Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 06, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Swisher Hygiene Inc. | |
Entity Central Index Key | 1,504,747 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17,675,220 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 25,299 | $ 25,228 |
Restricted cash | 318 | 318 |
Accounts receivable | 158 | 2,158 |
Other assets | 1,090 | 1,513 |
Total current assets | 26,865 | 29,217 |
Property and equipment, net | 22 | 26 |
Other noncurrent assets | 158 | 162 |
Total assets | 27,045 | 29,405 |
Current liabilities | ||
Accounts payable | 858 | 587 |
Accrued payroll and benefits | 199 | 235 |
Accrued expense | 2,227 | 2,650 |
Total current liabilities | 3,284 | 3,472 |
Other long-term liabilities | 1,552 | 1,575 |
Total noncurrent liabilities | 1,552 | 1,575 |
Equity | ||
Preferred stock, par value $0.001, authorized 10,000,000 shares; no shares issued and outstanding at March 31, 2016 and December 31, 2015 | 0 | 0 |
Common stock, par value $0.001, authorized 600,000,000 shares; 17,675,220 shares issued and outstanding at March 31, 2016 and December 31, 2015 | 18 | 18 |
Additional paid-in capital | 390,557 | 390,557 |
Accumulated deficit | (367,102) | (364,953) |
Accumulated other comprehensive loss | (1,264) | (1,264) |
Total equity | 22,209 | 24,358 |
Total liabilities and equity | $ 27,045 | $ 29,405 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Swisher Hygiene Inc. stockholders' equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 17,675,220 | 17,675,220 |
Common stock, shares outstanding | 17,675,220 | 17,675,220 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue | ||
Revenue | $ 0 | $ 0 |
Costs and expenses | ||
General and administrative expenses | 2,151 | 2,226 |
Depreciation and amortization | 6 | 0 |
Total costs and expenses | 2,157 | 2,226 |
Loss from continuing operations | (2,157) | (2,226) |
Other income (expense), net | 8 | (24) |
Net loss on continuing operations | (2,149) | (2,250) |
Discontinued operations | ||
Loss from discontinued operations | 0 | (6,553) |
Income tax expense | 0 | (28) |
Net loss on discontinued operations | 0 | (6,581) |
Net Loss | (2,149) | (8,831) |
Comprehensive loss | ||
Foreign currency translation adjustment | 0 | (26) |
Comprehensive loss | $ (2,149) | $ (8,857) |
Loss per share | ||
Basic and diluted (Continuing operations) | $ (0.12) | $ (0.13) |
Basic and diluted (discontinued operations) | $ 0 | $ (0.37) |
Weighted-average common shares used in the computation of loss per share | ||
Basic and diluted | 17,675,220 | 17,750,214 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net loss | $ (2,149) | $ (8,831) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Net loss from discontinued operations, net of tax | 0 | 6,581 |
Depreciation and amortization | 6 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,000 | 0 |
Accounts payable, accrued expense and other liabilities | (211) | (560) |
Other assets and non-current assets | 427 | 252 |
Net cash provided by (used in) operating activities of continuing operations | 73 | (2,558) |
Net cash used in operating activities of discontinued operations | 0 | (3,380) |
Cash provided by (used in) operating activities | 73 | (5,938) |
Investing activities | ||
Purchases of property and equipment | (2) | 0 |
Net cash used in investing activities of continuing operations | (2) | 0 |
Net cash provided by investing activities of discontinued operations | 0 | (1,369) |
Cash provided by investing activities | (2) | (1,369) |
Financing activities | ||
Principal payments on debt | 0 | (592) |
Net cash used in financing activities of continuing operations | 0 | (592) |
Net cash provided by financing activities of discontinued operations | 0 | 4,462 |
Cash provided by financing activities | 0 | 3,870 |
Net increase (decrease) in cash and cash equivalents | 71 | (3,437) |
Cash and cash equivalents at the beginning of the period | 25,228 | 7,233 |
Cash and cash equivalents at the end of the period | $ 25,299 | $ 3,796 |
1. BASIS OF PRESENTATION
1. BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. The Company's Condensed Consolidated Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial position, results of operations, comprehensive loss and cash flows for the periods presented. The information at December 31, 2015 in the Company's Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheet included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The Company's 2015 Annual Report on Form 10-K is referred to in this quarterly report as the 2015 Annual Report. This quarterly report should be read in conjunction with the 2015 Annual Report. Intercompany balances and transactions have been eliminated in consolidation. Tabular information, other than share and per share data, is presented in thousands of dollars. Certain reclassifications, including those described further in Note 2, Discontinued Operations and Assets