Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'DecisionPoint Systems, Inc. | ' |
Entity Central Index Key | '0001505611 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 12,144,096 |
Unaudited_Condensed_Consolidat
Unaudited Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash | $270 | $1,103 |
Accounts receivable, net | 12,685 | 12,287 |
Due from related party | 195 | 202 |
Inventory, net | 918 | 811 |
Deferred costs | 3,773 | 3,955 |
Deferred tax assets | 47 | 48 |
Prepaid expenses and other current assets | 919 | 302 |
Total current assets | 18,807 | 18,708 |
Property and equipment, net | 139 | 179 |
Other assets, net | 151 | 205 |
Deferred costs, net of current portion | 1,810 | 2,124 |
Goodwill | 8,485 | 8,571 |
Intangible assets, net | 4,472 | 6,023 |
Total assets | 33,864 | 35,810 |
Current liabilities | ' | ' |
Accounts payable | 13,036 | 11,080 |
Accrued expenses and other current liabilities | 3,040 | 2,895 |
Lines of credit | 4,247 | 3,430 |
Current portion of debt | 1,963 | 1,800 |
Due to related parties | 160 | 1 |
Accrued earn out consideration | 331 | 1,186 |
Warrant liability | 933 | ' |
Unearned revenue | 6,639 | 7,409 |
Total current liabilities | 30,349 | 27,801 |
Long term liabilities | ' | ' |
Unearned revenue, net of current portion | 2,472 | 2,883 |
Debt, net of current portion and discount | 2,099 | 2,922 |
Accrued earn out consideration, net of current portion | 154 | 159 |
Deferred tax liabilities | 1,038 | 1,078 |
Other long term liabilities | 76 | 80 |
Total liabilities | 36,188 | 34,923 |
Commitments and contingencies and subsequent event | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Cumulative Convertible Preferred stock, $0.001 par value, 10,000,000 shares authorized, 1,105,155 shares issued and outstanding, including cumulative and imputed preferred dividends of $586 and $361, and with a liquidation preference of $8,983 and $8,758 at September 30, 2013 and December 31, 2012, respectively | 7,609 | 7,370 |
Common stock, $0.001 par value, 100,000,000 shares authorized, 12,297,979 issued and 12,144,096 outstanding as of September 30, 2013, and 9,300,439 issued and 9,146,556 outstanding as of December 31, 2012 | 12 | 9 |
Additional paid-in capital | 16,621 | 16,132 |
Treasury stock, 153,883 shares of common stock | -205 | -205 |
Accumulated deficit | -25,720 | -21,674 |
Unearned ESOP shares | -664 | -767 |
Accumulated other comprehensive income | 23 | 22 |
Total stockholders' (deficit) equity | -2,324 | 887 |
Total liabilities and stockholders' equity | $33,864 | $35,810 |
Unaudited_Condensed_Consolidat1
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shared authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 1,105,155 | 1,105,155 |
Preferred stock, shares outstanding | 1,105,155 | 1,105,155 |
Preferred stock, dividends (in dollars) | $586 | $361 |
Preferred Stock, Liquidation preference (in dollars) | $8,983 | $8,758 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shared authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 12,297,979 | 9,300,439 |
Common stock, shares outstanding | 12,144,096 | 9,146,556 |
Treasury stock, shares | 153,883 | 153,883 |
Unaudited_Condensed_Consolidat2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net sales | $17,575 | $18,567 | $46,067 | $54,144 |
Cost of sales | 14,113 | 14,445 | 36,216 | 42,559 |
Gross profit | 3,462 | 4,122 | 9,851 | 11,585 |
Selling, general and administrative expense | 4,485 | 4,741 | 13,981 | 13,370 |
Adjustment to earn-out obligations | -820 | ' | -820 | ' |
Operating loss | -203 | -619 | -3,310 | -1,785 |
Other expense: | ' | ' | ' | ' |
Interest expense | 241 | 350 | 723 | 698 |
Other income, net | -168 | -19 | -182 | -80 |
Total other expense | 73 | 331 | 541 | 618 |
Net loss before income taxes | -276 | -950 | -3,851 | -2,403 |
Provision (benefit) for income taxes | -109 | 64 | -466 | 132 |
Net loss | -167 | -1,014 | -3,385 | -2,535 |
Cumulative and imputed preferred stock dividends | -223 | -249 | -661 | -710 |
Net loss attributable to common shareholders | -390 | -1,263 | -4,046 | -3,245 |
Net loss per share - | ' | ' | ' | ' |
Basic and diluted | ($0.04) | ($0.15) | ($0.44) | ($0.42) |
Weighted average shares outstanding - | ' | ' | ' | ' |
Basic and diluted | 10,019,109 | 8,182,103 | 9,117,969 | 7,698,635 |
Comprehensive loss | ($166) | ($992) | ($3,383) | ($2,507) |
Unaudited_Consolidated_Stateme
Unaudited Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Total | Convertible Preferred stock | Common stock | Additional paid-in capital | Treasury stock | Accumulated deficit | Unearned ESOP shares | Accumulated other comprehensive income |
In Thousands | ||||||||
Balance at Dec. 31, 2012 | $887 | $7,370 | $9 | $16,132 | ($205) | ($21,674) | ($767) | $22 |
Balance, Shares at Dec. 31, 2012 | ' | 1,105 | 9,300 | ' | ' | ' | ' | ' |
Net loss | -3,385 | ' | ' | ' | ' | -3,385 | ' | ' |
Foreign currency translation adjustment | 1 | ' | ' | ' | ' | ' | ' | 1 |
Common stock issued to employee as part of a specified portion of their regular annual cash bond | 83 | ' | ' | 83 | ' | ' | ' | ' |
Common stock issued to employee as part of a specified portion of their regular annual cash bond, Shares | ' | ' | 71 | ' | ' | ' | ' | ' |
Common stock issued in private placement, net of costs | 403 | ' | 3 | 400 | ' | ' | ' | ' |
Common stock issued in private placement, net of costs, Shares | ' | ' | 2,927 | ' | ' | ' | ' | ' |
Employee stock-based compensation | 6 | ' | ' | 6 | ' | ' | ' | ' |
Accrued dividends on preferred stock | -422 | 239 | ' | ' | ' | -661 | ' | ' |
Principal payment from ESOP | 103 | ' | ' | ' | ' | ' | 103 | ' |
Balance at Sep. 30, 2013 | ($2,324) | $7,609 | $12 | $16,621 | ($205) | ($25,720) | ($664) | $23 |
Balance, Shares at Sep. 30, 2013 | ' | 1,105 | 12,298 | ' | ' | ' | ' | ' |
Unaudited_Condensed_Consolidat3
Unaudited Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net loss | ($3,385) | ($2,535) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' |
Depreciation and amortization | 1,497 | 992 |
Amortization of deferred financing costs and note discount | 140 | 160 |
Employee stock-based compensation | 6 | 50 |
Non-employee stock-based compensation | ' | 341 |
Non-cash interest income | ' | -24 |
Acquisition earn-out adjustment | -820 | ' |
Change in fair value of warrants | -166 | ' |
ESOP compensation expense | 104 | 98 |
Deferred taxes, net | -5 | 28 |
Allowance for doubtful accounts | 56 | 13 |
Loss on disposal of property and equipment | 13 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -468 | 3,899 |
Due from related party | ' | -357 |
Inventory, net | -107 | -184 |
Deferred costs | 496 | -583 |
Prepaid expenses and other current assets | -578 | 179 |
Other assets, net | 5 | -11 |
Accounts payable | 1,961 | -572 |
Accrued expenses and other current liabilities | 106 | 178 |
Due to related parties | 158 | -791 |
Unearned revenue | -1,163 | -186 |
Net cash (used in) provided by operating activities | -2,150 | 695 |
Cash flows from investing activities | ' | ' |
Cash paid for acquisitions | ' | -5,051 |
Purchases of property and equipment | -33 | -50 |
Net cash used in investing activities | -33 | -5,101 |
Cash flows from financing activities | ' | ' |
(Repayments) borrowings from lines of credit, net | 817 | 718 |
Proceeds from issuance of term debt | 1,000 | 4,033 |
Cash received in reverse recapitalization, net of expenses | ' | 1,500 |
Repayment of debt | -1,552 | -962 |
Paid financing costs | -119 | -296 |
Dividends paid | -296 | -482 |
Common stock issued in private placement, net of costs | 1,502 | ' |
Net cash provided by financing activities | 1,352 | 4,511 |
Effect on cash of foreign currency translation | -2 | -79 |
Net (decrease) increase in cash | -833 | 26 |
Cash at beginning of period | 1,103 | 366 |
Cash at end of period | 270 | 392 |
Supplemental disclosures of cash flow information: | ' | ' |
Interest paid | 705 | 858 |
Income taxes paid | 234 | 56 |
Supplemental disclosure of non-cash financing activities: | ' | ' |
Accrued and imputed dividends on preferred stock | 661 | 261 |
Warrants issued in connection with common stock private placement | $1,099 | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' |
DESCRIPTION OF BUSINESS | ' |
NOTE 1 - DESCRIPTION OF BUSINESS | |
Description of Business | |
DecisionPoint Systems, Inc. (“DecisionPoint”, “Company”), through its subsidiaries is a provider of Enterprise Mobility Systems. Enterprise Mobility Solutions are those computer systems that give an enterprise the ability to connect to people, control assets, and transact business from any location by using mobile computers, tablet computers, and smartphones to securely connect the mobile worker to the back office software systems that run the enterprise. Technologies that support Enterprise Mobility Solutions include national wireless carrier networks, Wi-Fi, local area networks, mobile computers, smartphones and tablets, mobile software applications, middleware and device security and management software. The Company also provides professional services, proprietary and third party software and software customization as an integral part of its customized solutions for its customers. The proprietary suite of software products utilizes the latest technologies to empower the mobile worker in many areas including merchandising, sales and delivery, field service, logistics and transportation, and warehouse management. |
BASIS_OF_PRESENTATION_LIQUIDIT
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
NOTE 2 - BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the periods ended September 30, 2013, are not necessarily indicative of results for the full 2013 fiscal year or any other future interim periods. | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, DecisionPoint Systems International and Apex Systems Integrators, Inc. (“Apex”). DecisionPoint Systems International has two wholly-owned subsidiaries, DecisionPoint Systems Group, Inc. (“DPS Group”) and CMAC, Inc. (“CMAC”). Apex was acquired on June 4, 2012, and as such, the operating results of Apex have been consolidated into the Company’s consolidated results of operations beginning on June 5, 2012. In addition, on July 31, 2012, the Company consummated an asset purchase agreement (“Asset Purchase Agreement”) with MacroSolve, Inc. Pursuant to the Asset Purchase Agreement, the Company purchased the business (including substantially all the related assets) of the seller’s Illume Mobile division (“Illume Mobile”) and is a division of the Company. The Company currently operates in one business segment. | |||||||||||||||||
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the recorded amounts reported therein. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company uses historical experience and various other assumptions that are believed to be reasonable under the circumstances to form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates and assumptions used in preparation of the unaudited condensed consolidated financial statements. | |||||||||||||||||
These unaudited condensed consolidated financial statements have been prepared by management and should be read in conjunction with the audited consolidated financial statements of DecisionPoint Systems, Inc. and notes thereto for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2013. | |||||||||||||||||
Liquidity | |||||||||||||||||
In the quarter ended September 30, 2013, the Company experienced a decrease in revenue of $1.0 million compared to the quarter ended September 30, 2012, and a $2.9 million increase in revenue compared to the previous sequential quarter ended June 30, 2013. In the nine months ended September 30, 2013, the Company incurred approximately $1.3 million in increased expenses due to professional fees relating to capital raising activities, including the registration of common shares as a result of the Series D Preferred Stock offering completed in December 2012 and the private placement of common stock completed in August 2013 and associated audit fees, and other matters such as employee termination costs. The Company experienced a net loss of $0.2 million and $3.4 million for the three and nine month periods ended September 30, 2013. In addition, the Company has a substantial working capital deficit totaling $(11.5) million at September 30, 2013. Although a portion of this deficit is associated with deferred costs and unearned revenues and term debt that has been classified current due to expected future covenant violations (see further discussion at Note 8), the liabilities of the Company that are expected to be satisfied in the foreseeable future in cash exceed the operating assets that are expected to be satisfied in cash. | |||||||||||||||||
To address this, the Company has plans to seek additional capital through sales of our securities. There is no assurance additional funding will be available on terms acceptable to us, or at all. If the Company raises additional funds by selling additional shares of our capital stock, or securities convertible into shares of our capital stock, the ownership interest of our existing shareholders will be diluted. The Company is also reducing non-essential expenses and completing the integration of our acquisitions of Apex and Illume Mobile, which is expected to result in further cost savings. Such expense reduction measures include, but are not limited to, consolidation of administrative personnel, consolidation of information technology environments, reduction of outsourced consulting expertise and replacing certain service providers with lower cost providers. The result of these activities has reduced the expense structure of the consolidated business, however this reduction has not been material to date and we do not anticipate it becoming material in the foreseeable future. | |||||||||||||||||
On August 15, 2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with multiple accredited investors for the sale of common stock for gross proceeds of $1,756,400 (including $100,000 from management and existing shareholders of the Company) for 2,927,333 shares of common stock. The effective price of the offering was $0.60 per share of common stock. An initial closing for $1,556,400 was held on August 15, 2013. The final closing for $200,000 was held on August 21, 2013. Additionally, pursuant to the Purchase Agreement, the Company issued 1,463,667 warrants to multiple accredited investors at an exercise price of $1.00 per share. Further, the Company issued 292,733 warrants to the placement agent at an exercise price of $0.60 per share. The warrants received liability accounting treatment under existing accounting standards. The Company received net proceeds of approximately $1.5 million from the offering, after deducting the placement agent’s fees of 10% and other offering expenses. (see Note 9 – Stockholders’ Equity and Note 3 – Warrant Liability). | |||||||||||||||||
In November 2013, the Company entered into definitive subscription agreements (“Series E Purchase Agreement”) with accredited investors for the sales of $3,835,000 in gross proceeds for 383,500 shares of Series E Convertible Preferred Stock (“Series E Preferred Shares”) for a purchase price of $10.00 per share. The initial Conversion Price is $0.50, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. The Company received net proceeds of approximately $3.4 million (net of the fair value of placement agent warrants) from the initial closing, after deducting the placement agent’s fees of 8% and other offering expenses. The Company issued to the Placement Agent five-year warrants to purchase 767,000 shares of our common stock (equal to 10% of the number of shares of common stock underlying the Series E Preferred Shares sold under the Series E Purchase Agreement) at an exercise price of $0.55 per share, in connection with the Series E Purchase Agreement initial closing. The Company expects to close a second round of Series E Preferred Shares with gross proceeds of $300,000-$700,000 shortly thereafter. (see Note 13 – Subsequent Event). | |||||||||||||||||
During 2012 and 2013, all principal payments on the Company’s term debt were made within payment terms. The Company was not in compliance with certain financial covenants under the agreements with Royal Bank of Canada (“RBC Credit Agreement”) and BDC, Inc. (“BDC Credit Agreement”) as of December, 31, 2012, March 31, 2013 and June 30, 2013. The Company has received waivers for non-compliance for past covenant violations. On August 22, 2013, the BDC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended loan agreement, the Company is required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised annually 120 days after each year end. We were in compliance with all of our BDC financial covenants as of September 30, 2013. We expect to continue to meet the requirements of our BDC financial covenants over the short and long term. On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ending December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. As part of the revised financial covenants, covenant testing was waived by RBC for September 30, 2013. The Company does not believe that it will be in compliance with the reset covenants at December 31, 2013. Although management of the Company believes it is improbable that RBC will exercise their rights up to, and including, acceleration of the outstanding debt, there can be no assurance RBC will not exercise their rights pursuant to the provisions of the debt obligation. Accordingly, the Company has classified this debt obligation as current at September 30, 2013 (see Note 8 – Term Debt). | |||||||||||||||||
At October 31, 2013, the outstanding balance on the line of credit with Silicon Valley Bank (“SVB”) is $3.7 million, down from $4.1 million at September 30, 2013, and the availability under the line of credit has decreased to $1.6 million (see Note 7 – Lines of Credit). The Company relies on the line of credit to fund daily operating activities maintaining very little cash on hand. As of December 31, 2012, the Company was in compliance with all of its financial covenants with SVB. As of May 31, 2013 and June 30, 2013, the Company was not in compliance with the Tangible Net Worth financial covenant as defined in the amended SVB Loan Agreement. SVB agreed to temporarily forbear exercising their rights and remedies under the facility until August 28, 2013 and agreed to waive the existing covenant violations if a gross capital raise of $1.5 million was completed by such date. The Company completed the capital raise and was able to achieve compliance with the forbearance agreement prior to August 28, 2013. Except for any capital raises through August 28, 2013, the minimum Tangible Net Worth requirement of a $(9.7) million deficit will be further reduced by one half of any funds raised through sales of common stock (as only 50% of additional capital raises are given credit in the Tangible Net Worth calculation). As of September 30, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.3 million cushion over the requirement. In November 2013, the Company entered into a definitive subscription agreement with accredited investors for the sale of Series E Preferred Stock, raising $3.8 million in gross proceeds (See Note 13). Given the effect of the capital raise ($3.8 million in gross proceeds, net of $400,000 in costs) closed to date in November, the Company believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement and expects to continue to meet the requirements of our SVB financial covenants over the short and long term. The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013. Should the Company continue to incur losses in a manner consistent with its recent historical financial performance, the Company will violate this covenant without additional net capital raises in amounts that are approximately twice the amount of the losses incurred. | |||||||||||||||||
In the near term, the Company’s successful restructuring of its operations and reduction of operating costs and/or its ability to raise additional capital at acceptable terms is critical to its ability to continue to operate for the foreseeable future. If the Company continues to incur operating losses and/or does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations, 2) the Company’s inability to fully implement its current business plan and/or 3) continued defaults under the various loan agreements. A covenant default would give the bank the right to demand immediate payment of all outstanding amounts which the Company would not be able to repay out of normal operations. There are no assurances that the Company will successfully implement its plans with respect to these liquidity matters. The unaudited condensed consolidated financial statements do not reflect any adjustment that may be required resulting from the adverse outcome relating to this uncertainty. | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
