Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'DecisionPoint Systems, Inc. | ' | ' |
Entity Central Index Key | '0001505611 | ' | ' |
Trading Symbol | 'dpsi | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Well-Known Seasoned Issuer | 'No | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 12,729,563 | ' |
Entity Public Float | ' | ' | $7,152,787 |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 08, 2011 |
Current assets | ' | ' | ' |
Cash | $641,000 | $1,103,000 | ' |
Accounts receivable, net | 10,504,000 | 12,287,000 | ' |
Due from related party | 188,000 | 202,000 | ' |
Inventory, net | 1,533,000 | 811,000 | ' |
Deferred costs | 3,809,000 | 3,955,000 | ' |
Deferred tax assets | 49,000 | 48,000 | ' |
Prepaid expenses and other current assets | 188,000 | 302,000 | ' |
Total current assets | 16,912,000 | 18,708,000 | ' |
Property and equipment, net | 136,000 | 179,000 | ' |
Other assets, net | 165,000 | 205,000 | ' |
Deferred costs, net of current portion | 1,807,000 | 2,124,000 | ' |
Goodwill | 8,395,000 | 8,571,000 | ' |
Intangible assets, net | 3,907,000 | 6,023,000 | ' |
Total assets | 31,322,000 | 35,810,000 | ' |
Current liabilities | ' | ' | ' |
Accounts payable | 9,774,000 | 11,080,000 | ' |
Accrued expenses and other current liabilities | 2,976,000 | 2,895,000 | ' |
Lines of credit | 3,883,000 | 3,430,000 | ' |
Current portion of debt | 1,474,000 | 1,800,000 | ' |
Due to related parties | 77,000 | 1,000 | ' |
Accrued earn out consideration | 319,000 | 1,186,000 | ' |
Warrant Liability | 803,000 | ' | ' |
Unearned revenue | 7,481,000 | 7,409,000 | ' |
Total current liabilities | 26,787,000 | 27,801,000 | ' |
Long term liabilities | ' | ' | ' |
Unearned revenue, net of current portion | 2,481,000 | 2,883,000 | ' |
Debt, net of current portion and discount | 1,961,000 | 2,922,000 | ' |
Accrued earn out consideration, net of current portion | 149,000 | 159,000 | ' |
Deferred tax liabilities | 740,000 | 1,078,000 | ' |
Other long term liabilities | 77,000 | 80,000 | ' |
Total liabilities | 32,195,000 | 34,923,000 | ' |
Commitments and contingencies | ' | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' | ' |
Cumulative Convertible Preferred stock, $0.001 par value, 10,000,000 shares authorized, 1,514,155 and 1,105,155 shares issued and outstanding, including cumulative and imputed preferred dividends of $1,956 and $361, and with a liquidation preference of $14,731 and $8,758 at December 31, 2013 and 2012, respectively | 12,193,000 | 7,370,000 | ' |
Common stock, $0.001 par value, 100,000,000 shares authorized, 12,883,446 issued and 12,729,563 outstanding as of December 31, 2013, and 9,300,439 shares issued and 9,146,556 outstanding as of December 31, 2012 | 13,000 | 9,000 | ' |
Additional paid-in capital | 17,231,000 | 16,132,000 | ' |
Treasury stock, 153,883 shares of common stock | -205,000 | -205,000 | -205,000 |
Accumulated deficit | -29,475,000 | -21,674,000 | ' |
Unearned ESOP shares | -629,000 | -767,000 | ' |
Accumulated other comprehensive income | -1,000 | 22,000 | ' |
Total stockholders' equity | -873,000 | 887,000 | ' |
Total liabilities and stockholders' equity | $31,322,000 | $35,810,000 | ' |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 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 | 1,514,155 | 1,105,155 |
Preferred stock, shares outstanding | 1,514,155 | 1,105,155 |
Preferred stock, dividends (in dollars) | $1,956 | $361 |
Preferred Stock, Liquidation preference (in dollars) | $14,731 | $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 | 100,000,000 | 9,300,439 |
Common stock, shares outstanding | 12,729,563 | 9,146,556 |
Treasury stock, shares | 153,883 | 153,883 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | ' | ' | |
Net sales | $60,692 | $71,501 | [1] |
Cost of sales | 47,965 | 56,458 | [1] |
Gross profit | 12,727 | 15,043 | [1] |
Selling, general and administrative expense | 18,338 | 18,152 | [1] |
Adjustment To Earn Out Obligations | -820 | ' | [1] |
Operating loss | -4,791 | -3,109 | [1] |
Other expense (income): | ' | ' | |
Interest expense | 959 | 998 | [1] |
Fair Value Adjustment of Warrants | 296 | ' | |
Other income, net | -37 | -116 | [1] |
Total other expense | 626 | 882 | [1] |
Loss before income taxes | -5,417 | -3,991 | [1] |
Provision (tax benefit) for income taxes | -199 | -125 | [1] |
Net loss | -5,218 | -3,866 | [1] |
Common stock deemed dividend | -263 | ' | [1] |
Cumulative and imputed Series A and B preferred stock dividends | -108 | -954 | [1] |
Accrued paid-in-kind dividends on Series D and Series E preferred stock | -289 | ' | [1] |
Imputed dividends on Series D preferred stock | -580 | ' | [1] |
Imputed contingent beneficial converion on Series D preferred stock | -1,343 | ' | [1] |
Net loss attributable to common shareholders | -7,801 | -4,820 | [1] |
Net loss per share - | ' | ' | |
Basic and diluted | ($0.80) | ($0.61) | [1] |
Weighted-average shares outstanding - | ' | ' | |
Basic and diluted | 9,802,810 | 7,900,693 | [1] |
Other comprehensive loss, net of tax | ' | ' | |
Net loss | -5,218 | -3,866 | [1] |
Foreign currency translation adjustment | -23 | 22 | [1] |
Comprehensive loss | ($5,241) | ($3,844) | [1] |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Convertible Preferred stock | Common Stock | Additional paid-in capital | Treasury stock | Accumulated deficit | Unearned ESOP shares | Accumulated other comprehensive income | Total | ||
Balance at Dec. 31, 2011 | $6,320,000 | $8,000 | $14,514,000 | ($205,000) | ($17,231,000) | ($899,000) | ' | $2,507,000 | ||
Balance (in shares) at Dec. 31, 2011 | 1,816 | 8,183 | ' | ' | ' | ' | ' | ' | ||
Net loss | ' | ' | ' | ' | -3,866,000 | ' | ' | -3,866,000 | [1] | |
Foreign currency translation adjustment | ' | ' | ' | ' | ' | ' | 22,000 | 22,000 | [1] | |
Convertible Series C Preferred retired | -4,906,000 | ' | ' | ' | 377,000 | ' | ' | -4,529,000 | ||
Convertible Series C Preferred retired (in shares) | -1,415 | ' | ' | ' | ' | ' | ' | ' | ||
Convertible Series E Preferred sold in private placement, net of issuance costs | 5,668,000 | ' | 355,000 | ' | ' | ' | ' | 6,023,000 | ||
Convertible Series E Preferred sold in private placement, net of issuance costs (in shares) | 704 | ' | ' | ' | ' | ' | ' | ' | ||
Shares issued in connection with Illume acquisition | ' | 1,000 | 697,000 | ' | ' | ' | ' | 698,000 | ||
Shares issued in connection with Illume acquisition (in shares) | ' | 617 | ' | ' | ' | ' | ' | ' | ||
Shares issued in connection with Apex acquisition | ' | ' | 341,000 | ' | ' | ' | ' | 341,000 | ||
Shares issued in connection with Apex acquisition (in shares) | ' | 325 | ' | ' | ' | ' | ' | ' | ||
Common stock issued as an antidilution adjustment | ' | ' | 173,000 | ' | ' | ' | ' | 173,000 | ||
Common stock issued as an antidilution adjustment (in shares) | ' | 175 | ' | ' | ' | ' | ' | ' | ||
Employee stock-based compensation | ' | ' | 52,000 | ' | ' | ' | ' | 52,000 | ||
Accrued dividends on preferred stock | 288,000 | ' | ' | ' | -954,000 | ' | ' | -666,000 | ||
Accrued dividends paid-in-kind | [1] | ' | ' | ' | ' | ' | ' | ' | ' | |
Principal payment from ESOP | ' | ' | ' | ' | ' | 132,000 | ' | 132,000 | ||
Balance at Dec. 31, 2012 | 7,370,000 | 9,000 | 16,132,000 | -205,000 | -21,674,000 | -767,000 | 22,000 | 887,000 | ||
Balance (in shares) at Dec. 31, 2012 | 1,105 | 9,300 | ' | ' | ' | ' | ' | ' | ||
Net loss | ' | ' | ' | ' | -5,218,000 | ' | ' | -5,218,000 | ||
Foreign currency translation adjustment | ' | ' | ' | ' | ' | ' | ' | -23,000 | ||
Convertible Series E Preferred sold in private placement, net of issuance costs | 3,215,000 | ' | 278,000 | ' | ' | ' | ' | 3,493,000 | ||
Convertible Series E Preferred sold in private placement, net of issuance costs (in shares) | 409 | ' | ' | ' | ' | ' | ' | ' | ||
Common stock issued as an antidilution adjustment | ' | 586,000 | 262,000 | ' | -263,000 | ' | ' | ' | ||
Common stock issued as an antidilution adjustment (in shares) | ' | 1 | ' | ' | ' | ' | ' | ' | ||
Employee stock-based compensation | ' | ' | 76,000 | ' | ' | ' | ' | 76,000 | ||
Common stock issued to employees as part of a specified portion of their annual cash bonus | ' | ' | 83,000 | ' | ' | ' | ' | 83,000 | ||
Common stock issued to employees as part of a specified portion of their annual cash bonus (in shares) | ' | 70 | ' | ' | ' | ' | ' | ' | ||
Common stock issued in private placement, net of issuance costs | ' | 2,927,000 | 400,000 | ' | ' | ' | ' | 403,000 | ||
Common stock issued in private placement, net of issuance costs (in shares) | ' | 3 | ' | ' | ' | ' | ' | ' | ||
Accrued dividends paid-in-kind | ' | ' | ' | ' | -289,000 | ' | ' | 289,000 | ||
Accrued and imputed dividends on preferred stock | 1,608,000 | ' | ' | ' | -2,031,000 | ' | ' | -423,000 | ||
Accrued And imputed Dividends On Preferred Stock, (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ||
Principal payment from ESOP | ' | ' | ' | ' | ' | 138,000 | ' | 138,000 | ||
Balance at Dec. 31, 2013 | $12,193,000 | $12,883,000 | $17,231,000 | ($205,000) | ($29,475,000) | ($629,000) | ($1,000) | ($873,000) | ||
Balance (in shares) at Dec. 31, 2013 | 1,514 | 13 | ' | ' | ' | ' | ' | ' | ||
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholders' Equity (Deficit) (Parentheticals) | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Of Stockholders' Equity [Abstract] | ' | ' |
Treasury stock, shares | 153,883 | 153,883 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Cash flows from operating activities: | ' | ' | |
Net loss | ($5,218,000) | ($3,866,000) | [1] |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ' | ' | |
Depreciation and amortization | 1,967,000 | 1,510,000 | |
Amortization of deferred financing costs and note discount | 181,000 | 183,000 | |
Employee and Director stock-based compensation | 76,000 | 52,000 | |
Non-employee stock-based compensation | ' | 514,000 | |
Acquisition earn-out adjustment | -820,000 | ' | |
Change in fair value of warrants | -296,000 | ' | |
Loss on disposal of property and equipment | 13,000 | ' | |
ESOP compensation expense | 138,000 | 132,000 | |
Allowance for doubtful accounts | 142,000 | 108,000 | |
Deferred taxes, net | -270,000 | -256,000 | |
Changes in operating assets and liabilities, net of assets and liabilities acquired: | ' | ' | |
