costs incurred with the delivery of products as cost of sales. | ||||||||||||||
Revenues from our products are recognized only when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the customer is fixed or determinable, and collectibility is reasonably assured. Generally, revenue is recognized (1) upon shipment for equipment and software, (2) as work is performed for professional services and (3) in equal periodic amounts over the term of the contract for software and hardware maintenance. The Company’s revenue recognition policies are in accordance with SEC Staff Accounting Bulletin No. 104, Revenue Recognition and ASC Topic 985, Software. | ||||||||||||||
Earnings Per Share | ' | |||||||||||||
(k) | Earnings Per Share | |||||||||||||
Basic EPS is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares, such as options, had been issued. | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
(l) | Fair Value of Financial Instruments | |||||||||||||
Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact, and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non performance. | ||||||||||||||
Accounting standards have established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting standards have established three levels of inputs that may be used to measure fair value: | ||||||||||||||
⋅ | Level 1: Quoted prices in active markets for identical assets and liabilities. | |||||||||||||
⋅ | Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||||||
⋅ | Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | |||||||||||||
The carrying amounts of financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable approximate their fair value due to the short-term nature of the instruments. | ||||||||||||||
The following table presents information about the liabilities recorded at fair value at July 31, 2013, in the balance sheets (in thousands): | ||||||||||||||
Fair Value Measurements at July 31, 2013 | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
In Active | Other | Significant | ||||||||||||
Markets for | Observable | Unobservable | Total at | |||||||||||
Identical Assets | Inputs | Inputs | July 31, | |||||||||||
(Level 1) | (Level 2) | (Level 3) | 2013 | |||||||||||
Notes payable-related parties | $ | - | $ | - | $ | 3,189 | $ | 3,189 | ||||||
Total | $ | - | $ | - | $ | 3,189 | $ | 3,189 | ||||||
The following table presents information about the liabilities recorded at fair value at July 31, 2012, in the balance sheets (in thousands): | ||||||||||||||
Fair Value Measurements at July 31, 2012 | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
In Active | Other | Significant | ||||||||||||
Markets for | Observable | Unobservable | Total at | |||||||||||
Identical Assets | Inputs | Inputs | July 31, | |||||||||||
(Level 1) | (Level 2) | (Level 3) | 2012 | |||||||||||
Notes payable-related parties | $ | - | $ | - | $ | 3,668 | $ | 3,668 | ||||||
Total | $ | - | $ | - | $ | 3,668 | $ | 3,668 | ||||||
As of July 31, 2013 the Company owns approximately four percent of Symbio Investment Corp. Symbio Investment Corp. is a holding company whose primary asset is an approximate twenty percent investment in Symbio S.A. Symbio S.A.’s principal business is to provide outsourced information technology and research and development services globally at sites located in the United States, Finland, Sweden, China and Taiwan. The Company believes, based on recent stock issuances by Symbio S.A. in 2012, that the fair value of the Company’s investment in Symbio may be less than the Company’s cost of $990,000. There are no quoted market prices for the Company’s investment in Symbio Investment Corp., and sufficient information is not readily available for the Company to utilize a valuation model to determine its fair value without incurring excessive costs relative to the materiality of the investment. Accordingly, the Company has not estimated the fair value of its investment in Symbio Investment Corp. at July 31, 2013. Based on the Company’s evaluation of the near-term prospects of Symbio Investment Corp. and the Company’s ability and intent to hold the investment for a reasonable period of time sufficient for a forecasted recovery of fair value, the Company does not consider any potential impairment to be other-than-temporary at July 31, 2013. | ||||||||||||||
The notes payable – related parties is primarily due to the note payable to former Cortelco shareholders (See Note 8) which is valued using a discounted cash flow analysis of the projected future payments of Cortelco using a discount rate of 15.22%. The note is classified within Level 3 of the fair value hierarchy. | ||||||||||||||
The following represents transactions related to the note payable for the years ended July 31, 2013 and 2012 (in thousands). | ||||||||||||||