There have been no material changes to the Company's significant accounting policies during the nine months ended September 30, 2013. See Footnote 2 of the Company's consolidated financial statements included in the Company's 2012 Annual Report on Form 10-K filed on March 28, 2013, for a comprehensive description of the Company's significant accounting policies. | |||||||||||||||||
Concentration of Credit Risk - The Company derived approximately 9.8% and 13.3% of revenues from one customer, and 21.1% and 26.2% of revenues from the top three customers in the nine months ended September 30, 2013 and 2012, respectively. Additionally there was one customer which comprised 15.5% of accounts receivable at September 30, 2013. Customer mix can shift significantly from year to year, but a concentration of the business with a few large customers is typical in any given year. A decline in revenues could occur if a customer which has been a significant factor in one financial reporting period gives significantly less business in the following period. | |||||||||||||||||
The Company’s contracts with these customers and other customers do not include any specific purchase requirements or other requirements outside of the normal course of business. The majority of customer contracts are on an annual basis for service support while on a purchase order basis for hardware purchases. Typical hardware sales are submitted on an estimated order basis with subsequent follow on orders for specific quantities. These sales are ultimately subject to the time that the units are installed at each of the customer locations as per their requirements. Service contracts are purchased on an annual basis generally and are the performance responsibility of the actual service provider as opposed to the Company. Termination provisions are generally standard clauses based upon non-performance, but a customer can cancel with a certain reasonable notice period anywhere from 30 to 90 days. General industry standards for contracts provide ordinary terms and conditions, while actual work and performance aspects are usually dictated by a Statement of Work which outlines what is being ordered, product specifications, delivery, installation and pricing. | |||||||||||||||||
Translation of Foreign Currencies - The Company's functional currency is the U.S. dollar. The financial statements of the Company's foreign subsidiary is measured using the local currency, in this case the Canadian dollar (CDN$), as its functional currency and is translated to U.S. dollars for reporting purposes. Assets and liabilities of the subsidiary are translated at exchange rates as of the balance sheet dates. Revenues and expenses of the subsidiary are translated at the rates of exchange in effect during the year. | |||||||||||||||||
Comprehensive Loss - Comprehensive loss is comprised of net loss and other comprehensive loss. The only component of comprehensive loss is the foreign currency translation adjustments, which were nominal in amount. There was no tax effect allocated to any component of other comprehensive loss during the periods presented. | |||||||||||||||||
Fair Value Measurement - Financial assets and liabilities are measured at fair value, which is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: | |||||||||||||||||
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
• | Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||
The following table presents the Company’s warrant liability measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, aggregated by the level in the fair-value hierarchy within which those measurements fall (in thousands): | |||||||||||||||||
Balance | Quoted prices in active markets | Significant other observable inputs | Significant other unobservable inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Balance at December 31, 2012 | $ | - | - | - | $ | - | |||||||||||
Balance at September 30, 2013 | $ | 933 | - | - | $ | 933 | |||||||||||
The following table presents the activity for liabilities measured at estimated fair value using unobservable inputs (Level 3) from December 31, 2012 through September 30, 2013 (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Balance at December 31, 2012 | $ | - | |||||||||||||||
Fair value of derivative warrants issued in connection with share purchase agreement (see Note 3) | 1,099 | ||||||||||||||||
Adjustments to fair value (reflected in other income) | (166 | ) | |||||||||||||||
Balance at September 30, 2013 | $ | 933 | |||||||||||||||
Reclassifications - Certain reclassifications have been made to prior years to conform to current period financial statement presentation with no effect on our previously reported consolidated financial position, results of operations, or cash flows. |
WARRANT_LIABILITY
WARRANT LIABILITY | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Warrant Liability [Abstract] | ' | ||||||||||||||||||||
Warrant liablity | ' | ||||||||||||||||||||
NOTE 3 – WARRANT LIABILITY | |||||||||||||||||||||
The Company has determined that certain warrants the Company has issued contain provisions that protect the holders from future issuances of the Company’s Common Stock at prices below such warrants’ then in effect respective exercise prices (see Note 9). These provisions could result in modification of the warrants then in effect exercise price. The Company evaluated the following guidance ASC 480-10 Distinguishing Liabilities from Equity and ASC 815-40 Contracts in an Entity’s Own Equity. Pursuant to this guidance, the Company’s management concluded these instruments do not meet the criteria for classification as equity treatment and must be recorded as a liability as a result of the terms in the warrants that provide for price protection in the event of a future issuance. The Company recognized these Warrants as liabilities at their fair value and re-measures them at fair value on each reporting date. ASC 820 Fair Value Measurement provides requirements for disclosure of liabilities that are measured at fair value on a recurring basis in periods subsequent to the initial recognition (see Note 2). | |||||||||||||||||||||
The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities. The estimated fair values were determined using a Monte Carlo option pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of derivative liabilities. Various factors are considered in the pricing models the Company uses to value the warrants, including the Company’s current stock price, the remaining life of the warrants, the volatility of the Company’s stock price, and the risk-free interest rate. In addition, as of the valuation dates, management assessed the probabilities of future financing assumptions in the Monte Carlo valuation models. Future changes in these factors will have a significant impact on the computed fair value of the warrant liability. As such, the Company expects future changes in the fair value of the warrants to continue to vary from quarter to quarter. | |||||||||||||||||||||
The Company revalues the warrants as of the end of each reporting period. The estimated fair value of the outstanding warrant liabilities was approximately $0.9 million and $0.0 million, as of September 30, 2013 and December 31, 2012, respectively. The change in fair value of the derivative liabilities for the three and nine months ended September 30, 2013 was approximately $166,000 and is included in other income in the unaudited condensed consolidated statement of operations and comprehensive loss. | |||||||||||||||||||||
The derivative warrant liabilities were valued at the closing dates of the Purchase Agreement (see Note 9 (c)) and the end of each reporting period using a Monte Carlo valuation model with the following assumptions: | |||||||||||||||||||||
Placement Agent Warrants | Investor Warrants | ||||||||||||||||||||
Investor Warrants | September | August | September | August | August | ||||||||||||||||
30, 2013 | 21, 2013 | 30, 2013 | 21, 2013 | 15, 2013 | |||||||||||||||||
Closing price per share of common stock | $ | 0.63 | $ | 0.84 | $ | 0.63 | $ | 0.84 | $ | 0.69 | |||||||||||
Exercise price per share (range) | 0.6 | 0.6 | 1 | 1 | 1 | ||||||||||||||||
Expected volatility | 132.1 | % | 134.9 | % | 132.1 | % | 134.9 | % | 134.1 | % | |||||||||||
Risk-free interest rate | 1.4 | % | 1.6 | % | 1.4 | % | 1.6 | % | 1.6 | % | |||||||||||
Dividend yield | - | - | - | - | - | ||||||||||||||||
Remaining expected term of underlying securities (years) | 4.9 | 5 | 4.9 | 5 | 5 | ||||||||||||||||
LOSS_PER_COMMON_SHARE
LOSS PER COMMON SHARE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
LOSS PER COMMON SHARE | ' | ||||||||
NOTE 4 – LOSS PER COMMON SHARE | |||||||||
Basic loss per share is computed by dividing the loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The weighted-average basic and diluted shares for each of the nine months ended September 30, 2013 and 2012 exclude approximately 0.5 million of ESOP shares that have not been committed to be released. | |||||||||
For periods presented in which there is a net loss, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive. All potentially dilutive securities are anti-dilutive due to the net loss incurred by the Company in the periods presented. | |||||||||
Potential dilutive securities consist of (in thousands): | |||||||||
Nine Months Ended September 30, | |||||||||
2013 | 2012 | ||||||||
Convertible preferred stock - Series A | 270 | 270 | |||||||
Convertible preferred stock - Series B | 131 | 131 | |||||||
Convertible preferred stock - Series C | - | 1,415 | |||||||
Convertible preferred stock - Series D | 7,824 | - | |||||||
Warrants to purchase common stock | 2,737 | 277 | |||||||
Options to purchase common stock | 544 | 642 | |||||||
Total potentially dilutive securities | 11,506 | 2,735 | |||||||
BUSINESS_COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
BUSINESS COMBINATIONS | ' | ||||||||||||||||
NOTE 5 – BUSINESS COMBINATIONS | |||||||||||||||||
Illume Mobile | |||||||||||||||||
On July 31, 2012 (“Illume Closing Date”), the Company consummated an asset purchase agreement (“Asset Purchase Agreement”) with MacroSolve, Inc. Pursuant to the Asset Purchase Agreement, the Company purchased the business (including substantially all the related assets) of the seller’s Illume Mobile division (“Illume Mobile”), based in Tulsa, Oklahoma. Founded in 1996, Illume Mobile is a mobile business solutions provider that serves mobile products and platforms. Illume Mobile’s initial core business is the development and integration of business applications for mobile environments. The Company accounted for the transaction using the purchase method of accounting and the operating results for Illume Mobile have been consolidated into the Company’s results of operations beginning on August 1, 2012. | |||||||||||||||||
In consideration for the business of Illume Mobile, the Company paid $1,000,000, of which $250,000 was paid in cash and $750,000 was paid in the form of 617,284 shares of the Company’s common stock. The Company valued the shares issued in conjunction with the acquisition at $697,531. | |||||||||||||||||
Pursuant to the Asset Purchase Agreement, the Company was required to make an additional payment (“Earn Out Payment”) to the seller of up to $500,000 of which 50% will be paid in cash, and 50% will be paid in shares of the common stock of the Company. The value of the shares will be based on the closing price of the Company’s common stock on the one year anniversary of the Illume Closing Date, July 31, 2013. The fair value of the Earn Out Payment was calculated to be approximately $107,000 at the Closing Date. At September 30, 2013, the calculated Earn Out Payment due under the Asset Purchase Agreement was zero. Accordingly, there is $0 accrued for the Earn Out Payment included in accrued earn out consideration in the unaudited condensed consolidated financial statements. The adjustment was recorded as a separate component of operating expenses in the unaudited condensed consolidated statement of operations and comprehensive loss as of September 30, 2013. | |||||||||||||||||
Apex | |||||||||||||||||
On June 4, 2012 (“Closing Date”), pursuant to a Stock Purchase Agreement (“Purchase Agreement”), the Company acquired all of the issued and outstanding shares of Apex, a corporation organized under the laws of the Province of Ontario, Canada. Apex is a provider of wireless mobile work force software solutions. Its suite of products utilizes the latest technologies to empower the mobile worker in many areas including merchandising, sales and delivery; field service; logistics and transportation; and, warehouse management. Its clients are North American companies that are household names whose products and services are used daily to feed, transport, entertain and care for people throughout the world. | |||||||||||||||||
In consideration for the shares of Apex, the Company paid CDN$5,000,000 (US$4,801,000 at the Closing Date) (“Closing Amount”) in cash. The Company was required to pay up to an undiscounted amount of CDN$3,500,000 (US$3,360,700 at the Closing Date) in consideration for Apex achieving certain levels of adjusted earnings before interest, depreciation, taxes and amortization (“EBITDA”), as defined by the Purchase Agreement, in the period ended July 2013. The fair value of the earn out was calculated to be approximately CDN$1,076,000 (US$1,033,000 at the Closing Date). At September 30, 2013, the calculated Earn Out Payment due under the Purchase Agreement was CDN$341,000 (US$331,000). The seller has disputed the Company’s calculation (see Note 12). Accordingly, there is CDN$341,000 (US$331,000) recorded as potential additional purchase consideration in the unaudited condensed consolidated financial statements. The adjustment of CDN$735,000 (US$713,000) was recorded as a separate component of operating expenses in the unaudited condensed consolidated statement of operations and comprehensive loss as of September 30, 2013. The Company accounted for the transaction using the purchase method of accounting and the operating results for Apex have been consolidated into the Company’s results of operations beginning on June 5, 2012. The Company funded the purchase of Apex through borrowings as further explained below. | |||||||||||||||||
As part of the Purchase Agreement, the Company is obligated to pay bonus consideration to the CEO of Apex. Such bonus is considered additional contingent purchase consideration as the Company is obligated to pay the bonus regardless of whether or not the CEO’s employment is retained. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Closing Date). At September 30, 2013 there is CDN$160,000 (US$154,000) recorded in accrued earn out consideration in the Company’s unaudited condensed consolidated balance sheets. | |||||||||||||||||
Pro Forma Financial Information (unaudited): | |||||||||||||||||
The following summarizes the Company’s unaudited consolidated results of operations for the three and nine months ended September 30, 2012 as if the Apex and Illume Mobile acquisitions had occurred on January 1, 2012: (in thousands except per share data): | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2012 | 30-Sep-12 | ||||||||||||||||
As Reported | Pro Forma | As Reported | Pro Forma | ||||||||||||||
Net sales | $ | 18,567 | $ | 18,669 | $ | 54,144 | $ | 56,346 | |||||||||
Net loss attributable to common shareholders | (1,263 | ) | (1,445 | ) | (3,245 | ) | (5,311 | ) | |||||||||
Net loss per share - basic and diluted | (0.15 | ) | (0.18 | ) | (0.42 | ) | (0.69 | ) | |||||||||
Included in the pro forma combined results of operations are the following adjustments for Apex: (i) amortization of intangible assets for the three and nine months ended September 30, 2012 of $0 and $572,000, respectively (ii) a net increase in interest expense for the three and nine months ended September 30, 2012 of $0 and $291,000, respectively. | |||||||||||||||||
Included in the pro forma combined results of operations are the following adjustments for Illume Mobile: (i) amortization of intangible assets for the three and nine months ended September 30, 2012 of $18,000 and $125,000, respectively. Net loss per share assumes the 325,000 shares issued in connection with the Apex acquisition and the 617,284 shares issued in connection with the Illume Mobile acquisition are outstanding for the period presented. | |||||||||||||||||
The historical financial information of Apex has been extracted for the periods required from the historical financial statements of Apex Systems Integrators, Inc. which were prepared in accordance with U.S. generally accepted accounting principles. The historical financial information of Illume Mobile has been derived from using internally generated management reports for the periods required. | |||||||||||||||||
The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s consolidated results of operations that would have been reported had the Apex and Illume Mobile acquisitions been completed as of the beginning of the period presented, nor should it be taken as indicative of the Company’s future consolidated results of operations. | |||||||||||||||||
The combined amounts of Apex and Illume Mobile’s revenue and net loss since the respective acquisition dates included in the Company’s unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2013 were $0.7 million, ($0.1) million and $2.6 million, ($1.8) million, respectively, and for the three and nine months ended September 30, 2012 were $0.6 million, ($0.7) million and $0.7 million, ($1.2) million, respectively. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||
NOTE 6 – GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||
The following summarizes the transaction affecting goodwill through September 30, 2013 (in thousands): | |||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 8,571 | |||||||||||||||||||||||
Effect of currency translation on Apex | (86 | ) | |||||||||||||||||||||||
Balance at September 30, 2013 | $ | 8,485 | |||||||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the Company’s intangible assets and accumulated amortization consist of the following (in thousands): | |||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||
Gross | Amortization | Net | Gross | Amortization | Net | ||||||||||||||||||||
Customer relationships | $ | 3,319 | $ | (1,498 | ) | $ | 1,821 | $ | 3,373 | $ | (966 | ) | $ | 2,407 | |||||||||||
Contractor and resume databases | 675 | (371 | ) | 304 | 675 | (270 | ) | 405 | |||||||||||||||||
Tradename | 878 | (324 | ) | 554 | 893 | (193 | ) | 700 | |||||||||||||||||
Internal use software | 2,892 | (1,137 | ) | 1,755 | 2,978 | (545 | ) | 2,433 | |||||||||||||||||
Covenant not to compete | 105 | (67 | ) | 38 | 105 | (27 | ) | 78 | |||||||||||||||||
$ | 7,869 | $ | (3,397 | ) | $ | 4,472 | $ | 8,024 | $ | (2,001 | ) | $ | 6,023 | ||||||||||||
The effect of foreign currency translation on the goodwill and intangible assets for the nine months ended September 30, 2013 is approximately ($86,000) and ($120,000), respectively. |
LINES_OF_CREDIT
LINES OF CREDIT | 9 Months Ended |
Sep. 30, 2013 | |
Line of Credit Facility [Abstract] | ' |
LINES OF CREDIT | ' |
NOTE 7 – LINES OF CREDIT | |