Accounts receivable, net | 1,615,000 | 1,801,000 | |
Due from related parties | ' | 147,000 | |
Inventory, net | -723,000 | -98,000 | |
Deferred costs | 462,000 | -810,000 | |
Prepaid expenses and other current assets | 126,000 | 182,000 | |
Other assets, net | -18,000 | -37,000 | |
Accounts payable | -1,296,000 | 946,000 | |
Accrued expenses and other current liabilities | -104,000 | 506,000 | |
Due to related parties | 76,000 | ' | |
Unearned revenue | -284,000 | 705,000 | |
Net cash (used in) provided by operating activities | -4,233,000 | 1,719,000 | |
Cash flows from investing activities | ' | ' | |
Cash paid for Apex | ' | -4,801,000 | |
Cash paid for Illume | ' | -250,000 | |
Capital expenditures | -45,000 | -64,000 | |
Net cash used in investing activities | -45,000 | -5,115,000 | |
Cash flows from financing activities | ' | ' | |
(Repayments) borrowings from lines of credit, net | 459,000 | -594,000 | |
Proceeds from the issuance of term debt | 1,000,000 | 4,033,000 | |
Cash received in reverse recapitalization, net of expenses | ' | 1,500,000 | |
Repayment of debt | -2,082,000 | -1,393,000 | |
Convertible series C preferred stock retired | ' | -4,529,000 | |
Issuance of convertible series D preferred stock | ' | 7,042,000 | |
Issuance of convertible series E preferred stock | 4,090,000 | ' | |
Paid financing costs associated with convertible series D preferred stock | -597,000 | -1,020,000 | |
Cash dividends paid on Series C Preferred | -423,000 | -651,000 | |
Paid financing costs | -119,000 | -270,000 | |
Common stock issued in private placement (less warrants classified as liability) | 403,000 | ' | |
Warrants classified as a liability in connection with common stock private placement | 1,099,000 | ' | |
Net cash provided by financing activities | 3,830,000 | 4,118,000 | |
Effect on cash of foreign currency translation | -14,000 | 15,000 | |
Net increase in cash | -462,000 | 737,000 | |
Cash at beginning of year | 1,103,000 | 366,000 | |
Cash at end of year | 641,000 | 1,103,000 | |
Supplemental disclosure of cash flow information: | ' | ' | |
Interest paid | 1,019,000 | 888,000 | |
Income taxes paid | 258,000 | 57,000 | |
Supplemental disclosure of non-cash financing activities: | ' | ' | |
Common stock issued in connection with Apex acquisition | ' | 341,000 | |
Common stock issued in connection with Illume acquisition | ' | 698,000 | |
Common stock issued to preferred series C holders as an antidilution adjustment | ' | 173,000 | |
Accrued and imputed dividends on preferred stock | 265,000 | 288,000 | |
Imputed dividends as contingent beneficial converion on Series D preferred stock | 1,343,000 | ' | [1] |
Accrued PIK dividends on series D and Series E preferred stock | 289,000 | ' | [1] |
Warrants issued in connection with common stock private placement | 1,099,000 | ' | |
Warrants issued in connection with convertible series D preferred stock | ' | 355,000 | |
Warrants issued in connection with convertible series E preferred stock | $278,000 | ' | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation Of Financial Statements [Abstract] | ' |
DESCRIPTION OF BUSINESS | ' |
NOTE 1 - DESCRIPTION OF BUSINESS | |
DecisionPoint Systems, Inc., (“DecisionPoint”, “Company”) through its subsidiaries is an enterprise mobility systems integrator that sells and installs mobile computing and wireless systems that are used both within a company’s facilities in conjunction with wireless networks and in the field using carrier-based wireless networks. These systems generally include mobile computers, mobile application software, and related data capture equipment including bar code scanners and radio frequency identification (“RFID”) readers. 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 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 | 12 Months Ended | ||||||||||||||||
Dec. 31, 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 consolidated financial statements of DecisionPoint and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying 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. (the “Seller”) 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”). The operating results of Illume Mobile have been consolidated into the Company’s consolidated results of operations beginning on August 1, 2012. The Company currently operates in one business segment. All intercompany transactions have been eliminated. | |||||||||||||||||
Liquidity and Going Concern | |||||||||||||||||
The consolidated financial statements were prepared on a going concern basis in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will able to realize its assets and discharge its liabilities and commitments in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raises substantial doubt about the Company ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business, the Company must establish profitable operations through increased sales, successfully implement cost cutting measures, avoid further unforeseen expenses, potentially raise additional equity or debt capital, and successfully refinance its current debt obligations when they come due in February of 2015. There can be no assurance that the Company will be able achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. | |||||||||||||||||
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 consolidated financial statements do not reflect any adjustment that may be required resulting from the adverse outcome relating to this uncertainty. | |||||||||||||||||
For the year ended December 31, 2013, the Company experienced a decrease in revenue of $10.8 million compared to the year ended December 31, 2012. For the year ended December 31, 2013, the Company incurred approximately $2.5 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, the private placement of common stock completed in August 2013, and the Series E Preferred Stock offering completed in November 2013, and associated audit fees, and other matters such as employee termination costs. The Company experienced a net loss of $5.2 million for the year ended December 31, 2013. In addition, the Company has a substantial working capital deficit totaling $9.9 million at December 31, 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 10), 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 reduced non-essential expenses. Such expense reduction measures include, but are not limited to, consolidation of information technology environments, consolidation of our east coast depot facility in to our larger California facility, reduction of outsourced consulting expertise where unnecessary and replacing certain service providers with lower cost providers. The Company has also consolidated administrative personnel and reduced staffing levels by 29% from April 2013 through February 2014, constituting annual savings of $3 million (unaudited). The result of these activities has reduced the expense structure of the consolidated business significantly. The Company is focused on improve processes and continuing cost reduction efforts. The Company has no plans to seek additional capital through the sale of our securities unless deemed necessary. Should additional funding be needed, there is no assurance that such 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. | |||||||||||||||||
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, of which $1.1 million was recorded as a warrant liability. (see Note 12 – Stockholders’ Equity and Note 4 – Warrant Liability). | |||||||||||||||||
In November 2013, the Company entered into definitive subscription agreements (“Series E Purchase Agreement”) with accredited investors for the sales of $4,090,000 in gross proceeds (exclusive of $875,000 in costs) for 409,000 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 $3.5 million (before reduction of the fair value of placement agent warrants of $278,000) 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 818,000 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. | |||||||||||||||||
During 2012 and 2013, all principal and interest 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 December 31, 2013. We currently 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 was not in compliance with the reset covenants at December 31, 2013. Although management of the Company believes it is not likelythat 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 this debt obligation as current at December 31, 2013 (see Note 10 – Term Debt). | |||||||||||||||||
At December 31, 2013, the outstanding balance on the line of credit with Silicon Valley Bank (“SVB”) is $3.9 million, down from $4.1 million at September 30, 2013, and the availability under the line of credit has increased to $3.3 million (see Note 9 – Lines of Credit). The Company relies on the line of credit which expires in February 2015 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 $4.1 million in gross proceeds (exclusive of $875,000 in costs) (See Note 12). In November 2013, the SVB Loan Agreement was amended whereby the minimum Tangible Net Worth requirement of a $(9.7) million deficit was reduced by 25% of funds raised in the sale of Series E Preferred stock to a $(8.7) million deficit. As of December 31, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.8 million cushion over the requirement. The Company currently believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement. 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. | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
Use of Estimates - The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 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 materially differ from these estimates and assumptions used in preparation of the consolidated financial statements. | |||||||||||||||||
Purchase Accounting and Business Combinations - The Company accounts for its business combinations using the purchase method of accounting which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured on the fair value of consideration exchanged and, if the consideration given is not cash, measurement is based on the fair value of the consideration given or the fair value of the assets acquired, whichever is more reliably measurable. The excess of cost of an acquired entity over the fair value of identifiable acquired assets and liabilities assumed is allocated to goodwill. | |||||||||||||||||