2013 | 2012 | |||||||||||||
Beginning fair value | $ | 3,486 | $ | 3,504 | ||||||||||
Imputed interest | 487 | 518 | ||||||||||||
Change in estimates | -796 | -368 | ||||||||||||
Interest (income) expense | -309 | 150 | ||||||||||||
Payments | -173 | -168 | ||||||||||||
Ending fair value - July 31 | $ | 3,004 | $ | 3,486 | ||||||||||
Estimates | ' | |||||||||||||
(m) | Estimates | |||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||||||||
Advertising Expense | ' | |||||||||||||
(n) | Advertising Expense | |||||||||||||
The Company expenses advertising costs as incurred. Advertising expenses for fiscal years 2013 and 2012 were not significant. | ||||||||||||||
Segment Reporting | ' | |||||||||||||
(o) | Segment Reporting | |||||||||||||
The Company operates in two business segments: Telephony Products and Puerto Rico. Segment information is consistent with how management reviews its businesses, makes investing and resource allocation decisions and assesses operating performance. | ||||||||||||||
Reclassification | ' | |||||||||||||
(p) | Reclassification | |||||||||||||
Certain amounts in the July 31, 2012 consolidated financial statements have been reclassed to conform to the July 31, 2013 consolidated financial statement presentation. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Jul. 31, 2013 | ||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||||||||||
Summary of company's revenues from its six product lines | ' | |||||||||||||
The Company’s revenues from its three product lines are the result of separate, individual deliverables: | ||||||||||||||
Type of Revenues Earned | ||||||||||||||
Professional | Maintenance | |||||||||||||
Product Line | Equipment/Software | Services | Contracts | |||||||||||
Cortelco Products | Individual sale | - | - | |||||||||||
CSPR Products | Individual sale | Individual sale | Individual sale | |||||||||||
CSPR Telephony Billing | - | Individual sale | - | |||||||||||
Liabilities recorded at fair value | ' | |||||||||||||
The following table presents information about the liabilities recorded at fair value at July 31, 2013, in the balance sheets (in thousands): | ||||||||||||||
Fair Value Measurements at July 31, 2013 | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
In Active | Other | Significant | ||||||||||||
Markets for | Observable | Unobservable | Total at | |||||||||||
Identical Assets | Inputs | Inputs | July 31, | |||||||||||
(Level 1) | (Level 2) | (Level 3) | 2013 | |||||||||||
Notes payable-related parties | $ | - | $ | - | $ | 3,189 | $ | 3,189 | ||||||
Total | $ | - | $ | - | $ | 3,189 | $ | 3,189 | ||||||
The following table presents information about the liabilities recorded at fair value at July 31, 2012, in the balance sheets (in thousands): | ||||||||||||||
Fair Value Measurements at July 31, 2012 | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
In Active | Other | Significant | ||||||||||||
Markets for | Observable | Unobservable | Total at | |||||||||||
Identical Assets | Inputs | Inputs | July 31, | |||||||||||
(Level 1) | (Level 2) | (Level 3) | 2012 | |||||||||||
Notes payable-related parties | $ | - | $ | - | $ | 3,668 | $ | 3,668 | ||||||
Total | $ | - | $ | - | $ | 3,668 | $ | 3,668 | ||||||
Note Payable | ' | |||||||||||||
The following represents transactions related to the note payable for the years ended July 31, 2013 and 2012 (in thousands). | ||||||||||||||
2013 | 2012 | |||||||||||||
Beginning fair value | $ | 3,486 | $ | 3,504 | ||||||||||
Imputed interest | 487 | 518 | ||||||||||||
Change in estimates | -796 | -368 | ||||||||||||
Interest (income) expense | -309 | 150 | ||||||||||||
Payments | -173 | -168 | ||||||||||||
Ending fair value - July 31 | $ | 3,004 | $ | 3,486 | ||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Inventories [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories consist of the following as of July 31, 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Raw materials and purchased components | $ | 791 | $ | 1,151 | ||||
Work in process | 749 | 894 | ||||||
Finished goods | 4,029 | 5,355 | ||||||
Total | 5,569 | 7,400 | ||||||
Inventory obsolescence reserve | -543 | -2,139 | ||||||
Total inventories | $ | 5,026 | $ | 5,261 | ||||
Prepaid_and_Other_Current_Asse1
Prepaid and Other Current Assets (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ' | |||||||
Prepaid and other current assets | ' | |||||||
Prepaid and other current assets consist of the following as of July 31, 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Refundable facility deposits | $ | 15 | $ | 13 | ||||
Prepaid expenses | 238 | 363 | ||||||
Other | 4 | 11 | ||||||
Total | $ | 257 | $ | 387 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Property and Equipment [Abstract] | ' | |||||||
Property and equipment | ' | |||||||