The Company has a $10.0 million revolving line of credit with Silicon Valley Bank (“SVB”) which provides for borrowings based upon eligible accounts receivable, as defined in the Loan Agreement (“SVB Loan Agreement”). Under the SVB Loan Agreement as amended, SVB has also provided the Company with a term loan as discussed at Note 8. The SVB Loan Agreement is secured by substantially all the assets of the Company and matures in February 2015. As of September 30, 2013, the outstanding balance on the line of credit is approximately $4.1 million and the interest rate is 7.0%. The line of credit has a certain financial covenant and other non-financial covenants. As of December 31, 2012, the Company was in compliance with all of its financial covenants with SVB. As of May 31, 2013 and June 30, 2013, the Company was not incompliance with the Tangible Net Worth covenant as defined in the amended SVB Loan Agreement. On August 16, 2013, the Company and SVB signed an agreement (“Forbearance Agreement”) where SVB agreed to temporarily forbear from exercising their rights and remedies under the facility until August 28, 2013 and agreed to waive the existing covenant violations, subject to the Company’s completion of a capital raise. The Company completed the capital raise and was able to achieve compliance with the forbearance agreement prior to August 28, 2013. Except for any capital raises through August 28, 2013, the minimum Tangible Net Worth requirement of a $(9.7) million deficit will be further reduced by one half of any funds raised through sales of common stock (as only 50% of additional capital raises are given credit in the Tangible Net Worth calculation). As of September 30, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.3 million cushion over the requirement. In November 2013, the Company entered into a definitive subscription agreement with accredited investors for the sale of Series E Preferred Stock, raising $3.8 million in gross proceeds (See Note 13). Given the effect of the capital raise ($3.8 million in gross proceeds, net of $400,000 in costs) closed to date in November, the Company believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement and expects to continue to meet the requirements of our SVB financial covenants over the short and long term. The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013. Should the Company continue to incur losses in a manner consistent with its recent historical financial performance, the Company will violate this covenant without additional net capital raises in amounts that are approximately twice the amount of the losses incurred. | |
Availability under the line of credit was approximately $4.3 million as of September 30, 2013 and $1.6 million as of October 31, 2013. The line of credit allows the Company to cause the issuance of letters of credit on account of the Company to a maximum of the borrowing base as defined in the Loan Agreement. No letters of credit were outstanding as of September 30, 2013 or December 31, 2012. | |
On February 27, 2013, the SVB Loan Agreement was amended to provide for 1) an extension of the termination date of the line of credit to February 28, 2015, 2) the modification of the line of credit borrowing base, advance rate and financial covenants, 3) the inclusion of an additional $1.0 million term loan (See further discussion at Note 8, 5) a modification of the rate of interest of the line of credit to 3.75% above SVB’s prime rate and 5) other various terms and provisions. | |
The Company is party to a credit agreement, dated June 4, 2012 (the “RBC Credit Agreement”) with Royal Bank of Canada (“RBC”). Under the RBC Credit Agreement, the revolving demand facility allows for borrowings up to CDN$200,000 based upon eligible accounts receivable. Interest is based on the Royal Bank Prime (“RBP”) plus 1.5% and is payable on demand. As of September 30, 2013, the outstanding balance on the line of credit was $180,000 and the interest rate is 4.5%. The RBC Credit Agreement is secured by the assets of Apex. The revolving demand facility has certain financial covenants and other non-financial covenants. As of June 30, 2013 and December 31, 2012, Apex was not in compliance with the Fixed Charge Coverage ratio covenant as defined in the RBC Credit Agreement. At June 30, 2013, Apex was not in compliance with the Maximum Funded Debt to EBITDA ratio covenant as defined in the RBC Credit Agreement. In March 2013 and May 2013, the Company received waivers for non-compliance of these covenants at December 31, 2012, March 31, 2013 and June 30, 2013. The covenants were reset by RBC on August 16, 2013. The Company does not believe that it will be in compliance with the reset covenants at December 31, 2013. See further discussion regarding this condition at Note 8. | |
For the nine months ended September 30, 2013 and 2012, the Company’s interest expense for the lines of credit, including amortization of deferred financing costs, was approximately $262,000 and $251,000, respectively. | |
RBC and SVB are party to a subordination agreement, pursuant to which RBC agreed to subordinate any security interest in assets of the Company granted in connection with the RBC Credit Agreement to SVB’s security interest in assets of the Company. | |
Under the RBC Credit Agreement, the lender provided Apex with a term loan as discussed at Note 8. |
TERM_DEBT
TERM DEBT | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Long-Term Debt, Unclassified [Abstract] | ' | ||||||||||||||||||||||||
TERM DEBT | ' | ||||||||||||||||||||||||
NOTE 8 – TERM DEBT | |||||||||||||||||||||||||
Term debt as of September 30, 2013, consists of the following (in thousands): | |||||||||||||||||||||||||
Balance | Additions | Payments | Amortization of Note Discount | Effect of | Balance | ||||||||||||||||||||
31-Dec-12 | Currency | September 30, | |||||||||||||||||||||||
Translation | 2013 | ||||||||||||||||||||||||
RBC term loan | $ | 2,090 | $ | - | $ | (608 | ) | $ | - | $ | (68 | ) | $ | 1,414 | |||||||||||
Note discount | (38 | ) | - | 18 | $ | 1 | (19 | ) | |||||||||||||||||
BDC term loan | 1,705 | - | - | - | (56 | ) | 1,649 | ||||||||||||||||||
Note discount | (31 | ) | - | 5 | 1 | (25 | ) | ||||||||||||||||||
SVB term loan | 1,000 | - | (750 | ) | - | - | 250 | ||||||||||||||||||
Note discount | (4 | ) | - | - | 4 | - | - | ||||||||||||||||||
SVB term loan-2 | - | 1,000 | (194 | ) | - | - | 806 | ||||||||||||||||||
Note discount | - | (19 | ) | - | 6 | - | (13 | ) | |||||||||||||||||
Total debt | $ | 4,722 | $ | 981 | $ | (1,552 | ) | $ | 33 | $ | (122 | ) | 4,062 | ||||||||||||
Less contractual current portion | (1,377 | ) | |||||||||||||||||||||||
Less RBC debt long term classified as current | (586 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 2,099 | |||||||||||||||||||||||
RBC Term Loan -- On June 4, 2012, Apex entered into the RBC Credit Agreement with RBC pursuant to which RBC made available certain credit facilities in the aggregate amount of up to CDN$2,750,000, including a term facility (“RBC Term Loan”) in the amount of CDN $2,500,000 (US$2,401,000 at the Closing Date). The RBC Term Loan accrues interest at Royal Bank Prime (“RBP”) plus 4% (7% at December 31, 2012). Principal and interest is payable over a three year period at a fixed principal amount of CDN $70,000 a month beginning in July 2012 and continuing through June 2015. Apex paid approximately $120,000 in financing costs, which has been recorded as deferred financing costs or note discount in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2013, and is being amortized to interest expense over the term of the loan. | |||||||||||||||||||||||||
In addition, the RBC Term Loan calls for mandatory repayments based on 20% of Apex’s free cash flow as defined in the RBC Credit Agreement, before discretionary bonuses based on the annual year end audited financial statements of Apex, beginning with the fiscal year ended December 31, 2012, and payable within 30 days of the delivery of the annual audited financial statements, and continuing every six months through December 31, 2014. This amount is estimated to be $0 at September 30, 2013 and December 31, 2012. | |||||||||||||||||||||||||
The RBC Term Loan has certain financial covenants and other non-financial covenants. As of June 30, 2013 and December 31, 2012, Apex was not in compliance with the Fixed Charge Coverage ratio covenant as defined in the RBC Credit Agreement. At June 30, 2013, Apex was not in compliance with the Maximum Funded Debt to EBITDA ratio covenant as defined in the RBC Credit Agreement. In March 2013, May 2013 and August 2013, the Company received waivers for non-compliance of these covenants at December 31, 2012, March 31, 2013 and June 30, 2013. On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ending December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. As part of the revised financial covenants, covenant testing was waived by RBC for September 30, 2013. The Company does not believe that it will be in compliance with the reset covenants at December 31, 2013. Although the Company believes it is improbable RBC will exercise their rights up to, and including, acceleration of the outstanding debt, there can be no assurance that RBC will not exercise their rights pursuant to the provisions of the debt obligation. Accordingly, the Company has classified the term debt obligation as current at September 30, 2013. | |||||||||||||||||||||||||
BDC Term Loan -- On June 4, 2012, Apex also entered into a loan agreement (the “BDC Loan Agreement”) with BDC Capital, Inc. (“BDC”), pursuant to which BDC made available to Apex a term credit facility (“BDC Term Loan”) in the aggregate amount of CDN $1,700,000 (USD $1,632,000 at the Closing Date). The BDC Term Loan initially accrued interest at the rate of 12% per annum, and matures on June 23, 2016, with an available one year extension for a fee of 2%, payable at the time of extension. On April 29, 2013, the BDC Term Loan was amended to accrue interest at the rate of 12.5% per annum. In addition to the interest payable, consecutive quarterly payments of CDN$20,000 as additional interest are due beginning on June 23, 2012, and subject to compliance with bank covenants, Apex will make a mandatory annual principal payment in the form of a cash flow sweep which will be equal to 50% of the Excess Available Funds (as defined by the BDC Loan Agreement) before discretionary bonuses based on the annual year end audited financial statements of Apex. The maximum annual cash flow sweep in any year will be CDN$425,000. As of December 31, 2012 and at September 30, 2013, the Company estimates that the cash sweep will be approximately $0. Such payments will be applied to reduce the outstanding principal payment due on the maturity date. In the event that Apex’s annual audited financial statements are not received within 120 days of its fiscal year end, the full CDN$425,000 becomes due and payable on the next payment date. Apex paid approximately $70,000 in financing costs which has been recorded as deferred financing costs in the accompanying unaudited consolidated balance sheet as of September 30, 2013, and is being amortized to interest expense over the term of the loan. | |||||||||||||||||||||||||
The terms of the BDC loan agreement also provide for a fee to BDC in the event of the occurrence of any of the following: | |||||||||||||||||||||||||
(a) | if 50% or more of any company comprising Apex or the Company (consolidated assets or shares) is sold or merged with an unrelated entity; or | ||||||||||||||||||||||||
(b) | if there is a change of control of Apex and/or the Company prior to the Maturity Date or any extended maturity date of the BDC Tern Loan, | ||||||||||||||||||||||||
In the event of (a) or (b) above, Apex will pay to BDC a bonus in an amount equal to 2% of the aggregate value of Apex and the Company determined as at the closing date of such transaction, which bonus shall become due and payable at the time of the closing of such transaction. Notwithstanding any prepayment of the BDC Term Loan, the bonus and Apex’s obligation to pay same to the BDC will remain in full force and effect until the maturity date or any amended or extended maturity date agreed by the BDC such that in the event of any sale, initial public offering or similar transaction, Apex’s obligation to pay the bonus amount to the BDC will survive such prepayment. | |||||||||||||||||||||||||
The BDC Loan Agreement contains certain financial and non-financial covenants. As of June 30, 2013 and December 31, 2012, Apex was not in compliance with the minimum working capital financial covenant. In March 2013, May 2013 and August 2013, the Company received waivers for non-compliance of these covenants at December 31, 2012, March 31, 2013 and June 30, 2013. On August 22, 2013, the BDC Term Loan was amended and certain financial covenants were modified. Pursuant to the amended loan agreement, the Company is required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised yearly 120 days after each year end. We were in compliance with all of our BDC financial covenants as of September 30, 2013. We expect to continue to meet the requirements of our BDC financial covenants over the short and long term. | |||||||||||||||||||||||||
In the event either or both of the RBC Loan Agreement or the BDC Loan Agreement were deemed to be in default, RBC or BDC, as applicable, could, among other things (subject to the rights of SVB as the Company’s senior lender), terminate the facilities, demand immediate repayment of any outstanding amounts, and foreclose on our assets. Any such action would require us to curtail or cease operations, as the Company does not currently have alternative sources of financing. | |||||||||||||||||||||||||
SVB Term Loan - On December 31, 2010, pursuant to an Assumption and Amendment to Loan and Security Agreement ("Amended SVB Loan Agreement"), the Company borrowed $3.0 million (the “SVB Term Loan”) from Silicon Valley Bank (“SVB”). The SVB Term Loan was due in 36 equal monthly installments of principal plus interest beginning on February 1, 2011. The SVB Term Loan is secured by substantially all of the assets of the Company except for the assets of Apex. On May 20, 2011, pursuant to a Consent and Amendment to Loan and Security Agreement (“Amendment”), the maturity date was amended to April 30, 2012, with the remaining principal due on that date to be paid as a balloon payment. On September 27, 2011, the agreement was amended and certain covenants were replaced or modified resulting in the Company being in full compliance at September 30, 2011. The principal amount outstanding under the SVB Term Loan accrues interest at a fixed rate equal to 9% per annum. In addition, a final payment equal to 2% of the aggregate amount of the Term Loan is due on the earlier of the maturity date or the date the Term Loan is prepaid. This final payment of $60,000 has been recorded as a discount to the SVB Term Loan, which is being amortized to interest expense through December 2013, using the effective interest method. | |||||||||||||||||||||||||
The Amended SVB Loan Agreement includes various customary covenants, limitations and events of default. Financial covenants, among others, include liquidity and fixed charge coverage ratios, minimum tangible net worth requirements and limitations on indebtedness. As of December 31, 2012, the Company was in compliance with all of its financial covenants with SVB. As of May 31, 2013 and June 30, 2013, the Company was not incompliance with the Tangible Net Worth covenant as defined in the Amended SVB Loan Agreement. On August 16, 2013, the Company and SVB signed an agreement (“Forbearance Agreement”) where SVB agreed to temporarily forbear from exercising their rights and remedies under the facility until August 28, 2013 and agreed to waive the existing covenant violations if a gross capital raise of $1.5 million is completed by such date. The Company completed the capital raise and was able to achieve compliance with the forbearance agreement prior to August 28, 2013. As of September 30, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.3 million cushion over the requirement. In November 2013, the Company entered into a definitive subscription agreement with accredited investors for the sale of Series E Preferred Stock, raising $3.8 million in gross proceeds (See Note 13). Given the effect of the capital raise ($3.8 million in gross proceeds, net of $400,000 in costs) closed to date in November, the Company believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement and expects to continue to meet the requirements of our SVB financial covenants over the short and long term. The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013. See further discussion regarding this matter at Note 7. | |||||||||||||||||||||||||
On September 27, 2011, pursuant to a Limited Waiver and Amendment to Loan and Security Agreement, the Loan Agreement was amended. | |||||||||||||||||||||||||
On February 27, 2013, the Company entered into an amended the Loan and Security Agreement which provided an additional term loan of $1,000,000. The new term loan is due in 36 monthly installments of principal plus accrued interest beginning on April 1, 2013. The additional term loan accrues interest at 7.5% per annum. | |||||||||||||||||||||||||
For the nine months ended September 30, 2013 and 2012, the Company’s interest expense on the term debt, including amortization of deferred financing costs, was approximately $439,000 and $331,000, respectively. | |||||||||||||||||||||||||
In the event either or both RBC Loan Agreement and/or the BDC Loan Agreement were deemed to be in default, then the Amended SVB Loan agreement would be in default, which could, among other things, terminate the facility and term loan, demand immediate repayment of any outstanding amounts, and foreclose on our assets. Any such action would require us to curtail or cease operations, as the Company does not currently have alternative sources of financing. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders' Equity Attributable To Parent [Abstract] | ' | ||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||
NOTE 9 – STOCKHOLDERS’ EQUITY | |||||||||||||||||
The Company is authorized to issue two classes of stock designated as common stock and preferred stock. As of September 30, 2013, the Company is authorized to issue 110,000,000 total shares of stock. Of that amount, 100,000,000 shares are common stock, each having a par value of $0.001. The remaining 10,000,000 shares are preferred stock, each having a par value of $0.001, of which 500,000 shares are designated as Series A Preferred Stock, of which 269,608 are issued and outstanding, 500,000 shares are designated as Series B Preferred Stock, of which 131,347 are issued and outstanding, 5,000,000 shares are designated as Series C Preferred Stock, of which 0 shares are issued and outstanding and, 4,000,000 shares are designated as Series D Preferred Stock, of which 704,200 shares are issued and outstanding. | |||||||||||||||||
(a) Cumulative Convertible Preferred Stock | |||||||||||||||||
A summary of preferred stock outstanding as of September 30, 2013 is as follows (in thousands, except share data): | |||||||||||||||||
Description | |||||||||||||||||
Series A Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||
269,608 shares issued and outstanding, liquidation preference of $975 | |||||||||||||||||
plus cumulative dividends of $344 | $ | 1,319 | |||||||||||||||
Series B Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||
131,347 shares issued and outstanding, liquidation preference of $380 | |||||||||||||||||
plus cumulative dividends of $85 | 465 | ||||||||||||||||
Series D Preferred, $0.001 par value per share, 4,000,000 shares designated, | |||||||||||||||||
704,200 shares issued and outstanding, liquidation preference of $7,042 | |||||||||||||||||
(net of $1,374 in issuance costs) plus imputed dividends of $157 | 5,825 | ||||||||||||||||
Total convertible preferred stock | $ | 7,609 | |||||||||||||||
Series A Preferred Stock and Series B Preferred Stock | |||||||||||||||||
The holders of the Series A and Series B Preferred Stock shall be entitled to receive, when, as, and if declared by the Board of Directors, dividends at an annual rate of 8% of the stated value. The stated value of the Series A Preferred is $4.00 per share and the stated value of the Series B Preferred is $3.20 per share. Dividends shall be cumulative and shall accrue on each share of the outstanding preferred stock from the date of its issue. | |||||||||||||||||
The holders of the Series A and Series B Preferred Stock have no voting rights except on matters affecting their rights or preferences. Subject to the rights of the Series D Preferred Stock, upon any liquidation, dissolution or winding-up of the Company, the holders of the Series A (subject to the rights of the Series B Preferred) and Series B Preferred Stock shall be entitled to receive an amount equal to the stated value per share of $4.00 and $3.20, respectively, plus any accrued and unpaid dividends before any payments shall be made to the holders of any common stock or hereinafter issued preferred stock. The Series A Preferred Stock has preference over the Series B Preferred Stock in liquidation. | |||||||||||||||||
Each share of Series A Preferred Stock is convertible, at the option of the holder, at a conversion price of $4.00 per share. Each share of Series B Preferred Stock is convertible, at the option of the holder, at a conversion price of $3.20 per share. | |||||||||||||||||
Series C Preferred Stock | |||||||||||||||||
On December 20, 2012, the Company redeemed all issued and outstanding shares of Series C Preferred Stock using the proceeds generated from the sale of the Series D Preferred Stock. | |||||||||||||||||
Series D Preferred Stock | |||||||||||||||||