The valuation and allocation process relies on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when the Company receives updated information, including appraisals and other analyses, which are completed within one year of the acquisition. Revisions to the fair values, which may be significant, are recorded when pending information is finalized, within one year from the acquisition date. | |||||||||||||||||
Accounts Receivable - Accounts receivable are stated at net realizable value, and as such, current earnings are charged with an allowance for doubtful accounts based on management’s best estimate of the amount of probable incurred credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience and specific account information available. Accounts receivable are reflected in the accompanying consolidated balance sheets net of a valuation allowance of $377,000 and $246,000, as of December 31, 2013 and 2012, respectively. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for doubtful accounts. | |||||||||||||||||
Inventory - Inventory consists solely of finished goods and is stated at the lower of cost or market. Cost is determined under the first-in, first-out (FIFO) method. The Company periodically reviews its inventory and makes provisions as necessary for estimated obsolete and slow-moving goods. The creation of such provisions results in a write down of inventory to net realizable value and a charge to cost of sales. Inventories are reflected in the accompanying consolidated balance sheets net of a valuation allowance of $41,000 and $83,000, as of December 31, 2013 and 2012, respectively. | |||||||||||||||||
Deferred costs – Deferred costs consist primarily of third party extended hardware and software maintenance services which the Company has paid for in advance. The costs are ratably amortized over the life of the contract, generally one to five years. | |||||||||||||||||
Property and Equipment - Property and equipment are recorded at cost. Repairs and maintenance that do not improve or extend the lives of the respective assets are expensed in the period incurred. | |||||||||||||||||
Depreciation of property and equipment is provided for by the straight-line method over the estimated useful lives of the related assets as follows: | |||||||||||||||||
Computer equipment | 3 to 5 years | ||||||||||||||||
Office furniture and fixtures | 5 to 7 years | ||||||||||||||||
Leasehold improvements are amortized over the shorter of the lease term or the life of the improvements. | |||||||||||||||||
Impairment of Long-Lived Assets - The Company reviews its long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell. To date, the Company has not recorded any impairment charges. | |||||||||||||||||
Goodwill – Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at December 31 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of reporting unit goodwill with the carrying amount. If the carrying amount exceeds the implied fair value then an impairment loss is recognized equal to that excess. No impairment charges have been recorded as a result of the Company’s annual impairment assessments. | |||||||||||||||||
Intangible assets – Purchased intangible assets with finite useful lives are amortized over their respective estimated useful lives (using an accelerated method for customer relationships and trade names) to their estimated residual values, if any. The Company’s finite-lived intangible assets consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over periods ranging from two to nine years. Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the rate of amortization is accelerated and the remaining carrying value is amortized over the new shorter useful life. No impairments were identified or changes to estimated useful lives have been recorded. | |||||||||||||||||
Deferred Financing Costs - Costs incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over the life of the underlying indebtedness, adjusted to reflect any early repayments using the effective interest rate method. Deferred financing costs net of amortization totaled approximately $48,000 and $107,000, as of December 31, 2013 and 2012, respectively, and are included in other assets in the accompanying consolidated balance sheets. | |||||||||||||||||
Fair Value Measurement - Fair value is the price that would be received from selling 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 as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: | |||||||||||||||||
· | Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
· | Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. | ||||||||||||||||
· | Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company. | ||||||||||||||||
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. | |||||||||||||||||
Liabilities Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||
The Company measures certain liabilities at fair value on a recurring basis such as our contingent consideration related to business combinations and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the fiscal year ended December 31, 2013. | |||||||||||||||||
The Company has classified its contingent consideration related to the acquisitions as a Level 3 liability (see Note 5). Revenue and other assumptions used in the calculation require significant management judgment. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. Based on that assessment, the Company recognized an adjustment of $820,000 and $0 to the actual calculation of the earn-out obligations during the fiscal years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
The Company has classified certain warrants related to the August 2013 issuance and sale of Common Stock in a private offering as a Level 3 Liability. Assumptions used in the calculation require significant judgment. The Company reassesses the fair value of the warrant liabilities on a quarterly basis. Based on that assessment, the Company recognized a $296,000 reduction to the fair value of the warrant liability during the fiscal year ended December 31, 2013 | |||||||||||||||||
As of December 31, 2013, liabilities recorded at fair value on a recurring basis consist of the following (in thousands): | |||||||||||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 468 | $ | - | $ | - | $ | 468 | |||||||||
Fair value of derivative warrants issued | |||||||||||||||||
in connection with share purchase agreement | 803 | - | - | 803 | |||||||||||||
Balance at December 31, 2013 | $ | 1,271 | $ | - | $ | - | $ | 1,271 | |||||||||
The following table summarizes changes to the fair value of the contingent consideration and derivative warrants, which are Level 3 liabilities (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Derivative | ||||||||||||||||
consideration | warrants | ||||||||||||||||
Balance at December 31, 2012 | $ | 1,346 | $ | - | |||||||||||||
Adjustments to fair value of Apex earn-out (reflected in operating expenses) | (713 | ) | - | ||||||||||||||
Adjustments to fair value of Illume Mobile earn-out (reflected in operating expenses) | (107 | ) | - | ||||||||||||||
Fair value of warrants accounted for as a liability | - | 1,099 | |||||||||||||||
Adjustments to fair value of derivative warrants (reflected in other income) | - | (296 | ) | ||||||||||||||
Effect of currency translation | (58 | ) | - | ||||||||||||||
Balance at December 31, 2013 | $ | 468 | $ | 803 | |||||||||||||
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis | |||||||||||||||||
The Company's non-financial assets and liabilities, such as goodwill, intangible assets, and other long lived assets resulting from business combinations are measured at fair value using income and market comparable valuation methodologies at the date of acquisition and subsequently re-measured if there are indicators of impairment. There were no indicators of impairment identified during the fiscal year ended December 31, 2013. | |||||||||||||||||
Translation of Foreign Currencies - The Company's functional currency is the U.S. dollar. The financial statements of the Company's foreign subsidiary (Apex) 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. | |||||||||||||||||
Revenue Recognition - Revenues are generated through product sales, warranty and maintenance agreements, software customization, and professional services. Product sales are recognized when the following criteria are met (1) there is persuasive evidence that an arrangement exits; (2) delivery has occurred and title has passed to the customer which generally happens at the point of shipment provided that no significant obligations remain; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. The Company generates revenues from the sale of extended warranties on wireless and mobile hardware and systems. Revenue related to extended warranty and service contracts is recorded as unearned revenue and is recognized over the life of the contract as the Company maintains financial risk throughout the term of these contracts and may be liable to refund a customer for amounts paid in certain circumstances. Our policy is to classify shipping and handling costs billed to customers and the related expenses as cost of sales. | |||||||||||||||||
The Company also generates revenue from professional services and customer specified software customization on either a fee-for-service or fixed fee basis. Revenue from software customization and professional services that is contracted as fee-for-service is recognized in the period in which the services are performed or delivered. Adjustments to contract price and estimated labor costs are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The Company records sales net of sales tax. | |||||||||||||||||