Property and equipment consist of the following as of July 31, 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Leasehold improvements | $ | 69 | $ | 65 | ||||
Equipment | 595 | 663 | ||||||
Furniture and fixtures | 151 | 151 | ||||||
Total | 815 | 879 | ||||||
Less: accumulated depreciation | -312 | -527 | ||||||
Property and equipment, net | $ | 503 | $ | 352 | ||||
Accrued_Expenses_and_Other_Tab
Accrued Expenses and Other (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Accrued Expenses and Other [Abstract] | ' | |||||||
Accrued expenses and other | ' | |||||||
Accrued expenses and other consist of the following as of July 31, 2013 and 2012 | ||||||||
(in thousands): | ||||||||
2013 | 2012 | |||||||
Employee compensation | $ | 208 | $ | 213 | ||||
Vacation | 31 | 56 | ||||||
Deferred income | 76 | 467 | ||||||
Warranty reserve | 156 | 166 | ||||||
Professional fees | 137 | 147 | ||||||
Other | 574 | 573 | ||||||
Total | $ | 1,182 | $ | 1,622 | ||||
Product warranty liability | ' | |||||||
The following table summarizes the activity related to the product warranty liability during fiscal years 2013 and 2012 (in thousands): | ||||||||
2013 | 2012 | |||||||
Balance at beginning of period | $ | 166 | $ | 185 | ||||
Accruals for warranty liability | 94 | 99 | ||||||
Warranty charges | -104 | -118 | ||||||
Balance at end of period | $ | 156 | $ | 166 | ||||
Notes_Payable_and_Lines_of_Cre1
Notes Payable and Lines of Credit (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Notes Payable and Lines of Credit [Abstract] | ' | ||||
Value of projected payouts for notes payable | ' | ||||
The following table represents the present value of projected payouts for notes payable based on current assumptions (in thousands): | |||||
Fiscal year ending July 31, | |||||
2014 | $ | 366 | |||
2015 | 448 | ||||
2016 | 443 | ||||
2017 | 366 | ||||
2018 | 287 | ||||
Thereafter | 1,353 | ||||
$ | 3,263 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Tax Expenses Benefit | ' | |||||||
Income tax expense consisted of the following for the fiscal years ended July 31, 2013 and 2012 (in thousands): | ||||||||
Fiscal year ended | ||||||||
31-Jul-13 | 31-Jul-12 | |||||||
Current | ||||||||
Federal | $ | - | $ | - | ||||
State | 20 | 20 | ||||||
20 | 20 | |||||||
Deferred | ||||||||
Federal | - | - | ||||||
State | - | - | ||||||
- | - | |||||||
$ | 20 | $ | 20 | |||||
Reconciliation | ' | |||||||
A reconciliation between the income tax expense recognized in the Company's consolidated statements of operations and the income tax expense (benefit) computed by applying the domestic federal statutory income tax rate to income before income taxes for fiscal years 2013 and 2012 is as follows (in thousands): | ||||||||
2013 | 2012 | |||||||
Income tax expense at federal statutory rate (35%) | $ | 85 | $ | 186 | ||||
State income taxes | 13 | 13 | ||||||
Change in valuation allowance | 382 | -160 | ||||||
Effect of tax rate differences and newly enacted tax rates in Puerto Rico | -245 | - | ||||||
Imputed interest expense on notes payable - related parties | -193 | -32 | ||||||
Other, net | -22 | 13 | ||||||
Total income tax expense | $ | 20 | $ | 20 | ||||
Deferred Tax Effects | ' | |||||||
The deferred tax effects of the Company's principal temporary differences at July 31, 2013 and 2012 are as follows (in thousands): | ||||||||
2013 | 2012 | |||||||
Allowance for doubtful receivables | $ | 105 | $ | 177 | ||||
Inventories | 227 | 858 | ||||||
Basis difference in property and equipment | -12 | -5 | ||||||
Accrued warranty costs | 87 | 50 | ||||||
Accrued expenses and other | 123 | 115 | ||||||
Deferred revenue | - | -42 | ||||||
Net operating loss carry-forwards | 10,668 | 9,663 | ||||||
Valuation allowance | -11,198 | -10,816 | ||||||
Total deferred tax asset | $ | - | $ | - | ||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Jul. 31, 2013 | |||||||||||||||||
Stock-Based Compensation [Abstract] | ' | ||||||||||||||||
Summary of share-based compensation activity | ' | ||||||||||||||||
Activity in the Company’s stock option plans during fiscal years 2013 and 2012 is as follows: | |||||||||||||||||
2013 | |||||||||||||||||
Weighted | |||||||||||||||||
Shares | Average | ||||||||||||||||
Available | Shares | Exercise | |||||||||||||||
for Grant | Outstanding | Price | |||||||||||||||
Beginning of year | 307,344 | 68,933 | $ | 11.19 | |||||||||||||
Granted | - | - | - | ||||||||||||||
Exercised | - | - | - | ||||||||||||||
Cancelled | 8,600 | -8,600 | 7.07 | ||||||||||||||
End of year | 315,944 | 60,333 | $ | 11.78 | |||||||||||||
2012 | |||||||||||||||||
Weighted | |||||||||||||||||
Shares | Average | ||||||||||||||||
Available | Shares | Exercise | |||||||||||||||
for Grant | Outstanding | Price | |||||||||||||||