The Series D Preferred Stock has a Stated Value of $10.00 per share, votes on an as-converted basis with the common stock, and is convertible, at the option of the holder, into such number of shares of our common stock equal to the number of shares of Series D Preferred Stock to be converted, multiplied by the Stated Value, divided by the Conversion Price in effect at the time of the conversion. The initial Conversion Price is $1.00, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. As a result of the subsequent sales of common stock on August 15, 2013 and August 21, 2013 (see Note 9(b)), the Conversion Price of the Series D Preferred Stock was reduced to $0.90. The Series D Preferred Stock entitles the holder to cumulative dividends, payable quarterly, at an annual rate of (i) 8% of the Stated Value during the three year period commencing on the date of issue, and (ii) 12% of the Stated Value commencing three years after the date of issue. We may, at the Company’s option, pay dividends in PIK Shares, in which event the applicable dividend rate will be 12% and the number of such PIK Shares issuable will be equal to the aggregate dividend payable divided by the lesser of (x) the then effective Conversion Price or (y) the average volume weighted average price of the Company’s common stock for the five prior consecutive trading days. On October 15, 2013, the Company paid a cash dividend of $142,000 on the Series D preferred Stock for the period from July 1, 2013 to September 30, 2013. | |||||||||||||||||
Upon any liquidation, dissolution or winding-up of our Company, holders of Series D Preferred Stock will be entitled to receive, for each share of Series D Preferred Stock, an amount equal to the Stated Value of $10.00 per share plus any accrued but unpaid dividends thereon before any distribution or payment may be made to the holders of any common stock, Series A Preferred Stock, Series B Preferred Stock, or subsequently issued preferred stock. | |||||||||||||||||
In addition, commencing on the trading day on which the closing price of the common stock is greater than $2.00 for thirty consecutive trading days with a minimum average daily trading volume of at least 5,000 shares for such period, and at any time thereafter, the Company may, in its sole discretion, effect the conversion of all of the outstanding shares of Series D Preferred Stock to common stock (subject to the condition that, all of the shares issuable upon such conversion may be re-sold without limitation under an effective registration statement or pursuant to Rule 144 under the Securities Act). | |||||||||||||||||
The Series D Preferred Stock holders also were granted registration rights which required the Company to file a registration statement with the SEC within 60 days of the final closing date (December 31, 2012), and to have the registration statement declared effective within 90 days thereafter. The initial registration statement was filed on February 12, 2013. Failure of the registration statement to be declared effective by May 12, 2013, resulted in a partial liquidated damage equal to 0.1% of the purchase price paid by each investor to become payable on each monthly anniversary until the registration statement was declared effective. On July 30, 2013, the registration statement was declared effective by the U.S. Securities and Exchange Commission. On October 15, 2013, the Company paid liquidated damages of $18,000. | |||||||||||||||||
Pursuant to the Series D Certificate of Designation, commencing two years from the termination or expiration of the offering of the Series D Preferred Stock (which termination occurred on December 31, 2012), and at any time thereafter, the Company in its sole discretion may redeem all of the outstanding shares of Series D Preferred Stock at a purchase price of $10.00 per share plus any accrued but unpaid dividends. | |||||||||||||||||
(b) Common Stock | |||||||||||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||
On August 15, 2013, the Company entered into a Purchase Agreement with multiple accredited investors relating to the issuance and sale of Common Stock in a private offering. On August 15, 2013, the initial closing date (the “Initial Closing”) of the Purchase Agreement, we sold (i) an aggregate of 2,594,000 shares of our Common Stock for $0.60 per share and (ii) Common Stock Purchase Warrants (the “Investor Warrants”) for the purchase of an aggregate of 1,297,000 shares for aggregate gross proceeds of $1,556,400. The Investor Warrants have a five-year term, an exercise price of $1.00 and contain certain provisions for anti-dilution and price adjustments in the event of a future offering. | |||||||||||||||||
On August 21, 2013, the final closing date (the “Final Closing”) of the Purchase Agreement, we sold (i) an aggregate of 333,333 shares of our Common Stock for $0.60 per share and (ii) 166,667 Investor Warrants for aggregate gross proceeds of $200,000. | |||||||||||||||||
For a period commencing on the Initial Closing and terminating on a date which is 24 months from the Initial Closing, in the event the Company issues or grants any shares of Common Stock or securities convertible, exchangeable or exercisable for shares of Common Stock pursuant to which shares of Common Stock may be acquired at a price less than $0.60 per share, then the Company shall promptly issue additional shares of Common Stock to the investors under the Purchase Agreement in an amount sufficient that the subscription price paid, when divided by the total number of shares issued (shares purchased under the Purchase Agreement plus the additional shares issued under this provision), will result in an actual price paid by the Subscriber per share of Common Stock equal to such lower price. | |||||||||||||||||
If the Company at any time while the Investor Warrants are outstanding, shall sell or grant an option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities convertible, exchangeable or exercisable for shares of common stock (as, at an effective price per share less than the exercise price of the Investor Warrants then in effect, the exercise price of the Investor Warrants will be reduced to equal to such lower price | |||||||||||||||||
Pursuant to the terms in the Purchase Agreement, on September 23, 2013, the Company filed a Registration Statement on Form S-1 (the “Form S-1”) for the registration of the 2,927,333 shares of Common Stock and the 1,463,667 shares issuable upon exercise of the Investor Warrants sold under the Purchase Agreement. On October 4, 2013, the Form S-1 was declared effective by the SEC. | |||||||||||||||||
The Company paid the placement agent $175,600 in commissions (equal to 10% of the gross proceeds), and issued to the placement agent five-year warrants (the “Placement Agent Warrants”) to purchase 292,733 shares of our common stock (equal to 10% of the number of shares of common stock sold under the Purchase Agreement). The Placement Agent Warrants have a five-year term, an exercise price of $0.60 and contain provisions for anti-dilution and price adjustments in the event of a future offering. | |||||||||||||||||
If the Company at any time while the Placement Agent Warrants are outstanding, shall sell or grant an option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities convertible, exchangeable or exercisable for shares of common stock, at an effective price per share less than the exercise price of the Placement Agent Warrants then in effect, the exercise price of the Placement Agent Warrants will be reduced to equal to such lower price. | |||||||||||||||||
The Company recorded the Investor Warrants and Placement Agent Warrants as a liability (see further disclosure at Note 3). Accordingly, the net proceeds raised ($1.7 million in gross offering proceeds, net of $0.2 million in cost), were allocated to the fair value of the warrant liability of $1.1 million and the remainder was recorded as equity ($0.4 million). | |||||||||||||||||
On April 26, 2013, the Company issued 70,207 shares of its common stock to 3 employees as part of a specified portion of their regular annual cash bonus. | |||||||||||||||||
For the year ended December 31, 2012 | |||||||||||||||||
On June 4, 2012, the Company issued 325,000 shares of its common stock as consideration for acquisition related expenses in conjunction with the Apex transaction. The shares were valued at $341,000 and were recorded as part of selling, general and administrative expenses in the consolidated statement of operations and comprehensive loss as of December 31, 2012. (Note 5) | |||||||||||||||||
On July 31, 2012, pursuant to the Asset Purchase Agreement with MacroSolve, the Company issued 617,284 shares of its common stock to purchase the business of Illume Mobile, a division of MacroSolve. The shares were valued at $698,000 and were recorded as part of the purchase price. (Note 5) | |||||||||||||||||
On November 15, 2012, the Company entered into an agreement (the “Sigma Agreement”) with Sigma Opportunity Fund II, LLC (“Sigma Opportunity Fund”) and Sigma Capital Advisors, LLC (“Sigma Advisors”). Pursuant to the Sigma Agreement, the Company issued to the holders of the Series C Preferred Stock an aggregate of 175,364 shares of common stock as an anti-dilution adjustment. | |||||||||||||||||
(c) Warrants | |||||||||||||||||
For the nine months ended September 30, 2013 | |||||||||||||||||
During the nine months ended September 30, 2013, the Company issued 1,463,667 Investor Warrants and 292,733 Placement Agent Warrants as discussed above. The exercise price of the Investor Warrants and the Placement Agent Warrants will be adjusted in the event of future issuances of the Company’s Common Stock at prices below the exercise price then in effect (“down-round” protection). The Company evaluated the following guidance ASC 480-10 Distinguishing Liabilities from Equity and ASC 815-40 Contracts in an Entity’s Own Equity. Based on this guidance, the Company’s management concluded these instruments are to be accounted for as liabilities instead of equity due to the down-round protection feature available on the exercise price of the Warrants. The Company recognized these Warrants as liabilities at their fair value and will re-measure them at fair value on each reporting date. ASC 820 Fair Value Measurement provides requirements for disclosure of liabilities that are measured at fair value on a recurring basis in periods subsequent to the initial recognition (see Note 2). Fair values for warrants are determined using the Monte-Carlo Simulation Model valuation technique. The Monte-Carlo Simulation Model valuation model provides for dynamic assumptions regarding volatility and risk-free interest rates within the total period to expected conversion. In addition, management assessed the probabilities of future financing assumptions. | |||||||||||||||||
As of August 15, 2013 and August 21, 2013, the dates of issuance, we recorded the warrant liability at $1,099,000. At September 30, 2013, the warrants were re-valued with a fair value of $933,000 with the difference of $166,000 recorded to other income in the unaudited condensed consolidated statement of operations and comprehensive loss. | |||||||||||||||||
The following table summarizes information about the Company’s outstanding common stock warrants as of September 30, 2013: | |||||||||||||||||
Total | Weighted | ||||||||||||||||
Warrants | Total | Average | |||||||||||||||
Date | Strike | Outstanding | Exercise | Exercise | |||||||||||||
Issued | Expiration | Price | and Exercisable | Price | Price | ||||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | $ | 3.62 | 138,260 | $ | 500,000 | ||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | 4.34 | 138,260 | 600,000 | ||||||||||||
Placement Agent Preferred Stock - Class D | 12-Dec | 17-Dec | 1.1 | 704,200 | 774,620 | ||||||||||||
Common Stock Investor Warrants | 13-Aug | 18-Aug | 1 | 1,297,000 | 1,297,000 | ||||||||||||
Common Stock Investor Warrants | 13-Aug | 18-Aug | 1 | 166,667 | 166,667 | ||||||||||||
Placement Agent Warrants - Common Stock | 13-Aug | 18-Aug | 0.6 | 292,733 | 175,640 | ||||||||||||
2,737,120 | $ | 3,513,927 | $ | 1.28 |
ESOP_PLAN
ESOP PLAN | 9 Months Ended |
Sep. 30, 2013 | |
Esop Plan [Abstract] | ' |
ESOP PLAN | ' |
NOTE 10 – ESOP PLAN | |
The Company has an Employee Stock Ownership Plan (the “ESOP”) which covers all non-union employees. The Company’s contribution expense for the nine months ended September 30, 2013, was $134,000 representing approximately $104,000 for the ESOP principal payment and $30,000 for the ESOP interest. ESOP shares are allocated to individual employee accounts as the loan obligation of the ESOP to the Company is reduced. These amounts were previously calculated on an annual basis by an outside, independent financial advisor. Compensation costs relating to shares released are based on the fair value of shares at the time they are committed to be released. The unreleased shares are not considered outstanding in the computation of earnings per common share. ESOP compensation expense consisting of both cash contributions and shares committed to be released for the nine months ended September 30, 2013 was approximately $78,000. The fair value of the shares was $0.94 per share, based on the average of the daily market closing share price. |
STOCK_OPTION_PLAN
STOCK OPTION PLAN | 9 Months Ended | ||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ' | ||||||||||||||||||||||||||
STOCK OPTION PLAN | ' | ||||||||||||||||||||||||||
NOTE 11 - STOCK OPTION PLAN | |||||||||||||||||||||||||||
In December 2010, the Company established the 2010 Stock Option Plan (the “Plan”). The Plan authorizes the issuance of 1,000,000 shares of common stock. Pursuant to the terms of the Merger Agreement, the Company assumed all of Old DecisionPoint’s obligations under their outstanding stock option plans. | |||||||||||||||||||||||||||
The Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors, which determines recipients and types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. The term of stock options granted under the Plans cannot exceed ten years. Options shall not have an exercise price less than 100% of the fair market value of the Company’s common stock on the grant date, and generally vest over a period of five years. If the individual possesses more than 10% of the combined voting power of all classes of stock of the Company, the exercise price shall not be less than 110% of the fair market of a share of common stock on the date of grant. | |||||||||||||||||||||||||||
A summary of the status of the Plans as of September 30, 2013, and information with respect to the changes in options outstanding is as follows: | |||||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Options | Average | Aggregate | |||||||||||||||||||||||||
Available | Options | Exercise | Intrinsic | ||||||||||||||||||||||||
for Grant | Outstanding | Price | Value | ||||||||||||||||||||||||
31-Dec-12 | 455,495 | 544,505 | $ | 1.82 | $ | - | |||||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||||
Forfeited | - | - | - | - | |||||||||||||||||||||||
30-Sep-13 | 455,495 | 544,505 | $ | 1.82 | $ | - | |||||||||||||||||||||
Exercisable options at September 30, 2013 | 446,374 | $ | 1.75 | $ | - | ||||||||||||||||||||||
The following table summarizes information about stock options outstanding as of September 30, 2013: | |||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||||||||||||
Average | Weighted- | Average | Weighted- | ||||||||||||||||||||||||
Range of | Remaining | Average | Remaining | Average | |||||||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Contractual | Exercise | |||||||||||||||||||||
Prices | Outstanding | Life (Years) | Price | Exercisable | Life (Years) | Price | |||||||||||||||||||||
$ | 1.33 - 2.03 | 365,620 | 1.58 | $ | 1.65 | 355,461 | 1.53 | $ | 1.64 | ||||||||||||||||||
$ | 2.06 - 4.34 | 178,885 | 7.6 | 2.16 | 90,913 | 7.54 | 2.16 | ||||||||||||||||||||
Total | 544,505 | 3.56 | $ | 1.82 | 446,374 | 2.76 | $ | 1.75 | |||||||||||||||||||
No awards were exercised during the nine months ended September 30, 2013 and 2012, respectively. The total fair value of awards vested for the nine months ended September 30, 2013 and 2012 was $40,000 and $73,000, respectively. | |||||||||||||||||||||||||||
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period, which is generally equal to the vesting period. There were no stock option grants during the nine months ended September 30, 2013 and 2012. | |||||||||||||||||||||||||||
Due to the limited time that the Company’s common stock has been publicly traded, management estimates expected volatility based on the average expected volatilities of a sampling of five companies with similar attributes to the Company, including: industry, size and financial leverage. The expected term of the awards represents the period of time that the awards are expected to be outstanding. Management considered expectations for the future to estimate employee exercise and post-vest termination behavior. The Company does not intend to pay dividends in the foreseeable future, and therefore has assumed a dividend yield of zero. The risk-free interest rate is the yield on zero-coupon U.S. Treasury securities for a period that is commensurate with the expected term of the awards. | |||||||||||||||||||||||||||
Employee stock-based compensation costs for the nine months ended September 30, 2013 and 2012, was $31,000 and $50,000, respectively, and is included in selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations. As of September 30, 2013, total unrecognized estimated employee compensation cost related to stock options granted prior to that date was $109,000 which is expected to be recognized over a weighted-average vesting period of 2.69 years. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
COMMITMENTS AND CONTINGENCIES | ' | |
NOTE 12 – COMMITMENTS AND CONTINGENCIES | ||
Leases - The Company leases its facilities and certain equipment under various operating leases which expire at various dates through fiscal 2018 and require us to pay a portion of the related operating expenses such as maintenance, property taxes, and insurance. There have been no material changes to our lease arrangements during the nine months ended September 30, 2013. Please refer to Note 14 to the audited consolidated financial statements for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2013. | ||
Rent expense for the nine months ended September 30, 2013 and 2012, was $511,000 and $353,000, respectively. | ||
Apex Earn Out Obligations - If EBITDA (as uniquely defined in the agreement), of Apex for the twelve months ending July 31, 2013 (“2013 EBITDA”), is equal to or less than CDN$2,000,000, Apex shall pay an amount, to its former owners, equal to the product of the 2013 EBITDA multiplied by four less CDN$5,000,000 (“2013 EBITDA Basic Earn-Out Amount”), up to a maximum of CDN$3,000,000. An amount equal to 22.22% of the 2013 EBITDA Basic Earn-Out Amount shall be paid in cash and the balance shall be paid by Apex issuing a subordinated convertible note (the “Note”) (see Note 5). | ||
Under the terms of the Note, Apex will pay the principal sum due on the Note in eight quarterly payments beginning on January 31, 2014 (“Installment Dates”). Interest from and after August 1, 2013, shall be paid in arrears on the last day of each calendar quarter commencing on January 31, 2014. The interest rate shall be determined as follows: | ||
(i) | 9% per annum, calculated and compounded quarterly before November 1, 2014; and | |
(ii) | 11% per annum, calculated and compounded quarterly after October 31, 2014; | |
(iii) | except, however, that, if, during the term of the Note, the Company raises Net Equity Capital (as defined in the Note) in an amount greater than CDN$5,000,000 and this Note is not repaid in full within 30 days from the date that the Company receives such Net Equity Capital, the interest rate otherwise provided in the Note shall be 15% per annum from the end of such 30-day period to the first anniversary thereof and 20% per annum thereafter to the date of payment in full. | |
The Note is convertible, only on each Installment Date, at the option of the Note holder, into shares of our common stock at a conversion price that is equal to the greater of the market price of our common stock on the day prior to the conversion, or $1.00. The shares issuable under the Note will be restricted but will have certain piggy back registration rights as set forth in the Purchase Agreement. | ||