The Company enters into revenue arrangements that contain multiple deliverables. Judgment is required to properly identify the accounting units of the multiple deliverable transactions and to determine the manner in which revenue should be allocated among the accounting units. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria of revenue recognition have been met for each deliverable in order for revenue recognition to occur in the appropriate accounting period. In an arrangement with multiple deliverables, the delivered item or items shall be considered a separate unit of accounting if both of the following criteria are met: (i) the delivered item or items have value to the customer on a standalone basis; (ii) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement shall be combined with the other applicable undelivered item(s) within the arrangement and the allocation of arrangement consideration and the recognition of revenue then shall be determined for those combined deliverables as a single unit of accounting. While changes in the allocation of the arrangement consideration between the units of accounting will not affect the amount of total revenue recognized for a particular sales arrangement, any material changes in these allocations could impact the timing of revenue recognition, which could affect the Company’s results of operations. When the Company enters into an arrangement that includes multiple elements, we allocate revenue base on their relative selling prices. We use the a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor specific objective evidence of fair value (“VSOE”), (ii) third party evidence of selling prices (“TPE”) and (iii) best estimate of selling price (“ESP”) as a proxy for VSOE. When both VSOE and TPE are unavailable, we use ESP. We determine ESP by considering all relevant factors in establishing the price, which is demonstrated in a gross margin model used revenue from software licenses may contain arrangements with multiple deliverables, including post-contract customer support, that are subject to software revenue recognition guidance. The revenue for these arrangements is allocated to the software and non-software deliverable based on the relative selling prices of all components in the arrangement using the criteria above. Post-contract support is recognized ratably over the support period. When a contract contains multiple elements wherein the only undelivered element is post-contract customer support and VSOE of the fair value of post-contract customer support does not exist, revenue from the entire arrangement is recognized ratably over the support period. Software royalty revenue is recognized in arrears on a quarterly basis, based upon reports received from licensees during the period, unless collectability is not reasonably assured, in which case revenue is recognized when payment is received from the licensee. | |||||||||||||||||
Concentration of Risk - Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and accounts payable. Beginning January 1, 2013, all of our cash balances were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor at each financial institution. This coverage is available at all FDIC member institutions. The Company uses Silicon Valley Bank, which is an FDIC insured institution. Based on these facts, collectability of bank balances appears to be adequate. | |||||||||||||||||
For the year ended December 31, 2013, the Company had sales to two customers which represented a total of 10% and 8%, of total revenues. Accounts receivable from two customers at December 31, 2013, were approximately 19% and 12%. For the year ended December 31, 2012, the Company had sales to two customers which represented a total of 13% and 7%, of total revenues. Accounts receivable from two customers at December 31, 2012, accounted for 14% and 10% of accounts receivable. The loss of a significant customer could have a material adverse impact on the Company. | |||||||||||||||||
The Company has the same four primary vendors in both periods presented. For the year ended December 31, 2013, the Company had purchases from these four vendors that collectively represented 58% of total purchases and 61% of the total outstanding accounts payable at December 31, 2013. For the year ended December 31, 2012, the Company had purchases from these four vendors that collectively represented 71% of total purchases and 67% of the total outstanding accounts payable at December 31, 2012. The same single vendor represented 18% and 28% of the total purchases for the years ended December 31, 2013 and 2012, respectively. Loss of this certain vendor could have a material adverse effect on our operations. | |||||||||||||||||
Fair Value of Financial Instruments - The Company’s financial instruments include cash, accounts receivable, accounts payable, accrued expenses, line of credit and long term debt. The carrying value of the short term financial instruments approximates their fair values at December 31, 2013 and 2012, due to their short-term maturities. The carrying value of the Company’s long-term debt approximates its fair value, net of a discount related to a final payment to be made on the due date which is equal to two percent of the original loan amount. | |||||||||||||||||
Stock-Based Compensation - The Company records the fair value of all stock-based compensation awards in its consolidated financial statements. The terms and vesting schedules for stock-based awards vary by type of grant and generally vest based on the passage of time. The fair value of stock options and warrants is calculated using the Black-Scholes option-pricing model and the expense is recognized on a straight-line basis over the requisite service period, net of estimated forfeitures. | |||||||||||||||||
Employee Stock Ownership Plan (ESOP) - The cost of shares issued to the ESOP, but not yet earned is shown as a reduction of equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. As shares of common stock acquired by the ESOP are committed to be released to each employee, the Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per share computations. | |||||||||||||||||
Comprehensive Loss - Comprehensive loss consists of net loss and accumulated other comprehensive loss, which includes certain changes in equity that are excluded from net loss. Comprehensive loss for the year ended December 31, 2013 is equal to the net loss of $5,218,000 plus other comprehensive loss totaling $23,000 (relating to exchange translation adjustments arising from the consolidation of the Company’s Canadian Apex subsidiary) to arrive at comprehensive loss of $5,241,000. Comprehensive loss for the year ended December 31, 2012 is equal to the net loss of $3,866,000 plus other comprehensive income totaling $22,000 (relating to exchange translation adjustments arising from the consolidation of the Company’s Canadian Apex subsidiary) to arrive at comprehensive loss of $3,844,000. | |||||||||||||||||
Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (“FASB”) guidance, which requires deferred tax assets and liabilities, be recognized using enacted tax rates to measure the effect of temporary differences between book and tax basis on recorded assets and liabilities. FASB guidance also requires that deferred tax assets be reduced by a valuation allowance, if it is more likely than not some portion or all of the deferred tax assets will not be recognized. | |||||||||||||||||
The Company evaluates on an annual basis its ability to realize deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are forecasts of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. | |||||||||||||||||
In accordance with FASB guidance on accounting for uncertainty in income taxes, the Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit. If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period. | |||||||||||||||||
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. | |||||||||||||||||
Restatement on previously issued Consolidated Financial Statements – The Company identified a misstatement with respect to the manner in which it presented cost of sales and selling, general and administrative expenses in its Consolidated Statement of Operations and Comprehensive Loss as of December 31, 2012. The Company has historically included the amortization of acquired intangibles within selling, general and administrative expenses for consistency. Commencing January 31, 2013, the Company has started classifying acquired technology as a cost of sales in order to align the intangible asset amortization with the related revenue. | |||||||||||||||||
This restatement has no impact on the balance sheet as of December 31, 2012 or on net loss or basic and diluted loss per share for the year then ended. The Company has assessed this misstatement in the financial statement presentation and has determined that, on both a qualitative and quantitative basis, the adjustment is immaterial to the consolidated financial statements, and thus the Company will not amend any of its prior quarterly and annual reports on Form 10-Q and 10-K, and that it will adjust presentation on a prospective basis. In order to provide consistency in the Company’s financial reporting, the December 31, 2012 Consolidated Statement of Operations and Comprehensive Loss has been restated to appropriately reflect the corrections described above. The following table summarizes the effect of this correction on the previously filed Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012, which was restated for comparative purposes only (in thousands): | |||||||||||||||||
31-Dec-12 | |||||||||||||||||
As Previously | As | ||||||||||||||||
Reported | Adjustment | Restated | |||||||||||||||
Cost of sales | $ | 55,949 | $ | 509 | $ | 56,458 | |||||||||||
Gros profit | 15,552 | (509 | ) | 15,043 | |||||||||||||
Selling, general and administrative expense | 18,661 | (509 | ) | 18,152 | |||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, which amends guidance in ASC740, Income Taxes. ASU No. 2013-11 amends existing guidance related to the financial presentation of unrecognized tax benefits by requiring an entity to net its unrecognized tax benefits against the deferred tax assets for all available same-jurisdiction loss or other tax carryforwards that would apply in settlement of the uncertain tax positions. The amendments will be effective beginning in the first quarter of 2014 with early adoption permitted, will be applied prospectively to all unrecognized tax benefits that exist at the effective date, and are not expected to have a material effect on our consolidated financial position or results of operations. | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-10, which amends the guidance in ASC 815, Derivatives and Hedging. ASU No. 2013-10 permits the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to the U.S. government rate and LIBOR. This amended guidance is to be applied prospectively and is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The implementation of the amended accounting guidance has not had, and is not expected to have, a material impact on our consolidated financial position or results of operations. | |||||||||||||||||