Held for Sale, have been made to prior year amounts for consistency with the current period presentation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. The Company's significant accounting policies are discussed in Note 1 of the Notes to Consolidated Financial Statements in our 2015 Annual Report. There have been no significant changes to those policies. On August 13, 2015, Swisher Hygiene Inc. announced that it had agreed to sell the stock of its wholly owned U.S. subsidiary Swisher International, Inc. and other assets relating to Swisher Hygiene Inc.'s U.S. operations, which comprised all of the Companys remaining operating interests, to Ecolab Inc. ("Ecolab"). Immediately following the sale of Swisher International, Inc., Swisher Hygiene Inc. became a shell company (as defined in Rule 12b-2 of the Securities and Exchange Act of 1934) with no operating assets and no revenue producing business or operations. We refer to the transaction pursuant to the purchase agreement between the Company and Ecolab dated August 12, 2015 as the "Sale Transaction". At closing, Ecolab paid the closing purchase price of $40.5 million, less a $2.0 million holdback to address working capital and other adjustments in accordance with the agreement governing the Sale Transaction. The net proceeds were adjusted by the following items subsequent to closing: an increase of $0.2 million receivable for the final adjusted cash balance, a decrease of $2.0 million of transaction costs for consulting and legal fees, and a decrease of $0.9 million purchased cash balance, net of $0.2 million debt assumed. In the Sale Transaction, the Company retained certain debt and liabilities as set forth in the purchase agreement governing the sale. The sale was approved at the Annual Meeting of Stockholders on October 15, 2015, and the sale was completed on November 2, 2015, with an effective date of November 1, 2015. Subsequent to the Sale Transaction, it was determined the $2.0 million holdback would be paid to the Company without any adjustment for working capital. At December 31, 2015, the $2.2 million amount in accounts receivable on the Newly Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update ASU No. 2016-02, Leases (Topic 842) |
2. DISCONTINUED OPERATIONS AND
2. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | Discontinued Operations Due to the Sale Transaction discussed above in Note 1 - Basis of Presentation, the Company performed an impairment analysis of its long-lived assets in accordance with ASC 360-10, Impairment or Disposal of Long-Lived Assets Intangible-Goodwill and Other as discussed further in Assets Held for Sale below and in Note 3, " Other Intangible Assets In addition to these impairment charges, a loss of $2.6 million was recorded in discontinued operations in the fourth quarter of 2015 as a result of the Sale Transaction. The following table summarizes the results of discontinued operations for the three months ended March 31, 2015: Three Months Ended March 31, 2015 Revenue $ 43,841 Cost of sales 19,962 Route expense 11,692 Selling, general and administrative 14,288 Depreciation and amortization 4,590 Other income (138 ) Income tax expense 28 Net loss from discontinued operations $ (6,581 ) Assets Held For Sale The results of operations for the disposal groups, which were included in continuing operations in the Companys Quarterly Report on Form 10-Q for , have been presented as discontinued operations in this quarterly . In accordance with ASC 360, Property, Plant and Equipment During 2014, the Company updated its estimates of the fair value of certain linen routes and operations to reflect various events that occurred during the year. In the second quarter of 2014, n the fourth quarter of 2014, the linen processing operation was closed and for the three months ended March 31, 2015 in the above table During March 2015, the Board of Directors of the Company approved a resolution to sell the Companys remaining linen operation. In accordance with ASC 360, Property, Plant and Equipment, he Company completed the sale of this operation receiving $4.0 million in cash and notes receivable plus purchased accounts receivables, resulting in a gain of $0.9 million. As described above, on October 15, 2015 at the Annual Meeting of Stockholders, the sale of Swisher International, Inc. and other assets relating to Swisher Hygiene Inc.'s U.S. operations, which comprised all of the Companys remaining operating interests to Ecolab Inc. was approved, and the Sale Transaction was completed on November 2, 2015. |
3. OTHER INTANGIBLE ASSETS
3. OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