Beginning of year | 302,756 | 73,521 | $ | 10.8 | |||||||||||||
Granted | - | - | - | ||||||||||||||
Exercised | - | - | - | ||||||||||||||
Cancelled | 4,588 | -4,588 | 5.03 | ||||||||||||||
End of year | 307,344 | 68,933 | $ | 11.19 | |||||||||||||
Outstanding options | ' | ||||||||||||||||
Information regarding the stock options outstanding under the Company’s stock option plans at July 31, 2013 is summarized as follows: | |||||||||||||||||
Weighted | |||||||||||||||||
Average | Weighted | Weighted | |||||||||||||||
Outstanding | Remaining | Average | Exercisable | Average | |||||||||||||
at July 31, | Contractual | Exercise | at July 31, | Exercise | |||||||||||||
Range of Exercise Prices | 2013 | Life | Price | 2013 | Price | ||||||||||||
$ 5.01 — $10.00 | 30,000 | 2.9 years | 7.15 | 30,000 | 7.15 | ||||||||||||
$15.01 — $20.00 | 30,333 | 0.6 years | 16.35 | 30,333 | 16.35 | ||||||||||||
60,333 | 1.7 years | $ | 11.78 | 60,333 | $ | 11.78 | |||||||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Discontinued Operations [Abstract] | ' | |||||||
Assets and liabilities related to discontinued operation | ' | |||||||
Further, assets and liabilities related to the discontinued operations in the accompanying consolidated balance sheets are as follows (in thousands): | ||||||||
July 31, | July 31, | |||||||
2013 | 2012 | |||||||
Assets of Discontinued Operations | $ | |||||||
Accounts receivable | 106 | $ | 294 | |||||
Inventories | - | 543 | ||||||
Prepaid and other current assets | 26 | 23 | ||||||
Property and equipment, net | 20 | 25 | ||||||
$ | 152 | $ | 885 | |||||
Liabilities of Discontinued Operations | ||||||||
Accounts payable | 4 | 23 | ||||||
Accrued expenses and other | 215 | 393 | ||||||
$ | 219 | $ | 416 | |||||
Condensed results of operation for discontinued operation | ' | |||||||
Condensed results of operations for the discontinued operations for the years ended July 31, 2013 and 2012 are as follows (in thousands): | ||||||||
For the Years Ended July 31, | ||||||||
2013 | 2012 | |||||||
Revenues | $ | 1,223 | $ | 1,826 | ||||
Income from discontinued operations | 342 | 455 | ||||||
Loss on sale of discontinued operations | -286 | - | ||||||
Net income from discontinued operations | $ | 56 | $ | 455 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Jul. 31, 2013 | |||||
Commitments and Contingencies [Abstract] | ' | ||||
Future minimum annual lease payments | ' | ||||
Future minimum annual lease payments at July 31, 2013 under non-cancelable operating lease agreements with remaining terms greater than one year are as follows (dollars in thousands): | |||||
Amount | |||||
2014 | $ | 110 | |||
2015 | 116 | ||||
2016 | 112 | ||||
2017 | 111 | ||||
2018 | 111 | ||||
Thereafter | 112 | ||||
Total | $ | 672 | |||
Segments_Tables
Segments (Tables) | 12 Months Ended | |||||||||||||
Jul. 31, 2013 | ||||||||||||||
Segments [Abstract] | ' | |||||||||||||
Segment reporting | ' | |||||||||||||
Segment reporting for activity for the fiscal year ended and balances as of July 31, 2013 follows (in thousands): | ||||||||||||||
Telephony Products | Puerto Rico | Total | ||||||||||||
Revenue | $ | 11,129 | $ | 9,457 | $ | 20,586 | ||||||||
Income (loss) from operations | -440 | 320 | -120 | |||||||||||
Total assets | 8,768 | 4,347 | 13,115 | |||||||||||
Capital expenditures | 129 | 159 | 288 | |||||||||||
Allowance for doubtful accounts | 123 | 162 | 285 | |||||||||||
Depreciation and amortization | 49 | 85 | 134 | |||||||||||
Income tax expense | 20 | - | 20 | |||||||||||
Segment reporting for activity for the fiscal year ended and balances as of July 31, 2012 follows (in thousands): | ||||||||||||||
Communications | Telephony Products | Puerto Rico | Total | |||||||||||
Systems and Services | ||||||||||||||
Revenue | $ | 1,826 | $ | 12,807 | $ | 7,864 | $ | 22,497 | ||||||
Income (loss) from operations | -465 | 1,057 | 100 | 692 | ||||||||||
Total assets | 2,178 | 7,616 | 3,812 | 13,606 | ||||||||||
Capital expenditures | - | 100 | 132 | 232 | ||||||||||
Allowance for doubtful accounts | 342 | 16 | 197 | 555 | ||||||||||
Depreciation and amortization | 6 | 37 | 62 | 105 | ||||||||||
Income tax expense | - | 20 | - | 20 | ||||||||||
Description_of_Business_Additi
Description of Business - Additional Information (Detail) | 12 Months Ended |
Jul. 31, 2013 | |
Telecommunications expertise | '20 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended |
Apr. 01, 2009 | Jul. 31, 2013 | |
Cash equivalents maturity period | ' | 'three months or less |
Investment interest in initially recorded at cost | ' | 20.00% |
Uncertain income tax | ' | 50.00% |
Carrying value of the Company's investment in Symbio Investment Corp | ' | 990,000 |
Maximum [Member] | ' | ' |
Property plant and equipments estimated useful lives of assets | ' | '5 years |