In February 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-02, which amends the guidance in Accounting Standard Codification (“ASC”) 220 on Comprehensive Income. ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. The implementation of this accounting guidance on January 1, 2013 did not have a material impact on our consolidated financial position or results of operations. |
Loss_Per_Common_Share
Loss Per Common Share | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
LOSS PER COMMON SHARE | ' | ||||||||
NOTE 3 – 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 the years ended December 31, 2013 and 2012, exclude approximately 0.4 million and 0.6 million, respectively, 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. Below is a reconciliation of the fully dilutive securities effect for the period with net income (in thousands except share and per share data): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Net loss attributable to common shareholders | $ | (7,801 | ) | $ | (4,820 | ) | |||
Weighted average common shares outstanding - basic and diluted | 9,802,810 | 7,900,693 | |||||||
Loss per common share - basic and diluted | $ | (0.80 | ) | $ | (0.61 | ) | |||
For the years ended December 31, 2013 and 2012, respectively, potentially dilutive securities are excluded from the computation of fully diluted net loss per share as their effect is anti-dilutive. | |||||||||
Potential dilutive securities consist of (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Convertible preferred stock - Series A | 270 | 270 | |||||||
Convertible preferred stock - Series B | 131 | 131 | |||||||
Convertible preferred stock - Series D | 9,918 | 7,042 | |||||||
Convertible preferred stock - Series E | 8,180 | - | |||||||
Warrants to purchase common stock | 3,555 | 981 | |||||||
Options to purchase common stock | 805 | 544 | |||||||
Total potentially dilutive securities |
Warrant_Liability
Warrant Liability | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Warrant Liability [Abstract] | ' | ||||||||||||||||||||
WARRANT LIABILITY | ' | ||||||||||||||||||||
NOTE 4 – 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 12). 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 common stock price, the remaining life of the warrants, the volatility of the Company’s common 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. Accordingly, 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 $803,000 and $0, as of December 31, 2013 and December 31, 2012, respectively. The change in fair value of the warrant liabilities for the twelve months ended December 31, 2013 was approximately $296,000 from the date of original recordation in August 2013 and is included in the Company’s consolidated results of operations. | |||||||||||||||||||||
The warrant liabilities were valued at the closing dates of the Purchase Agreement (see Note 12 (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 | December | August | December | August | August | ||||||||||||||||
31, 2013 | 21, 2013 | 31, 2013 | 21, 2013 | 15, 2013 | |||||||||||||||||
Closing price per share of common stock | $ | 0.53 | $ | 0.84 | $ | 0.53 | $ | 0.84 | $ | 0.69 | |||||||||||
Exercise price per share (range) | 0.5 | 0.6 | 0.5 | 1 | 1 | ||||||||||||||||
Expected volatility | 123.5 | % | 134.9 | % | 123.5 | % | 134.9 | % | 134.1 | % | |||||||||||
Risk-free interest rate | 1.6 | % | 1.6 | % | 1.6 | % | 1.6 | % | 1.6 | % | |||||||||||
Dividend yield | - | - | - | - | - | ||||||||||||||||
Remaining expected term of underlying securities (years) | 4.6 | 5 | 4.6 | 5 | 5 |
Business_Combinations
Business Combinations | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
BUSINESS COMBINATIONS | ' | ||||||||
NOTE 5 – BUSINESS COMBINATIONS | |||||||||
In pursuing our business strategies, we acquire and make investments in certain businesses that meet strategic and financial criteria. | |||||||||
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 determined to be zero. The adjustment was recorded as a separate component of operating expenses in the Company’s Consolidated Statement of Operations and Comprehensive Loss as of December 31, 2013. | |||||||||
The purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The following table summarizes the fair value of the Illume Mobile assets acquired and liabilities assumed at July 31, 2012 (in thousands): | |||||||||
15 | |||||||||
Assets acquired: | |||||||||
Accounts receivable | $ | 16 | |||||||
Other current assets | |||||||||
Property and equipment | 26 | ||||||||
Intangible assets | 630 | ||||||||
Goodwill | 444 | ||||||||
Total assets | 1,131 | ||||||||
Liabilities assumed: | |||||||||
Accounts payable and other accrued liabilities | 39 | ||||||||
Unearned revenue | 37 | ||||||||
Total liabilities assumed | 76 | ||||||||
Net assets acquired | $ | 1,055 | |||||||
Purchase consideration: | |||||||||
Cash paid at closing | $ | 250 | |||||||
Shares issued at closing | 698 | ||||||||
Earn out consideration | 107 | ||||||||
Total purchase consideration | $ | 1,055 | |||||||
Apex Systems Integrators, Inc. | |||||||||
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. The Company accounted for the transaction using the purchase accounting method of accounting and the operating results for Apex have been consolidated into the Company’s results of operations beginning June 5, 2012. The Company funded the purchase of Apex through borrowings as further explained below. | |||||||||
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 determined to be CDN$341,000 (US$331,000). The seller has disputed the Company’s calculation (see Note 15). Accordingly, there is CDN$341,000 (US$319,000) recorded as potential additional purchase consideration in the Company’s consolidated Balance Sheet as of December 31, 2013. The adjustment of CDN$735,000 (US$713,000) was recorded as a separate component of operating expenses in the Company’s Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2013. | |||||||||
The purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values on the acquisition date. The following table summarizes the fair value of the Apex assets acquired and liabilities assumed at June 4, 2012 (in thousands): | |||||||||
Assets acquired: | |||||||||
Accounts receivable | $ | 243 | |||||||
Due from related party | 412 | ||||||||
Other current assets | 62 | ||||||||
Property and equipment | 30 | ||||||||
Intangible assets | 4,466 | ||||||||
Goodwill | 2,449 | ||||||||
Total assets | 7,662 | ||||||||
Liabilities assumed: | |||||||||
Accounts payable and other accrued liabilities | 194 | ||||||||
Unearned revenue | 297 | ||||||||
Deferred tax liability | 1,184 | ||||||||
Total liabilities assumed | 1,675 | ||||||||
Net assets acquired | $ | 5,987 | |||||||
Purchase consideration: | |||||||||
Cash paid at closing | $ | 4,801 | |||||||
Accrued earn out consideration | 1,186 | ||||||||
Total purchase consideration | $ | 5,987 | |||||||
Pro Forma Financial Information (unaudited): | |||||||||
The following summarizes the Company’s unaudited consolidated results of operations for the years ended December 31, 2012 as if the Apex and Illume Mobile acquisitions had occurred on January 1, 2012: (in thousands except per share data): | |||||||||
December 31, | |||||||||
2012 | 2012 | ||||||||
as reported | pro forma | ||||||||
Net sales | $ | 71,501 | $ | 73,703 | |||||
Net loss attributable to common shareholders | (4,820 | ) | (6,887 | ) | |||||
Net loss per share - basic and diluted | (0.61 | ) | (0.87 | ) | |||||
Included in the pro forma combined results of operations are the following adjustments for Apex: (i) amortization of intangible assets for the year ended December 31, 2012 of $572,000, (ii) a net increase in interest expense for the year ended December 31, 2012 of $291,000. | |||||||||
Included in the pro forma combined results of operations are the following adjustments for Illume Mobile: (i) amortization of intangible assets for the year ended December 31, 2012 of $125,000. 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 (see discussion at Note 5). | |||||||||
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 Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 were $1.5 million and $1.8 million, respectively. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
NOTE 6 - PROPERTY AND EQUIPMENT | |||||||||
Property and equipment consists of the following at (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Computer equipment | $ | 225 | $ | 238 | |||||
Office furniture and fixtures | 109 | 113 | |||||||
Leasehold improvements | 26 | 43 | |||||||
Total property and equipment | 360 | 394 | |||||||
Less accumulated depreciation and amortization | (224 | ) | (215 | ) | |||||
Property and equipment, net | $ | 136 | $ | 179 | |||||
Depreciation and amortization expense related to property and equipment for the years ended December 31, 2013 and 2012, totaled $73,000, and $67,000, respectively. |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||||||||||
NOTE 7 – GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||||||||||
The Company allocates the cost of its acquisitions to the assets acquired and liabilities assumed based on their estimated fair values. The excess cost over the acquired fair value of the identified net assets acquired is recorded as goodwill. | |||||||||||||||||||||||||||||||||
Goodwill is tested annually on December 31 and whenever events or circumstances indicate impairment may have occurred. If the carrying amount of goodwill exceeds its fair value, estimated based on discounted cash flow analyses, an impairment charge would be recorded. Based on the results of the annual impairment tests, no impairment of goodwill existed at December 31, 2013. | |||||||||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012 are as follows (in thousands): | |||||||||||||||||||||||||||||||||
Balance as of January 1, 2012 | $ | 5,538 | |||||||||||||||||||||||||||||||
Acquisition of Apex in June | 2,449 | ||||||||||||||||||||||||||||||||