If the 2013 EBITDA is greater than CDN$2,000,000, Apex shall pay an amount, to its former owners, (the “2013 EBITDA Additional Earn-Out Amount”) by which the dollar-for-dollar 2013 EBITDA exceeds CDN$2,000,000, up to a maximum of CDN$500,000. The 2013 EBITDA Additional Earn-Out shall be paid by the issuance of shares of the Company’s common stock. The number of shares to be issued shall be determined by the amount due divided by the 30 day average daily closing price of the shares of the Company’s common stock in the month of July 2013. The shares issued will be restricted but will have certain piggy back registration rights as set forth in the Purchase Agreement. | ||
The fair value of the earn out was calculated to be approximately CDN$1,076,000 (US$1,033,000 at the Closing Date). At September 30, 2013, the calculated Earn Out Payment due under the Purchase Agreement was CDN$341,000 (US$331,000). Accordingly, there is CDN$341,000 (US$331,000) recorded as potential additional purchase consideration in the unaudited condensed consolidated financial statements. The adjustment of CDN$735,000 (US$713,000) was recorded as a separate component of operating expenses in the unaudited condensed consolidated statement of operations and comprehensive loss as of September 30, 2013. On October 31, 2013 the Sellers disputed the Company’s calculation of the Earn Out Payment due and has stated the payment should be $1.6 million. Per the terms of the Purchase Agreement, the seller and the Company have ten business days to reconcile any differences in the calculation of the Earn Out Payment. The ten business days concludes on November 14, 2013. If a reconciliation cannot be completed in that time period, the Company and the seller will refer the matter to a mutually agreed upon accounting firm to conclude the accuracy of the Earn Out Payment. The accounting firm will have 45 calendar days to review the seller and the Company’s calculation of the Earn Out Payment, which will conclude on December 31, 2013. | ||
The Company also entered into an employment agreement with Donald Dalicandro, the Former Chief Executive Officer of Apex, as a result of the Apex acquisition. Under the employment agreement, the Company further agreed Mr. Dalicandro would be appointed to the Company’s board of directors effective June 4, 2012, and would not be removed from the Company’s board of directors during the Earn-Out Period (as defined in the employment agreement) and the Bonus Period (as defined in the employment agreement) except by death, bankruptcy, incapacity or voluntary resignation. The agreement calls for annual bonus upon achieving certain results of operation at Apex for the 12 months ending July 31, 2013, 2014, and 2015. Such bonuses are considered additional contingent purchase consideration as the Company is obligated to pay the bonus regardless of whether or not his employment is retained (see Note 5). | ||
As part of the Purchase Agreement, we are obligated to pay bonus consideration to the CEO of Apex. Such bonus is considered additional contingent purchase consideration as we are obligated to pay the bonus regardless of whether or not the CEO’s employment is retained. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Closing Date). At September 30, 2013 there is CDN$160,000 (US$154,000) recorded in accrued earn out consideration in the Company’s unaudited condensed consolidated balance sheets. | ||
Apex Escrow Obligation - As part of the Apex Purchase Agreement, from the Closing Date up until the expiry of the bonus period, the Company is obligated to escrow 25% of any Equity Capital raised in excess of $500,000. The funds in the escrow are to be used to pay the 2013 EBITDA Basic Earn-Out and the 2013 EBITDA Additional Earn-Out and the additional bonus consideration. In December 2012, the Company raised $7,042,000 as part of the Series D Purchase Agreement. These funds have not been placed into escrow pending agreement between the Company and the sellers of Apex regarding the financial institution that will escrow the funds, the amount of funds that are to be placed in escrow and the terms of the escrow agreement itself. | ||
Contingencies - The Company is not a party to any material pending legal proceedings other than ordinary routine litigation incidental to the business; the outcome of which the Company believes will not have a material adverse effect on the business, financial condition, cash flows or results of operations. These matters are subject to inherent uncertainties and management’s view of these matters may change in the future. | ||
The Company is subject to the possibility of various loss contingencies, including claims, suits and complaints, arising in the ordinary course of business. The Company considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information available to it to determine whether such accruals should be adjusted and whether new accruals are required. | ||
Under the Company’s bylaws, directors and officers have certain rights to indemnification by the Company against certain liabilities that may arise by reason of their status or service as directors or officers. The Company maintains director and officer insurance, which covers certain liabilities arising from the obligation to indemnify directors and officers and former directors in certain circumstances. No material indemnification liabilities were accrued at September 30, 2013. | ||
The Company is party to employment agreements with certain of its key executive officers as of September 30, 2013. The agreements do not provide for any material, out of ordinary course of business provisions or benefits. | ||
Included in the key executive officer agreements is an employment agreement with its Chief Operating Officer. Pursuant to the agreement, the officer is entitled to an annual bonus calculated pursuant to terms set forth in the agreement. The agreement also contains a severance provision providing up to twelve months of salary in certain situations. |
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
NOTE 13 – SUBSEQUENT EVENT | |
In November 2013, the Company entered into definitive subscription agreements (“Series E Purchase Agreement”) with accredited investors for the sales of $3,835,000 in gross proceeds for 383,500 shares of Series E Convertible Preferred Stock (“Series E Preferred Shares”) for a purchase price of $10.00 per share. The initial Conversion Price is $0.50, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. The Company received net proceeds of approximately $3.4 million (net of the fair value of placement agent warrants) from the initial closing, after deducting the placement agent’s fees of 8% and other offering expenses. The Company paid the Placement Agent $306,800 in commissions (equal to 8% of the gross proceeds), and issued to the Placement Agent five-year warrants to purchase 767,000 shares of our common stock (equal to 10% of the number of shares of common stock underlying the Series E Preferred Shares sold under the Series E Purchase Agreement) at an exercise price of $0.55 per share, in connection with the Series E Purchase Agreement initial closing. The Company expects to close a second round of Series E Preferred Shares with gross proceeds of $300,000-$700,000 shortly thereafter. | |
The Series D Preferred Stock’s initial Conversion Price was $1.00, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. As a result of the issuance of Common Stock in connection with the August 15, 2013 private placement (see Note 9(b)), the Conversion Price of the Series D Preferred Stock was reduced to $0.90. As a result of the sale of Series E Preferred Shares described above, the Conversion Price of the Series D Preferred Stock was further reduced to $0.75 per share on November 12, 2013. The Company expects a second closing of Series E Preferred shortly after November 12, 2013 of approximately $300,000- $700,000. If the second closing is for $700,000 the revised conversion price would be reduced to $0.73 per share. The Series D Preferred Stock contained certain anti-dilution provisions whereby the subsequent sale of Series E Preferred Shares may potentially create an imputed dividend that would impact EPS. | |
On August 15, 2013, the Company entered into a Purchase Agreement with multiple accredited investors relating to the issuance and sale of Common Stock in a private offering (see Note 9(b)). For a period commencing on the Initial Closing and terminating on a date which is 24 months from the Initial Closing, in the event the Company issues or grants any shares of Common Stock or securities convertible, exchangeable or exercisable for shares of Common Stock pursuant to which shares of Common Stock may be acquired at a price less than $0.60 per share, then the Company shall promptly issue additional shares of Common Stock to the investors under the Purchase Agreement in an amount sufficient that the subscription price paid, when divided by the total number of shares issued (shares purchased under the Purchase Agreement plus the additional shares issued under this provision), will result in an actual price paid by the Subscriber per share of Common Stock equal to such lower price. As a result of the sale of Series E Preferred Shares described above, the Company is required to issue up to 585,467 additional common shares to the subscribers in the private offering, | |
The conversion price of the Investor Warrants issued in connection with the August 15, 2013 private placement was $1.00 per share. If the Company at any time while the Investor Warrants are outstanding, shall sell or grant an option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities convertible, exchangeable or exercisable for shares of common stock (as, at an effective price per share less than the exercise price of the Investor Warrants then in effect, the exercise price of the Investor Warrants will be reduced to equal to such lower price. As a result of the sale of Series E Preferred Shares described above, the conversion price of the Investor Warrants was reduced to $0.50 per share on November 12, 2013. | |
The conversion price of the Placement Agent Warrants issued in connection with the August 15, 2013 private placement was $0.60 per share. If the Company at any time while the Placement Agent Warrants are outstanding, shall sell or grant an option to purchase, or sell or grant any right to reprice, or otherwise dispose of or issue any common stock or securities convertible, exchangeable or exercisable for shares of common stock (as, at an effective price per share less than the exercise price of the Placement Agent Warrants then in effect, the exercise price of the Placement Agent Warrants will be reduced to equal to such lower price. As a result of the sale of Series E Preferred Shares described above, the conversion price of the Placement Agent Warrants was reduced to $0.50 per share on November 12, 2013 |
BASIS_OF_PRESENTATION_LIQUIDIT1
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all of the adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows of the Company at the dates and for the periods indicated. The interim results for the periods ended September 30, 2013, are not necessarily indicative of results for the full 2013 fiscal year or any other future interim periods. | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, DecisionPoint Systems International and Apex Systems Integrators, Inc. (“Apex”). DecisionPoint Systems International has two wholly-owned subsidiaries, DecisionPoint Systems Group, Inc. (“DPS Group”) and CMAC, Inc. (“CMAC”). Apex was acquired on June 4, 2012, and as such, the operating results of Apex have been consolidated into the Company’s consolidated results of operations beginning on June 5, 2012. In addition, on July 31, 2012, the Company consummated an asset purchase agreement (“Asset Purchase Agreement”) with MacroSolve, Inc. Pursuant to the Asset Purchase Agreement, the Company purchased the business (including substantially all the related assets) of the seller’s Illume Mobile division (“Illume Mobile”) and is a division of the Company. The Company currently operates in one business segment. | |||||||||||||||||
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the recorded amounts reported therein. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. The Company evaluates its estimates and assumptions on a regular basis. The Company uses historical experience and various other assumptions that are believed to be reasonable under the circumstances to form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates and assumptions used in preparation of the unaudited condensed consolidated financial statements. | |||||||||||||||||
These unaudited condensed consolidated financial statements have been prepared by management and should be read in conjunction with the audited consolidated financial statements of DecisionPoint Systems, Inc. and notes thereto for the year ended December 31, 2012, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2013. | |||||||||||||||||
Liquidity | ' | ||||||||||||||||
Liquidity | |||||||||||||||||
In the quarter ended September 30, 2013, the Company experienced a decrease in revenue of $1.0 million compared to the quarter ended September 30, 2012, and a $2.9 million increase in revenue compared to the previous sequential quarter ended June 30, 2013. In the nine months ended September 30, 2013, the Company incurred approximately $1.3 million in increased expenses due to professional fees relating to capital raising activities, including the registration of common shares as a result of the Series D Preferred Stock offering completed in December 2012 and the private placement of common stock completed in August 2013 and associated audit fees, and other matters such as employee termination costs. The Company experienced a net loss of $0.2 million and $3.4 million for the three and nine month periods ended September 30, 2013. In addition, the Company has a substantial working capital deficit totaling $(11.5) million at September 30, 2013. Although a portion of this deficit is associated with deferred costs and unearned revenues and term debt that has been classified current due to expected future covenant violations (see further discussion at Note 8), the liabilities of the Company that are expected to be satisfied in the foreseeable future in cash exceed the operating assets that are expected to be satisfied in cash. | |||||||||||||||||
To address this, the Company has plans to seek additional capital through sales of our securities. There is no assurance additional funding will be available on terms acceptable to us, or at all. If the Company raises additional funds by selling additional shares of our capital stock, or securities convertible into shares of our capital stock, the ownership interest of our existing shareholders will be diluted. The Company is also reducing non-essential expenses and completing the integration of our acquisitions of Apex and Illume Mobile, which is expected to result in further cost savings. Such expense reduction measures include, but are not limited to, consolidation of administrative personnel, consolidation of information technology environments, reduction of outsourced consulting expertise and replacing certain service providers with lower cost providers. The result of these activities has reduced the expense structure of the consolidated business, however this reduction has not been material to date and we do not anticipate it becoming material in the foreseeable future. | |||||||||||||||||
On August 15, 2013, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with multiple accredited investors for the sale of common stock for gross proceeds of $1,756,400 (including $100,000 from management and existing shareholders of the Company) for 2,927,333 shares of common stock. The effective price of the offering was $0.60 per share of common stock. An initial closing for $1,556,400 was held on August 15, 2013. The final closing for $200,000 was held on August 21, 2013. Additionally, pursuant to the Purchase Agreement, the Company issued 1,463,667 warrants to multiple accredited investors at an exercise price of $1.00 per share. Further, the Company issued 292,733 warrants to the placement agent at an exercise price of $0.60 per share. The warrants received liability accounting treatment under existing accounting standards. The Company received net proceeds of approximately $1.5 million from the offering, after deducting the placement agent’s fees of 10% and other offering expenses. (see Note 9 – Stockholders’ Equity and Note 3 – Warrant Liability). | |||||||||||||||||
In November 2013, the Company entered into definitive subscription agreements (“Series E Purchase Agreement”) with accredited investors for the sales of $3,835,000 in gross proceeds for 383,500 shares of Series E Convertible Preferred Stock (“Series E Preferred Shares”) for a purchase price of $10.00 per share. The initial Conversion Price is $0.50, subject to adjustment in the event of stock splits, stock dividends and similar transactions, and in the event of subsequent equity sales at a lower price per share, subject to certain exceptions. The Company received net proceeds of approximately $3.4 million from the initial closing, after deducting the placement agent’s fees of 8% and other offering expenses. The Company issued to the Placement Agent five-year warrants to purchase 767,000 shares of our common stock (equal to 10% of the number of shares of common stock underlying the Series E Preferred Shares sold under the Series E Purchase Agreement) at an exercise price of $0.55 per share, in connection with the Series E Purchase Agreement initial closing. The Company expects to close a second round of Series E Preferred Shares with gross proceeds of $300,000-$700,000 shortly thereafter. (see Note 13 – Subsequent Event). | |||||||||||||||||
During 2012 and 2013, all principal payments on the Company’s term debt were made within payment terms. The Company was not in compliance with certain financial covenants under the agreements with Royal Bank of Canada (“RBC Credit Agreement”) and BDC, Inc. (“BDC Credit Agreement”) as of December, 31, 2012, March 31, 2013 and June 30, 2013. The Company has received waivers for non-compliance for past covenant violations. On August 22, 2013, the BDC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended loan agreement, the Company is required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised annually 120 days after each year end. We were in compliance with all of our BDC financial covenants as of September 30, 2013. We expect to continue to meet the requirements of our BDC financial covenants over the short and long term. On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ending December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. As part of the revised financial covenants, covenant testing was waived by RBC for September 30, 2013. The Company does not believe that it will be in compliance with the reset covenants at December 31, 2013. Although management of the Company believes it is improbable that RBC will exercise their rights up to, and including, acceleration of the outstanding debt, there can be no assurance RBC will not exercise their rights pursuant to the provisions of the debt obligation. Accordingly, the Company has classified this debt obligation as current at September 30, 2013 (see Note 8 – Term Debt). | |||||||||||||||||
At October 31, 2013, the outstanding balance on the line of credit with Silicon Valley Bank (“SVB”) is $3.7 million, down from $4.1 million at September 30, 2013, and the availability under the line of credit has decreased to $1.6 million (see Note 7 – Lines of Credit). The Company relies on the line of credit to fund daily operating activities maintaining very little cash on hand. As of December 31, 2012, the Company was in compliance with all of its financial covenants with SVB. As of May 31, 2013 and June 30, 2013, the Company was not in compliance with the Tangible Net Worth financial covenant as defined in the amended SVB Loan Agreement. SVB agreed to temporarily forbear exercising their rights and remedies under the facility until August 28, 2013 and agreed to waive the existing covenant violations if a gross capital raise of $1.5 million was completed by such date. The Company completed the capital raise and was able to achieve compliance with the forbearance agreement prior to August 28, 2013. Except for any capital raises through August 28, 2013, the minimum Tangible Net Worth requirement of a $(9.7) million deficit will be further reduced by one half of any funds raised through sales of common stock (as only 50% of additional capital raises are given credit in the Tangible Net Worth calculation). As of September 30, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.3 million cushion over the requirement. As of November 13, 2013, SVB agreed to temporarily waive the existing financial covenant testing under the facility as of October 31, 2013 if a gross capital raise of $3.0 million is completed by November 15, 2013. SVB also agreed to waive the reduction of one half of any funds received through November 15, 2013 as a reduction of the minimum Tangible Net Worth requirement of a ($9.7) million deficit. In November 2013, the Company entered into a definitive subscription agreement with accredited investors for the sale of Series E Preferred Stock, raising $3.8 million in gross proceeds (See Note 13). Given the effect of the capital raise ($3.8 million in gross proceeds, net of $400,000 in costs) closed to date in November, the Company believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement and expects to continue to meet the requirements of our SVB financial covenants over the short and long term. Should the Company continue to incur losses in a manner consistent with its recent historical financial performance, the Company will violate this covenant without additional net capital raises in amounts that are approximately twice the amount of the losses incurred. | |||||||||||||||||