Investment interest in equity method | ' | 50.00% |
Cost of satisfying warranty claims | ' | 1.00% |
Minimum [Member] | ' | ' |
Property plant and equipments estimated useful lives of assets | ' | '3 years |
Investment interest in equity method | ' | 20.00% |
Cost of satisfying warranty claims | ' | 0.50% |
Cortelco Products [Member] | Maximum [Member] | ' | ' |
Product warranty period | ' | '5 years |
Cortelco Products [Member] | Minimum [Member] | ' | ' |
Product warranty period | ' | '1 year |
Subsidiaries [Member] | ' | ' |
Investment interest in equity method | ' | 20.00% |
Former Shareholders [Member] | ' | ' |
Discount rate of Cortelco | 15.22% | 15.22% |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Revenue Recognition (Detail) | 12 Months Ended |
Jul. 31, 2013 | |
Cortelco Products [Member] | Equipment/ Software [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
Cortelco Products [Member] | Professional Services [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | '- |
Cortelco Products [Member] | Maintenance Contracts [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | '- |
CSPR Products [Member] | Equipment/ Software [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
CSPR Products [Member] | Professional Services [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
CSPR Products [Member] | Maintenance Contracts [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
CSPR Telephony Billing [Member] | Equipment/ Software [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | '- |
CSPR Telephony Billing [Member] | Professional Services [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
CSPR Telephony Billing [Member] | Maintenance Contracts [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | '- |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Liabilities Recorded At Fair Value (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Liabilities recorded at fair value | ' | ' |
Notes payable-related parties | $3,189 | $3,668 |
Total | 3,189 | 3,668 |
Quoted Prices In Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Liabilities recorded at fair value | ' | ' |
Notes payable-related parties | 0 | 0 |
Total | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Liabilities recorded at fair value | ' | ' |
Notes payable-related parties | 0 | 0 |
Total | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ' | ' |
Liabilities recorded at fair value | ' | ' |
Notes payable-related parties | 3,189 | 3,668 |
Total | $3,189 | $3,668 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies - Transaction Related to Notes Payable (Detail) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Note payable | ' | ' |
Payments | ($210,000) | ($168,000) |
Former Shareholders [Member] | ' | ' |
Note payable | ' | ' |
Beginning fair value | 3,486,000 | 3,504,000 |
Imputed interest | 487,000 | 518,000 |
Change in estimates | -796,000 | -368,000 |
Interest (income) expense | -309,000 | 150,000 |
Payments | -173,000 | -168,000 |
Ending fair value | $3,004,000 | $3,486,000 |
Concentrations_of_Credit_Risk_1
Concentrations of Credit Risk, Major Customers, Major Suppliers and Geographic Information - Additional Information (Detail) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Unit | ||
Revenue from four major distributors of Cortelco | $8,708,000 | $10,105,000 |
Percentage revenue of Cortelco | 42.00% | 45.00% |
Number of major distributors | 4 | ' |
Percentage revenue of distributor one | 16.00% | 17.00% |
Percentage revenue of distributor two | 14.00% | 15.00% |
Percentage revenue of distributor three | ' | 11.00% |
Revenue from distributor one | 3,358,000 | 3,518,000 |
Revenue from distributor two | 2,904,000 | 3,157,000 |
Revenue from distributor three | ' | 2,314,572 |
Receivables | 1,461,000 | 1,604,000 |
Receivables from the federal government | 42,000 | 185,000 |
Trade accounts receivable | 18.00% | 21.00% |
Purchases of company | 39.00% | ' |
Number of major suppliers | 2 | ' |
Total purchases | 3,100,000 | 3,441,000 |
Balances payable | $126,000 | $227,000 |
Inventories_Summary_Of_Invento
Inventories - Summary Of Inventories (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials and purchased components | $791 | $1,151 |
Work in process | 749 | 894 |
Finished goods | 4,029 | 5,355 |
Total | 5,569 | 7,400 |
Inventory obsolescence reserve | -543 | -2,139 |
Total inventories | $5,026 | $5,261 |
Prepaid_and_Other_Current_Asse2
Prepaid and Other Current Assets - Summary Of Prepaid and Other Current Assets (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Prepaid and other current assets | ' | ' |
Refundable facility deposits | $15 | $13 |
Prepaid expenses | 238 | 363 |
Other | 4 | 11 |
Total | $257 | $387 |
Property_and_Equipment_Summary