Adjustment to Apex goodwill | 37 | ||||||||||||||||||||||||||||||||
Tax adjustment to Apex goodwill | (9 | ) | |||||||||||||||||||||||||||||||
Acquisition of Illume in July | 444 | ||||||||||||||||||||||||||||||||
Impact of foreign currency translation | 112 | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2012 | 8,571 | ||||||||||||||||||||||||||||||||
Impact of foreign currency translation | (176 | ) | |||||||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 8,395 | |||||||||||||||||||||||||||||||
As of December 31, 2013 and 2012, respectively, the Company’s intangible assets and accumulated amortization consist of the following (in thousands): | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Accumulated | WA | Accumulated | WA | ||||||||||||||||||||||||||||||
Gross | Amortization | Net | Life | Gross | Amortization | Net | Life | ||||||||||||||||||||||||||
Customer relationships | $ | 3,264 | $ | (1,654 | ) | $ | 1,610 | 6.5 | $ | 3,373 | $ | (966 | ) | $ | 2,407 | 7.6 | |||||||||||||||||
Contractor and resume databases | 675 | (405 | ) | 270 | 2 | 675 | (270 | ) | 405 | 3 | |||||||||||||||||||||||
Tradename | 862 | (364 | ) | 498 | 4.6 | 893 | (193 | ) | 700 | 5.3 | |||||||||||||||||||||||
Internal use software | 2,802 | (1,299 | ) | 1,503 | 2.1 | 2,978 | (545 | ) | 2,433 | 3.1 | |||||||||||||||||||||||
Covenant not to compete | 104 | (78 | ) | 26 | 0.6 | 105 | (27 | ) | 78 | 1.5 | |||||||||||||||||||||||
$ | 7,707 | $ | (3,800 | ) | $ | 3,907 | 4.2 | $ | 8,024 | $ | (2,001 | ) | $ | 6,023 | 5.1 | ||||||||||||||||||
Amortization expense for intangible assets was $1,903,000 and $1,486,000 for the years ended December 31, 2013 and 2012, respectively. The effect of foreign currency translation on the intangible assets for the years ended December 31, 2013 and 2012 was ($213,000) and $199,000, respectively. Amortization is calculated over the estimated useful lives of the assets on a straight line basis for covenant not to compete, internal use software and contractor and resume databases, and on an accelerated basis for customer relationships and trade name. | |||||||||||||||||||||||||||||||||
Based on the current amount of intangibles subject to amortization, estimated amortization expense in the next five years and thereafter, is as follows (in thousands): | |||||||||||||||||||||||||||||||||
Year | Amount | ||||||||||||||||||||||||||||||||
2014 | $ | 1,593 | |||||||||||||||||||||||||||||||
2015 | 1,357 | ||||||||||||||||||||||||||||||||
2016 | 318 | ||||||||||||||||||||||||||||||||
2017 | 243 | ||||||||||||||||||||||||||||||||
2018 | 189 | ||||||||||||||||||||||||||||||||
Thereafter | 207 | ||||||||||||||||||||||||||||||||
Total | $ | 3,907 | |||||||||||||||||||||||||||||||
Accrued_Expenses_and_Other_Cur
Accrued Expenses and Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ' | ||||||||
NOTE 8 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||||||||
Accrued expenses and other current liabilities consist of the following (in thousands): | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Salaries and benefits | $ | 1,873 | $ | 1,937 | |||||
Interest payable | 23 | 139 | |||||||
Professional fees | 30 | 33 | |||||||
Vendor purchases | 161 | 92 | |||||||
Sales tax payable | 94 | 293 | |||||||
Customer deposits | 194 | 139 | |||||||
Other fees and expenses | 601 | 262 | |||||||
Total accrued expenses and other current liabilities | $ | 2,976 | $ | 2,895 |
Line_of_Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2013 | |
Line Of Credit Facility [Abstract] | ' |
LINE OF CREDIT | ' |
NOTE 9 – LINE OF CREDIT | |
SVB Line 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 10. The SVB Loan Agreement is secured by substantially all the assets of the Company and was scheduled to mature in February 2015. As of December 31, 2013 and 2012, the outstanding balance on the line of credit is approximately $3.9 million and $3.3 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). In November 2013, the Company entered into a definitive subscription agreement with accredited investors for the sale of Series E Preferred Stock, raising $4.1 million in gross proceeds (exclusive of $875,000 in costs) (See Note 12). In November 2013, the SVB Loan Agreement was amended whereby the minimum Tangible Net Worth requirement of a $(9.7) million deficit was reduced by 25% of funds raised in the sale of Series E Preferred stock to a $(8.7) million deficit. As of December 31, 2013, the Company was in compliance with the tangible Net Worth financial covenant and had available a $0.8 million cushion over the requirement. The Company believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement. 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 $3.3 million as of December 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 December 31, 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 10), 4) a modification of the rate of interest of the line of credit to 3.75% above the bank’s prime rate and 5) other various terms and provisions. | |
RBC Line of Credit -- 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 December 31, 2013, the outstanding balance on the line of credit was $0 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 was not in compliance with the reset covenants at December 31, 2013. See further discussion regarding this condition at Note 10. | |
For the years ended December 31, 2013 and 2012, the Company’s interest expense, including fees paid to secure lines of credit, totaled approximately $362,000 and $375,000, respectively. | |
RBC and SVB entered into 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 10. |
Term_Debt
Term Debt | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Long-Term Debt, Unclassified [Abstract] | ' | ||||||||||||||||||||||||
TERM DEBT | ' | ||||||||||||||||||||||||
NOTE 10 – TERM DEBT | |||||||||||||||||||||||||
Long term debt as of December 31, 2013 and 2012, consists of the following (in thousands): | |||||||||||||||||||||||||
Amortization | |||||||||||||||||||||||||
Balance | of Note | Currency | Balance | ||||||||||||||||||||||
1-Jan-13 | Additions | Payments | Discount | Translation | 31-Dec-13 | ||||||||||||||||||||
RBC term loan | $ | 2,090 | $ | - | $ | (804 | ) | $ | - | $ | (117 | ) | $ | 1,169 | |||||||||||
BDC term loan | 1,705 | - | - | - | (116 | ) | 1,589 | ||||||||||||||||||
SVB term loan | 1,000 | - | (1,000 | ) | - | - | - | ||||||||||||||||||
SVB term loan 2 | - | 1,000 | (278 | ) | - | - | 722 | ||||||||||||||||||
Total note discounts | (73 | ) | (19 | ) | - | 43 | 4 | (45 | ) | ||||||||||||||||
Total debt | $ | 4,722 | $ | 981 | $ | (2,082 | ) | $ | 43 | $ | (229 | ) | 3,435 | ||||||||||||
less current portion | (1,086 | ) | |||||||||||||||||||||||
less RBC debt long term classified as current | (388 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 1,961 | |||||||||||||||||||||||
Amortization | |||||||||||||||||||||||||
Balance | of Note | Currency | Balance | ||||||||||||||||||||||
1-Jan-12 | Additions | Payments | Discount | Translation | 31-Dec-12 | ||||||||||||||||||||
RBC term loan | $ | - | $ | 2,401 | $ | (419 | ) | $ | - | $ | 108 | $ | 2,090 | ||||||||||||
BDC term loan | - | 1,632 | - | - | 73 | 1,705 | |||||||||||||||||||
SVB term loan | 2,000 | - | (1,000 | ) | - | - | 1,000 | ||||||||||||||||||
Total note discounts | (30 | ) | (92 | ) | 49 | (73 | ) | ||||||||||||||||||
Total debt | $ | 1,970 | $ | 3,941 | $ | (1,419 | ) | $ | 49 | $ | 181 | 4,722 | |||||||||||||
less current portion | (1,800 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 2,922 | |||||||||||||||||||||||
The Company’s debt is recorded at par value adjusted for any unamortized discounts. Discounts and costs directly related to the issuance of debt are capitalized and amortized over the life of the debt using the effective interest rate method and is recorded in interest expense in the accompanying consolidated statements of operations. Unamortized deferred financing costs of approximately $48,000 and $107,000 are included in other assets in the accompanying consolidated balance sheets as of December 31, 2013 and December 31, 2012, respectively. | |||||||||||||||||||||||||
As of December 31, 2013, maturities of long-term obligations for the next three fiscal years are as follows (in thousands): | |||||||||||||||||||||||||
Year | Amount | ||||||||||||||||||||||||
2014 | $ | 1,086 | |||||||||||||||||||||||
2014 RBD debt long term classified as current | 388 | ||||||||||||||||||||||||
2015 | 321 | ||||||||||||||||||||||||
2016 | 1,640 | ||||||||||||||||||||||||
Total | $ | 3,435 | |||||||||||||||||||||||
RBC Term Loan -- On June 4, 2012, Apex entered into the RBC Credit Agreement with RBC described in Note 9, 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 RBP plus 4% (7% at December 31, 2013). 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 consolidated balance sheet as of December 31, 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 December 31, 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 was not in compliance with the reset covenants at December 31, 2013. Although the Company believes it is not likely that 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 December 31, 2013. | |||||||||||||||||||||||||
BDC Term Loan -- On June 4, 2012, Apex also entered into the BDC Loan Agreement as described in Note 5, 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 accrues 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. 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, 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 $35,000 has been recorded as deferred financing costs and $35,000 recorded as a note discount in the accompanying consolidated balance sheet as of December 31, 2012, and is being amortized to interest expense over the term of the loan. As of December 31, 2013, there was $22,000 in unamortized deferred financing costs and $22,000 in unamortized note discount. | |||||||||||||||||||||||||