In the near term, the Company’s successful restructuring of its operations and reduction of operating costs and/or its ability to raise additional capital at acceptable terms is critical to its ability to continue to operate for the foreseeable future. If the Company continues to incur operating losses and/or does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations, 2) the Company’s inability to fully implement its current business plan and/or 3) continued defaults under the various loan agreements. A covenant default would give the bank the right to demand immediate payment of all outstanding amounts which the Company would not be able to repay out of normal operations. There are no assurances that the Company will successfully implement its plans with respect to these liquidity matters. The unaudited condensed consolidated financial statements do not reflect any adjustment that may be required resulting from the adverse outcome relating to this uncertainty. | |||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
There have been no material changes to the Company's significant accounting policies during the nine months ended September 30, 2013. See Footnote 2 of the Company's consolidated financial statements included in the Company's 2012 Annual Report on Form 10-K filed on March 28, 2013, for a comprehensive description of the Company's significant accounting policies. | |||||||||||||||||
Concentration of Credit Risk | ' | ||||||||||||||||
Concentration of Credit Risk - The Company derived approximately 9.8% and 13.3% of revenues from one customer, and 21.1% and 26.2% of revenues from the top three customers in the nine months ended September 30, 2013 and 2012, respectively. Additionally there was one customer which comprised 15.5% of accounts receivable at September 30, 2013. Customer mix can shift significantly from year to year, but a concentration of the business with a few large customers is typical in any given year. A decline in revenues could occur if a customer which has been a significant factor in one financial reporting period gives significantly less business in the following period. | |||||||||||||||||
The Company’s contracts with these customers and other customers do not include any specific purchase requirements or other requirements outside of the normal course of business. The majority of customer contracts are on an annual basis for service support while on a purchase order basis for hardware purchases. Typical hardware sales are submitted on an estimated order basis with subsequent follow on orders for specific quantities. These sales are ultimately subject to the time that the units are installed at each of the customer locations as per their requirements. Service contracts are purchased on an annual basis generally and are the performance responsibility of the actual service provider as opposed to the Company. Termination provisions are generally standard clauses based upon non-performance, but a customer can cancel with a certain reasonable notice period anywhere from 30 to 90 days. General industry standards for contracts provide ordinary terms and conditions, while actual work and performance aspects are usually dictated by a Statement of Work which outlines what is being ordered, product specifications, delivery, installation and pricing. | |||||||||||||||||
Translation of Foreign Currencies | ' | ||||||||||||||||
Translation of Foreign Currencies - The Company's functional currency is the U.S. dollar. The financial statements of the Company's foreign subsidiary is measured using the local currency, in this case the Canadian dollar (CDN$), as its functional currency and is translated to U.S. dollars for reporting purposes. Assets and liabilities of the subsidiary are translated at exchange rates as of the balance sheet dates. Revenues and expenses of the subsidiary are translated at the rates of exchange in effect during the year. | |||||||||||||||||
Comprehensive Loss | ' | ||||||||||||||||
Comprehensive Loss - Comprehensive loss is comprised of net loss and other comprehensive loss. The only component of comprehensive loss is the foreign currency translation adjustments, which were nominal in amount. There was no tax effect allocated to any component of other comprehensive loss during the periods presented. | |||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
Fair Value Measurement - Financial assets and liabilities are measured at fair value, which is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: | |||||||||||||||||
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
• | Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||||||||
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||||||||
The following table presents the Company’s warrant liability measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, aggregated by the level in the fair-value hierarchy within which those measurements fall (in thousands): | |||||||||||||||||
Balance | Quoted prices in active markets | Significant other observable inputs | Significant other unobservable inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Balance at December 31, 2012 | $ | - | - | - | $ | - | |||||||||||
Balance at September 30, 2013 | $ | 933 | - | - | $ | 933 | |||||||||||
The following table presents the activity for liabilities measured at estimated fair value using unobservable inputs (Level 3) from December 31, 2012 through September 30, 2013 (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Balance at December 31, 2012 | $ | - | |||||||||||||||
Fair value of derivative warrants issued in connection with share purchase agreement (see Note 3) | 1,099 | ||||||||||||||||
Adjustments to fair value (reflected in other income) | (166 | ) | |||||||||||||||
Balance at September 30, 2013 | $ | 933 | |||||||||||||||
Reclassifications | ' | ||||||||||||||||
Reclassifications - Certain reclassifications have been made to prior years to conform to current period financial statement presentation with no effect on our previously reported consolidated financial position, results of operations, or cash flows. |
BASIS_OF_PRESENTATION_LIQUIDIT2
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Summary of liabilities measured at estimated fair value using unobservable inputs | ' | ||||||||||||||||
Level 3 | |||||||||||||||||
Balance at December 31, 2012 | $ | - | |||||||||||||||
Fair value of derivative warrants issued in connection with share purchase agreement (see Note 3) | 1,099 | ||||||||||||||||
Adjustments to fair value (reflected in other income) | (166 | ) | |||||||||||||||
Balance at September 30, 2013 | $ | 933 | |||||||||||||||
Warrant [Member] | ' | ||||||||||||||||
Summary of warrant liability measured at fair value on a recurring basis | ' | ||||||||||||||||
Balance | Quoted prices in active markets | Significant other observable inputs | Significant other unobservable inputs | ||||||||||||||
(Level 1) | (Level 2) | (Level 3) | |||||||||||||||
Balance at December 31, 2012 | $ | - | - | - | $ | - | |||||||||||
Balance at September 30, 2013 | $ | 933 | - | - | $ | 933 |
WARRANT_LIABILITY_Tables
WARRANT LIABILITY (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||
Warrant Liability [Abstract] | ' | ||||||||||||||||||||
Schedule of derivative warrant liabilities valued at the closing dates of purchase agreement | ' | ||||||||||||||||||||
Placement Agent Warrants | Investor Warrants | ||||||||||||||||||||
Investor Warrants | September | August | September | August | August | ||||||||||||||||
30, 2013 | 21, 2013 | 30, 2013 | 21, 2013 | 15, 2013 | |||||||||||||||||
Closing price per share of common stock | $ | 0.63 | $ | 0.84 | $ | 0.63 | $ | 0.84 | $ | 0.69 | |||||||||||
Exercise price per share (range) | 0.6 | 0.6 | 1 | 1 | 1 | ||||||||||||||||
Expected volatility | 132.1 | % | 134.9 | % | 132.1 | % | 134.9 | % | 134.1 | % | |||||||||||
Risk-free interest rate | 1.4 | % | 1.6 | % | 1.4 | % | 1.6 | % | 1.6 | % | |||||||||||
Dividend yield | - | - | - | - | - | ||||||||||||||||
Remaining expected term of underlying securities (years) | 4.9 | 5 | 4.9 | 5 | 5 | ||||||||||||||||
LOSS_PER_COMMON_SHARE_Tables
LOSS PER COMMON SHARE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of potentially dilutive securities | ' | ||||||||
Nine Months Ended September 30, | |||||||||
2013 | 2012 | ||||||||
Convertible preferred stock - Series A | 270 | 270 | |||||||
Convertible preferred stock - Series B | 131 | 131 | |||||||
Convertible preferred stock - Series C | - | 1,415 | |||||||
Convertible preferred stock - Series D | 7,824 | - | |||||||
Warrants to purchase common stock | 2,737 | 277 | |||||||
Options to purchase common stock | 544 | 642 | |||||||
Total potentially dilutive securities | 11,506 | 2,735 | |||||||
BUSINESS_COMBINATIONS_Tables
BUSINESS COMBINATIONS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Schedule of pro forma financial information | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, 2012 | 30-Sep-12 | ||||||||||||||||
As Reported | Pro Forma | As Reported | Pro Forma | ||||||||||||||
Net sales | $ | 18,567 | $ | 18,669 | $ | 54,144 | $ | 56,346 | |||||||||
Net loss attributable to common shareholders | (1,263 | ) | (1,445 | ) | (3,245 | ) | (5,311 | ) | |||||||||
Net loss per share - basic and diluted | (0.15 | ) | (0.18 | ) | (0.42 | ) | (0.69 | ) | |||||||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Schedule of transactions effecting goodwill | ' | ||||||||||||||||||||||||
Balance at December 31, 2012 | $ | 8,571 | |||||||||||||||||||||||
Effect of currency translation on Apex | (86 | ) | |||||||||||||||||||||||
Balance at September 30, 2013 | $ | 8,485 | |||||||||||||||||||||||
Schedule of intangible assets and accumulated amortization | ' | ||||||||||||||||||||||||
30-Sep-13 | 31-Dec-12 | ||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||
Gross | Amortization | Net | Gross | Amortization | Net | ||||||||||||||||||||
Customer relationships | $ | 3,319 | $ | (1,498 | ) | $ | 1,821 | $ | 3,373 | $ | (966 | ) | $ | 2,407 | |||||||||||
Contractor and resume databases | 675 | (371 | ) | 304 | 675 | (270 | ) | 405 | |||||||||||||||||
Tradename | 878 | (324 | ) | 554 | 893 | (193 | ) | 700 | |||||||||||||||||
Internal use software | 2,892 | (1,137 | ) | 1,755 | 2,978 | (545 | ) | 2,433 | |||||||||||||||||
Covenant not to compete | 105 | (67 | ) | 38 | 105 | (27 | ) | 78 | |||||||||||||||||
$ | 7,869 | $ | (3,397 | ) | $ | 4,472 | $ | 8,024 | $ | (2,001 | ) | $ | 6,023 | ||||||||||||
TERM_DEBT_Tables
TERM DEBT (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Long-Term Debt, Unclassified [Abstract] | ' | ||||||||||||||||||||||||
Schedule of long term debt | ' | ||||||||||||||||||||||||
Balance | Additions | Payments | Amortization of Note Discount | Effect of | Balance | ||||||||||||||||||||
31-Dec-12 | Currency | September 30, | |||||||||||||||||||||||
Translation | 2013 | ||||||||||||||||||||||||
RBC term loan | $ | 2,090 | $ | - | $ | (608 | ) | $ | - | $ | (68 | ) | $ | 1,414 | |||||||||||
Note discount | (38 | ) | - | 18 | $ | 1 | (19 | ) | |||||||||||||||||
BDC term loan | 1,705 | - | - | - | (56 | ) | 1,649 | ||||||||||||||||||
Note discount | (31 | ) | - | 5 | 1 | (25 | ) | ||||||||||||||||||
SVB term loan | 1,000 | - | (750 | ) | - | - | 250 | ||||||||||||||||||
Note discount | (4 | ) | - | - | 4 | - | - | ||||||||||||||||||
SVB term loan-2 | - | 1,000 | (194 | ) | - | - | 806 | ||||||||||||||||||
Note discount | - | (19 | ) | - | 6 | - | (13 | ) | |||||||||||||||||
Total debt | $ | 4,722 | $ | 981 | $ | (1,552 | ) | $ | 33 | $ | (122 | ) | 4,062 | ||||||||||||
Less contractual current portion | (1,377 | ) | |||||||||||||||||||||||
Less RBC debt long term classified as current | (586 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 2,099 | |||||||||||||||||||||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders' Equity Attributable To Parent [Abstract] | ' | ||||||||||||||||
Schedule of preferred stock outstanding | ' | ||||||||||||||||
Description | |||||||||||||||||
Series A Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||
269,608 shares issued and outstanding, liquidation preference of $975 | |||||||||||||||||
plus cumulative dividends of $344 | $ | 1,319 | |||||||||||||||
Series B Preferred, $0.001 par value per share, 500,000 shares designated, | |||||||||||||||||
131,347 shares issued and outstanding, liquidation preference of $380 | |||||||||||||||||
plus cumulative dividends of $85 | 465 | ||||||||||||||||
Series D Preferred, $0.001 par value per share, 4,000,000 shares designated, | |||||||||||||||||
704,200 shares issued and outstanding, liquidation preference of $7,042 | |||||||||||||||||
(net of $1,374 in issuance costs) plus imputed dividends of $157 | 5,825 | ||||||||||||||||
Total convertible preferred stock | $ | 7,609 | |||||||||||||||
Schedule of outstanding common stock warrants | ' | ||||||||||||||||
Total | Weighted | ||||||||||||||||
Warrants | Total | Average | |||||||||||||||
Date | Strike | Outstanding | Exercise | Exercise | |||||||||||||
Issued | Expiration | Price | and Exercisable | Price | Price | ||||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | $ | 3.62 | 138,260 | $ | 500,000 | ||||||||||
Senior Subordinated Notes | 9-Dec | 14-Dec | 4.34 | 138,260 | 600,000 | ||||||||||||
Placement Agent Preferred Stock - Class D | 12-Dec | 17-Dec | 1.1 | 704,200 | 774,620 | ||||||||||||
Common Stock Investor Warrants | 13-Aug | 18-Aug | 1 | 1,297,000 | 1,297,000 | ||||||||||||
Common Stock Investor Warrants | 13-Aug | 18-Aug | 1 | 166,667 | 166,667 | ||||||||||||
Placement Agent Warrants - Common Stock | 13-Aug | 18-Aug | 0.6 | 292,733 | 175,640 | ||||||||||||
2,737,120 | $ | 3,513,927 | $ | 1.28 |
STOCK_OPTION_PLAN_Tables
STOCK OPTION PLAN (Tables) | 9 Months Ended | ||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||
Stock Option Plan [Abstract] | ' | ||||||||||||||||||||||||||
Schedule of the summary of the status of the plans and information with respect to the changes in options outstanding | ' | ||||||||||||||||||||||||||
Weighted - | |||||||||||||||||||||||||||
Options | Average | Aggregate | |||||||||||||||||||||||||
Available | Options | Exercise | Intrinsic | ||||||||||||||||||||||||
for Grant | Outstanding | Price | Value | ||||||||||||||||||||||||
31-Dec-12 | 455,495 | 544,505 | $ | 1.82 | $ | - | |||||||||||||||||||||
Granted | - | - | - | - | |||||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||||
Forfeited | - | - | - | - | |||||||||||||||||||||||
30-Sep-13 | 455,495 | 544,505 | $ | 1.82 | $ | - | |||||||||||||||||||||
Exercisable options at September 30, 2013 | 446,374 | $ | 1.75 | $ | - | ||||||||||||||||||||||
Schedule of summary of the information about stock options outstanding | ' | ||||||||||||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||||||||||||
Weighted- | Weighted- | ||||||||||||||||||||||||||
Average | Weighted- | Average | Weighted- | ||||||||||||||||||||||||
Range of | Remaining | Average | Remaining | Average | |||||||||||||||||||||||
Exercise | Number | Contractual | Exercise | Number | Contractual | Exercise | |||||||||||||||||||||
Prices | Outstanding | Life (Years) | Price | Exercisable | Life (Years) | Price | |||||||||||||||||||||
$ | 1.33 - 2.03 | 365,620 | 1.58 | $ | 1.65 | 355,461 | 1.53 | $ | 1.64 | ||||||||||||||||||
$ | 2.06 - 4.34 | 178,885 | 7.6 | 2.16 | 90,913 | 7.54 | 2.16 | ||||||||||||||||||||
Total | 544,505 | 3.56 | $ | 1.82 | 446,374 | 2.76 | $ | 1.75 | |||||||||||||||||||
BASIS_OF_PRESENTATION_LIQUIDIT3
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (Warrant [Member], USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fair value of warrant liability | $933 | ' |
Quoted prices in active markets (Level 1) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fair value of warrant liability | ' | ' |
Significant other observable inputs (Level 2) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fair value of warrant liability | ' | ' |
Significant other unobservable inputs (Level 3) | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Fair value of warrant liability | $933 | ' |
BASIS_OF_PRESENTATION_LIQUIDIT4
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 9 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
Warrant [Member] | Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Warrant [Member] | |||||
Fair Value, Liabilities Measured on Recurring Basis [Line Items] | ' | ' | ' | ' | ' |
Balance at December 31, 2012 | ' | ' | $933,000 | ' | ' |
Fair value of derivative warrants issued in connection with share purchase agreement (see Note 3) | 1,099,000 | ' | ' | ' | 1,099,000 |
Adjustments to fair value (reflected in other income) | -166,000 | ' | ' | ' | -166,000 |
Balance at September 30, 2013 | ' | ' | $933,000 | ' | $933,000 |
BASIS_OF_PRESENTATION_LIQUIDIT5
BASIS OF PRESENTATION, LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||
Aug. 21, 2013 | Aug. 15, 2013 | Aug. 16, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 31, 2013 | Apr. 26, 2013 | Dec. 31, 2012 | Aug. 28, 2013 | Aug. 22, 2013 | Sep. 30, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Oct. 31, 2013 | Aug. 16, 2013 | |
Subsidiary | Forbearance Agreement [Member] | BDC Credit Agreement [Member] | RBC Credit Agreement [Member] | RBC Credit Agreement [Member] | Warrant [Member] | Warrant [Member] | Subsequent Event | Subsequent Event | ||||||||||
Silicon Valley Bank [Member] | BDC Inc [Member] | Silicon Valley Bank [Member] | Royal Bank Of Canada [Member] | Private Placement [Member] | Forbearance Agreement [Member] | |||||||||||||
Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Line of Credit [Member] | Silicon Valley Bank [Member] | ||||||||||||||
Line of Credit [Member] | ||||||||||||||||||
Basis Of Presentation Liquidity and Summary Of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of wholly- owned subsidiaries | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance on the line of credit with Silicon Valley Bank | ' | ' | ' | $4,100,000 | ' | $4,100,000 | ' | $3,700,000 | ' | ' | ' | ' | $180,000 | ' | ' | ' | ' | ' |
Decrease in revenue compare previous Q3 2012 | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in revenue compare to Q2 2013 | ' | ' | ' | ' | ' | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in professional fees compare to Q4 2012 | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | -167,000 | -1,014,000 | -3,385,000 | -2,535,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working capital deficit | ' | ' | ' | ' | ' | -11,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | 200,000 | 1,556,400 | 1,756,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stocks, including management and existing shareholders | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares issued | ' | 2,927,333 | ' | 12,297,979 | ' | 12,297,979 | ' | ' | 70,207 | 9,300,439 | ' | ' | ' | ' | 1,463,667 | 292,833 | ' | ' |
Purchase price per Share | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit Increase decrease in additional capital | ' | ' | ' | ' | ' | 'The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 0.6 | ' | ' |
Net proceeds from private placement offering after deductions | ' | ' | ' | ' | ' | 1,502,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' |
Placement agent fees percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' |
Decrease in availability under line of credit | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of additional capital raises in tangible net worth | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | 50.00% |
Minimum Tangible Net Worth | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -9,700,000 |