Property and Equipment - Summary Of Property and Equipment (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property and equipment | ' | ' |
Total | $815 | $879 |
Less: accumulated depreciation | -312 | -527 |
Property and equipment, net | 503 | 352 |
Leasehold improvements [Member] | ' | ' |
Property and equipment | ' | ' |
Total | 69 | 65 |
Equipment [Member] | ' | ' |
Property and equipment | ' | ' |
Total | 595 | 663 |
Furniture and fixtures [Member] | ' | ' |
Property and equipment | ' | ' |
Total | $151 | $151 |
Accrued_Expenses_and_Other_Sum
Accrued Expenses and Other - Summary Of Accrued Expenses And Other (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 |
In Thousands, unless otherwise specified | |||
Accrued expenses and other | ' | ' | ' |
Employee compensation | $208 | $213 | ' |
Vacation | 31 | 56 | ' |
Deferred income | 76 | 467 | ' |
Warranty reserve | 156 | 166 | 185 |
Professional fees | 137 | 147 | ' |
Other | 574 | 573 | ' |
Total | $1,182 | $1,622 | ' |
Accrued_Expenses_and_Other_Act
Accrued Expenses and Other - Activity Related To Product Warranty Liability (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Product warranty liability | ' | ' |
Balance at beginning of period | $166 | $185 |
Accruals for warranty liability | 94 | 99 |
Warranty charges | -104 | -118 |
Balance at end of period | $156 | $166 |
Notes_Payable_and_Lines_of_Cre2
Notes Payable and Lines of Credit - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||
Jul. 31, 2013 | Apr. 01, 2009 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | Jun. 09, 2010 | Jul. 31, 2013 | Jul. 31, 2013 | |
Former Shareholders [Member] | Former Shareholders [Member] | Former Shareholders [Member] | Former Shareholders [Member] | Chairman [Member] | Chairman [Member] | Revolving Credit Facility [Member] | ||
Installment | ||||||||
Accounts receivable and inventories | $1,000,000 | ' | ' | ' | ' | ' | ' | $800,000 |
Drawing of Receivables and Inventories | 0 | ' | ' | ' | ' | ' | ' | 0 |
Notes payable to Cortelco former shareholders | ' | ' | 3,004,000 | 3,486,000 | 3,504,000 | 185,511 | ' | ' |
Fair value of notes | ' | 4,430,000 | ' | ' | ' | ' | ' | ' |
Discount Rate | ' | 15.22% | 15.22% | ' | ' | ' | ' | ' |
Annual Installments of Notes payable | ' | ' | ' | ' | ' | 3 | ' | ' |
Present Value of Notes Payable | ' | ' | ' | ' | ' | ' | 185,511 | ' |
Loans Interest Rate | 4.00% | ' | ' | ' | ' | ' | ' | ' |
Notes payable for Purchase of equipment | $74,000 | ' | ' | ' | ' | ' | ' | ' |
Period of notes payable | '3 years | ' | ' | ' | ' | ' | ' | ' |
Revolving line Agreement expiration | 15-Dec-13 | ' | ' | ' | ' | ' | ' | 30-Nov-13 |
Libor rate | 'The loan's interest rate, with a floor of 4%, is floating based on LIBOR. | ' | ' | ' | ' | ' | ' | ' |
Interest Rate Base | ' | ' | ' | ' | ' | ' | ' | 2.00% |
Notes_Payable_and_Lines_of_Cre3
Notes Payable and Lines of Credit - Present Value Of Projected Payouts For Notes Payable (Detail) (USD $) | Jul. 31, 2013 |
In Thousands, unless otherwise specified | |
Value of projected payouts for notes payable | ' |
2014 | $366 |
2015 | 448 |
2016 | 443 |
2017 | 366 |
2018 | 287 |
Thereafter | 1,353 |
Total | $3,263 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Federal and state net operating loss carry-forwards | $28,000,000 |
Income tax expense (benefit) at federal statutory rate | 35.00% |
CSPR [Member] | ' |
Net operating loss carry-forwards | 500,000 |
CSPR [Member] | Telecommunication Equipment Business [Member] | ' |
Net operating loss carry-forwards | $450,000 |
Income_Taxes_Income_Tax_Expens
Income Taxes - Income Tax Expense (Benefit) (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Current | ' | ' |
Federal | $0 | $0 |
State | 20 | 20 |
Current Total | 20 | 20 |
Deferred | ' | ' |
Federal | 0 | 0 |
State | 0 | 0 |
Deferred Income Tax Expense (Benefit) | 0 | 0 |
Income tax expense | $20 | $20 |
Income_Taxes_Reconciliation_Be
Income Taxes - Reconciliation Between Income Tax Expense (Benefit) Recognized And Computed (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Reconciliation | ' | ' |
Income tax expense at federal statutory rate (35%) | $85 | $186 |
State income taxes | 13 | 13 |
Change in valuation allowance | 382 | -160 |
Effect of tax rate differences and newly enacted tax rates in Puerto Rico | -245 | 0 |
Imputed interest expense on notes payable - related parties | -193 | -32 |
Other, net | -22 | 13 |
Income tax expense | $20 | $20 |
Income_Taxes_Deferred_Tax_Effe
Income Taxes - Deferred Tax Effects (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax effects of the Company's principal temporary differences | ' | ' |
Allowance for doubtful receivables | $105 | $177 |
Inventories | 227 | 858 |
Basis difference in property and equipment | -12 | -5 |
Accrued warranty costs | 87 | 50 |
Accrued expenses and other | 123 | 115 |