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 the 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. The Company was in compliance with all of our BDC financial covenants as of December 31, 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. 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). In November 2013, the Company entered into a definitive subscription agreement with accredited investors for the sale of Series E Preferred Stock, raising $4.1 million in gross proceeds (exclusive of $875,000 in costs) (See Note 12). In November 2013, the SVB Loan Agreement was amended whereby the minimum Tangible Net Worth requirement of a $(9.7) million deficit was reduced by 25% of funds raised in the sale of Series E Preferred stock to a $(8.7) million deficit. As of December 31, 2013, the Company was in compliance with the tangible Net Worth financial covenant and had available a $0.8 million cushion over the requirement. The Company currently 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 (unaudited). 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. | |||||||||||||||||||||||||
On February 27, 2013, the Company 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 year ended December 31, 2013 and 2012, the Company’s interest expense on the term debt, including amortization of deferred financing costs, was approximately $564,000 and $509,000, 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. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
NOTE 11 - INCOME TAXES | |||||||||||||||||
The provision for income taxes for the years ended December 31, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current income tax expense (benefit): | |||||||||||||||||
Federal | $ | - | $ | - | |||||||||||||
State | 47 | 63 | |||||||||||||||
Foreign | 25 | 68 | |||||||||||||||
72 | 131 | ||||||||||||||||
Deferred income tax expense (benefit): | |||||||||||||||||
Federal | 24 | 16 | |||||||||||||||
State | 6 | 6 | |||||||||||||||
Foreign | (301 | ) | (278 | ) | |||||||||||||
(271 | ) | (256 | ) | ||||||||||||||
Valuation allowance | - | - | |||||||||||||||
Total income tax expense (benefit) | $ | (199 | ) | $ | (125 | ) | |||||||||||
The Company’s deferred tax assets and liabilities are as follows (in thousands): | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Allowance for doubtful accounts | $ | 163 | $ | 98 | |||||||||||||
Inventory reserve and uniform capitalization | 41 | 44 | |||||||||||||||
Accrued expenses and other liabilities | 305 | 365 | |||||||||||||||
Unearned revenue | 343 | 226 | |||||||||||||||
Valuation allowance | (748 | ) | (685 | ) | |||||||||||||
Deferred tax assets - current | 104 | 48 | |||||||||||||||
Other assets | -295 | 42 | |||||||||||||||
Property and equipment | 18 | 5 | |||||||||||||||
Intangibles | 658 | 405 | |||||||||||||||
Net operating loss carryforward | 4,201 | 2,009 | |||||||||||||||
Valuation allowance | (4,631 | ) | (2,459 | ) | |||||||||||||
Deferred tax assets - long term | -49 | 2 | |||||||||||||||
Total net deferred tax asset | $ | 55 | $ | 50 | |||||||||||||
Long term debt | $ | (17 | ) | $ | (18 | ) | |||||||||||
Intangibles | (662 | ) | (1,022 | ) | |||||||||||||
Goodwill | (67 | ) | (40 | ) | |||||||||||||
Total net deferred tax liability | $ | (746 | ) | $ | (1,080 | ) | |||||||||||
Total | $ | (691 | ) | $ | (1,030 | ) | |||||||||||
A reconciliation of the United States statutory income tax rate to the effective income tax rate for the years ended December 31, 2013 and 2012 is as follows (in thousands): | |||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Amount | Rate (%) | Amount | Rate (%) | ||||||||||||||
Tax at the Federal statutory rate | $ | (1,842 | ) | 34 | $ | (1,357 | ) | 34 | |||||||||
State taxes | (464 | ) | 8.6 | (130 | ) | 3.3 | |||||||||||
Permanent differences | 92 | (1.7 | ) | 752 | (18.9 | ) | |||||||||||
Valuation allowance | 2,195 | (40.5 | ) | 147 | (3.7 | ) | |||||||||||
True up items | 13 | (0.2 | ) | 288 | (7.2 | ) | |||||||||||
Miscellaneous | 22 | (0.4 | ) | 22 | (0.6 | ) | |||||||||||
Stock transaction | 21 | (0.4 | ) | 57 | (1.4 | ) | |||||||||||
Foreign rate | (236 | ) | 4.3 | 96 | (2.4 | ) | |||||||||||
Effective tax rate | $ | (199 | ) | 3.7 | $ | (125 | ) | 3.1 | |||||||||
The Company’s deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. | |||||||||||||||||
The Company has net operating loss carryforwards available in certain jurisdictions to reduce future taxable income. Future tax benefits for net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. This determination is based on the expectation that related operations will be sufficiently profitable or various tax business and other planning strategies will enable the Company to utilize the net operating loss carryforwards. The Company’s evaluation of the realizability of deferred tax assets considers both positive and negative evidence. The weight given to potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. For the years ended December 31, 2013 and 2012, the Company recorded a valuation allowance related to the US federal and state temporary items as it was determined it is more likely than not that the Company will not be able to fully use the assets to reduce future tax liabilities. For the years ended December 31, 2013 and 2012, the Company recorded no allowance related to foreign temporary items as it was determined it is more likely than not that the Company will be able to fully use the assets to reduce future tax liabilities. | |||||||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): | |||||||||||||||||
Balance as of December 31, 2012 | $ | 170 | |||||||||||||||
Additions based on tax positions related to the current year | - | ||||||||||||||||
Additions for tax positions of prior years | - | ||||||||||||||||
Reductions for tax positions of prior years | - | ||||||||||||||||
Balance as of December 31, 2013 | $ | 170 | |||||||||||||||
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. During the fiscal years December 31, 2012, the Company recognized approximately $170,000 in liabilities related to tax positions taken by Apex, a foreign subsidiary acquired in 2012. | |||||||||||||||||
As of December 31, 2013, the Company had federal and state net operating loss carryforwards of approximately $10.7 million and $9.2 million, respectively. These loss carryforwards will expire in varying amounts through 2033. Section 382 of the U.S. Internal Revenue Code, as amended, or (“the Code”), generally imposes an annual limitation on the amount of net operating loss carryforwards that might be used to offset taxable income when a corporation has undergone significant changes in stock ownership. We have determined that we have experienced multiple ownership changes under Section 382 of the Code. As of December 31, 2013, we estimated that approximately $9.9 million of U.S. federal net operating losses and $9.2 million of state net operating losses may be utilized in the future based on limitations that we have calculated under Section 382 of the Code. | |||||||||||||||||
The Company continues to remain subject to examination by U.S. federal authority for the years 2009 through 2012 and for various state authorities for the years 2009 through 2012, with few exceptions. | |||||||||||||||||
The Company is subject to U.S. federal and Canadian income tax as well as income taxes in various state jurisdictions. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Stockholders' Equity Attributable To Parent [Abstract] | ' | |||||||||||||||||
STOCKHOLDERS' EQUITY | ' | |||||||||||||||||
NOTE 12 – STOCKHOLDERS’ EQUITY | ||||||||||||||||||
The Company is authorized to issue two classes of stock designated as common stock and preferred stock. As of December 31, 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, 4,000,000 shares are designated as Series D Preferred Stock, of which 704,200 shares are issued and outstanding, and 2,000,000 are designated as Series E Preferred Stock, of which 409,000 shares are issued and outstanding. | ||||||||||||||||||
(a) Cumulative Convertible Preferred Stock | ||||||||||||||||||
A summary of preferred stock outstanding as of December 31, 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 $363 | $ | 1,338 | ||||||||||||||||
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 $92 | 472 | |||||||||||||||||
Series D Preferred, $0.001 par value per share, 4,000,000 shares designated, | ||||||||||||||||||
704,200 shares issued and outstanding (net of $1,374 in issuance costs), | ||||||||||||||||||
liquidation preference of $7,042 plus accrued PIK dividends of $213; cumulative | 7,168 | |||||||||||||||||
impued dividends and beneficial convesion feature of $1,500 | ||||||||||||||||||
Series E Preferred, $0.001 par value per share, 2,000,000 shares designated, | ||||||||||||||||||
409,000 shares issued and outstanding (net of $875 in issuance costs); | ||||||||||||||||||
liquidation preference of $4,090 plus accrued PIK dividends of $76 | 3,215 | |||||||||||||||||
Total convertible preferred stock | $ | 12,193 | ||||||||||||||||
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 and E 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, all issued and outstanding shares of Series C Preferred Stock were redeemed using the proceeds generated from the sale of the Series D Preferred Stock. | ||||||||||||||||||
In connection with the sale of Series E Preferred Stock, on November 12, 2013, the Company filed a Certificate of Elimination of Series C Preferred Stock (the “Series C Certificate of Elimination”), pursuant to which, the 5,000,000 shares of the Company’s preferred stock that had been designated as Series C Preferred Stock were returned to the status of blank check preferred stock. | ||||||||||||||||||
Series D Preferred Stock | ||||||||||||||||||
In connection with the Series D Closing, on December 20, 2012, we filed a Certificate of Designation of Series D Preferred Shares (the “Series D Certificate of Designation”) with the Secretary of State of Delaware. Pursuant to the Series D Certificate of Designation, we designated 4,000,000 shares of our preferred stock as 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 private placement closed on August 15, 2013 and August 21, 2013, the Conversion Price of the Series D Preferred Stock was reduced to $0.90. As a result of the private placement closed on November 12, 2013 and November 22, 2013, the Conversion Price of the Series D Preferred Stock was reduced to $0.71. As a result of the reduction in conversion price, the Company recorded a contingent beneficial conversion feature of $1.3 million. 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 our option, pay dividends in PIK Shares, in which event the applicable dividend rate will be 12% and the number of such PIK Shares issuable as a dividend 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. | ||||||||||||||||||