Minimum tangible net worth's pro forma effect in capital raise | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $300,000 |
Line of credit, covenant terms | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'Company was not in compliance with the Tangible Net Worth financial covenant as defined in the amended SVB Loan Agreement. SVB agreed to temporarily forbear exercising their rights and remedies under the facility until August 28, 2013 and agreed to waive the existing covenant violations if a gross capital raise of $1.5 million was completed by such date. | 'Pursuant to the amended loan agreement, we are required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised yearly 120 days after each year end. | ' | 'Pursuant to the amended credit agreement and commencing with the fiscal year ending December 31, 2013, we are required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. | ' | ' | ' | 'The Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.3 million cushion over the requirement. |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals 1) (Customer Concentration Risk) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Customer | Customer | |
Concentration Risk [Line Items] | ' | ' |
Customer contract term | 'Termination provisions are generally standard clauses based upon non-performance, but a customer can cancel with a certain reasonable notice period anywhere from 30 to 90 days. | ' |
Revenues | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 1 | 3 |
Revenues | One Customer | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Total percent of revenues from various customers | 9.80% | 13.30% |
Revenues | Three Customer | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Total percent of revenues from various customers | 21.10% | 26.20% |
Accounts receivable | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Number of customers | 1 | ' |
Total percent of revenues from various customers | 15.50% | ' |
WARRANT_LIABILITY_Details
WARRANT LIABILITY (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |
Aug. 15, 2013 | Aug. 21, 2013 | Sep. 30, 2013 | Aug. 21, 2013 | Sep. 30, 2013 | |
Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | ||
Derivative [Line Items] | ' | ' | ' | ' | ' |
Closing price per share of common stock | $0.69 | $0.84 | $0.63 | $0.84 | $0.63 |
Exercise price per share (range) | $1 | $0.60 | $0.60 | $0.60 | $1 |
Expected volatility | 134.10% | 134.90% | 132.10% | 134.90% | 132.10% |
Risk-free interest rate | 1.60% | 1.60% | 1.40% | 1.60% | 1.40% |
Dividend yield | ' | ' | ' | ' | ' |
Remaining expected term of underlying securities (years) | '5 years | '5 years | '4 years 10 months 24 days | '5 years | '4 years 10 months 24 days |
WARRANT_LIABILITY_Detail_Textu
WARRANT LIABILITY (Detail Textuals) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Warrants Liability (Textual) | ' | ' | ' |
Estimated fair value of the outstanding warrant liabilities | $933 | ' | ' |
Change in fair value of the derivative liabilities | ($166) | ' | ' |
LOSS_PER_COMMON_SHARE_Potentia
LOSS PER COMMON SHARE - Potential dilutive securities (Details) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 11,506,000 | 2,735,000 |
Convertible Preferred stock | Series A | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 270 | 270 |
Convertible Preferred stock | Series B | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 131 | 131 |
Convertible Preferred stock | Series C | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | ' | 1,415 |
Convertible Preferred stock | Series D | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 7,824 | ' |
Warrants to purchase common stock | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 2,737 | 277 |
Options to purchase common stock | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 544 | 642 |
LOSS_PER_COMMON_SHARE_Detail_T
LOSS PER COMMON SHARE (Detail Textuals) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
ESOP shares that have not been committed to be released | 11,506,000 | 2,735,000 |
ESOP shares | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
ESOP shares that have not been committed to be released | 500,000 | 500,000 |
BUSINESS_COMBINATIONS_Unaudite
BUSINESS COMBINATIONS - Unaudited consolidated results of operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Net sales | $17,575 | $18,567 | $46,067 | $54,144 |
Net loss attributable to common shareholders | -390 | -1,263 | -4,046 | -3,245 |
Net loss per share - basic and diluted | ($0.04) | ($0.15) | ($0.44) | ($0.42) |
Pro forma | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Net sales | ' | 18,699 | ' | 56,346 |
Net loss attributable to common shareholders | ' | ($1,445) | ' | ($5,311) |
Net loss per share - basic and diluted | ' | ($0.18) | ' | ($0.69) |
BUSINESS_COMBINATIONS_Detail_T
BUSINESS COMBINATIONS (Detail Textuals) (Asset purchase agreement, Illume Mobile, USD $) | 1 Months Ended | |
Jul. 31, 2012 | Sep. 30, 2013 | |
Asset purchase agreement | Illume Mobile | ' | ' |
Acquisition Of Illume Mobile [Line Items] | ' | ' |
Total purchase consideration | $1,000,000 | ' |
Purchase consideration, cash paid | 250,000 | ' |
Purchase consideration, value of shares issued | 750,000 | ' |
Purchase consideration, number of shares issued | 617,284 | ' |
Value of shares issued in conjunction with the acquisition | 697,531 | ' |
Additional earn out payment to be paid | 500,000 | ' |
Percentage of additional payment to be paid in cash | 50.00% | ' |
Percentage of additional payment to be paid in form of shares | 50.00% | ' |
Fair value accrued liabilities for arn out payment consideration | ' | 107,000 |
Accrued liabilities for earn out payment consideration | ' | $0 |
BUSINESS_COMBINATIONS_Detail_T1
BUSINESS COMBINATIONS (Detail Textuals 1) (Apex) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | ||||
Jun. 04, 2012 | Jun. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
USD ($) | CAD | USD ($) | CAD | Fair Value | Fair Value | Fair Value | Fair Value | |
USD ($) | CAD | USD ($) | CAD | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid in consideration to Apex | $4,801,000 | 5,000,000 | $713,000 | 735,000,000 | $1,033,000,000 | 1,076,000 | $1,033,000 | 1,076,000 |
Undiscounted payment in consideration for Apex achieving certain levels of EBITDA | 3,360,700,000 | 3,500,000 | 331,000 | 341,000,000 | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO | ' | ' | 153,000 | 160,000,000 | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO, Accrued earn out recognized | ' | ' | $154,000 | 160,000,000 | ' | ' | ' | ' |
BUSINESS_COMBINATIONS_Detail_T2
BUSINESS COMBINATIONS (Detail Textuals 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Revenue | $17,575 | $18,567 | $46,067 | $54,144 |
Net loss | -167 | -1,014 | -3,385 | -2,535 |
Apex | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Amortization of intangible assets | ' | 0 | ' | 572 |
Net increase in interest expense | ' | 0 | ' | 219 |
Number of common stock issued (in shares) | ' | ' | ' | 325,000 |
Illume Mobile | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Amortization of intangible assets | ' | 18 | ' | 125 |
Number of common stock issued (in shares) | ' | ' | ' | 617,284 |
Apex and Illume Mobile's | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Revenue | 700 | 6,000 | 2,600 | 500 |
Net loss | ($100) | ($700) | ($1,800) | ($1,200) |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS - Schedule of transactions effecting goodwill (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Goodwill [Roll Forward] | ' |
Balance at December 31, 2012 | $8,571 |
Effect of currency translation on Apex | -86 |
Balance at June 30, 2013 | $8,485 |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS - Schedule of intangible assets and accumulated amortization (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | $7,869 | $8,024 |
Accumulated Amortization | -3,397 | -2,001 |
Net | 4,472 | 6,023 |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 3,319 | 3,373 |
Accumulated Amortization | -1,498 | -966 |
Net | 1,821 | 2,407 |
Contractor and resume databases | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 675 | 675 |
Accumulated Amortization | -371 | -270 |
Net | 304 | 405 |
Tradename | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 878 | 893 |
Accumulated Amortization | -324 | -193 |
Net | 554 | 700 |
Internal use software | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 2,892 | 2,978 |
Accumulated Amortization | -1,137 | -545 |
Net | 1,755 | 2,433 |
Covenant not to compete | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 105 | 105 |
Accumulated Amortization | -67 | -27 |
Net | $38 | $78 |
GOODWILL_AND_INTANGIBLE_ASSETS4
GOODWILL AND INTANGIBLE ASSETS (Detail Textuals) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' |
Effect of foreign currency translation on goodwill | ($86) |
Effect of foreign currency translation on intangible assets | ($120) |
LINES_OF_CREDIT_Detail_Textual
LINES OF CREDIT (Detail Textuals) | 9 Months Ended | 2 Months Ended | 9 Months Ended | 0 Months Ended | |||||
Sep. 30, 2013 | Sep. 30, 2012 | Oct. 31, 2013 | Feb. 27, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 28, 2013 | Aug. 16, 2013 | |
USD ($) | USD ($) | USD ($) | SVB Loan Agreement | SVB Loan Agreement | RBC Credit Agreement [Member] | RBC Credit Agreement [Member] | Forbearance Agreement | Subsequent Event | |
Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Forbearance Agreement | ||||
Line of credit | Line of credit | Line of credit | Line of credit | Line of credit | Silicon Valley Bank ("SVB") | ||||
USD ($) | USD ($) | USD ($) | CAD | Line of credit | |||||
USD ($) | |||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of credit facility | ' | ' | ' | ' | $10,000,000 | ' | 200,000 | ' | ' |
Outstanding balance on the line of credit | 4,100,000 | ' | 3,700,000 | ' | 4,100,000 | 180,000 | ' | ' | ' |
Minimum Tangible Net Worth | ' | ' | ' | ' | ' | ' | ' | ' | -9,700,000 |
Percentage of additional capital raises in tangible net worth | ' | ' | ' | ' | ' | ' | ' | 50.00% | 50.00% |
Minimum tangible net worth's pro forma effect in capital raise | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 |
Line of credit, covenant terms | ' | ' | ' | ' | ' | ' | ' | 'Company was not in compliance with the Tangible Net Worth financial covenant as defined in the amended SVB Loan Agreement. SVB agreed to temporarily forbear exercising their rights and remedies under the facility until August 28, 2013 and agreed to waive the existing covenant violations if a gross capital raise of $1.5 million was completed by such date. | 'The Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.3 million cushion over the requirement. |
Line of credit Increase decrease in additional capital | 'The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013 | ' | ' | ' | 'The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013 | ' | ' | ' | ' |
Annual Interest Rate | ' | ' | ' | 3.75% | 7.00% | 4.50% | 4.50% | ' | ' |
Annual interest rate, Additional percentage | ' | ' | ' | ' | ' | 1.50% | 1.50% | ' | ' |
Availability under the line of credit | ' | ' | ' | ' | 4,300,000 | ' | ' | ' | ' |
Terms of loan agreement, description | ' | ' | ' | 'On February 27, 2013, the SVB Loan Agreement was amended to provide for 1) an extension of the termination date of the line of credit to February 28, 2015, 2) the modification of the line of credit borrowing base, advance rate and financial covenants, 3) the inclusion of an additional $1.0 million term loan (See further discussion at Note 8, 5) a modification of the rate of interest of the line of credit to 3.75% above SVB's prime rate and 5) other various terms and provisions. | ' | ' | ' | ' | ' |
Additional term loan | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' |
Interest expense for the lines of credit, including amortization of deferred financing costs | $262,000 | $251,000 | ' | ' | ' | ' | ' | ' | ' |
TERM_DEBT_Summary_of_long_term
TERM DEBT - Summary of long term debt (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | $4,722 | ' |
Additions | 981 | ' |
Payments | -1,552 | ' |
Amortization of Note Discount | 33 | ' |
Effect of Currency Translation | -122 | ' |
Ending Balance | 4,062 | ' |
Less contractual current portion | -1,377 | ' |
Less RBC debt long term classified as current | -586 | ' |
Debt, net of current portion | 2,099 | 2,922 |
RBC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 2,090 | ' |
Additions | ' | ' |
Payments | -608 | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | -68 | ' |
Ending Balance | 1,414 | ' |
BDC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 1,705 | ' |
Additions | ' | ' |
Payments | ' | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | -56 | ' |
Ending Balance | 1,649 | ' |
SVB term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 1,000 | ' |
Additions | ' | ' |
Payments | 750 | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | ' | ' |
Ending Balance | 250 | ' |
SVB term loan-2 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | ' | ' |
Additions | 1,000 | ' |
Payments | -194 | ' |
Amortization of Note Discount | ' | ' |
Effect of Currency Translation | ' | ' |
Ending Balance | 806 | ' |
Note discount | RBC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | -38 | ' |
Additions | ' | ' |
Payments | ' | ' |
Amortization of Note Discount | 18 | ' |
Effect of Currency Translation | 1 | ' |
Ending Balance | -19 | ' |
Note discount | BDC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | -31 | ' |
Additions | ' | ' |
Payments | ' | ' |
Amortization of Note Discount | 5 | ' |
Effect of Currency Translation | 1 | ' |
Ending Balance | -25 | ' |
Note discount | SVB term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | -4 | ' |
Additions | ' | ' |
Payments | ' | ' |
Amortization of Note Discount | 4 | ' |
Effect of Currency Translation | ' | ' |
Ending Balance | ' | ' |
Note discount | SVB term loan-2 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | ' | ' |
Additions | -19 | ' |
Payments | ' | ' |
Amortization of Note Discount | 6 | ' |
Effect of Currency Translation | ' | ' |
Ending Balance | ($13) | ' |
TERM_DEBT_RBC_Term_Loan_Detail
TERM DEBT - RBC Term Loan (Detail Textuals) | 9 Months Ended | 1 Months Ended | 0 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jul. 31, 2012 | Jun. 04, 2012 | Dec. 31, 2012 | Jun. 04, 2012 | Jun. 04, 2012 | Sep. 30, 2013 | Oct. 31, 2013 | |
USD ($) | USD ($) | RBC term loan | Apex | Apex | Apex | Apex | Apex | Apex | Apex | |
RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | ||||
Line of credit | Line of credit | Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||
CAD | CAD | USD ($) | USD ($) | CAD | USD ($) | USD ($) | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of credit facility | ' | ' | ' | ' | 2,750,000 | ' | $2,401,000 | 2,500,000 | ' | ' |
Term Loan, Interest percentage | ' | ' | ' | ' | ' | 7.00% | 4.00% | 4.00% | ' | ' |
Interest Rate Basis | ' | ' | ' | ' | ' | ' | 'Royal Bank Prime | 'Royal Bank Prime | ' | ' |
Principal and interest payable period | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' |
Fixed principal amount | ' | ' | ' | 70,000,000 | ' | ' | ' | ' | ' | ' |
Frequency of repayment | ' | ' | ' | ' | ' | ' | ' | ' | 'Monthly | ' |
Financing costs paid | 119,000 | 296,000 | ' | ' | ' | ' | ' | ' | 120,000 | ' |
Percentage of Apex's free cash flow for mandatory repayments of term loan | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' |
Period of payment for mandatory repayments | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' |
Estimated amount of term loan included in current portion of debt | ($1,377,000) | ' | ' | ' | ' | $0 | ' | ' | ' | $0 |
Term loan and financial covenant, Description | ' | ' | 'On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ending December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter. | ' | ' | ' | ' | ' | ' | ' |
TERM_DEBT_BDC_Term_Loan_Detail
TERM DEBT - BDC Term Loan (Detail Textuals 1) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Jun. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 04, 2012 | |
USD ($) | USD ($) | BDC term loan | Apex | Apex | Apex | Apex | Apex | |
BDC term loan | BDC term loan | BDC term loan | BDC term loan | BDC term loan | ||||
Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||
CAD | USD ($) | CAD | CAD | USD ($) | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of credit facility | ' | ' | ' | 1,700,000 | ' | ' | ' | $1,632,000 |
Interest rate per annum | ' | ' | ' | ' | ' | ' | ' | 12.00% |
Debt instrument interest extention period | ' | ' | ' | '1 year | ' | ' | ' | ' |
Line of credit facility extension fee percentage | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Line of credit facility additional periodic interest payment | ' | ' | ' | 20,000 | ' | ' | ' | ' |
Term loan amended, Percentage | ' | ' | ' | 12.50% | ' | ' | ' | ' |
Maximum annual cash flow sweep | ' | ' | ' | ' | ' | 425,000 | 425,000 | ' |
Financing costs paid | $119,000 | $296,000 | ' | ' | $70,000 | ' | ' | ' |
Terms of loan agreement, description | ' | ' | 'The terms of the BDC loan agreement also provide for a fee to BDC in the event of the occurrence of any of the following:(a) if 50% or more of any company comprising Apex or the Company (consolidated assets or shares) is sold or merged with an unrelated entity; or (b) if there is a change of control of Apex and/or the Company prior to the Maturity Date or any extended maturity date of the BDC Tern Loan, | ' | ' | ' | ' | ' |
Percentage of value of company and acquiree paid as bonus on fulfillment of terms | ' | ' | 2.00% | ' | ' | ' | ' | ' |
Term loan and financial covenant, Description | ' | ' | 'On August 22, 2013, the BDC Term Loan was amended and certain financial covenants were modified. Pursuant to the amended loan agreement, the Company is required to maintain, for the duration of the investment, a term debt to equity ratio not exceeding 1.1:1 (measured annually); and an adjusted current ratio of 0.40:1 (measured annually) and revised yearly 120 days after each year end. We were in compliance with all of our BDC financial covenants as of September 30, 2013 | ' | ' | ' | ' | ' |
TERM_DEBT_SVB_Term_Loan_Detail
TERM DEBT - SVB Term Loan (Detail Textuals 2) (USD $) | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Feb. 27, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Feb. 01, 2011 | Dec. 31, 2010 | |
Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||
31-Oct-13 | Nov-13 | Nov-13 | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | ||||
Preferred Stock | Installment | Installment | |||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding balance on the line of credit | $4,100,000 | ' | $3,700,000 | ' | ' | ' | ' | ' | ' | ' | $3,000,000 |
Number of equal monthly installments | ' | ' | ' | ' | ' | ' | 36 | ' | ' | 36 | ' |
Percent of aggregate amount of the term loan equal to final payment | ' | ' | ' | ' | ' | ' | ' | 2.00% | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | 7.50% | 9.00% | ' | ' | ' |
Final payment recorded as discount | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' |
Increase in gross capital | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' |
Line of credit Increase decrease in additional capital | 'The Company is in currently discussions with SVB regarding the Tangible Net Worth covenant and a reduction of the 50% of additional capital raised to 25% of capital raised in November 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Excess tangible assets net worth | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' |
Gross proceeds from sale of preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance costs, Net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional term loan | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' |
Interest expense for the lines of credit, including amortization of deferred financing costs | $262,000 | $251,000 | ' | ' | ' | ' | ' | $439,000 | $331,000 | ' | ' |
STOCKHOLDERS_EQUITY_Preferred_
STOCKHOLDERS' EQUITY - Preferred Stock Outstanding (Details) (Cumulative Convertible Preferred Stock, USD $) | Sep. 30, 2013 |
In Thousands, unless otherwise specified | |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | $7,609 |
Series A Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | 1,319 |
Series B Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | 465 |
Series D Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total convertible preferred stock | $5,825 |
STOCKHOLDERS_EQUITY_Preferred_1
STOCKHOLDERS' EQUITY- Preferred Stock Outstanding (Parentheticals) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | $0.00 |
Shares designated | 10,000,000 | 10,000,000 |
Shares issued | 1,105,155 | 1,105,155 |