Deferred revenue | 0 | -42 |
Net operating loss carry-forwards | 10,668 | 9,663 |
Valuation allowance | -11,198 | -10,816 |
Total deferred tax asset | $0 | $0 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Equity Incentive Plans | 0 | 12,773 |
Stock compensation | $4,000 | $7,000 |
Number of equity incentive plans granted | 0 | 0 |
Fair market value of the stock at the date of grant | 'not less than 85% of the fair market value of the stock at the date of grant | ' |
Aggregate intrinsic value | 0 | ' |
Employee Stock Option [Member] | ' | ' |
Unrecognized cost of nonvested option | 0 | ' |
Equity Incentive Plan 1997 [Member] | ' | ' |
Number of equity incentive plans granted | 0 | 0 |
Equity Incentive Plan 1999 [Member] | ' | ' |
Equity Incentive Plans | 400,000 | ' |
Number of equity incentive plans granted | 0 | 0 |
Equity Incentive Plan 2001 [Member] | ' | ' |
Equity Incentive Plans | 100,000 | ' |
Number of shares issued under 1999 equity incentive plan | 0 | 0 |
Employee Stock Purchase Plan [Member] | ' | ' |
Equity Incentive Plans | 50,000 | ' |
Stock compensation | $4,000 | $7,000 |
Employee Stock Purchase Amended Plan [Member] | ' | ' |
Equity Incentive Plans | 200,000 | ' |
Minimum [Member] | ' | ' |
Stock bonuses and restricted stock purchase agreements | 85.00% | ' |
Minimum [Member] | Employee Stock Option [Member] | ' | ' |
Options vest period | '4 years | ' |
Maximum [Member] | Employee Stock Option [Member] | ' | ' |
Options vest period | '10 years | ' |
StockBased_Compensation_Activi
Stock-Based Compensation - Activity In Stock Option Plans (Detail) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Shares Available for Grant, Beginning of year | 307,344 | 302,756 |
Shares Outstanding, Beginning of year | 68,933 | 73,521 |
Weighted Average Exercise Price, Beginning of year | $11.19 | $10.80 |
Shares Available For Grant, Granted | 0 | 0 |
Shares Outstanding, Granted | 0 | 0 |
Weighted Average Exercise Price, Granted | $0 | $0 |
Shares Available For Grant, Exercised | 0 | 0 |
Shares Outstanding, Exercised | 0 | 0 |
Weighted Average Exercise Price, Exercised | $0 | $0 |
Shares Available For Grant, Cancelled | 8,600 | 4,588 |
Shares Outstanding, Cancelled | -8,600 | -4,588 |
Weighted Average Exercise Price, Cancelled | $7.07 | $5.03 |
Shares Available for Grant, End of year | 315,944 | 307,344 |
Shares Outstanding, End of year | 60,333 | 68,933 |
Weighted Average Exercise Price, End of year | $11.78 | $11.19 |
StockBased_Compensation_Inform
Stock-Based Compensation - Information Regarding Stock Options Outstanding (Detail) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Outstanding options | ' |
Outstanding Options, Shares | 60,333 |
Outstanding Options, Weighted Average Remaining Contractual Term | '1 year 8 months 12 days |
Outstanding Options, Weighted Average Exercise Price | $11.78 |
Exercisable Options, Shares | 60,333 |
Exercisable Options, Weighted Average Exercise Price | $11.78 |
Range of Exercise Prices - Range 1 [Member] | ' |
Outstanding options | ' |
Outstanding Options, Exercise price - lower limit | $5.01 |
Outstanding Options, Exercise price - upper limit | $10 |
Outstanding Options, Shares | 30,000 |
Outstanding Options, Weighted Average Remaining Contractual Term | '2 years 10 months 24 days |
Outstanding Options, Weighted Average Exercise Price | $7.15 |
Exercisable Options, Shares | 30,000 |
Exercisable Options, Weighted Average Exercise Price | $7.15 |
Range of Exercise Prices - Range 2 [Member] | ' |
Outstanding options | ' |
Outstanding Options, Exercise price - lower limit | $15.01 |
Outstanding Options, Exercise price - upper limit | $20 |
Outstanding Options, Shares | 30,333 |
Outstanding Options, Weighted Average Remaining Contractual Term | '7 months 6 days |
Outstanding Options, Weighted Average Exercise Price | $16.35 |
Exercisable Options, Shares | 30,333 |
Exercisable Options, Weighted Average Exercise Price | $16.35 |
Related_Parties_Additional_Inf
Related Parties - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | |||||
Jul. 31, 2013 | Jul. 31, 2013 | Jan. 01, 2008 | Jul. 31, 2013 | Jul. 31, 2013 | Aug. 27, 2007 | Aug. 01, 2007 | |
Put Option [Member] | Put Option [Member] | Subsidiaries [Member] | Symbio Investment Corporation [Member] | Symbio Investment Corporation [Member] | Symbio Investment Corporation [Member] | ||
Percentage of ownership investment | ' | ' | ' | 20.00% | ' | ' | ' |
Strategic Investment in Symbio | ' | ' | $400,000 | ' | ' | $400,000 | $500,000 |
Strategic Investment in Symbio, Shares | ' | ' | ' | ' | ' | 200,000 | 250,000 |
Percentage of shares | ' | ' | ' | ' | ' | 4.00% | ' |
Expiration Date of put option | ' | 1-Jan-15 | ' | ' | ' | ' | ' |
Selling of shares through put option to David lee | ' | 200,000 | ' | ' | ' | ' | ' |
Price per share | ' | $2 | ' | ' | ' | ' | ' |
Sale of shares without exercise of the put option | 200,000 | ' | ' | ' | ' | ' | ' |
Compensation for Mr. Lee's services | ' | ' | ' | ' | 45,000 | ' | ' |
Increase in investments and a capital contribution by David Lee | ' | ' | ' | ' | 90,000 | ' | ' |
Payments to David Lee of the proceeds | $1,000,000 | ' | ' | ' | ' | ' | ' |
Additional payments to David Lee | 50.00% | ' | ' | ' | ' | ' | ' |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Proceeds from divestiture of businesses | $48,000 |
Loss on sale of discontinued operation | 286,000 |
Deferred Revenue, Additions | $52,000 |
Discontinued_Operations_Assets
Discontinued Operations - Assets And Liabilities Related To Discontinued Operations (Detail) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets of Discontinued Operations | ' | ' |
Accounts receivable | $106 | $294 |
Inventories | 0 | 543 |
Prepaid and other current assets | 26 | 23 |
Property and equipment, net | 20 | 25 |
Total assets | 152 | 885 |
Liabilities of Discontinued Operations | ' | ' |
Accounts payable | 4 | 23 |
Accrued expenses and other | 215 | 393 |
Total liabilities | $219 | $416 |
Discontinued_Operations_Conden
Discontinued Operations - Condensed Results Of Operations For Discontinued Operations (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Revenues | $1,223 | $1,826 |
Income from discontinued operations | 342 | 455 |
Loss on sale of discontinued operations | -286 | 0 |
Net income from discontinued operations | $56 | $455 |
Employee_Savings_Plan_Addition
Employee Savings Plan - Additional Information (Detail) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Contribution of employee compensation to the plan | 3.00% | ' |
Company contributions | $51,000 | $65,000 |
Maximum amount of contribution by employees | 9,000 | ' |
Employers contribution | $0 | ' |
Maximum [Member] | ' | ' |
Employees contribution to savings plan | 10.00% | ' |
Minimum [Member] | ' | ' |
Employees contribution to savings plan | 1.00% | ' |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Aug. 21, 2013 | |
Operating lease rent | $248,000 | $242,000 | ' |
Expiry date of leasing in Puerto Rico Industrial Development Company | 1-Aug-19 | ' | ' |
Monthly rent | 12,000 | ' | ' |
Personal property tax | 320,000 | ' | ' |
Personal property tax including interest and penalties | ' | ' | 551,000 |
Company's Liability | $96,000 | $96,000 | ' |
Caguas Puerto Rico [Member] | ' | ' | ' |
Lease office and warehouse space in Corinth, Mississippi | 17,236 | ' | ' |
Corinth Mississippi [Member] | ' | ' | ' |
Lease office and warehouse space in Corinth, Mississippi | 77,000 | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Future Minimum Annual Lease Payments (Detail) (USD $) | Jul. 31, 2013 |
In Thousands, unless otherwise specified | |
Future minimum annual lease payments | ' |
2014 | $110 |
2015 | 116 |
2016 | 112 |
2017 | 111 |
2018 | 111 |
Thereafter | 112 |
Total | $672 |
Segments_Segment_Reporting_Act
Segments - Segment Reporting Activity (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Jul. 31, 2013 | Jul. 31, 2012 |
Revenue | $20,586 | $20,671 |
Income (loss) from operations | -120 | 237 |
Total assets | 13,115 | 13,606 |
Allowance for doubtful accounts | 285 | 555 |
Depreciation and amortization | 134 | 105 |
Income tax expense | 20 | 20 |
Communications Systems and Services [Member] | ' | ' |
Revenue | ' | 1,826 |
Income (loss) from operations | ' | -465 |
Total assets | ' | 2,178 |
Capital expenditures | ' | 0 |
Allowance for doubtful accounts | ' | 342 |
Depreciation and amortization | ' | 6 |
Income tax expense | ' | 0 |
Telephony Products [Member] | ' | ' |
Revenue | 11,129 | 12,807 |
Income (loss) from operations | -440 | 1,057 |
Total assets | 8,768 | 7,616 |
Capital expenditures | 129 | 100 |
Allowance for doubtful accounts | 123 | 16 |
Depreciation and amortization | 49 | 37 |
Income tax expense | 20 | 20 |
Puerto Rico [Member] | ' | ' |
Revenue | 9,457 | 7,864 |
Income (loss) from operations | 320 | 100 |
Total assets | 4,347 | 3,812 |
Capital expenditures | 159 | 132 |
Allowance for doubtful accounts | 162 | 197 |
Depreciation and amortization | 85 | 62 |
Income tax expense | 0 | 0 |
Total [Member] | ' | ' |
Revenue | 20,586 | 22,497 |
Income (loss) from operations | -120 | 692 |
Total assets | 13,115 | 13,606 |
Capital expenditures | 288 | 232 |
Allowance for doubtful accounts | 285 | 555 |
Depreciation and amortization | 134 | 105 |
Income tax expense | $20 | $20 |
Segments_Details_Textual
Segments (Details Textual) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Income from discontinued operations | $56,000 | $455,000 |
Ongoing Operating Costs and Expenses [Member] | ' | ' |
Income from discontinued operations | ' | $920,000 |