TSS (TSSI) 10-Q 18 Aug 15 2015 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 15, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Registrant Name	TSS, Inc.
Entity Central Index Key	1,320,760
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	TSSI
Entity Common Stock, Shares Outstanding		15,632,004

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 916	$ 1,378
Contract and other receivables, net	3,206	3,951
Costs and estimated earnings in excess of billings on uncompleted contracts	1,035	1,042
Inventories, net	80	154
Prepaid expenses and other current assets	659	243
Total current assets	5,896	6,768
Fixed assets, net	688	670
Goodwill	1,907	1,907
Intangible assets, net	910	979
Other assets	88	91
Total assets	9,489	10,415
Current Liabilities:
Convertible notes payable, current portion, net	600	149
Borrowings under credit facility	1,187	1,171
Accounts payable and accrued expenses	5,192	5,547
Billings in excess of costs and estimated earnings on uncompleted contracts	1,967	2,009
Total current liabilities	8,946	8,876
Convertible notes payable, less current portion, net	0	575
Non-current notes payable, net of discount	791	0
Other liabilities	7	18
Total liabilities	9,744	9,469
Commitments and Contingencies	0	0
Stockholders’ Equity (Deficit):
Preferred stock, $.0001 par value; 1,000 shares authorized at June 30, 2015 and December 31, 2014; none issued	0	0
Common stock, $.0001 par value; 49,000 shares authorized at June 30, 2015 and December 31, 2014; 16,385 and 15,905 issued at June 30, 2015 and December 31, 2014, respectively	2	2
Additional paid-in capital	68,070	67,651
Treasury stock 753 and 696 shares at cost at June 30, 2015 and December 31, 2014, respectively	(1,512)	(1,512)
Accumulated deficit	(66,815)	(65,195)
Total stockholders' equity (deficit)	(255)	946
Total liabilities and stockholders’ equity	$ 9,489	$ 10,415

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2015	Dec. 31, 2014
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000	1,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	49,000	49,000
Common stock, issued	16,385	15,905
Treasury stock, shares	753	696

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Results of Operations:
Revenue	$ 5,847	$ 6,302	$ 13,119	$ 13,361
Cost of revenue	4,405	4,643	9,273	9,467
Gross profit	1,442	1,659	3,846	3,894
Selling, general and administrative expenses	2,425	2,771	5,029	5,710
Depreciation and amortization	148	118	278	241
Total operating costs	2,573	2,889	5,307	5,951
Loss from operations	(1,131)	(1,230)	(1,461)	(2,057)
Other income (expense):
Interest expense, net	(87)	(72)	(159)	(137)
Loss from operations before income taxes	(1,218)	(1,302)	(1,620)	(2,194)
Income tax provision	0	0	0	0
Net loss	$ (1,218)	$ (1,302)	$ (1,620)	$ (2,194)
Basic and diluted loss per share:
Loss per common share	$ (0.08)	$ (0.09)	$ (0.10)	$ (0.15)
Weighted average common shares outstanding	15,665	14,475	15,474	14,473

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - 6 months ended Jun. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit
Balance at Dec. 31, 2014	$ 946	$ 2	$ 67,651	$ (1,512)	$ (65,195)
Balance (in shares) at Dec. 31, 2014		15,905		696
Purchase of treasury stock	0	$ 0	0	$ 0	0
Purchase of treasury stock (in shares)		0		57
Restricted shares granted to employees	0	$ 0	0	$ 0	0
Restricted shares granted to employees (in shares)		480		0
Stock-based compensation	251	$ 0	251	$ 0	0
Stock-based compensation (in shares)		0		0
Warrants issued with debt	168	$ 0	168	$ 0	0
Net loss	(1,620)	0	0	0	(1,620)
Balance at Jun. 30, 2015	$ (255)	$ 2	$ 68,070	$ (1,512)	$ (66,815)
Balance (in shares) at Jun. 30, 2015		16,385		753

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities:
Net loss	$ (1,620)	$ (2,194)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	278	241
Amortization of discount on notes payable	40	32
Provision for doubtful accounts	(11)	(49)
Stock-based compensation	251	250
Changes in operating assets and liabilities:
Restricted cash	0	322
Contract and other receivables	756	2,396
Costs and estimated earnings in excess of billings on uncompleted contracts	7	(255)
Inventories, net	74	0
Prepaid expenses and other assets	(441)	1
Accounts payable and accrued expenses	(355)	(3,139)
Billings in excess of costs and estimated earnings on uncompleted contracts	(42)	(72)
Other liabilities	(11)	(8)
Net cash used in operating activities	(1,074)	(2,475)
Cash Flows from Investing Activities:
Capital expenditures	(199)	(273)
Net cash used in investing activities	(199)	(273)
Cash Flows from Financing Activities:
Payment on convertible notes payable	(150)	(150)
Proceeds from line of credit	16	1,000
Proceeds from issuance of debt	945	0
Net cash provided by financing activities	811	850
Net decrease in cash	(462)	(1,898)
Cash and cash equivalents at beginning of period	1,378	3,291
Cash and cash equivalents at end of period	916	1,393
Supplemental disclosure of cash flow information:
Cash paid for interest	79	99
Cash paid for taxes	67	27
Supplemental non-cash financing information:
Issuance of warrants in connection with debt	$ 168	$ 0

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Significant Accounting Policies	Note 1 – Significant Accounting Policies TSS, Inc. (‘‘TSS’’, the ‘‘Company’’, ‘‘we’’, ‘‘us’’ or ‘‘our’’) provides comprehensive services for the planning, design, construction and maintenance of mission-critical facilities and information infrastructure as well as systems integration services related to this infrastructure. We provide a single source solution for highly technical mission-critical facilities such as data centers, operations centers, network facilities, server rooms, security operations centers, communications facilities and the infrastructure systems that are critical to their function. Our services consist of technology consulting, design and engineering, construction management, facilities management and systems integration. Our corporate offices are in Round Rock, Texas, and we also have facilities in Dulles, Virginia, Columbia, Maryland and Los Altos, California. The accompanying condensed consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial statements and pursuant to the rules and regulations of the SEC for interim reporting, and include the accounts of the Company and its consolidated subsidiaries. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring items) necessary to present fairly the consolidated financial position of the Company and its consolidated results of operations and cash flows. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying condensed consolidated financial statements have also been prepared on the basis that the Company will continue to operate as a going concern. Accordingly, assets and liabilities are recorded on the basis that the Company will be able to realize it assets and discharge its liabilities in the normal course of business. Our history of operating losses, declining revenue, stockholder’s deficit and declining current ratio, by themselves, raise substantial doubt about our ability to continue to operate our business as a going concern. We continue to seek additional funding to support our ongoing operations. In February 2015 we borrowed $ 945,000 5 Our business plans and our assumptions around the adequacy of our liquidity are based on estimates regarding expected revenues and future costs and our ability to secure additional sources of funding if needed. However, our revenue may not meet our expectations or our costs may exceed our estimates. Further, our estimates may change and future events or developments may also affect our estimates. Any of these factors may change our expectation of cash usage in 2015 or significantly affect our level of liquidity, which may require us to take measures to reduce our operating costs or obtain funding in order to continue operating. Any action to reduce operating costs may negatively affect our range of products and services that we offer or our ability to deliver such products and services, which could materially impact our financial results depending on the level of cost reductions taken. These financial statements do not include any adjustments that might result from the Company not being able to continue as a going concern We recognize revenue when pervasive evidence of an arrangement exists, the contract price is fixed or determinable, services have been rendered or goods delivered, and collectability is reasonably assured. Our revenue is derived from fixed-price contracts, time-and-materials contracts, cost-plus-fee contracts (including guaranteed maximum price contracts), facility service and maintenance contracts, and product shipments. Revenue from fixed price contracts is recognized on the percentage of completion method. We apply Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-35, Construction-Type and Production-Type Contracts Revenue on cost-plus-fee contracts is recognized to the extent of costs incurred, plus an estimate of the applicable fees earned. Fixed fees under cost-plus-fee contracts are recorded as earned in proportion to the allowable costs incurred in performance of the contract. Billings in excess of costs and estimated earnings on uncompleted contracts are classified as current liabilities. Costs and estimated earnings in excess of billings, or work in process, are classified as current assets for the majority of our projects. Work in process on contracts is based on work performed but not yet billed to customers as per individual contract terms. Certain of our contracts involve the delivery of multiple elements including design management, system installation and facilities maintenance. Revenues from contracts with multiple element arrangements are recognized as each element is earned based on the relative selling price of each element provided the delivered elements have value to customers on a standalone basis. Amounts allocated to each element are based on its objectively determined fair value, such as the sales price for the service when it is sold separately or competitor prices for similar services. Revenue and related costs for master and other service agreements billed on a time and materials basis are recognized as the services are rendered based on actual labor hours performed at contracted billable rates, and costs incurred on behalf of the customer. Services are also performed under master and other service agreements billed on a fixed fee basis. Under fixed fee master service and similar type service agreements for facilities and equipment, we furnish various unspecified units of service for a fixed price. These services agreements are recognized on the proportional performance method or ratably over the course of the service period and costs are recorded as incurred in performance. We recognize revenue from assembled products when the finished product is shipped and collection of the resulting receivable is reasonably assured. In arrangements where a formal acceptance of products or services is required by the customer, revenue is recognized upon meeting such acceptance criteria. We estimate an allowance for doubtful accounts based on factors related to the specific credit risk of each customer. Historically our credit losses have been minimal. We perform credit evaluations of new customers and may require prepayments or use of bank instruments such as trade letters of credit to mitigate credit risk. As we expand our product offerings and customer base, our risk of credit loss has increased. We monitor outstanding amounts to limit our credit exposure to individual accounts. We continue to pursue collection even if we have fully provided for an account balance. We are currently economically dependent upon our relationship with a large US-based IT Original Equipment Manufacturer (OEM). If this relationship is unsuccessful or discontinues, our business and revenue would suffer. The loss of or a significant reduction in orders from this customer or the failure to provide adequate products or services to them would significantly reduce our revenue. We also periodically perform large construction projects which may comprise a significant portion of our revenues during the construction phase, and which may cause large fluctuations in our quarterly revenues. Three months ended June 30, Sixe Months Ended June 30, 2015 2014 2015 2014 US-based IT OEM 40 % 48 % 47 % 41 % US-based data center company 20 % 7 % 9 % 14 % No other customers represented more than 10 20 29 32 13 10 In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs 64,000 49,000 We do not anticipate that adoption of this guidance will have a material impact on our financial statements when we implement this in fiscal year 2016. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Topic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information	6 Months Ended
	Jun. 30, 2015
Balance Sheet Related Disclosures [Abstract]
Supplemental Balance Sheet Information	Note 2 – Supplemental Balance Sheet Information Receivables June 30, December 31, 2015 2014 Contract and other receivables $ 3,220 $ 3,976 Allowance for doubtful accounts (14) (25) $ 3,206 $ 3,951 Inventory June 30, December 31, 2015 2014 Work in process $ 7 $ 33 Raw materials 73 121 Inventories, net $ 80 $ 154 Goodwill and Intangible Assets June 30, 2015 December 31, 2014 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Intangible assets not subject to amortization: Goodwill $ 1,907 - $ 1,907 - Trade name $ 60 - $ 60 - Intangible assets subject to amortization: Customer relationships $ 906 $ (191) $ 906 $ (146) Acquired software $ 234 $ (99) $ 234 $ (75) We recognized amortization expense related to intangibles of approximately $ 34,000 69,000 US GAAP requires us to perform an impairment test of goodwill on an annual basis or whenever events or circumstances make it more likely than not that impairment of goodwill may have occurred. As part of the annual impairment test, we first have the option to make a qualitative assessment of goodwill for impairment. If we are able to determine through the qualitative assessment that the fair value of a reporting unit more likely than not exceeds its carrying value, no further evaluation is necessary. For those reporting units for which the qualitative assessment is either not performed or indicates that further testing may be necessary, we may then assess goodwill for impairment using a two-step process. The first step requires comparing the fair value of the reporting unit with its carrying amount, including goodwill. If that fair value exceeds the carrying amount, the second step of the process is not required to be performed, and no impairment charge is required to be recorded. If that fair value does not exceed that carrying amount, we must perform the second step, which requires an allocation of the fair value of the reporting unit to all assets and liabilities of that unit as if the reporting unit had been acquired in a purchase business combination and the fair value of the reporting unit was the purchase price. The goodwill resulting from that purchase price allocation is then compared to the carrying amount with any excess recorded as an impairment charge. We have elected to use December 31 as our annual date to test goodwill and intangibles for impairment. As circumstances change that could affect the recoverability of the carrying amount of the assets during an interim period, the Company will evaluate its indefinite lived intangible assets for impairment. We performed a quantitative analysis of our goodwill and intangibles as at December 31, 2014 as part of our annual testing for impairment. We used a combination of valuation methodologies including income and market-based valuation methods, with increased weighting on the income-based approaches and subject company stock-price methods as we felt these options more accurately captured the operations of our reporting units. Although there were events and circumstances in existence at December 31, 2014 that suggest substantial doubt about our ability to continue as a going concern, the valuation results indicated that the fair value of our reporting units was substantially greater than the carrying value, including goodwill, for each of our reporting units. Thus we concluded that there was no impairment as at December 31, 2014 for our goodwill and other long-lived intangible assets. There were no identified triggering events or circumstances that occurred during the three or six-month periods ended June 30, 2015 that would have required an interim impairment analysis of our goodwill and other long-lived intangible assets. Accounts Payable and Accrued Expenses June 30, December 31, 2015 2014 Accounts payable $ 3,219 $ 3,995 Accrued expenses 1,175 961 Compensation, benefits & related taxes 403 574 Other accrued expenses 395 17 Total accounts payable and accrued expenses $ 5,192 $ 5,547

Long term borrowings

Long term borrowings	6 Months Ended
	Jun. 30, 2015
Debt Disclosure [Abstract]
Long term borrowings	Note 3 – Long term borrowings In February 2015 we entered into a multiple advance term loan agreement and related agreements with MHW SPV II, LLC (‘‘MHW’’), an entity affiliated with the Chairman of our Board of Directors, for a loan in the maximum amount of $ 2 945,000 The loan requires interest-only payments made monthly, beginning March 1, 2015, and bears annual interest at a fixed rate of 12 maturity date of February 3, 2020 4% of the amount prepaid if the prepayment is made prior to February 3, 2016 2% of the amount prepaid if the prepayment is made between February 4, 2016 and February 3, 2017 1% of the amount prepaid if the prepayment is made between February 4, 2017 and February 3, 2018 The obligations under the loan are secured by substantially all of our assets pursuant to the terms of a security agreement. The parties also executed a subordination agreement to evidence their agreement that the loan is subordinated to the senior debt held by Bridge Bank, National Association. In conjunction with entering into the loan agreement, the Company and MHW also entered into a warrant (the ‘‘Warrant’’) granting MHW the right to purchase up to 1,115,827 February 3, 2015 0.50 472,500 1.00 425,250 1.30 218,077 204,000 168,000 8,000 June 30, 2015 and $14,000 was amortized during the six-month period ended June 30 Peter H. Woodward, the Chairman of our Board of Directors, is a principal of MHW Capital Management LLC, which is the investment manager of MHW. MHW Capital Management LLC is entitled to a performance-related fee equal to 10% of any appreciation in the valuation of the common stock

Net Loss Per-Share

Net Loss Per-Share	6 Months Ended
	Jun. 30, 2015
Earnings Per Share, Basic and Diluted [Abstract]
Net Loss Per-Share	Note 4 – Net Loss Per-Share Basic and diluted (loss) earnings per share are based on the weighted average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for the purposes of determining diluted earnings per share, includes the effects of dilutive unvested restricted stock, options to purchase common stock and convertible securities including common stock warrants. The effect of such potential common stock is computed using the treasury stock method or the if-converted method, as applicable. Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net loss $ (1,218) $ (1,302) $ (1,620) $ (2,194) Denominator: Weighted-average shares of common stock outstanding 15,665 14,475 15,474 14,473 Dilutive effect of employee stock options and restricted stock awards - - - - Weighted-average shares for diluted net loss per share 15,665 14,475 15,474 14,473 Basic & diluted net loss per share $ (0.08) $ (0.09) $ (0.10) $ (0.15) For the three and six-month periods ended June 30, 2015 and 2014, potentially dilutive shares of 4,421,000 2,984,000

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
Related Party Transactions	Note 5 – Related Party Transactions We lease our facility in Columbia, Maryland from an entity that is 50 69,000 138,000 We have $ 600,000 12,000 4 7,000 8,000 75,000 25,000 14,000 17,000 150,000 We have $ 945,000 MHW. During the three and six-month periods ended June 30, 2015 we paid interest of $ 27,000 36,000

Segment Reporting

Segment Reporting	6 Months Ended
	Jun. 30, 2015
Segment Reporting [Abstract]
Segment Reporting	Note 6 Segment Reporting Segment information reported in the tables below represents the operating segments of the Company organized in a manner consistent with which separate information is available and for which segment results are evaluated regularly by our chief operating decision-maker in assessing performance and allocating resources. Our activities are organized into two major segments: facilities construction and maintenance, and systems integration. Our facilities construction and maintenance unit is involved in the design, construction and maintenance of data center and mission-critical business operations. Our systems integration unit integrates IT equipment for OEM vendors and customers to be used inside data center environments, including modular data centers. We have determined that the systems integration business should be reported as a separate business unit because it was increasingly becoming a greater proportion of our total business, operates with a different business model, and is managed and evaluated separately from our other business. All of our revenues are derived from the U.S. market. Segment operating results reflect earnings before stock-based compensation, acquisition related expenses, other expenses, net, and provision for income taxes. Three Month Periods Six Month Periods ended June 30, ended June 30, 2015 2014 2015 2014 Revenues: Facilities construction and maintenance $ 4,849 $ 4,564 $ 9,655 $ 10,051 System integration services 998 1,738 3,464 3,310 Total revenues $ 5,847 $ 6,302 $ 13,119 $ 13,361 Income (loss) from operations: Facilities construction and maintenance $ 812 $ 364 $ 1,806 $ 1,299 System integration services (202) 314 343 599 Other consolidated activities (1,741) (1,908) (3,610) (3,955) Consolidated loss from operations $ (1,131) $ (1,230) $ (1,461) $ (2,057) Depreciation expense: Facilities construction and maintenance System integration services $ 73 32 $ 138 68 Other consolidated activities 22 32 43 57 Consolidated depreciation expense $ 95 $ 64 $ 181 $ 125 Interest expense Facilities construction and maintenance $ — $ — $ — $ — System integration services — — — — Other consolidated activities 87 72 159 137 Consolidated interest expense $ 87 $ 72 $ 159 $ 137 Total Assets Facilities construction and maintenance $ 5,481 $ 6,543 System integration services 2,392 4,101 Other consolidated activities 1,616 2,101 Total assets $ 9,849 $ 12,745 Other consolidated activities relates to operating costs not specifically attributable to each business segment including sales, marketing, executive and administrative support functions including activities such as finance, human resources and IT.

Significant Accounting Polici13

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Description of Business	Description of Business TSS, Inc. (‘‘TSS’’, the ‘‘Company’’, ‘‘we’’, ‘‘us’’ or ‘‘our’’) provides comprehensive services for the planning, design, construction and maintenance of mission-critical facilities and information infrastructure as well as systems integration services related to this infrastructure. We provide a single source solution for highly technical mission-critical facilities such as data centers, operations centers, network facilities, server rooms, security operations centers, communications facilities and the infrastructure systems that are critical to their function. Our services consist of technology consulting, design and engineering, construction management, facilities management and systems integration. Our corporate offices are in Round Rock, Texas, and we also have facilities in Dulles, Virginia, Columbia, Maryland and Los Altos, California. The accompanying condensed consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) for interim financial statements and pursuant to the rules and regulations of the SEC for interim reporting, and include the accounts of the Company and its consolidated subsidiaries. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring items) necessary to present fairly the consolidated financial position of the Company and its consolidated results of operations and cash flows. These interim financial statements should be read in conjunction with the financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying condensed consolidated financial statements have also been prepared on the basis that the Company will continue to operate as a going concern. Accordingly, assets and liabilities are recorded on the basis that the Company will be able to realize it assets and discharge its liabilities in the normal course of business. Our history of operating losses, declining revenue, stockholder’s deficit and declining current ratio, by themselves, raise substantial doubt about our ability to continue to operate our business as a going concern. We continue to seek additional funding to support our ongoing operations. In February 2015 we borrowed $ 945,000 5 Our business plans and our assumptions around the adequacy of our liquidity are based on estimates regarding expected revenues and future costs and our ability to secure additional sources of funding if needed. However, our revenue may not meet our expectations or our costs may exceed our estimates. Further, our estimates may change and future events or developments may also affect our estimates. Any of these factors may change our expectation of cash usage in 2015 or significantly affect our level of liquidity, which may require us to take measures to reduce our operating costs or obtain funding in order to continue operating. Any action to reduce operating costs may negatively affect our range of products and services that we offer or our ability to deliver such products and services, which could materially impact our financial results depending on the level of cost reductions taken. These financial statements do not include any adjustments that might result from the Company not being able to continue as a going concern
Revenue Recognition	Revenue Recognition We recognize revenue when pervasive evidence of an arrangement exists, the contract price is fixed or determinable, services have been rendered or goods delivered, and collectability is reasonably assured. Our revenue is derived from fixed-price contracts, time-and-materials contracts, cost-plus-fee contracts (including guaranteed maximum price contracts), facility service and maintenance contracts, and product shipments. Revenue from fixed price contracts is recognized on the percentage of completion method. We apply Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-35, Construction-Type and Production-Type Contracts Revenue on cost-plus-fee contracts is recognized to the extent of costs incurred, plus an estimate of the applicable fees earned. Fixed fees under cost-plus-fee contracts are recorded as earned in proportion to the allowable costs incurred in performance of the contract. Billings in excess of costs and estimated earnings on uncompleted contracts are classified as current liabilities. Costs and estimated earnings in excess of billings, or work in process, are classified as current assets for the majority of our projects. Work in process on contracts is based on work performed but not yet billed to customers as per individual contract terms. Certain of our contracts involve the delivery of multiple elements including design management, system installation and facilities maintenance. Revenues from contracts with multiple element arrangements are recognized as each element is earned based on the relative selling price of each element provided the delivered elements have value to customers on a standalone basis. Amounts allocated to each element are based on its objectively determined fair value, such as the sales price for the service when it is sold separately or competitor prices for similar services. Revenue and related costs for master and other service agreements billed on a time and materials basis are recognized as the services are rendered based on actual labor hours performed at contracted billable rates, and costs incurred on behalf of the customer. Services are also performed under master and other service agreements billed on a fixed fee basis. Under fixed fee master service and similar type service agreements for facilities and equipment, we furnish various unspecified units of service for a fixed price. These services agreements are recognized on the proportional performance method or ratably over the course of the service period and costs are recorded as incurred in performance. We recognize revenue from assembled products when the finished product is shipped and collection of the resulting receivable is reasonably assured. In arrangements where a formal acceptance of products or services is required by the customer, revenue is recognized upon meeting such acceptance criteria.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts We estimate an allowance for doubtful accounts based on factors related to the specific credit risk of each customer. Historically our credit losses have been minimal. We perform credit evaluations of new customers and may require prepayments or use of bank instruments such as trade letters of credit to mitigate credit risk. As we expand our product offerings and customer base, our risk of credit loss has increased. We monitor outstanding amounts to limit our credit exposure to individual accounts. We continue to pursue collection even if we have fully provided for an account balance.
Concentrations of Credit Risk	Concentration of Credit Risk We are currently economically dependent upon our relationship with a large US-based IT Original Equipment Manufacturer (OEM). If this relationship is unsuccessful or discontinues, our business and revenue would suffer. The loss of or a significant reduction in orders from this customer or the failure to provide adequate products or services to them would significantly reduce our revenue. We also periodically perform large construction projects which may comprise a significant portion of our revenues during the construction phase, and which may cause large fluctuations in our quarterly revenues. Three months ended June 30, Sixe Months Ended June 30, 2015 2014 2015 2014 US-based IT OEM 40 % 48 % 47 % 41 % US-based data center company 20 % 7 % 9 % 14 % No other customers represented more than 10 20 29 32 13 10
Recently Issued Accounting Pronouncements	In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs 64,000 49,000 We do not anticipate that adoption of this guidance will have a material impact on our financial statements when we implement this in fiscal year 2016. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Topic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue Recognition

Significant Accounting Polici14

Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Schedules of Concentration of Risk, by Risk Factor	The following customers accounted for a significant percentage of our revenues for the periods shown: Three months ended June 30, Sixe Months Ended June 30, 2015 2014 2015 2014 US-based IT OEM 40 % 48 % 47 % 41 % US-based data center company 20 % 7 % 9 % 14 %

Supplemental Balance Sheet In15

Supplemental Balance Sheet Information (Tables)	6 Months Ended
	Jun. 30, 2015
Balance Sheet Related Disclosures [Abstract]
Receivables	Contract and other receivables consist of the following (in ‘000’s): June 30, December 31, 2015 2014 Contract and other receivables $ 3,220 $ 3,976 Allowance for doubtful accounts (14) (25) $ 3,206 $ 3,951
Inventory	We state inventories at the lower of cost or market, using the first-in-first-out-method (in ‘000’s): June 30, December 31, 2015 2014 Work in process $ 7 $ 33 Raw materials 73 121 Inventories, net $ 80 $ 154
Goodwill and Intangible Assets	Goodwill and Intangible Assets consist of the following (in ‘000’s): June 30, 2015 December 31, 2014 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Intangible assets not subject to amortization: Goodwill $ 1,907 - $ 1,907 - Trade name $ 60 - $ 60 - Intangible assets subject to amortization: Customer relationships $ 906 $ (191) $ 906 $ (146) Acquired software $ 234 $ (99) $ 234 $ (75)
Accounts Payable and Accrued Expenses	Accounts payable and accrued expenses consisted of the following (in $’000): June 30, December 31, 2015 2014 Accounts payable $ 3,219 $ 3,995 Accrued expenses 1,175 961 Compensation, benefits & related taxes 403 574 Other accrued expenses 395 17 Total accounts payable and accrued expenses $ 5,192 $ 5,547

Net Loss Per-Share (Tables)

Net Loss Per-Share (Tables)	6 Months Ended
	Jun. 30, 2015
Earnings Per Share, Basic and Diluted [Abstract]
Net Loss Per-Share	The following table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for income from continuing operations. In the table below income represents the numerator and shares represent the denominator (in thousands except per share amounts). Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Numerator: Net loss $ (1,218) $ (1,302) $ (1,620) $ (2,194) Denominator: Weighted-average shares of common stock outstanding 15,665 14,475 15,474 14,473 Dilutive effect of employee stock options and restricted stock awards - - - - Weighted-average shares for diluted net loss per share 15,665 14,475 15,474 14,473 Basic & diluted net loss per share $ (0.08) $ (0.09) $ (0.10) $ (0.15)

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jun. 30, 2015
Quarterly Financial Information Disclosure [Abstract]
Schedule of Segment Reporting Information, by Segment	Revenue and operating result by reportable segment reconciled to reportable net loss for the three and six-month periods ended June 30, 2015 and 2014 and other segment-related information is as follows (in thousands): Three Month Periods Six Month Periods ended June 30, ended June 30, 2015 2014 2015 2014 Revenues: Facilities construction and maintenance $ 4,849 $ 4,564 $ 9,655 $ 10,051 System integration services 998 1,738 3,464 3,310 Total revenues $ 5,847 $ 6,302 $ 13,119 $ 13,361 Income (loss) from operations: Facilities construction and maintenance $ 812 $ 364 $ 1,806 $ 1,299 System integration services (202) 314 343 599 Other consolidated activities (1,741) (1,908) (3,610) (3,955) Consolidated loss from operations $ (1,131) $ (1,230) $ (1,461) $ (2,057) Depreciation expense: Facilities construction and maintenance System integration services $ 73 32 $ 138 68 Other consolidated activities 22 32 43 57 Consolidated depreciation expense $ 95 $ 64 $ 181 $ 125 Interest expense Facilities construction and maintenance $ — $ — $ — $ — System integration services — — — — Other consolidated activities 87 72 159 137 Consolidated interest expense $ 87 $ 72 $ 159 $ 137 Total Assets Facilities construction and maintenance $ 5,481 $ 6,543 System integration services 2,392 4,101 Other consolidated activities 1,616 2,101 Total assets $ 9,849 $ 12,745

Significant Accounting Polici18

Significant Accounting Policies - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 28, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Organization And Summary Of Significant Accounting Policies [Line Items]
Proceeds from Related Party Debt	$ 945,000
Debt Instrument, Term	5 years
Debt Issuance Cost				$ 64,000		$ 49,000
Accounts Receivable [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				10.00%		10.00%
Sales Revenue, Net [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				10.00%
Us Based IT OEM Manufacturer
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage		40.00%	48.00%	47.00%	41.00%
Us Based IT OEM Manufacturer | Accounts Receivable [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				20.00%		29.00%
US Based Retailer Company | Accounts Receivable [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				32.00%		13.00%

Significant Percentage of Our R

Significant Percentage of Our Revenues (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
US-based IT OEM
Concentration Risk, Percentage	40.00%	48.00%	47.00%	41.00%
US-based data center company
Concentration Risk, Percentage	20.00%	7.00%	9.00%	14.00%

Supplemental Balance Sheet In20

Supplemental Balance Sheet Information - Additional Information (Detail) - Jun. 30, 2015 - USD ($)	Total	Total
Condensed Balance Sheet Statements, Captions [Line Items]
Amortization of Intangible Assets	$ 34,000	$ 69,000

Receivables (Detail)

Receivables (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Condensed Balance Sheet Statements, Captions [Line Items]
Contract and other receivables	$ 3,220	$ 3,976
Allowance for doubtful accounts	(14)	(25)
Receivables, Net, Current, Total	$ 3,206	$ 3,951

Inventories (Detail)

Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Inventory [Line Items]
Work in process	$ 7	$ 33
Raw materials	73	121
Inventories, net	$ 80	$ 154

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Goodwill
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,907	$ 1,907
Accumulated Amortization	0	0
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	60	60
Accumulated Amortization	0	0
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	906	906
Accumulated Amortization	(191)	(146)
Acquired software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	234	234
Accumulated Amortization	$ (99)	$ (75)

Accounts Payable and Accrued Ex

Accounts Payable and Accrued Expenses (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accounts Payable and Accrued Liabilities [Line Items]
Accounts payable	$ 3,219	$ 3,995
Accrued expenses	1,175	961
Compensation, benefits & related taxes	403	574
Other accrued expenses	395	17
Total accounts payable and accrued expenses	$ 5,192	$ 5,547

Long term borrowings - Addition

Long term borrowings - Additional Information (Detail) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014	Feb. 28, 2015	Feb. 03, 2015
Debt Instrument [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount				$ 2,000,000
Debt Instrument, Face Amount					$ 945,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%	12.00%
Debt Instrument, Maturity Date, Description		maturity date of February 3, 2020
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,115,827	1,115,827
Class of Warrant or Right, Date from which Warrants or Rights Exercisable		Feb. 3, 2015
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 0.50	$ 0.50
Debt Instrument, Unamortized Discount	$ 168,000	$ 168,000
Amortization of Debt Discount (Premium)		$ 40,000	$ 32,000
Debt Instrument Payment Term One		4% of the amount prepaid if the prepayment is made prior to February 3, 2016
Debt Instrument Payment Term Two		2% of the amount prepaid if the prepayment is made between February 4, 2016 and February 3, 2017
Debt Instrument Payment Term Three		1% of the amount prepaid if the prepayment is made between February 4, 2017 and February 3, 2018
loan agreement [Member]
Debt Instrument [Line Items]
Amortization of Debt Discount (Premium)	8,000	$ 14,000
MHW Capital Management LLC [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 945,000	$ 945,000
Description for performance related percentage		performance-related fee equal to 10% of any appreciation in the valuation of the common stock
First Warrant [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	472,500	472,500
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1	$ 1
Second Warrant [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	425,250	425,250
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.30	$ 1.30
Final Warrant [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	218,077	218,077
Warrant [Member]
Debt Instrument [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted		204,000

Net Loss Per-Share - Additional

Net Loss Per-Share - Additional Information (Detail) - shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares that were not included in computation of diluted net loss per common share	4,421,000	2,984,000

Computation of Basic and Dilute

Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net loss	$ (1,218)	$ (1,302)	$ (1,620)	$ (2,194)
Denominator:
Weighted-average shares of common stock outstanding	15,665	14,475	15,474	14,473
Dilutive effect of employee stock options and restricted stock awards	$ 0	$ 0	$ 0	$ 0
Weighted-average shares for diluted net loss per share	15,665	14,475	15,474	14,473
Basic & diluted net loss per share	$ (0.08)	$ (0.09)	$ (0.10)	$ (0.15)

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Feb. 03, 2015
Related Party Transaction [Line Items]
Annual lease, rate	$ 69,000	$ 69,000	$ 138,000	$ 138,000
Equity Method Investment, Ownership Percentage	50.00%		50.00%
Debt Instrument, Face Amount					$ 945,000
Debt Instrument, Interest Rate, Stated Percentage	12.00%		12.00%
Debt Instrument, Periodic Payment, Interest	$ 7,000	8,000	$ 14,000	17,000
Debt Instrument, Periodic Payment, Principal	75,000	$ 25,000	150,000	$ 150,000
Debt Instrument, Unamortized Discount	168,000		$ 168,000
Lease Expiration Date			Jul. 31, 2016
Convertible Notes Payable [Member]
Related Party Transaction [Line Items]
Debt Instrument, Face Amount	$ 600,000		$ 600,000
Debt Instrument, Interest Rate, Stated Percentage	4.00%		4.00%
Debt Instrument, Unamortized Discount	$ 12,000		$ 12,000
MHW Capital Management LLC [Member]
Related Party Transaction [Line Items]
Debt Instrument, Face Amount	945,000		945,000
Debt Instrument, Periodic Payment, Interest	$ 27,000		$ 36,000

Revenue and Operating Result By

Revenue and Operating Result By Reportable Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Revenues:
Revenues, Total	$ 5,847	$ 6,302	$ 13,119	$ 13,361
Income (loss) from operations:
Operating Income (Loss)	(1,131)	(1,230)	(1,461)	(2,057)
Depreciation expense:
Depreciation	95	64	181	125
Interest expense
Interest Expense	87	72	159	137
Total Assets
Assets, Total	9,489	12,745	9,489	12,745	$ 10,415
Facilities Construction And Maintenance [Member]
Revenues:
Revenues, Total	4,849	4,564	9,655	10,051
Income (loss) from operations:
Operating Income (Loss)	812	364	1,806	1,299
Interest expense
Interest Expense	0	0	0	0
Total Assets
Assets, Total	5,481	6,543	5,481	6,543
System Integration Services [Member]
Revenues:
Revenues, Total	998	1,738	3,464	3,310
Income (loss) from operations:
Operating Income (Loss)	(202)	314	343	599
Depreciation expense:
Depreciation	73	32	138	68
Interest expense
Interest Expense	0	0	0	0
Total Assets
Assets, Total	2,392	4,101	2,392	4,101
Other Consolidated Activities [Member]
Income (loss) from operations:
Operating Income (Loss)	(1,741)	(1,908)	(3,610)	(3,955)
Depreciation expense:
Depreciation	22	32	43	57
Interest expense
Interest Expense	87	72	159	137
Total Assets
Assets, Total	$ 1,616	$ 2,101	$ 1,616	$ 2,101