OTHER INTANGIBLE ASSETS | The Companys accounting policy was to perform an annual impairment test in the fourth quarter or more frequently whenever events or circumstances indicated that the carrying value of intangible assets may not be recoverable. On a quarterly basis, we monitored the key drivers of fair value to detect the existence of indicators or changes that would warrant an interim impairment test for our intangible assets. Due to the Sale Transaction, the Company performed an impairment analysis of its assets in accordance with ASC 360-10, Impairment or Disposal of Long-Lived Assets, Amortization expense on finite lived intangible assets for the three months ended March 31, 2015 was $1.7 million, which was included in continuing operations in the Companys Quarterly Report on Form 10-Q for the three months ended March 31, 2015, and is included in discontinued operations in the condensed consolidated statement of operations and comprehensive loss in this quarterly report |
4. ACCRUED EXPENSES
4. ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Expenses | |
ACCRUED EXPENSES | The details of accrued expenses are as follows: March 31, 2016 December 31, 2015 Honeycrest Holdings, Ltd. litigation reserve $ 1,667 $ 1,667 Accrued legal and professional fees 406 441 Accrued lease expense - 284 Other accruals 154 258 Total other income (expense), net $ 2,227 $ 2,650 In connection with the Honeycrest Holdings, Ltd. Litigation |
5. LONG-TERM DEBT AND OBLIGATIO
5. LONG-TERM DEBT AND OBLIGATIONS | 3 Months Ended |
Mar. 31, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
LONG-TERM DEBT AND OBLIGATIONS | A portion of the proceeds from the Sale Transaction were used to pay off the outstanding debt and Ecolab assumed capital leases in conjunction with the Sale Transaction and thus, the long-term debt and obligations balances as of March 31, 2016 and December 31, 2015 were zero. Prior to the Sale Transaction, the Company had long-term debt and obligations as described below. See Note 6, Other Income (Expense), Net Notes Payable In connection with certain acquisitions, the Company incurred or assumed notes payable as part of the purchase price. These obligations bore interest at rates ranging between 3.7% and 4.0%. The notes were paid in full with the proceeds from the Sale Transaction and the letters of credit securing a portion of the notes were cancelled. Convertible promissory notes During 2012 and 2011, the Company issued eighteen convertible promissory notes with an aggregate principal value of $10.9 million as part of total consideration paid for acquisitions that were recorded at fair value on the date of issuance and bore an interest rate of 4.0%. The Company made quarterly cash payments through each notes maturity date. These notes were paid in full with the proceeds from the Sale Transaction. Capital lease obligations and Other Financing The Company entered into capitalized lease obligations with third party finance companies to finance the cost of certain dish machines. These obligations bore interest at rates ranging between 4.0% and 18.4%. The Company also entered into notes payables with third party finance companies to pay various insurance premiums. These obligations bore interest at rates ranging between 2.3% and 2.8%. The capitalized leases and notes payable were either cancelled or assumed by Ecolab as part of the Sale Transaction. 2014 Revolving Credit Facility On August 29, 2014, the Company entered into a $20.0 million revolving credit facility, through the execution of a Loan and Security Agreement, by and among the Company, as Guarantor, and certain subsidiaries of the Company, collectively, as Borrower, and Siena Lending Group LLC, as Lender (the Credit Facility). Interest on borrowings under the Credit Facility accrued at the base rate, as defined in the Credit Facility, plus 2.00% and were payable monthly. The Credit Facility was paid in full and terminated on November 2, 2015 in connection with the Sale Transaction. |
6. OTHER INCOME (EXPENSE), NET
6. OTHER INCOME (EXPENSE), NET | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | Other expense of continuing operations consists of the following for the three months ended March 31, 2016 and 2015: Three Months Ended March 31, 2016 2015 Interest income $ 8 $ - Interest expense - (24 ) Total other income (expense), net $ 8 $ (24 ) Other income (expense) of discontinued operations consists of the following for the three months ended March 31, 2015: Three Months Ended March 31, 2015 Interest expense $ (71 ) Foreign currency (71 ) Other 280 Total other income (expense), net $ 138 |
7. SUPPLEMENTAL CASH FLOW INFOR
7. SUPPLEMENTAL CASH FLOW INFORMATION | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | Three Months Ended March 31, 2016 2015 Cash paid for interest $ - $ 95 Cash received from interest $ 8 $ - |
8. LOSS PER SHARE
8. LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | Basic net loss attributable to common stock per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Shares of common stock underlying outstanding stock options of which the market price of the common stock is higher than the exercise price of the related stock awards and unvested restricted stock units of zero and 6,603 were not included in the computation of diluted loss per share for the three months ended March 31, 2016 and 2015, respectively, since their inclusion would be anti-dilutive. |
9. INCOME TAXES
9. INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | In projecting the Companys income tax expense for 2016, management has concluded that it is not more likely than not that the Company will realize the benefit of its deferred tax assets and as a result a full valuation allowance will be required as of December 31, 2016. Therefore, the Company has not recognized a tax benefit as it relates to the current loss for the period ended March 31, 2016. The Companys tax provision has an unusual relationship to pretax loss mainly because of the existence of a full deferred tax asset valuation allowance. This circumstance generally results in a zero net tax provision since the income tax expense or benefit that would otherwise be recognized is offset by the change to the valuation allowance. Tax expense recorded in the first quarter of 2015 included the accrual of income tax expense related to an additional valuation allowance in connection with the tax amortization of the Companys indefinite-lived intangible assets that was not available to offset existing deferred tax assets (termed a naked credit). Specifically, the Company did not consider the deferred tax liabilities related to indefinite lived intangible assets when determining the need for a valuation allowance. |
10. RELATED PARTY TRANSACTIONS
10. RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | The Company paid fees for training course development and utilization of the delivery platform from a company, the majority of which is owned by a partnership in which a significant shareholder, former director and three former executives of the Company have a controlling interest. Fees paid during the three months ended March 31, 2016 and 2015 were zero and less than $0.1 million, respectively and are included in discontinued operations in the consolidated statement of operations and comprehensive loss. The Company was obligated to make lease payments pursuant to certain real property and equipment lease agreements with employees that were former owners of acquired companies. Such lease payments during the three months ended March 31, 2016 and 2015 were zero and $0.2 million, respectively. |
11. COMMITMENTS AND CONTINGENCI
11. COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Guarantees In connection with a distribution agreement entered into in December 2010, the Company agreed that the distributor's operating cash flows associated with the agreement would not fall below certain agreed-to minimums, subject to certain pre-defined conditions, over the ten year term of the distribution agreement. If the distributor's annual operating cash flow fell below the agreed-to annual minimums, the Company would have reimbursed the distributor for any such short fall up to a pre-designated amount. The distributor agreement was assumed by Ecolab in connection with the Sale Transaction. LEGAL MATTERS The Companys existing litigation matters are discussed in the Securities Litigation and Other Matters sections below. Additionally, we may be involved in other litigation matters in the future. The results of these matters cannot be predicted with certainty and no assurance can be given that the ultimate resolution of any legal or administrative proceedings or disputes will not have a material adverse effect on our financial condition and results of operations. Securities Litigation On May 21, 2012, a stockholder derivative action was brought against the Company's former CEO and former CFO and the Company's then directors for alleged breaches of fiduciary duty by a purported Company stockholder in the United States District Court for the Southern District of New York. In this derivative action, captioned Arsenault v. Berrard, et al. On August 13, 2012, the Arsenault derivative action, along with a related putative securities class action pending in the Southern District of New York, was transferred to the United States District Court for the Western District of North Carolina where other related putative securities class actions were pending. All actions were consolidated under the caption In re Swisher Hygiene Inc. Securities and Derivative Litigation On September 8, 2015, a lawsuit seeking to be certified as a class action ( Paul Berger v. Swisher Hygiene Inc., et al., Case No. 2015 CH 13325 (Ill. Cir. Ct. Cook Co.) On October 6, 2015, Defendants filed a motion to dismiss the Illinois action given that a substantially similar action, Raul Raul On September 11, 2015, a derivative and putative class action ( Malka Raul v. Swisher Hygiene Inc. et al., Case No. 15-CVS-16703 (Superior Court, Mecklenburg County, North Carolina) On November 5, 2015, defendants in the Raul case filed motions to dismiss, and on November 23, 2015, the plaintiff filed a motion to dismiss as moot and a motion for an award of attorneys fees. Oral arguments of the plaintiffs and defendants motions occurred on January 12, 2016. In supplemental briefing plaintiff advised the Court that it intended to withdraw its motion to dismiss and amend its complaint to include newly discovered information. On January 28, 2016, the Court granted Ecolabs motion to dismiss and plaintiffs permission to file an amended complaint, preserved defendants motions to dismiss for future consideration and deferred consideration of plaintiffs motion for award of attorneys fees. On February 11, 2016, the plaintiff in the Raul case filed her amended complaint bringing the action derivatively on behalf of Swisher Hygiene Inc., individually and on behalf of all others similarly, against the members of Swisher Hygiene Inc.s board of directors and Swisher Hygiene Inc. The plaintiff alleged a claim for declaratory relief against the individual defendants, a claim for breach of fiduciary duty against the individual defendants, and derivative claims for breach of fiduciary duties, unjust enrichment, abuse of control, and waste relating to the Sale Transaction and the Plan of Dissolution. On February 24, 2016, following a review of the amended complaint, defense counsel advised plaintiffs counsel of certain factual and legal errors contained in the amended complaint, and further advised of defendants intention to seek reimbursement for expenses, including attorneys fees, if the amended complaint was not withdrawn. On February 29, 2016, plaintiff filed a notice of voluntary dismissal and, on March 3, 2016, the amended complaint was dismissed with prejudice as to the plaintiff, with each side bearing its own costs and expenses. On October 28, 2015, a civil suit was filed against Swisher Hygiene Inc. and related entities in the Commonwealth of Puerto Rico, Gerardo Jimenez Pacheco v. Service Puerto Rico, LLC, et al. Civil No. D AC2015-2256 (Commonwealth of Puerto Rico). Plaintiff alleges that he sold assets of his privately held company to Service Puerto Rico in February 2011 in exchange for cash and a $375,000 note that was convertible into Swisher Hygiene Inc., shares of common stock. Plaintiff alleges breach of contract, defect in consent, joint and several liability, and abuse of process, all of which appear to be based on plaintiffs reliance on Swisher Hygiene Inc.s 2011 financial statements that were subsequently withdrawn and restated. Plaintiff requested a total of $475,000 in damages for all causes of action, plus attorneys fees and pre-judgment interests. Other Matters The Honeycrest Holdings, Ltd. v. Integrated Brands, Inc Honeycrest Holdings, Ltd. v. Integrated Brands, Inc Honeycrest Holdings, Ltd. v. Coolbrands International, Inc., et al., The court has not set a date for oral argument nor has it set a date by which it would rule on Plaintiff's motion to amend its complaint. On October 7, 2015, the Company entered into a Deferred Prosecution Agreement (the DPA) with the United States Attorneys Office for the Western District of North Carolina (USAO) relating to the USAOs investigation of the Companys accounting practices. Under the terms of the DPA, the USAO filed, but deferred prosecution of, a Bill of Information charging Swisher Hygiene Inc. with conspiracy to commit securities fraud and other charges relating to the Companys accounting and financial reporting practices reflected in the Company's originally filed Quarterly Reports on Form 10-Q for the periods ended March 31, 2011, June 30, 2011, and September 30, 2011. Pursuant to the DPA, the Company agreed to pay a $2 million fine to the USAO payable in four annual installments of $500,000 each if the Company is financially able to do so. Pursuant to the terms of the DPA, the fine became immediately due and payable in full upon a change in control of the Company. As a result, the fine was paid in full upon the closing of the Sale Transaction, and we are awaiting dismissal of the Bill of Information pursuant to the terms of the DPA. In 2012, the Company was contacted by the staff of the Atlanta Regional Office of the SEC after publicly announcing the Audit Committee's internal review and the delays in filing our periodic reports. The Company has been asked to make certain individuals available and to provide certain information about these matters to the SEC. The Company is fully cooperating with the SEC. Any action by the SEC or other government agency could result in criminal or civil sanctions against the Company and/or certain of its current or former officers, directors or employees. |
12. SUBSEQUENT EVENTS
12. SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On April 8, 2016, the Board of Directors of Swisher Hygiene Inc. unanimously approved the filing of a Certificate of Dissolution (the Certificate) on Friday, May 27, 2016 (the Final Record Date). The Certificate will be filed with the Secretary of State of the State of Delaware on the Final Record Date. The filing of the Certificate will be made pursuant to a Plan of Dissolution approved by stockholders at the Companys annual meeting held on October 15, 2015. The Company has notified OTCQB that the Certificate will be filed on the Final Record Date and that as of 6:00 pm Eastern Time on the Final Record Date, the Companys shares will cease to be traded on OTCQB. Also after the Final Record Date, the Companys stock transfer books will be closed and transfers of the shares of the Companys common stock will no longer be recorded. The Company also requested relief from the Securities and Exchange Commission (the SEC) to suspend certain of its reporting obligations under the Securities Exchange Act of 1934, as amended (No Action Letter). If the SEC grants such relief, the Company intends to report any further material events relating to the liquidation and dissolution on Form 8-K. Pursuant to the Plan of Dissolution, and under Delaware law, the dissolution of the Company shall be effective as of 6:00 pm Eastern Time on the Final Record Date. Under Delaware law, the dissolved corporation is continued for three (3) years (unless extended by direction of the Court of Chancery) to enable the Companys directors to wind up the affairs of the corporation, including the discharge of the Companys liabilities and to distribute to the stockholders any remaining assets. No assurances can be made as to if or when any such distribution will be made, or the amount of any such distribution, if one is made. Any distribution, however, would be made to the Companys stockholders of record as of the Final Record Date. As a result of the Board's approval to file the Certificate, liquidation basis accounting ASC 205-30, Liquidation Basis of Accounting |
1. BASIS OF PRESENTATION (Polic
1. BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Basis Of Presentation Policies | |
Basis of Presentation | The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. The Company's Condensed Consolidated Financial Statements reflect all adjustments that management believes are necessary for the fair presentation of their financial position, results of operations, comprehensive loss and cash flows for the periods presented. The information at December 31, 2015 in the Company's Condensed Consolidated Balance Sheets included in this quarterly report was derived from the audited Consolidated Balance Sheet included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The Company's 2015 Annual Report on Form 10-K is referred to in this quarterly report as the 2015 Annual Report. This quarterly report should be read in conjunction with the 2015 Annual Report. Intercompany balances and transactions have been eliminated in consolidation. Tabular information, other than share and per share data, is presented in thousands of dollars. Certain reclassifications, including those described further in Note 2, Discontinued Operations and Assets Held for Sale, have been made to prior year amounts for consistency with the current period presentation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. The Company's significant accounting policies are discussed in Note 1 of the Notes to Consolidated Financial Statements in our 2015 Annual Report. There have been no significant changes to those policies. On August 13, 2015, Swisher Hygiene Inc. announced that it had agreed to sell the stock of its wholly owned U.S. subsidiary Swisher International, Inc. and other assets relating to Swisher Hygiene Inc.'s U.S. operations, which comprised all of the Companys remaining operating interests, to Ecolab Inc. ("Ecolab"). Immediately following the sale of Swisher International, Inc., Swisher Hygiene Inc. became a shell company (as defined in Rule 12b-2 of the Securities and Exchange Act of 1934) with no operating assets and no revenue producing business or operations. We refer to the transaction pursuant to the purchase agreement between the Company and Ecolab dated August 12, 2015 as the "Sale Transaction". At closing, Ecolab paid the closing purchase price of $40.5 million, less a $2.0 million holdback to address working capital and other adjustments in accordance with the agreement governing the Sale Transaction. The net proceeds were adjusted by the following items subsequent to closing: an increase of $0.2 million receivable for the final adjusted cash balance, a decrease of $2.0 million of transaction costs for consulting and legal fees, and a decrease of $0.9 million purchased cash balance, net of $0.2 million debt assumed. In the Sale Transaction, the Company retained certain debt and liabilities as set forth in the purchase agreement governing the sale. The sale was approved at the Annual Meeting of Stockholders on October 15, 2015, and the sale was completed on November 2, 2015, with an effective date of November 1, 2015. Subsequent to the Sale Transaction, it was determined the $2.0 million holdback would be paid to the Company without any adjustment for working capital. At December 31, 2015, the $2.2 million amount in accounts receivable on the |
Newly Issued Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update ASU No. 2016-02, Leases (Topic 842) |
2. DISCONTINUED OPERATIONS AN19
2. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations And Assets Held For Sale Tables | |
Summary of discontinued operations | Three Months Ended March 31, 2015 Revenue $ 43,841 Cost of sales 19,962 Route expense 11,692 Selling, general and administrative 14,288 Depreciation and amortization 4,590 Other income (138 ) Income tax expense 28 Net loss from discontinued operations $ (6,581 ) |
4. ACCRUED EXPENSES (Tables)
4. ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accrued Expenses Tables | |
Details of accrued expenses | March 31, 2016 December 31, 2015 Honeycrest Holdings, Ltd. litigation reserve $ 1,667 $ 1,667 Accrued legal and professional fees 406 441 Accrued lease expense - 284 Other accruals 154 258 Total other income (expense), net $ 2,227 $ 2,650 |
6. OTHER INCOME (EXPENSE), NET
6. OTHER INCOME (EXPENSE), NET (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income Expense Net Tables | |
Schedule of other expense | Other expense of continuing operations consists of the following for the three months ended March 31, 2016 and 2015: Three Months Ended March 31, 2016 2015 Interest income $ 8 $ - Interest expense - (24 ) Total other income (expense), net $ 8 $ (24 ) Other income (expense) of discontinued operations consists of the following for the three months ended March 31, 2015: Three Months Ended March 31, 2015 Interest expense $ (71 ) Foreign currency (71 ) Other 280 Total other income (expense), net $ 138 |
7. SUPPLEMENTAL CASH FLOW INF22
7. SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental cash flow information | Three Months Ended March 31, 2016 2015 Cash paid for interest $ - $ 95 Cash received from interest $ 8 $ - |
2. DISCONTINUED OPERATIONS AN23
2. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details 1) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets held for sale, Current assets: | ||
Restricted cash | $ 318 | $ 318 |
2. DISCONTINUED OPERATIONS AN24
2. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income tax expense | $ 0 | $ 28 |
Net loss from discontinued operations | $ 0 | (6,581) |
Discontinued operations | ||
Revenue | 43,841 | |
Cost of sales | 19,962 | |
Route expense | 11,692 | |
Selling, general and administrative | 14,288 | |
Depreciation and amortization | 4,590 | |
Other income | (138) | |
Income tax expense | 28 | |
Net loss from discontinued operations | $ (6,581) |
3. OTHER INTANGIBLE ASSETS (Det
3. OTHER INTANGIBLE ASSETS (Details Narrative) $ in Thousands | 3 Months Ended |
Mar. 31, 2015USD ($) | |
Other Intangible Assets Details Narrative | |
Amortization expense | $ 1,700 |
4. ACCRUED EXPENSES (Details)
4. ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Accrued Expenses Details | ||
Honeycrest Holdings, Ltd. litigation reserve | $ 1,667 | $ 1,667 |
Accrued legal and professional fees | 406 | 441 |
Accrued lease expense | 0 | 284 |
Other accruals | 154 | 258 |
Total other income (expense), net | $ 2,227 | $ 2,650 |
5. LONG-TERM DEBT AND OBLIGAT27
5. LONG-TERM DEBT AND OBLIGATIONS (Details Narrative) | Mar. 31, 2016 | Dec. 31, 2015 |
Notes Payable [Member] | Minimum [Member] | ||
Obligations bore interest rates | 3.70% | 3.70% |
Notes Payable [Member] | Maximum [Member] | ||
Obligations bore interest rates | 4.00% | 4.00% |
Capital Lease Obligation [Member] | Minimum [Member] | ||
Obligations bore interest rates | 4.00% | 4.00% |
Capital Lease Obligation [Member] | Maximum [Member] | ||
Obligations bore interest rates | 18.40% | 18.40% |
Notes Payable Third Party [Member] | Minimum [Member] | ||
Obligations bore interest rates | 2.30% | 2.30% |
Notes Payable Third Party [Member] | Maximum [Member] | ||
Obligations bore interest rates | 2.80% | 2.80% |
6. OTHER INCOME (EXPENSE), NE28
6. OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other | $ 8 | $ (24) |
Continuing Operations [Member] | ||
Interest income | 8 | 0 |
Interest expense | 0 | (24) |
Total other income (expense), net | $ 8 | (24) |
Discontinued Operations [Member] | ||
Interest expense | (71) | |
Foreign currency | (71) | |
Other | 280 | |
Total other income (expense), net | $ 138 |
7. SUPPLEMENTAL CASH FLOW INF29
7. SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 0 | $ 95 |
Cash received from interest | $ 8 | $ 0 |
8. LOSS PER SHARE (Details Narr
8. LOSS PER SHARE (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Anti-Dilutive securities not included in the computation of diluted loss per share | 0 | 6,603 |
10. RELATED PARTY TRANSACTIONS
10. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transactions [Abstract] | ||
Lease payments, Related Party | $ 0 | $ 200 |