Shares outstanding | 1,105,155 | 1,105,155 |
Cumulative preferred dividends | $586 | $361 |
Cumulative Convertible Preferred Stock | Series A Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 500,000 | ' |
Shares issued | 269,608 | ' |
Shares outstanding | 269,608 | ' |
Liquidation preference | 975 | ' |
Cumulative preferred dividends | 344 | ' |
Cumulative Convertible Preferred Stock | Series B Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 500,000 | ' |
Shares issued | 131,347 | ' |
Shares outstanding | 131,347 | ' |
Liquidation preference | 380 | ' |
Cumulative preferred dividends | 85 | ' |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 4,000,000 | ' |
Shares issued | 704,200 | ' |
Shares outstanding | 704,200 | ' |
Liquidation preference | 7,042 | ' |
Cumulative preferred dividends | 157 | ' |
Preferred stock, issuance costs | $1,374 | ' |
STOCKHOLDERS_EQUITY_Outstandin
STOCKHOLDERS' EQUITY - Outstanding Common Stock Warrants (Details) (Warrants, USD $) | Sep. 30, 2013 | Aug. 16, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
In Thousands, except Per Share data, unless otherwise specified | Senior Subordinated Notes Strike Price 3.62 | Senior Subordinated Notes Strike Price 4.34 | Placement Agent Preferred Stock Class D | Common Stock Investor Warrants One | Common Stock Investor Warrants Two | Placement Agent Warrants - Common Stock | ||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding common stock warrants, date issued | ' | ' | '2009 December | '2009 December | '2012 December | '2013 August | '2013 August | '2013 August |
Outstanding common stock warrants expiration date | ' | ' | '2014 December | '2014 December | '2017 December | '2018 August | '2018 August | '2018 August |
Outstanding common stock warrants strike price | ' | ' | $3.62 | $4.34 | $1.10 | $1 | $1 | $0.60 |
Outstanding common stock warrants, total warrants outstanding and exercisable | $2,737,120 | ' | $138,260 | $138,260 | $704,200 | $1,297,000 | $166,667 | $292,733 |
Outstanding common stock warrants total exercise price | $3,513,927 | ' | $500,000 | $600,000 | $774,620 | $1,297,000 | $166,667 | $175,640 |
Outstanding common stock warrants weighted average exercise price | 1.28 | 1 | ' | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_Detail_Tex
STOCKHOLDERS' EQUITY (Detail Textuals) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Class of Stock [Line Items] | ' | ' |
Total number of authorized shares | 110,000,000 | ' |
Number of common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Number of preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares issued | 1,105,155 | 1,105,155 |
Preferred stock, shares outstanding | 1,105,155 | 1,105,155 |
Preferred Stock | Series A Preferred Stock [Member] | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 500,000 | ' |
Preferred stock, shares issued | 269,608 | ' |
Preferred stock, shares outstanding | 269,608 | ' |
Preferred Stock | Series B Preferred Stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 500,000 | ' |
Preferred stock, shares issued | 131,347 | ' |
Preferred stock, shares outstanding | 131,347 | ' |
Preferred Stock | Series C Preferred Stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 5,000,000 | ' |
Preferred stock, shares issued | 0 | ' |
Preferred stock, shares outstanding | 0 | ' |
Preferred Stock | Series D Preferred Stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 4,000,000 | ' |
Preferred stock, shares issued | 704,200 | ' |
Preferred stock, shares outstanding | 704,200 | ' |
STOCKHOLDERS_EQUITY_Cumulative
STOCKHOLDERS' EQUITY - Cumulative convertible preferred stock (Detail Textuals 1) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Dividends Payable [Line Items] | ' |
Cash dividend paid | ($422,000) |
Cumulative Convertible Preferred Stock | Series A Preferred Stock | ' |
Dividends Payable [Line Items] | ' |
Stated value of the Preferred per share | $4 |
Dividend Rate | 8.00% |
Conversion Price per Share | $4 |
Cumulative Convertible Preferred Stock | Series B Preferred Stock | ' |
Dividends Payable [Line Items] | ' |
Stated value of the Preferred per share | $3.20 |
Dividend Rate | 8.00% |
Conversion Price per Share | $3.20 |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | ' |
Dividends Payable [Line Items] | ' |
Stated value of the Preferred per share | $10 |
Conversion Price per Share | $1 |
Reduced Conversion Price per share | $0.90 |
Preferred Stock, Dividend Payment Rate, Variable | 'The Series D Preferred Stock entitles the holder to cumulative dividends, payable quarterly, at an annual rate of (i) 8% of the Stated Value during the three year period commencing on the date of issue, and (ii) 12% of the Stated Value commencing three years after the date of issue. We may, at the Company's option, pay dividends in PIK Shares, in which event the applicable dividend rate will be 12% and the number of such PIK Shares issuable will be equal to the aggregate dividend payable divided by the lesser of (x) the then effective Conversion Price or (y) the average volume weighted average price of the Company's common stock for the five prior consecutive trading days. |
Cash dividend paid | 142,000 |
Minimum closing price of common stock | $2 |
Minimum average daily trading volume | 5,000 |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | Minimum | ' |
Dividends Payable [Line Items] | ' |
Partial liquidated damage percentages of purchase price paid by each investor | 0.10% |
Liquidated Damages | $18,000 |
Redemption purchase price per share | $10 |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | On the date of issue | ' |
Dividends Payable [Line Items] | ' |
Stated value of the Preferred per share | $8 |
Cumulative Convertible Preferred Stock | Series D Preferred Stock | After the date of issue | ' |
Dividends Payable [Line Items] | ' |
Dividend Rate | 12.00% |
STOCKHOLDERS_EQUITY_Common_Sto
STOCKHOLDERS' EQUITY - Common Stock (Detail Textuals 2) (USD $) | 9 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Aug. 15, 2013 | Apr. 26, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 16, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Aug. 16, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | Sep. 23, 2013 | Aug. 21, 2013 | Aug. 15, 2013 | Nov. 15, 2012 | Aug. 15, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Aug. 15, 2013 | Aug. 15, 2013 | Sep. 30, 2013 | Aug. 21, 2013 | Aug. 15, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Jul. 31, 2012 | |
Employee | Warrant [Member] | Warrant [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Private Placement [Member] | Private Placement [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Series C Preferred Stock | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | Investor Warrants [Member] | Apex | Apex | Illume Mobile | |||||
Warrant [Member] | Warrant [Member] | Subsequent Event [Member] | Private Placement [Member] | Private Placement [Member] | Sigma Agreement | Warrant [Member] | Purchase Agreement [Member] | Warrant [Member] | Purchase Agreement [Member] | Purchase Agreement [Member] | Common Stock | Selling, General and Administrative Expenses | Common Stock | ||||||||||||||
Warrant [Member] | Sigma Opportunity Fund II, LLC and Sigma Capital Advisors, LLC | Common Stock | Asset purchase agreement | ||||||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 12,297,979 | ' | 2,927,333 | 70,207 | 9,300,439 | ' | ' | ' | ' | ' | ' | ' | 2,927,333 | ' | ' | ' | ' | ' | 1,463,667 | 292,733 | ' | 292,733 | ' | 1,463,667 | ' | ' | ' |
Number of employees | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued as consideration for acquisition related expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 325,000 | ' | 617,284 |
Value of shares issued as consideration for acquisition related expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $341,000 | $698,000 |
Number of series C preferred stock, aggregate of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,364 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate number of common stock sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 333,333 | 2,594,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of stock price per Share | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from private placement | 1,502,000 | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 1,556,400 | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | 1.28 | 1 | ' | ' | 0.6 | ' | ' | ' | ' | 1 | ' | ' | 0.6 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase of aggregate shares by investor warrants sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,297,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '5 years | ' | ' | '5 years | ' | ' | ' | ' | ' | ' |
Investor warrants sold | ' | ' | ' | ' | ' | ' | 1,099,000 | ' | ' | ' | ' | ' | ' | 166,667 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock purchase price per share, Minimum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shared authorized | 100,000,000 | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | 2,927,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Placement agent commision, Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,600 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Placement agent fees percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock purchased by Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 292,733 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from warrants offering | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance costs, Net | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
fair value of the warrant liability | -166,000 | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 933,000 | ' | ' | ' | ' | ' | ' |
Balance of warrant liability recorded as equity | ' | ' | ' | ' | ' | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_Warrants_D
STOCKHOLDERS' EQUITY - Warrants (Detail Textuals 3) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 15, 2013 | Apr. 26, 2013 | Dec. 31, 2012 | Aug. 15, 2013 | Aug. 21, 2013 | Aug. 15, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Investor Warrants [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | ||||||||
Placement Agent Warrants [Member] | Investor Warrants [Member] | ||||||||||||
Common Stock, Shares, Issued | 12,297,979 | ' | 12,297,979 | ' | 2,927,333 | 70,207 | 9,300,439 | ' | ' | ' | ' | 1,463,667 | 292,733 |
Warrants issued in connection with common stock private placement | ' | ' | $1,099,000 | ' | ' | ' | ' | ' | $1,099,000 | $1,099,000 | ' | ' | ' |
Fair Value Adjustment of Warrants | ' | ' | -166,000 | ' | ' | ' | ' | 933,000 | ' | ' | 1,100,000 | ' | ' |
other income | ($166,000) | ($992,000) | ($3,383,000) | ($2,507,000) | ' | ' | ' | ' | ' | ' | $166,000 | ' | ' |
ESOP_PLAN_Detail_Textuals
ESOP PLAN (Detail Textuals) (Employee Stock Ownership Plan (the "ESOP"), USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Employee Stock Ownership Plan (the "ESOP") | ' |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ' |
Contribution expense | $134,000 |
ESOP principal payment | 104,000 |
ESOP interest expenses | 30,000 |
ESOP compensation expenses | $78,000 |
Fair value of the shares | $0.94 |
STOCK_OPTION_PLAN_Summary_of_s
STOCK OPTION PLAN - Summary of status of Plans (Details) (2010 Stock Option Plan (the "Plan"), USD $) | 9 Months Ended |
Sep. 30, 2013 | |
2010 Stock Option Plan (the "Plan") | ' |
Number Of Options Available For Grant [Roll Forward] | ' |
Options Available for Grant, December 31, 2012 | 455,495 |
Options Available for Grant, Granted | ' |
Options Available for Grant, Exercised | ' |
Options Available for Grant, Forfeited | ' |
Options Available for Grant, September 30, 2013 | 455,495 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' |
Options Outstanding, December 31, 2012 | 544,505 |
Options Outstanding, Granted | ' |
Options Outstanding, Exercised | ' |
Options Outstanding, Forfeited | ' |
Options Outstanding, September 30, 2013 | 544,505 |
Exercisable options at September 30, 2013 | 446,374 |
Share Based Compensation Arrangement By Share Based Payment Award, Weighted Average Exercise Price [Roll Forward] | ' |
Weighted - Average Exercise Price, December 31, 2012 | $1.82 |
Weighted - Average Exercise Price, Granted | ' |
Weighted - Average Exercise Price, Exercised | ' |
Weighted - Average Exercise Price, Forfeited | ' |
Weighted - Average Exercise Price, September 30, 2013 | $1.82 |
Weighted Average Exercise Price, Exercisable options at September 30, 2013 | $1.75 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' |
Aggregate Intrinsic Value, December 31, 2012 | ' |
Aggregate Intrinsic Value, Granted | ' |
Aggregate Intrinsic Value, Exercised | ' |
Aggregate Intrinsic Value, Forfeited | ' |
Aggregate Intrinsic Value, September 30, 2013 | ' |
Aggregate Intrinsic Value, Exercisable options at September 30, 2013 | ' |
STOCK_OPTION_PLAN_Summary_of_i
STOCK OPTION PLAN - Summary of information about stock options outstanding (Details 1) (2010 Stock Option Plan (the "Plan"), USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 544,505 | 544,505 |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '3 years 6 months 22 days | ' |
Options Outstanding Weighted Average Exercise Price | $1.82 | $1.82 |
Number Of Options Exercisable | 446,374 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '2 years 9 months 4 days | ' |
Options Exercisable Weighted Average Exercise Price | $1.75 | ' |
Dollar 1.33 To 2.03 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Minimum Range of Exercise Prices | $1.33 | ' |
Maximum Range of Exercise Prices | $2.03 | ' |
Number Of Options Outstanding | 365,620 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '1 year 6 months 29 days | ' |
Options Outstanding Weighted Average Exercise Price | $1.65 | ' |
Number Of Options Exercisable | 355,461 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '1 year 6 months 11 days | ' |
Options Exercisable Weighted Average Exercise Price | $1.64 | ' |
Dollar 2.06 To 4.34 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Minimum Range of Exercise Prices | $2.06 | ' |
Maximum Range of Exercise Prices | $4.34 | ' |
Number Of Options Outstanding | 178,885 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '7 years 7 months 6 days | ' |
Options Outstanding Weighted Average Exercise Price | $2.16 | ' |
Number Of Options Exercisable | 90,913 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '7 years 6 months 15 days | ' |
Options Exercisable Weighted Average Exercise Price | $2.16 | ' |
STOCK_OPTION_PLAN_Detail_Textu
STOCK OPTION PLAN (Detail Textuals) (USD $) | 9 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2010 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
2010 Stock Option Plan (the "Plan") | 2010 Stock Option Plan (the "Plan") | 2010 Stock Option Plan (the "Plan") | 2010 Stock Option Plan (the "Plan") | |||
Samplings | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Number of common stock, shares authorized | ' | 1,000,000 | ' | ' | ' | ' |
Term of stock option granted | '10 years | ' | ' | ' | ' | ' |
Percentage of exercise price to market value of common stock | 100.00% | ' | ' | ' | ' | ' |
Vested period of stock option | '5 years | ' | ' | ' | ' | ' |
Percentage of voting power of common stock | 10.00% | ' | ' | ' | ' | ' |
Maximum percentage of fair market of a share of common stock | 110.00% | ' | ' | ' | ' | ' |
Total fair value of stock option awards vested | $40,000 | ' | ' | $73,000 | ' | ' |
Number of expected sampling volatility of companies | ' | ' | 5 | ' | ' | ' |
Employee stock-based compensation cost | ' | ' | ' | ' | 31,000 | 50,000 |
Unrecognized estimated employee compensation cost | ' | ' | $109,000 | ' | ' | ' |
Weighted-average vesting period | ' | ' | '2 years 8 months 9 days | ' | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Textuals) | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Jul. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
USD ($) | USD ($) | Apex Earn Out Obligation | Apex Earn Out Obligation | Apex Earn Out Obligation | |
CAD | CAD | Note | |||
USD ($) | |||||
Installment | |||||
Commitment and Contingencies [Line Items] | ' | ' | ' | ' | ' |
Rental expense | $511,000 | $353,000 | ' | ' | ' |
Threashold value of EBITDA defined in agreement | ' | ' | 2,000,000 | ' | ' |
Basic earn out amount defined in agreement | ' | ' | 5,000,000 | ' | ' |
Maximum Basic earn out amount | ' | ' | 3,000,000 | ' | ' |
Percentage of cash to be paid of basic earn out amount | ' | ' | 22.22% | ' | ' |
Number of quarterly payment for principal sum due | ' | ' | ' | ' | 8 |
Interest rate on notes payable | ' | ' | ' | ' | 9.00% |
Interest rate on notes payable after October 31, 2014 | ' | ' | ' | ' | 11.00% |
Minimum net equity capital raised during the term of note payable | ' | ' | ' | 5,000,000 | ' |
Increase rate of interest due to raises in net equity capital | ' | ' | ' | ' | 15.00% |
Increase rate of interest after first anniversary of raises in net equity capital | ' | ' | ' | ' | 20.00% |
Maximum Conversion price | ' | ' | ' | ' | $1 |
Threashold EBITDA limit for earn out to former owner of Apex | ' | ' | ' | 2,000,000 | ' |
Maximum of earn out payable to former owner of Apex | ' | ' | ' | 500,000 | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details Textuals 1) | Sep. 30, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Jun. 04, 2012 | Jun. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
USD ($) | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | Apex | |
USD ($) | CAD | USD ($) | CAD | Convertible Preferred stock | Convertible Preferred stock | Estimate Of Fair Value, Fair Value Disclosure [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | Estimate Of Fair Value, Fair Value Disclosure [Member] | ||
Series D Preferred Stock | Series D Preferred Stock | USD ($) | CAD | USD ($) | CAD | ||||||
USD ($) | USD ($) | ||||||||||
Employment Agreement [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Escrow percentage of any equity capital raised | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' |
Equity capital raised in excess | ' | ' | ' | ' | ' | $500,000 | ' | ' | ' | ' | ' |
Issuance of convertible series D preferred stock | ' | ' | ' | ' | ' | ' | 7,042,000 | ' | ' | ' | ' |
Amount paid in consideration to Apex | ' | 4,801,000 | 5,000,000 | 713,000 | 735,000,000 | ' | ' | 1,033,000,000 | 1,076,000 | 1,033,000 | 1,076,000 |
Undiscounted payment in consideration for Apex achieving certain levels of EBITDA | ' | 3,360,700,000 | 3,500,000 | 331,000 | 341,000,000 | ' | ' | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO | ' | ' | ' | 153,000 | 160,000,000 | ' | ' | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO, Accrued earn out recognized | ' | ' | ' | 154,000 | 160,000,000 | ' | ' | ' | ' | ' | ' |
Fair Value Earn Out Payment Due | $1,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (USD $) | 0 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||
Aug. 21, 2013 | Aug. 15, 2013 | Aug. 16, 2013 | Sep. 30, 2013 | Apr. 26, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Aug. 16, 2013 | Aug. 16, 2013 | Oct. 31, 2013 | Nov. 30, 2013 | Oct. 31, 2013 | Oct. 31, 2013 | Nov. 30, 2013 | |
Warrants | Warrants | Warrants | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | Subsequent Event | |||||||
Placement Agent Warrants | Series D Preferred Stock | Warrants | Warrants | Warrants | ||||||||||
Placement Agent Warrants | Series E Preferred Stock | |||||||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds | $200,000 | $1,556,400 | $1,756,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stocks, including management and existing shareholders | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, shares issued | ' | 2,927,333 | ' | 12,297,979 | 70,207 | 9,300,439 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | 1.28 | 1 | 0.6 | ' | ' | ' | ' | ' |
Proceeds from stock offering before deductions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from stock offering after deductions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commission to place agent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of gross proceeds | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' |
Percentage of commonn stock under purchase price agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' |
Purchase price per Share | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares purchased by directors and employess | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion Price per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1 | ' | ' | $1 |
Reduced Conversion Price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.90 | ' | ' | ' |
Reduced Conversion Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |