Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Apr. 30, 2014 | 30-May-14 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Apr-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
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 Filer Category | 'Smaller Reporting Company | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Apr. 30, 2014 | Jul. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $1,657 | $1,778 |
Restricted cash | 2,750 | 0 |
Trade and other accounts receivable, net of allowance of $158 and $285, respectively | 3,775 | 4,521 |
Inventories | 4,367 | 5,026 |
Prepaid and other current assets | 303 | 257 |
Total current assets | 12,852 | 11,582 |
Property and equipment, net | 458 | 503 |
Other non-current assets | 0 | 40 |
Investments | 596 | 990 |
Total assets | 13,906 | 13,115 |
Current liabilities: | ' | ' |
Current maturities of notes payable | 46 | 37 |
Current maturities of notes payable - related parties | 338 | 330 |
Trade accounts payable | 2,164 | 2,297 |
Accrued expenses and other | 856 | 1,182 |
Total current liabilities | 3,404 | 3,846 |
Notes payable - net of current maturities | 0 | 37 |
Notes payable - related parties, net of current maturities | 2,802 | 2,859 |
Total liabilities | 6,206 | 6,742 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock | 0 | 0 |
Common stock, $0.005 par value (10,000,000 shares authorized, 3,030,697 and 3,016,758 shares issued, respectively) | 15 | 15 |
Additional paid-in capital | 56,318 | 56,305 |
Treasury stock, at cost (139,084 shares) | -1,497 | -1,497 |
Accumulated deficit | -50,592 | -49,237 |
Total eOn Communications Corp. stockholders' equity | 4,244 | 5,586 |
Noncontrolling interest | 706 | 787 |
Total stockholders' equity | 4,950 | 6,373 |
Total liabilities, redeemable convertible preferred stock and stockholders' equity | 13,906 | 13,115 |
Redeemable Convertible Preferred Stock [Member] | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock | $2,750 | $0 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Apr. 30, 2014 | Jul. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Trade accounts receivable, allowance | $158 | $285 |
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 | 3,030,697 | 3,016,758 |
Treasury stock, shares | 139,084 | 139,084 |
Redeemable Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 2,750 | 0 |
Preferred stock, shares issued | 2,750 | 0 |
Preferred stock, shares outstanding | 2,750 | 0 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 | Apr. 30, 2014 | Apr. 30, 2013 |
REVENUE | ' | ' | ' | ' |
Products | $3,546 | $3,989 | $11,658 | $12,639 |
Services | 959 | 790 | 2,761 | 2,455 |
Net revenue | 4,505 | 4,779 | 14,419 | 15,094 |
COST OF REVENUE | ' | ' | ' | ' |
Products | 2,723 | 3,130 | 9,017 | 10,070 |
Services | 751 | 462 | 2,173 | 1,438 |
Cost of revenue | 3,474 | 3,592 | 11,190 | 11,508 |
Gross profit | 1,031 | 1,187 | 3,229 | 3,586 |
OPERATING EXPENSE | ' | ' | ' | ' |
Selling, general and administrative | 1,210 | 1,204 | 3,976 | 3,759 |
Other operating expense (income), net | 4 | 5 | -2 | 21 |
Total operating expense | 1,214 | 1,209 | 3,974 | 3,780 |
Loss from operations | -183 | -22 | -745 | -194 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Interest income (expense), net | -110 | -113 | -454 | 168 |
Impairment of investment | 0 | 0 | -394 | 0 |
Total other income (expense) | -110 | -113 | -848 | 168 |
Loss from continuing operations before income taxes | -293 | -135 | -1,593 | -26 |
Income tax expense (benefit) from continuing operations | -3 | 6 | -17 | 13 |
Net loss from continuing operations | -290 | -141 | -1,576 | -39 |
DISCONTINUED OPERATIONS | ' | ' | ' | ' |
Income from discontinued operations | 64 | 113 | 140 | 240 |
Net income (loss) | -226 | -28 | -1,436 | 201 |
Less: Net income (loss) attributable to noncontrolling interest | 0 | 30 | -81 | 88 |
Net income (loss) attributable to common shareholders | ($226) | ($58) | ($1,355) | $113 |
Weighted average shares outstanding | ' | ' | ' | ' |
Basic | 2,892 | 2,877 | 2,891 | 2,877 |
Diluted | 2,892 | 2,877 | 2,891 | 2,877 |
Basic and diluted income (loss) per share | ' | ' | ' | ' |
Continuing operations | ($0.10) | ($0.06) | ($0.52) | ($0.04) |
Discontinued operations | $0.02 | $0.04 | $0.05 | $0.08 |
Total | ($0.08) | ($0.02) | ($0.47) | $0.04 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income (loss) | ($1,436) | $201 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 123 | 71 |
Provision for (recovery of) doubtful trade accounts receivable | -23 | 21 |
Imputed interest expense (benefit) on notes payable | 454 | -168 |
Impairment of investment | 394 | 0 |
Changes in net assets and liabilities: | ' | ' |
Trade accounts receivable | 769 | 563 |
Inventories | 659 | 272 |
Prepaid and other assets | -6 | 109 |
Trade accounts payable | -133 | -632 |
Accrued expenses and other | -326 | -528 |
Net cash provided by (used in) operating activities | 475 | -91 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -78 | -219 |
Net cash used in investing activities | -78 | -219 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repayment of notes payable | -531 | -201 |
Proceeds from issuance of redeemable convertible preferred stock | 2,750 | 0 |
Restricted cash | -2,750 | 0 |
Proceeds from employee stock purchase plan | 13 | 0 |
Net cash used in financing activities | -518 | -201 |
Net decrease in cash and cash equivalents | -121 | -511 |
Cash and cash equivalents, beginning of period | 1,778 | 2,162 |
Cash and cash equivalents, end of period | $1,657 | $1,651 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended | ||||
Apr. 30, 2014 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||
Basis of Presentation | ' | ||||
1 | Basis of Presentation | ||||
The accompanying unaudited condensed consolidated financial statements have been prepared by eOn Communications Corporation (“eOn” or the "Company"). It is management’s opinion that these statements include all adjustments, consisting of only normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows as of April 30, 2014, and for all periods presented. | |||||
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. | |||||
Interim Condensed Consolidated Financial Statements | |||||
The accompanying condensed 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, Cortelco acquired on April 1, 2009 and CSPR, control of which was acquired on June 9, 2010. All significant inter-company balances and transactions have been eliminated in consolidation. | |||||
Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto as of July 31, 2013 and 2012 and for each of the two years in the period ended July 31, 2013, which are included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission. | |||||
Pending Transaction with Inventergy, Inc. | |||||
On December 17, 2013, eOn, Inventergy, Inc., an intellectual property investment and licensing company whose principal offices are located in Cupertino, California (“Inventergy”), and Inventergy Merger Sub, Inc., a newly formed wholly-owned subsidiary of eOn (“Merger Sub”) entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) pursuant to which the parties agreed that Merger Sub will merge with and into Inventergy (the “Merger”). As a result of the Merger, Inventergy will be a wholly-owned subsidiary of eOn. Consummation of the Merger is subject to approval by the stockholders of eOn and certain other conditions as set forth in the Merger Agreement. The Merger is expected to close during the second calendar quarter of 2014. Upon completing the Merger, eOn will be renamed Inventergy Global, Inc. and Inventergy stockholders in the aggregate will own approximately 93% of the fully diluted common stock of eOn. The Merger will be accounted for as a reverse merger under the acquisition method of accounting for business combinations. Inventergy will be deemed to be the accounting acquirer in the transaction and, consequently the transaction is treated as an acquisition of eOn. | |||||
In conjunction with the Merger Agreement, eOn, Cortelco, and eOn Communications Systems, Inc., a wholly-owned subsidiary of eOn (“eOn Subsidiary”) entered into a transition agreement that provides for numerous transactions among eOn and its subsidiaries in connection with, and subject to the completion of, the Merger. Each of these transactions would take place at the time the Merger becomes effective, including but not limited to the following: | |||||
-1 | eOn and Cortelco will each transfer certain contracts and other assets to eOn Subsidiary, and eOn Subsidiary will assume the liabilities associated with such contracts on and after the date of assumption. | ||||
-2 | eOn and Cortelco will redeem in full the contingent note to the former Cortelco shareholders in the maximum initial amount of $11,000,000 in consideration of paying the noteholders either cash or shares of Cortelco owned by eOn. . | ||||
-3 | Cortelco will enter into a fulfillment services agreement with eOn Subsidiary providing for certain services to be conducted on behalf of eOn Subsidiary after the Merger. | ||||
-4 | eOn will transfer to Cortelco all of its ownership in CSPR and Symbio Investment Corporation. | ||||
Upon completion of the Merger and the transition transactions, eOn will no longer own any interest in Cortelco, CSPR, or Symbio Investment Corporation. | |||||
Subject to the completion of and at the time of the Merger, additional transactions will take place, including but not limited to the following: | |||||
-1 | eOn will declare and pay to eOn shareholders of record as of a record date that is at least 10 days prior to the date of the eOn special stockholder meeting called to vote upon the Merger a dividend in the amount of $1,650,000. | ||||
-2 | eOn will file an amended and restated certificate of incorporation, which amendments will include changing its name to Inventergy Global, Inc., effecting a reverse stock split at a ratio of between one-for-one and one-half and one-for-five shares of eOn common stock and designating the rights and preferences of eOn preferred stock. | ||||
-3 | eOn will issue convertible notes in the aggregate amount of $8 million to be issued upon the closing of the Merger in exchange for existing Inventergy notes and each of eOn’s subsidiaries, including Inventergy, will execute a guaranty with respect to the eOn Notes. | ||||
-4 | The officers and directors of eOn will resign and the directors elected by the eOn stockholders and officers appointed by such newly elected directors will serve in their stead. | ||||
For additional information regarding the Merger, see eOn’s registration statement on Form S-4, filed with the Securities Exchange Commission on February 7, 2014, and amendments No.1 and No.2 to eOn’s registration statement on Form S-4 filed on April 10, 2014 and April 24, 2014, respectively. | |||||
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. | |||||
Fair Value Measurements | |||||
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 Company’s cash equivalent instruments, primarily money market securities and U.S. Treasury Securities, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. | |||||
As of April 30, 2014, the Company owns approximately four percent of Symbio Investment Corporation. Symbio Investment Corporation is a holding company whose primary asset is an approximate nineteen 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 stock issuances by Symbio S.A., that the fair value of the Company’s investment in Symbio Investment Corporation is less than the Company’s cost of $990,000. The Company estimated the fair value of the investment in Symbio Investment Corporation based on the stock issuances noted above and the put option described in Note 4. The estimated fair value resulted in an other-than-temporary impairment charge of $394,000 recognized in the quarter ended October 31, 2013. This impairment resulted in a remaining book value of the investment in Symbio Investment Corporation, including the estimated value of the put option, totaling $596,000 as of April 30, 2014. No impairment charge was recognized for the quarter ended April 30, 2014 based on no indicators of other-than-temporary impairment identified at period end. | |||||
The note payable to the former Cortelco shareholders (Note 6) is valued each period end 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. Projected future payments are evaluated at each reporting period and are significantly impacted by seasonal changes in inventory and vendor and customer payments. The following represents transactions related to the note payable for the six months ended April 30, 2014 (in thousands): | |||||
Beginning fair value - August 1, 2013 | $ | 3,004 | |||
Imputed interest | 340 | ||||
Change in estimates | 114 | ||||
Interest expense | 454 | ||||
Payments | -503 | ||||
Ending fair value - April 30, 2014 | $ | 2,955 | |||
Restricted Cash | |||||
The Company’s restricted cash is held in a bank as security for irrevocable letters of credit obtained from the bank as required by the securities purchase agreement under which the Company sold 2,750 shares of redeemable convertible preferred stock (see Note 8). Restricted cash totaled $2,750,000 and zero as of April 30, 2014 and July 31, 2013, respectively. | |||||
Income Taxes | |||||
Due to uncertainties surrounding the timing of realizing the benefits of its net deferred tax assets in future returns, to the extent that it is more likely than not that deferred tax assets may not be realized, the Company continues to record a valuation allowance against all of its deferred tax assets at April 30, 2014. | |||||
Stock_Based_Compensation
Stock Based Compensation | 9 Months Ended | ||||||||||
Apr. 30, 2014 | |||||||||||
Stock-Based Compensation [Abstract] | ' | ||||||||||
Stock Based Compensation | ' | ||||||||||
2 | Stock Based Compensation | ||||||||||
Equity Incentive Plans | |||||||||||
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. The board of directors has declared that no future grants will be made under the plan adopted in 1997. 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. 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. During the nine months ended April 30, 2014, there were no options to purchase shares of common stock and no restricted stock granted by the Company. | |||||||||||
Employee Stock Purchase Plan | |||||||||||
The Employee Stock Purchase Plan permits employees to purchase up to 200,000 shares of the Company's common stock. 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 the nine months ended April 30, 2014, there were 13,939 shares purchased by employees under the plan, at an exercise price of $0.80 per share. | |||||||||||
Stock-based compensation of $341 and $0 was recognized for the nine months ended April 30, 2014 and 2013, respectively. As of April 30, 2014, the Company has no unrecognized compensation costs related to unvested stock options under the Plans. The aggregate intrinsic value of both options outstanding and options exercisable as of April 30, 2014 was $0. All options outstanding were fully vested as of April 30, 2014. During the nine months ended April 30, 2014 no options to purchase stock were exercised. | |||||||||||
General Stock Option Information | |||||||||||
Activity in the Company’s stock option plans since July 31, 2013 is as follows: | |||||||||||
Weighted | |||||||||||
Shares | Average | ||||||||||
Available | Options | Exercise | |||||||||
for Grant | Outstanding | Price | |||||||||
Options at August 1, 2013 | 315,944 | 60,333 | $ | 11.78 | |||||||
Granted | - | - | - | ||||||||
Exercised | - | - | - | ||||||||
Cancelled | 30,333 | -30,333 | 16.35 | ||||||||
Options at April 30, 2014 | 346,277 | 30,000 | $ | 7.15 | |||||||
Revenue_Recognition
Revenue Recognition | 9 Months Ended | ||||||
Apr. 30, 2014 | |||||||
Revenue Recognition [Abstract] | ' | ||||||
Revenue Recognition | ' | ||||||
3 | 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 and Services | Individual sale | Individual sale | - | ||||
CSPR Products and Services | 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 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 collectability is reasonably assured. Generally, revenue is recognized (i) upon shipment for equipment and software, (ii) as work is performed for professional services, and (iii) in equal periodic amounts over the term of the contract for software and hardware maintenance. | |||||||
Related_Parties
Related Parties | 9 Months Ended | ||
Apr. 30, 2014 | |||
Related Parties [Abstract] | ' | ||
Related Parties | ' | ||
4 | Related Parties | ||
Symbio Investment Corp. | |||
On August 1, 2007 and August 27, 2007, the Company made strategic investments in Symbio Investment Corporation of $500,000 and $400,000 for 250,000 and 200,000 shares, respectively, or a total of approximately 4% of Symbio Investment Corporation. Symbio Investment Corporation is a holding company whose primary asset is an approximate nineteen 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 Corporation 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 Corporation, the Company received a put option from David Lee, Chairman of the Company, effective beginning January 1, 2008 and expiring on January 1, 2011. In December 2010, the expiration of the put option was extended until 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 Corporation 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. The Company was granted a total of 45,000 shares of Symbio Investment Corporation stock as compensation for Mr. Lee's services. These shares have been valued at $90,000, by the Company, and have been recorded as an increase in investments and a capital contribution by David Lee, in 2009. | |||
During the first quarter of 2014, the Company recognized an other-than-temporary impairment charge of $394,000 against the Investment in Symbio Investment Corporation. This impairment resulted in a remaining book value of the investment in Symbio Investment Corporation, including the value of the put option, totaling $596,000 as of April 30, 2014. | |||
Inventories
Inventories | 9 Months Ended | |||||||
Apr. 30, 2014 | ||||||||
Inventories [Abstract] | ' | |||||||
Inventories | ' | |||||||
5 | Inventories | |||||||
Inventories consist of the following (in thousands): | ||||||||
April 30, | July 31, | |||||||
2014 | 2013 | |||||||
Raw materials and purchased components | $ | 582 | $ | 791 | ||||
Work in process | 720 | 749 | ||||||
Finished goods | 3,571 | 4,029 | ||||||
Total | 4,873 | 5,569 | ||||||
Obsolescence reserve | -506 | -543 | ||||||
Inventories | $ | 4,367 | $ | 5,026 | ||||
Notes_Payable_Related_Party
Notes Payable, Related Party | 9 Months Ended | ||
Apr. 30, 2014 | |||
Payables and Accruals [Abstract] | ' | ||
Notes Payable, Related Party | ' | ||
6 | Notes Payable, Related Party | ||
On April 1, 2009, the Company executed a note payable to Cortelco’s former shareholders for $11,000,000 (the “Cortelco Note”) in connection with the acquisition of Cortelco. The Cortelco Note is non-interest bearing and is to be repaid based primarily upon the level of Cortelco earnings after closing and all Cortelco shareholders are eligible to receive quarterly payments thereunder in cash until the full consideration has been paid. | |||
The fair value of the Cortelco Note payable obligation was approximately $2,955,000 at April 30, 2014 using a discounted cash flow analysis of the projected future payments and a discount rate of 15.22%. The Cortelco Note balance includes $110,000 and $454,000 of imputed interest expense during the three and nine months ended April 30, 2014 imputed at the 15.22% discount rate using the effective interest method. | |||
The amount of actual quarterly payments under the Cortelco Note, which are based on Cortelco’s quarterly cash flows, as defined, may differ significantly from the projected payments estimated at the Cortelco Note’s inception. Payments on the Cortelco Note based upon Cortelco’s quarterly cash flows have totaled $3,131,000 since the April 1, 2009 inception of the Cortelco Note through April 30, 2014. The Company does not expect to make a payment on the Cortelco Note in June 2014 based upon the cash flows of Cortelco for the quarter ended April 30, 2014. | |||
On June 9, 2010 pursuant to a Stock Purchase Agreement, the Company recorded a non-interest bearing note payable to David S. Lee, eOn’s Chairman, due 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 total obligation of approximately $186,000 is included in current maturities of notes payable–related parties. | |||
Product_Warranties
Product Warranties | 9 Months Ended | |||||||
Apr. 30, 2014 | ||||||||
Product Warranties Disclosures [Abstract] | ' | |||||||
Product Warranties | ' | |||||||
7 | 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. The following table summarizes the activity related to the product warranty liability during the six months ended April 30, 2014 and 2013 (in thousands): | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 156 | $ | 166 | ||||
Warranty cost incurred | -69 | -81 | ||||||
Accrued warranty cost | 48 | 68 | ||||||
Ending balance | $ | 135 | $ | 153 | ||||
Redeemable_Convertible_Preferr
Redeemable Convertible Preferred Stock | 9 Months Ended | ||
Apr. 30, 2014 | |||
Redeemable Convertible Preferred Stock [Abstract] | ' | ||
Redeemable Convertible Preferred Stock | ' | ||
8 | Redeemable Convertible Preferred Stock | ||
On December 17, 2013, in contemplation of the Merger, the Company issued 2,750 shares of its Series B Preferred Stock (the “redeemable convertible preferred stock”) at a price of $1,000 per share, subject to the terms of its Certificate of Designations for the Series B Preferred Stock (the “Certificate of Designations”), and warrants to purchase an aggregate of 1,401,870 shares of the Company’s common stock (the “warrants”) to certain accredited investors in a private offering transaction for proceeds of $2,750,000. The Certificate of Designations sets forth the terms, rights, provisions for conversion to common stock, obligations and preferences of the redeemable convertible preferred stock and provides that holders of the redeemable convertible preferred stock are entitled to receive dividends on an as-converted basis with the common stock. However, the holders of the redeemable convertible preferred stock will not participate in the $1,650,000 dividend to be paid upon completion of the Merger (see Note 1). Each share of redeemable convertible preferred stock is convertible, at the option of the holder upon certain conversion events, into common stock, at a conversion rate of $1.07 per common share (subject to adjustment for stock splits and similar events). Each share of redeemable convertible preferred stock has a vote equal to the number of shares of common stock into which the redeemable convertible preferred stock would be convertible, using a conversion price of $1.24 per share (subject to adjustment for stock splits and similar events) in lieu of the stated conversion price. Upon certain triggering events, such as the Merger not being completed by June 30, 2014, the holders of the redeemable convertible preferred stock can require the Company to redeem its redeemable convertible preferred stock and warrants in cash at a price as specified in the Certificate of Designations. In the event the holders of the redeemable convertible preferred stock do not exercise their redemption options within thirty days of a triggering event, the Company has the right to redeem all, but not less than all, of the outstanding shares of redeemable convertible preferred stock in cash at a price as specified in the Certificate of Designations. As of April 30, 2014, the Company recorded $2,750,000 related to the redeemable convertible preferred stock, which represents its redemption value. | |||
The warrants to purchase shares of the Company’s common stock issued in connection with the redeemable convertible preferred stock are exercisable the business day following the completion of the Merger and expire two years from the initial exercise date. If the Merger is not completed, the warrants will be cancelled. The warrants have an exercise price of $1.33 per common share (subject to adjustments for stock splits and similar events). As of April 30, 2014, no amounts have been recognized for the warrants as they do not convey to the holders the unconditional ability to acquire the Company’s common stock. Once the warrants become exercisable following the completion of the Merger, the value of the warrants will be recorded. | |||
Concentrations_Commitments_and
Concentrations, Commitments and Contingencies | 9 Months Ended | ||
Apr. 30, 2014 | |||
Commitments and Contingencies [Abstract] | ' | ||
Concentrations, Commitments and Contingencies | ' | ||
9 | Concentrations, Commitments and Contingencies | ||
(a) | Customer Concentrations | ||
At April 30, 2014, four customers accounted for approximately 30% of total accounts receivable and individually 11%, 7%, 6% and 6% of the total accounts receivable. At April 30, 2013, four customers accounted for approximately 42% of total accounts receivable and individually 16%, 9%, 9% and 8% of the total accounts receivable. For the nine months ended April 30, 2014, four customers accounted for approximately 36% of total revenue and individually 11%, 10%, 8% and 7% of total revenue. For the nine months ended April 30, 2013, four customers accounted for approximately 42% of total revenue and individually 17%, 14%, 7% and 4% of total revenue. | |||
(b) | Commitments | ||
At April 30, 2014, the Company had outstanding commitments for inventory purchases under open purchase orders of approximately $1,814,000. | |||
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 in the current or prior fiscal year. The line of credit is secured by substantially all of Cortelco’s assets and expires December 15, 2014. 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 April 30, 2014 and 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, 2014. | |||
(c) | Litigation and Claims | ||
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 $559,807 as of February 14, 2014, 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 2003 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 believed it had strong arguments to support its position that the components of inventory qualify as raw material and that a settlement could be reached for an amount less than the assessment. Accordingly, the Company had previously recorded a liability, which had a balance of $96,000 as of July 31, 2013. On February 12, 2014 CSPR received a payment demand notice from the CRIM in the amount of $559,807, but provided that if CSPR entered into a settlement agreement on or prior to March 27, 2014, CSPR could settle the outstanding amount for $320,000 and take advantage of an amnesty provision which would eliminate accumulated interest and penalties. Management has entered into a settlement agreement to settle this claim for the initial assessment of approximately $320,000 and has recorded an additional liability of $224,000 as of April 30, 2014 in anticipation of this settlement. The settlement amount is due in twelve equal installments, beginning May 1, 2014, and bears no interest. | |||
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. | |||
Discontinued_Operations
Discontinued Operations | 9 Months Ended | |||||||
Apr. 30, 2014 | ||||||||
Discontinued Operations [Abstract] | ' | |||||||
Discontinued Operations | ' | |||||||
10 | 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, 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 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 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): | ||||||||
April 30, | July 31, | |||||||
2014 | 2013 | |||||||
Assets of Discontinued Operations | ||||||||
Trade and other accounts receivable | $ | - | $ | 106 | ||||
Prepaid and other current assets | 14 | 26 | ||||||
Property and equipment, net | 17 | 20 | ||||||
$ | 31 | $ | 152 | |||||
Liabilities of Discontinued Operations | ||||||||
Accounts payable | 0 | 4 | ||||||
Accrued expenses and other | 35 | 62 | ||||||
$ | 35 | $ | 66 | |||||
Condensed results of operations for the discontinued operations for the nine months ended April 30, 2014 and 2013 are as follows (in thousands): | ||||||||
Nine Months Ended | ||||||||
April 30, | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 32 | $ | 983 | ||||
Royalties earned from sale of business | 161 | - | ||||||
Income from discontinued operations | $ | 140 | $ | 240 | ||||
Upon the consummation of the merger transaction described under footnote 1 above certain assets, liabilities and operations will be divested in accordance with a transition agreement. Assets and liabilities related to the divestiture in the accompanying consolidated balance sheets are as follows (in thousands): | ||||||||
April 30, | July 31, | |||||||
2014 | 2013 | |||||||
Assets of Divested Operations | ||||||||
Cash | $ | 1,611 | $ | 1,649 | ||||
Trade and other accounts receivable | 3,513 | 4,261 | ||||||
Prepaid and other current assets | 265 | 231 | ||||||
Property and equipment, net | 441 | 483 | ||||||
Investments | 596 | 990 | ||||||
$ | 6,426 | $ | 7,614 | |||||
Liabilities of Divested Operations | ||||||||
Accounts payable | 2,053 | 2,145 | ||||||
Accrued expenses and other | 757 | 967 | ||||||
Notes payable - related parties | 3,140 | 3,189 | ||||||
$ | 5,950 | $ | 6,301 | |||||
Condensed results of operations related to the divestiture for the nine months ended April 30, 2014 and 2013 are as follows (in thousands): | ||||||||
Nine Months Ended | ||||||||
April 30, | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 13,674 | $ | 15,019 | ||||
Operating expenses | 2,934 | 2,875 | ||||||
Interest income (expense) | -454 | 168 | ||||||
Income (loss) from divested operations | $ | -617 | $ | 721 | ||||
Income_Taxes
Income Taxes | 9 Months Ended | |
Apr. 30, 2014 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Taxes | ' | |
11 | Income Taxes | |
The Company’s income tax expense (benefit) of ($17,000) and $13,000 for the nine months ended April 30, 2014 and 2013, respectively, consisted of estimated current state income taxes of Cortelco. No deferred taxes are provided in the accompanying financial statements due to the valuation allowance established. | ||
As of April 30, 2014, the Company has federal and state net operating loss carryforwards of approximately $28,000,000 which expire at various dates through 2034. The Internal Revenue Code provides limitations on utilization of existing net operating losses against future taxable income based upon changes in share ownership. If these changes occur, the ultimate realization of the net operating loss carryforwards could be limited which would result in some portion of the carryforwards becoming permanently impaired. | ||
Segments
Segments | 9 Months Ended | |||||||||||||||||||||||||
Apr. 30, 2014 | ||||||||||||||||||||||||||
Segments [Abstract] | ' | |||||||||||||||||||||||||
Segments | ' | |||||||||||||||||||||||||
12 | Segments | |||||||||||||||||||||||||
The Company’s reportable segments are Telephony Products and Puerto Rico, each of which offers different products and services or 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 sales 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 condensed consolidated statements of operations for the nine months ended April 30, 2014 and 2013 to reflect operations of this segment as discontinued. Income from discontinued operations for the nine months ended April 30, 2013 totaled $240,000, which excludes approximately $627,000 of ongoing operating costs and expenses, which were allocated to the Communications Systems and Services nine months ended April 30, 2013 segment information disclosed below. For the nine months ended April 30, 2014, such ongoing operating costs and expenses are included in the Telephony Products operating segment. | ||||||||||||||||||||||||||
Segment reporting for activity as of and for the three and nine months ended April 30, 2014 follows (in thousands): | ||||||||||||||||||||||||||
Telephony Products | Puerto Rico | Total | ||||||||||||||||||||||||
3 Months | 9 Months | 3 Months | 9 Months | 3 Months | 9 Months | |||||||||||||||||||||
Revenue | $ | 2,292 | $ | 7,386 | $ | 2,213 | $ | 7,033 | $ | 4,505 | $ | 14,419 | ||||||||||||||
Net (loss) income from operations | -184 | -578 | 1 | -167 | -183 | -745 | ||||||||||||||||||||
Total assets | - | 9,971 | - | 3,935 | - | 13,906 | ||||||||||||||||||||
Capital expenditures | - | 51 | 5 | 27 | 5 | 78 | ||||||||||||||||||||
Allowance for doubtful accounts | - | 17 | - | 141 | - | 158 | ||||||||||||||||||||
Depreciation and amortization | 15 | 49 | 27 | 74 | 42 | 123 | ||||||||||||||||||||
Segment reporting for activity as of and for the three and nine months ended April 30, 2013 follows (in thousands): | ||||||||||||||||||||||||||
Communications | ||||||||||||||||||||||||||
Systems and Services | Telephony Products | Puerto Rico | Total | |||||||||||||||||||||||
3 Months | 9 Months | 3 Months | 9 Months | 3 Months | 9 Months | 3 Months | 9 Months | |||||||||||||||||||
Revenue | $ | 323 | $ | 983 | $ | 2,871 | $ | 8,353 | $ | 1,908 | $ | 6,741 | $ | 5,102 | $ | 16,077 | ||||||||||
Net (loss) income from operations | -83 | -387 | 111 | 251 | 63 | 182 | 91 | 46 | ||||||||||||||||||
Total assets | - | 1,661 | - | 7,262 | - | 3,355 | - | 12,278 | ||||||||||||||||||
Capital expenditures | - | - | 3 | 122 | 56 | 97 | 59 | 219 | ||||||||||||||||||
Allowance for doubtful accounts | - | 106 | - | 17 | - | 161 | - | 284 | ||||||||||||||||||
Depreciation and amortization | 1 | 4 | 13 | 34 | 14 | 33 | 28 | 71 | ||||||||||||||||||
Substantially all of the Company’s revenues are earned in the United States and the Commonwealth of Puerto Rico. Substantially all of the Company’s assets are located in the United States and the Commonwealth of Puerto Rico. | ||||||||||||||||||||||||||
Subsequent_Events
Subsequent Events | 9 Months Ended | |
Apr. 30, 2014 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events | ' | |
13 | Subsequent Events | |
On May 28, 2014, subject to the approval of the eOn stockholders of the proposed range of the reverse stock split at the stockholders meeting held on June 3, 2014, the eOn Board approved and set the ratio of the reverse stock split at one-for-two, with such ratio to be reflected in eOn’s Amended and Restated Certificate of Incorporation to be filed at the time of the completion of the merger with Inventergy. | ||
On June 3, 2014, the eOn stockholders approved each of the proposals presented at the stockholders meeting. Management anticipates that the merger with Inventergy will be completed on June 6, 2014. | ||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended | ||||
Apr. 30, 2014 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||
Description of Business | ' | ||||
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. | |||||
Interim Condensed Consolidated Financial Statements | ' | ||||
Interim Condensed Consolidated Financial Statements | |||||
The accompanying condensed 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, Cortelco acquired on April 1, 2009 and CSPR, control of which was acquired on June 9, 2010. All significant inter-company balances and transactions have been eliminated in consolidation. | |||||
Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto as of July 31, 2013 and 2012 and for each of the two years in the period ended July 31, 2013, which are included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission. | |||||
Pending Transaction with Inventergy, Inc. | ' | ||||
Pending Transaction with Inventergy, Inc. | |||||
On December 17, 2013, eOn, Inventergy, Inc., an intellectual property investment and licensing company whose principal offices are located in Cupertino, California (“Inventergy”), and Inventergy Merger Sub, Inc., a newly formed wholly-owned subsidiary of eOn (“Merger Sub”) entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) pursuant to which the parties agreed that Merger Sub will merge with and into Inventergy (the “Merger”). As a result of the Merger, Inventergy will be a wholly-owned subsidiary of eOn. Consummation of the Merger is subject to approval by the stockholders of eOn and certain other conditions as set forth in the Merger Agreement. The Merger is expected to close during the second calendar quarter of 2014. Upon completing the Merger, eOn will be renamed Inventergy Global, Inc. and Inventergy stockholders in the aggregate will own approximately 93% of the fully diluted common stock of eOn. The Merger will be accounted for as a reverse merger under the acquisition method of accounting for business combinations. Inventergy will be deemed to be the accounting acquirer in the transaction and, consequently the transaction is treated as an acquisition of eOn. | |||||
In conjunction with the Merger Agreement, eOn, Cortelco, and eOn Communications Systems, Inc., a wholly-owned subsidiary of eOn (“eOn Subsidiary”) entered into a transition agreement that provides for numerous transactions among eOn and its subsidiaries in connection with, and subject to the completion of, the Merger. Each of these transactions would take place at the time the Merger becomes effective, including but not limited to the following: | |||||
-1 | eOn and Cortelco will each transfer certain contracts and other assets to eOn Subsidiary, and eOn Subsidiary will assume the liabilities associated with such contracts on and after the date of assumption. | ||||
-2 | eOn and Cortelco will redeem in full the contingent note to the former Cortelco shareholders in the maximum initial amount of $11,000,000 in consideration of paying the noteholders either cash or shares of Cortelco owned by eOn. . | ||||
-3 | Cortelco will enter into a fulfillment services agreement with eOn Subsidiary providing for certain services to be conducted on behalf of eOn Subsidiary after the Merger. | ||||
-4 | eOn will transfer to Cortelco all of its ownership in CSPR and Symbio Investment Corporation. | ||||
Upon completion of the Merger and the transition transactions, eOn will no longer own any interest in Cortelco, CSPR, or Symbio Investment Corporation. | |||||
Subject to the completion of and at the time of the Merger, additional transactions will take place, including but not limited to the following: | |||||
-1 | eOn will declare and pay to eOn shareholders of record as of a record date that is at least 10 days prior to the date of the eOn special stockholder meeting called to vote upon the Merger a dividend in the amount of $1,650,000. | ||||
-2 | eOn will file an amended and restated certificate of incorporation, which amendments will include changing its name to Inventergy Global, Inc., effecting a reverse stock split at a ratio of between one-for-one and one-half and one-for-five shares of eOn common stock and designating the rights and preferences of eOn preferred stock. | ||||
-3 | eOn will issue convertible notes in the aggregate amount of $8 million to be issued upon the closing of the Merger in exchange for existing Inventergy notes and each of eOn’s subsidiaries, including Inventergy, will execute a guaranty with respect to the eOn Notes. | ||||
-4 | The officers and directors of eOn will resign and the directors elected by the eOn stockholders and officers appointed by such newly elected directors will serve in their stead. | ||||
For additional information regarding the Merger, see eOn’s registration statement on Form S-4, filed with the Securities Exchange Commission on February 7, 2014, and amendments No.1 and No.2 to eOn’s registration statement on Form S-4 filed on April 10, 2014 and April 24, 2014, respectively. | |||||
Estimates | ' | ||||
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. | |||||
Fair Value Measurements | ' | ||||
Fair Value Measurements | |||||
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 Company’s cash equivalent instruments, primarily money market securities and U.S. Treasury Securities, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. | |||||
As of April 30, 2014, the Company owns approximately four percent of Symbio Investment Corporation. Symbio Investment Corporation is a holding company whose primary asset is an approximate nineteen 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 stock issuances by Symbio S.A., that the fair value of the Company’s investment in Symbio Investment Corporation is less than the Company’s cost of $990,000. The Company estimated the fair value of the investment in Symbio Investment Corporation based on the stock issuances noted above and the put option described in Note 4. The estimated fair value resulted in an other-than-temporary impairment charge of $394,000 recognized in the quarter ended October 31, 2013. This impairment resulted in a remaining book value of the investment in Symbio Investment Corporation, including the estimated value of the put option, totaling $596,000 as of April 30, 2014. No impairment charge was recognized for the quarter ended April 30, 2014 based on no indicators of other-than-temporary impairment identified at period end. | |||||
The note payable to the former Cortelco shareholders (Note 6) is valued each period end 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. Projected future payments are evaluated at each reporting period and are significantly impacted by seasonal changes in inventory and vendor and customer payments. The following represents transactions related to the note payable for the six months ended April 30, 2014 (in thousands): | |||||
Beginning fair value - August 1, 2013 | $ | 3,004 | |||
Imputed interest | 340 | ||||
Change in estimates | 114 | ||||
Interest expense | 454 | ||||
Payments | -503 | ||||
Ending fair value - April 30, 2014 | $ | 2,955 | |||
Restricted Cash | ' | ||||
Restricted Cash | |||||
The Company’s restricted cash is held in a bank as security for irrevocable letters of credit obtained from the bank as required by the securities purchase agreement under which the Company sold 2,750 shares of redeemable convertible preferred stock (see Note 8). Restricted cash totaled $2,750,000 and zero as of April 30, 2014 and July 31, 2013, respectively. | |||||
Income Taxes | ' | ||||
Income Taxes | |||||
Due to uncertainties surrounding the timing of realizing the benefits of its net deferred tax assets in future returns, to the extent that it is more likely than not that deferred tax assets may not be realized, the Company continues to record a valuation allowance against all of its deferred tax assets at April 30, 2014. | |||||
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 9 Months Ended | ||||
Apr. 30, 2014 | |||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||
Transactions related to note payable | ' | ||||
The following represents transactions related to the note payable for the six months ended April 30, 2014 (in thousands): | |||||
Beginning fair value - August 1, 2013 | $ | 3,004 | |||
Imputed interest | 340 | ||||
Change in estimates | 114 | ||||
Interest expense | 454 | ||||
Payments | -503 | ||||
Ending fair value - April 30, 2014 | $ | 2,955 | |||
Stock_Based_Compensation_Table
Stock Based Compensation (Tables) | 9 Months Ended | ||||||||||
Apr. 30, 2014 | |||||||||||
Stock-Based Compensation [Abstract] | ' | ||||||||||
Summary of share-based compensation activity | ' | ||||||||||
Activity in the Company’s stock option plans since July 31, 2013 is as follows: | |||||||||||
Weighted | |||||||||||
Shares | Average | ||||||||||
Available | Options | Exercise | |||||||||
for Grant | Outstanding | Price | |||||||||
Options at August 1, 2013 | 315,944 | 60,333 | $ | 11.78 | |||||||
Granted | - | - | - | ||||||||
Exercised | - | - | - | ||||||||
Cancelled | 30,333 | -30,333 | 16.35 | ||||||||
Options at April 30, 2014 | 346,277 | 30,000 | $ | 7.15 | |||||||
Revenue_Recognition_Tables
Revenue Recognition (Tables) | 9 Months Ended | ||||||
Apr. 30, 2014 | |||||||
Revenue Recognition [Abstract] | ' | ||||||
Revenues from its three 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 and Services | Individual sale | Individual sale | - | ||||
CSPR Products and Services | Individual sale | Individual sale | Individual sale | ||||
CSPR Telephony Billing | - | Individual sale | - | ||||
Inventories_Tables
Inventories (Tables) | 9 Months Ended | |||||||
Apr. 30, 2014 | ||||||||
Inventories [Abstract] | ' | |||||||
Summary of inventories | ' | |||||||
Inventories consist of the following (in thousands): | ||||||||
April 30, | July 31, | |||||||
2014 | 2013 | |||||||
Raw materials and purchased components | $ | 582 | $ | 791 | ||||
Work in process | 720 | 749 | ||||||
Finished goods | 3,571 | 4,029 | ||||||
Total | 4,873 | 5,569 | ||||||
Obsolescence reserve | -506 | -543 | ||||||
Inventories | $ | 4,367 | $ | 5,026 | ||||
Product_Warranties_Tables
Product Warranties (Tables) | 9 Months Ended | |||||||
Apr. 30, 2014 | ||||||||
Product Warranties Disclosures [Abstract] | ' | |||||||
Product warranty liability | ' | |||||||
The following table summarizes the activity related to the product warranty liability during the six months ended April 30, 2014 and 2013 (in thousands): | ||||||||
2014 | 2013 | |||||||
Beginning balance | $ | 156 | $ | 166 | ||||
Warranty cost incurred | -69 | -81 | ||||||
Accrued warranty cost | 48 | 68 | ||||||
Ending balance | $ | 135 | $ | 153 | ||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | |||||||
Apr. 30, 2014 | ||||||||
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): | ||||||||
April 30, | July 31, | |||||||
2014 | 2013 | |||||||
Assets of Discontinued Operations | ||||||||
Trade and other accounts receivable | $ | - | $ | 106 | ||||
Prepaid and other current assets | 14 | 26 | ||||||
Property and equipment, net | 17 | 20 | ||||||
$ | 31 | $ | 152 | |||||
Liabilities of Discontinued Operations | ||||||||
Accounts payable | 0 | 4 | ||||||
Accrued expenses and other | 35 | 62 | ||||||
$ | 35 | $ | 66 | |||||
Condensed results of operation for discontinued operation | ' | |||||||
Condensed results of operations for the discontinued operations for the nine months ended April 30, 2014 and 2013 are as follows (in thousands): | ||||||||
Nine Months Ended | ||||||||
April 30, | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 32 | $ | 983 | ||||
Royalties earned from sale of business | 161 | - | ||||||
Income from discontinued operations | $ | 140 | $ | 240 | ||||
Schedule of disposal group including divested operation balance sheet disclosures | ' | |||||||
Assets and liabilities related to the divestiture in the accompanying consolidated balance sheets are as follows (in thousands): | ||||||||
April 30, | July 31, | |||||||
2014 | 2013 | |||||||
Assets of Divested Operations | ||||||||
Cash | $ | 1,611 | $ | 1,649 | ||||
Trade and other accounts receivable | 3,513 | 4,261 | ||||||
Prepaid and other current assets | 265 | 231 | ||||||
Property and equipment, net | 441 | 483 | ||||||
Investments | 596 | 990 | ||||||
$ | 6,426 | $ | 7,614 | |||||
Liabilities of Divested Operations | ||||||||
Accounts payable | 2,053 | 2,145 | ||||||
Accrued expenses and other | 757 | 967 | ||||||
Notes payable - related parties | 3,140 | 3,189 | ||||||
$ | 5,950 | $ | 6,301 | |||||
Schedule of disposal group including divested operation income statement disclosures | ' | |||||||
Condensed results of operations related to the divestiture for the nine months ended April 30, 2014 and 2013 are as follows (in thousands): | ||||||||
Nine Months Ended | ||||||||
April 30, | ||||||||
2014 | 2013 | |||||||
Revenues | $ | 13,674 | $ | 15,019 | ||||
Operating expenses | 2,934 | 2,875 | ||||||
Interest income (expense) | -454 | 168 | ||||||
Income (loss) from divested operations | $ | -617 | $ | 721 | ||||
Segments_Tables
Segments (Tables) | 9 Months Ended | |||||||||||||||||||||||||
Apr. 30, 2014 | ||||||||||||||||||||||||||
Segments [Abstract] | ' | |||||||||||||||||||||||||
Segment reporting | ' | |||||||||||||||||||||||||
Segment reporting for activity as of and for the three and nine months ended April 30, 2014 follows (in thousands): | ||||||||||||||||||||||||||
Telephony Products | Puerto Rico | Total | ||||||||||||||||||||||||
3 Months | 9 Months | 3 Months | 9 Months | 3 Months | 9 Months | |||||||||||||||||||||
Revenue | $ | 2,292 | $ | 7,386 | $ | 2,213 | $ | 7,033 | $ | 4,505 | $ | 14,419 | ||||||||||||||
Net (loss) income from operations | -184 | -578 | 1 | -167 | -183 | -745 | ||||||||||||||||||||
Total assets | - | 9,971 | - | 3,935 | - | 13,906 | ||||||||||||||||||||
Capital expenditures | - | 51 | 5 | 27 | 5 | 78 | ||||||||||||||||||||
Allowance for doubtful accounts | - | 17 | - | 141 | - | 158 | ||||||||||||||||||||
Depreciation and amortization | 15 | 49 | 27 | 74 | 42 | 123 | ||||||||||||||||||||
Segment reporting for activity as of and for the three and nine months ended April 30, 2013 follows (in thousands): | ||||||||||||||||||||||||||
Communications | ||||||||||||||||||||||||||
Systems and Services | Telephony Products | Puerto Rico | Total | |||||||||||||||||||||||
3 Months | 9 Months | 3 Months | 9 Months | 3 Months | 9 Months | 3 Months | 9 Months | |||||||||||||||||||
Revenue | $ | 323 | $ | 983 | $ | 2,871 | $ | 8,353 | $ | 1,908 | $ | 6,741 | $ | 5,102 | $ | 16,077 | ||||||||||
Net (loss) income from operations | -83 | -387 | 111 | 251 | 63 | 182 | 91 | 46 | ||||||||||||||||||
Total assets | - | 1,661 | - | 7,262 | - | 3,355 | - | 12,278 | ||||||||||||||||||
Capital expenditures | - | - | 3 | 122 | 56 | 97 | 59 | 219 | ||||||||||||||||||
Allowance for doubtful accounts | - | 106 | - | 17 | - | 161 | - | 284 | ||||||||||||||||||
Depreciation and amortization | 1 | 4 | 13 | 34 | 14 | 33 | 28 | 71 | ||||||||||||||||||
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | ||||||
Apr. 30, 2014 | Oct. 31, 2013 | Apr. 30, 2014 | Jul. 31, 2013 | Apr. 30, 2014 | Dec. 17, 2013 | Apr. 30, 2014 | Apr. 30, 2014 | Jul. 31, 2013 | |
Inventergy Global, Inc | Inventergy Global, Inc | Former Shareholders [Member] | Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Telecommunications expertise | ' | ' | '20 years | ' | ' | ' | ' | ' | ' |
Carrying value of the Company's investment in Symbio Investment Corp | $990,000 | ' | $990,000 | ' | ' | ' | ' | ' | ' |
Discount rate of Cortelco | ' | ' | ' | ' | ' | ' | 15.22% | ' | ' |
Impairment of investment | 394,000 | 394,000 | 394,000 | ' | ' | ' | ' | ' | ' |
Investments | 596,000 | ' | 596,000 | 990,000 | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | ' | ' | ' | 93.00% | ' | ' | ' |
Equity method investments maximum initial amount | 11,000,000 | ' | 11,000,000 | ' | ' | ' | ' | ' | ' |
Merger dividend | 1,650,000 | ' | 1,650,000 | ' | ' | ' | ' | ' | ' |
Equity method investments initial principal amount | ' | ' | ' | ' | 8,000,000 | ' | ' | ' | ' |
Temporary equity shares issued | ' | ' | ' | ' | ' | ' | ' | 2,750 | ' |
Temporary equity redemption value | ' | ' | ' | ' | ' | ' | ' | $2,750,000 | $0 |
Basis_of_Presentaion_Transacti
Basis of Presentaion - Transaction Related to Notes Payable (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 |
Note payable | ' | ' |
Beginning fair value | $3,004 | ' |
Imputed interest | 340 | ' |
Change in estimates | 114 | ' |
Interest expense | 454 | ' |
Payments | -531 | -201 |
Ending fair value | $2,955 | ' |
Stock_Based_Compensation_Addit
Stock Based Compensation - Additional Information (Detail) (USD $) | 9 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Stock issued during period, shares, employee stock purchase plans | 13,939 | ' |
Number of equity incentive plans granted | 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 | ' |
Share based compensation shares authorized under stock purchase plans exercise price | $0.80 | ' |
Employee Stock Option [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Unrecognized cost of nonvested option | 0 | ' |
Equity Incentive Plan 1997 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of equity incentive plans granted | 0 | ' |
Equity Incentive Plan 1999 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of equity incentive plans granted | 0 | ' |
Equity Incentive Plan 2001 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of shares issued under 1999 equity incentive plan | 0 | ' |
Employee Stock Purchase Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Equity Incentive Plans | 200,000 | ' |
Stock compensation | $341 | $0 |
Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Stock bonuses and restricted stock purchase agreements | 85.00% | ' |
Minimum [Member] | Employee Stock Option [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Options vest period | '4 years | ' |
Maximum [Member] | Employee Stock Option [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Options vest period | '10 years | ' |
Stock_Based_Compensation_Activ
Stock Based Compensation - Activity In Stock Option Plans (Detail) (USD $) | 9 Months Ended |
Apr. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Available for Grant, Beginning of year | 315,944 |
Shares Available For Grant, Granted | 0 |
Shares Available For Grant, Exercised | 0 |
Shares Available For Grant, Cancelled | 30,333 |
Shares Available for Grant, End of year | 346,277 |
Options Outstanding, Beginning of year | 60,333 |
Options Outstanding, Granted | 0 |
Options Outstanding, Exercised | 0 |
Options Outstanding, Cancelled | -30,333 |
Options Outstanding, End of year | 30,000 |
Weighted Average Exercise Price, Beginning of year | $11.78 |
Weighted Average Exercise Price, Granted | $0 |
Weighted Average Exercise Price, Exercised | $0 |
Weighted Average Exercise Price, Cancelled | $16.35 |
Weighted Average Exercise Price, End of year | $7.15 |
Revenue_Recognition_Summary_of
Revenue Recognition - Summary of Company's Revenues from Its Product Lines (Detail) | 9 Months Ended |
Apr. 30, 2014 | |
Cortelco Products and Services [Member] | Equipment/ Software [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
Cortelco Products and Services [Member] | Professional Services [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
Cortelco Products and Services [Member] | Maintenance Contracts [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | '- |
CSPR Products and Services [Member] | Equipment/ Software [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
CSPR Products and Services [Member] | Professional Services [Member] | ' |
Revenues by product lines | ' |
Type of revenues earned | 'Individual sale |
CSPR Products and Services [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 | '- |
Related_Parties_Additional_Inf
Related Parties - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||
Apr. 30, 2014 | Oct. 31, 2013 | Apr. 30, 2014 | Jul. 31, 2013 | Apr. 30, 2014 | Apr. 30, 2014 | Aug. 27, 2007 | Aug. 01, 2007 | |
Put Option [Member] | Symbio Investment Corporation [Member] | Symbio Investment Corporation [Member] | Symbio Investment Corporation [Member] | |||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Strategic Investment in Symbio | ' | ' | ' | ' | ' | ' | $400,000 | $500,000 |
Strategic Investment in Symbio, Shares | ' | ' | ' | ' | ' | ' | 200,000 | 250,000 |
Percentage of shares | ' | ' | ' | ' | ' | ' | 4.00% | 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% | ' | ' | ' | ' | ' |
Impairment of investment | 394,000 | 394,000 | 394,000 | ' | ' | ' | ' | ' |
Investments | $596,000 | ' | $596,000 | $990,000 | ' | ' | ' | ' |
Inventories_Summary_Of_Invento
Inventories - Summary Of Inventories (Detail) (USD $) | Apr. 30, 2014 | Jul. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials and purchased components | $582 | $791 |
Work in process | 720 | 749 |
Finished goods | 3,571 | 4,029 |
Total | 4,873 | 5,569 |
Obsolescence reserve | -506 | -543 |
Inventories | $4,367 | $5,026 |
Notes_Payable_Related_Party_Ad
Notes Payable, Related Party - Additional Information (Detail) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | 61 Months Ended | ||||
Apr. 30, 2014 | Apr. 30, 2013 | Jul. 31, 2013 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 01, 2009 | Jun. 09, 2010 | |
Former Shareholders [Member] | Former Shareholders [Member] | Former Shareholders [Member] | Former Shareholders [Member] | Chairman [Member] | ||||
Short-term Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable to Cortelco former shareholders | $2,955,000 | ' | $3,004,000 | ' | ' | ' | $11,000,000 | ' |
Fair value of notes | ' | ' | ' | 2,955,000 | 2,955,000 | 2,955,000 | ' | ' |
Discount Rate | ' | ' | ' | ' | 15.22% | ' | ' | ' |
Notes Payable Imputed Interest Benefit | ' | ' | ' | 110,000 | 454,000 | ' | ' | ' |
Repayments of notes payable | 531,000 | 201,000 | ' | ' | ' | 3,131,000 | ' | ' |
Current maturities of notes payable - related parties | $338,000 | ' | $330,000 | ' | ' | ' | ' | $186,000 |
Product_Warranties_Additional_
Product Warranties - Additional Information (Detail) | 9 Months Ended |
Apr. 30, 2014 | |
Minimum [Member] | ' |
Product Warranty Disclosure [Line Items] | ' |
Cost of satisfying warranty claims | 0.50% |
Maximum [Member] | ' |
Product Warranty Disclosure [Line Items] | ' |
Cost of satisfying warranty claims | 1.00% |
Cspr Products [Member] | Minimum [Member] | ' |
Product Warranty Disclosure [Line Items] | ' |
Products Warranty Period | '1 year |
Cspr Products [Member] | Maximum [Member] | ' |
Product Warranty Disclosure [Line Items] | ' |
Products Warranty Period | '5 years |
Product_Warranties_Activity_Re
Product Warranties - Activity Related To Product Warranty Liability (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 |
Product warranty liability | ' | ' |
Beginning balance | $156 | $166 |
Warranty cost incurred | -69 | -81 |
Accrued warranty cost | 48 | 68 |
Ending balance | $135 | $153 |
Redeemable_Convertible_Preferr1
Redeemable Convertible Preferred Stock - Additional Information (Detail) (USD $) | 1 Months Ended | |
Dec. 17, 2013 | Apr. 30, 2014 | |
Temporary Equity [Line Items] | ' | ' |
Warrants to purchase of common stock | 1,401,870 | ' |
Proceeds from issuance of common stock | $2,750,000 | ' |
Dividends payable | 1,650,000 | ' |
Class of warrant or right, exercise price of warrants or rights | ' | 1.33 |
Series B Preferred Stock | ' | ' |
Temporary Equity [Line Items] | ' | ' |
Stock issued during period shares acquisition | 2,750 | ' |
Share price | $1,000 | ' |
Redeemable Convertible Preferred Stock | ' | ' |
Temporary Equity [Line Items] | ' | ' |
Redeemable convertible preferred stock to common stock conversion rate | $1.07 | ' |
Temporary equity, redemption price per share | $1.24 | ' |
Convertible preferred stock, nonredeemable or redeemable, issuer option, value | ' | $2,750,000 |
Concentrations_Commitments_and1
Concentrations, Commitments and Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | |||
Feb. 12, 2014 | Apr. 30, 2014 | Apr. 30, 2013 | Feb. 14, 2014 | Jul. 31, 2013 | |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Total accounts receivable | ' | 30.00% | 42.00% | ' | ' |
Total revenue | ' | 36.00% | 42.00% | ' | ' |
Commitment for inventory purchases | ' | $1,814,000 | ' | ' | ' |
Accounts receivable and inventories | ' | 1,000,000 | ' | ' | ' |
Interest rate of loan | ' | 4.00% | ' | ' | ' |
Trade accounts receivable | ' | 800,000 | ' | ' | ' |
Interest Rate Base | ' | 2.00% | ' | ' | ' |
Income Tax Examination Possible Losses | ' | 320,000 | ' | ' | ' |
Income Tax Examination Possible Losses Including Interest And Penalties | ' | ' | ' | 559,807 | ' |
Income Tax Examination, Penalties and Interest Accrued, Total | ' | ' | ' | ' | 96,000 |
Payments for legal settlements | 559,807 | ' | ' | ' | ' |
Loss contingency, period of occurrence | 'March 27, 2014 | ' | ' | ' | ' |
Litigation settlement, amount | 320,000 | ' | ' | ' | ' |
Additional liability recorded | ' | 224,000 | ' | ' | ' |
Borrowings on lines of credit | ' | $0 | ' | ' | $0 |
Cortelco Systems Puerto Rico [Member] | ' | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Line of credit, expiration date | ' | 15-Dec-14 | ' | ' | ' |
Agreement expiration period | ' | 30-Nov-14 | ' | ' | ' |
Customer One [Member] | ' | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Total accounts receivable | ' | 11.00% | 16.00% | ' | ' |
Total revenue | ' | 11.00% | 17.00% | ' | ' |
Customer Two [Member] | ' | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Total accounts receivable | ' | 7.00% | 9.00% | ' | ' |
Total revenue | ' | 10.00% | 14.00% | ' | ' |
Customer Three [Member] | ' | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Total accounts receivable | ' | 6.00% | 9.00% | ' | ' |
Total revenue | ' | 8.00% | 7.00% | ' | ' |
Customer Four [Member] | ' | ' | ' | ' | ' |
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Total accounts receivable | ' | 6.00% | 8.00% | ' | ' |
Total revenue | ' | 7.00% | 4.00% | ' | ' |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 1 Months Ended |
Jul. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' |
Proceeds from divestiture of businesses | $48,000 |
Deferred Revenue, Additions | $52,000 |
Discontinued_Operations_Assets
Discontinued Operations - Assets And Liabilities Related To Discontinued Operations (Detail) (USD $) | Apr. 30, 2014 | Jul. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets of Discontinued Operations | ' | ' |
Trade and other accounts receivable | $0 | $106 |
Prepaid and other current assets | 14 | 26 |
Property and equipment, net | 17 | 20 |
Total assets | 31 | 152 |
Liabilities of Discontinued Operations | ' | ' |
Accounts payable | 0 | 4 |
Accrued expenses and other | 35 | 62 |
Total liabilities | $35 | $66 |
Discontinued_Operations_Conden
Discontinued Operations - Condensed Results Of Operations For Discontinued Operations (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Revenues | $32 | $983 |
Royalties earned from sale of business | 161 | 0 |
Income from discontinued operations | $140 | $240 |
Discontinued_Operations_Assets1
Discontinued Operations - Assets And Liabilities Related To Divestiture (Detail) (USD $) | Apr. 30, 2014 | Jul. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets of Divested Operations | ' | ' |
Cash | $1,611 | $1,649 |
Trade and other accounts receivable | 3,513 | 4,261 |
Prepaid and other current assets | 265 | 231 |
Property and equipment, net | 441 | 483 |
Investments | 596 | 990 |
Total assets | 6,426 | 7,614 |
Liabilities of Divested Operations | ' | ' |
Accounts payable | 2,053 | 2,145 |
Accrued expenses and other | 757 | 967 |
Notes payable - related parties | 3,140 | 3,189 |
Total Liabilities | $5,950 | $6,301 |
Discontinued_Operations_Conden1
Discontinued Operations - Condensed Results Of Operations Related For Divestiture (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Revenues | $13,674 | $15,019 |
Operating expenses | 2,934 | 2,875 |
Interest income (expense) | -454 | 168 |
Income (loss) from divested operations | ($617) | $721 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2014 | Apr. 30, 2013 | Apr. 30, 2014 | Apr. 30, 2013 | |
Income Tax Disclosure [Line Items] | ' | ' | ' | ' |
Income Tax Expense (Benefit) | ($3,000) | $6,000 | ($17,000) | $13,000 |
Deferred tax assets, operating loss carryforwards, state and local | $28,000,000 | ' | $28,000,000 | ' |
Segments_Additional_Informatio
Segments - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2014 | Apr. 30, 2013 | Apr. 30, 2014 | Apr. 30, 2013 | |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Income from discontinued operations | $64,000 | $113,000 | $140,000 | $240,000 |
Ongoing Operating Costs and Expenses [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Income from discontinued operations | ' | ' | ' | $627,000 |
Segments_Segment_Reporting_Act
Segments - Segment Reporting Activity (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Apr. 30, 2014 | Apr. 30, 2013 | Apr. 30, 2014 | Apr. 30, 2013 | Jul. 31, 2013 |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | $4,505 | $4,779 | $14,419 | $15,094 | ' |
Net (loss) income from operations | -183 | -22 | -745 | -194 | ' |
Total assets | 13,906 | ' | 13,906 | ' | 13,115 |
Allowance for doubtful accounts | 158 | ' | 158 | ' | 285 |
Depreciation and amortization | ' | ' | 123 | 71 | ' |
Communications Systems and Services [Member] | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | ' | 323 | ' | 983 | ' |
Net (loss) income from operations | ' | -83 | ' | -387 | ' |
Total assets | ' | 0 | ' | 0 | ' |
Capital expenditures | ' | 0 | ' | 0 | ' |
Allowance for doubtful accounts | ' | 0 | ' | 0 | ' |
Depreciation and amortization | ' | 1 | ' | 4 | ' |
Telephony Products [Member] | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | 2,292 | 2,871 | 7,386 | 8,353 | ' |
Net (loss) income from operations | -184 | 111 | -578 | 251 | ' |
Total assets | 0 | 0 | 0 | 0 | ' |
Capital expenditures | 0 | 3 | 51 | 122 | ' |
Allowance for doubtful accounts | 0 | 0 | 0 | 0 | ' |
Depreciation and amortization | 15 | 13 | 49 | 34 | ' |
Puerto Rico [Member] | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | 2,213 | 1,908 | 7,033 | 6,741 | ' |
Net (loss) income from operations | 1 | 63 | -167 | 182 | ' |
Total assets | 0 | 0 | 0 | 0 | ' |
Capital expenditures | 5 | 56 | 27 | 97 | ' |
Allowance for doubtful accounts | 0 | 0 | 0 | 0 | ' |
Depreciation and amortization | 27 | 14 | 74 | 33 | ' |
Total [Member] | ' | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' |
Revenue | 4,505 | 5,102 | 14,419 | 16,077 | ' |
Net (loss) income from operations | -183 | 91 | -745 | 46 | ' |
Total assets | 0 | 0 | 0 | 0 | ' |
Capital expenditures | 5 | 59 | 78 | 219 | ' |
Allowance for doubtful accounts | 0 | 0 | 0 | 0 | ' |
Depreciation and amortization | $42 | $28 | $123 | $71 | ' |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (Subsequent Event) | 1 Months Ended |
28-May-14 | |
Subsequent Event | ' |
Subsequent Event [Line Items] | ' |
Stockholders equity, reverse stock split | 'one-for-two |