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 of 1933, as amended). | ||||||||||||||||||
The Series D Preferred Stock also contains registration rights which compel the Company to file a registration statement with the SEC within 60 days of the final closing date (December 31, 2012), and requires the registration statement to become effective within 90 days thereafter. The initial registration statement was filed on February 12, 2013. If the registration statement is not declared effective by May 12, 2013, a partial liquidated damage equal to 0.1% of the purchase price paid by each investor shall be payable on each monthly anniversary until the registration statement becomes effective. In no event shall the partial liquidated damage exceed 0.6% of the purchase price paid by each investor. 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. | ||||||||||||||||||
Series E Preferred Stock | ||||||||||||||||||
In connection with the Series E Closing, on November 12, 2013, we filed a Certificate of Designation of Series E Preferred Stock (the “Series E Certificate of Designation”) with the Secretary of State of Delaware. Pursuant to the Series E Certificate of Designation, we designated 2,000,000 shares of the Company’s preferred stock as Series E Preferred Stock. The Series E Preferred Stock has a Stated Value of $10.00 per share, does not have voting rights, and is convertible, at the option of the holder, into such number of shares of common stock equal to the number of shares of Series E 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 $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 Series E Preferred Stock entitles the holder to cumulative dividends (subject to the prior dividend rights of the Company’s Series D Preferred Stock), payable quarterly, at an annual rate of (i) 10% of the Stated Value during the three year period commencing on the date of issue, and (ii) 14% of the Stated Value commencing three years after the date of issue. We may, at our option (subject to certain conditions), pay dividends in PIK shares, in which event the applicable dividend rate will be 14% and the number of shares issuable as a dividend 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 our common stock for the five prior consecutive trading days. | ||||||||||||||||||
Upon any liquidation, dissolution or winding-up of our Company, holders of Series E Preferred Stock will be entitled to receive (following payment in full of amounts owed to in respect of the Company’s Series D Preferred Stock), for each share of Series E 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 $1.35 for thirty consecutive trading days with a minimum average daily trading volume of at least 10,000 shares for such period, and at any time thereafter, the Company may, in our sole discretion, effect the conversion of all of the outstanding shares of Series E 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 of 1933, as amended). | ||||||||||||||||||
The Series E Preferred Stock also contains registration rights which compel the Company to file a registration statement with the SEC within 60 days of the final closing date (November 22, 2013), and requires the registration statement to become effective within 90 days thereafter. The initial registration statement was filed on January 10, 2014. If the registration statement is not declared effective by January 21, 2014, a partial liquidated damage equal to 0.1% of the purchase price paid by each investor shall be payable on each monthly anniversary until the registration statement becomes effective. In no event shall the partial liquidated damage exceed 0.6% of the purchase price paid by each investor. On January 22, 2014, the registration statement was declared effective by the U.S. Securities and Exchange Commission. | ||||||||||||||||||
In connection with the Series E Closing, on November 12, 2013, we filed Amendment No. 2 to our Certificate of Designation of Series A Preferred Stock (the “Series A Amendment”), and Amendment No. 2 to our Certificate of Designation of Series B Preferred Stock (the “Series B Amendment”). Pursuant to the Series A Amendment and the Series B Amendment, the Series A Preferred Stock and the Series B Preferred Stock will be subordinate to the Series E Preferred Stock with respect to any distributions upon any liquidation, dissolution or winding-up of our Company, respectively. | ||||||||||||||||||
Issuance Activity | ||||||||||||||||||
In November 2013, the Company issued 409,000 shares of Series E Preferred for cash consideration totaling $4,090,000. In conjunction with the issuance, the Company incurred issuance costs totaling $875,000, consisting of placement fees of $327,000, legal and other expenses of $270,000, and issued 818,000 warrants to purchase shares of common stock with an exercise price of $0.55 per share provided to the placement agent with an estimated fair value of $278,000 determined using the Black Scholes option valuation pricing model. The fair value calculation was prepared using the following assumptions: Stock price: $0.47; expected term: 2.5 years; risk free rate of interest of 0.44%; volatility of 143%; and dividend yield of $0. | ||||||||||||||||||
In December 2012, the Company issued 704,200 shares of Series D Preferred for cash consideration totaling $7,042,000. In conjunction with the issuance, the Company incurred issuance costs totaling $1,374,000, consisting of placement fees of $879,000, legal and other expenses of $141,000, and 704,200 warrants to purchase shares of common stock with an exercise price of $1.10 per share provided to the placement agent with an estimated fair value of $354,000 determined using the Black Scholes option valuation pricing model. The fair value calculation was prepared using the following assumptions: Stock price: $0.80; expected term: 2.5 years; risk free rate of interest of 0.125%; volatility of 126%; and dividend yield of $0. | ||||||||||||||||||
(b) Common Stock | ||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||
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. The shares were valued at $83,000 and were recorded as part of selling, general and administrative expenses in the consolidated statement of operations and comprehensive loss as of December 31, 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. | ||||||||||||||||||
On December 10, 2013, the Company issued 585,467 shares of its common stock as a result of the anti-dilution adjustment triggered by the sale of Series E Preferred Shares. The closings on August 15, 2013 and August 21, 2013, common stock issued to investors contained certain price protection provisions. These price protections are considered embedded options to contingently acquire common stock that are clearly and closely related to the host common stock and are therefore not bifurcated. The shares issued were valued at $263,000 and were recorded as deemed dividend as of December 31, 2013. | ||||||||||||||||||
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. | ||||||||||||||||||
Pursuant to the Purchase Agreement, we agreed to, within 30 days of August 21, 2013, file a registration statement (the “Common Stock Registration Statement”) with the Securities and Exchange Commission covering the re-sale of the Common Shares and the shares of common stock underlying the Investor Warrants. We also agreed to use its best efforts to have the Common Stock Registration Statement become effective as soon as possible after filing (and in any event within 120 days of the filing of such Common Stock Registration Statement). If the Common Stock Registration Statement is not declared effective within the requisite period of time, a partial liquidated damage equal to 0.2% of the purchase price paid by each investor shall be payable on each monthly anniversary until it becomes effective. In no event shall the partial liquidated damage exceed 10% of the purchase price paid by each investor. On October 4, 2013, the Common Stock Registration Statement 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. 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. | ||||||||||||||||||
The Company recorded the Investor Warrants and Placement Agent Warrants as a liability (see further disclosure at Note 4). 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). | ||||||||||||||||||
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 Company’s 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 antidilution adjustment, the shares were valued at $174,000. | ||||||||||||||||||
(c) Warrants | ||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||
On August 15, 2013 and August 21, 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 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 December 31, 2013, the warrants were re-valued with a fair value of $803,000 with the difference of $296,000 recorded in the Company’s Consolidated Statement of Operations and Comprehensive Loss. | ||||||||||||||||||
On November 12, 2013 and November 22, 2013 in connection with the sale of Series E Preferred Stock, the Company issued 818,000 warrants to purchase shares of common stock with an exercise price of $0.55 per share provided to the placement agent with an estimated fair value of $278,000 determined using the Black Scholes option valuation pricing model. The fair value calculation was prepared using the following assumptions: stock price: $0.47; expected term: 2.5 years; risk free rate of interest of 0.44%; volatility of 143%; and dividend yield of $0. | ||||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||
On December 20, 2012 and December 31, 2012, in connection with the sale of Series D Preferred Stock, the Company issued 704,200 warrants to purchase shares of common stock with an exercise price of $1.10 per share provided to the placement agent with an estimated value of $354,000 determined using the Black Scholes option valuation pricing model. The fair value calculation was prepared using the following assumptions: stock price: $0.80; expected term: 2.5 years; risk free interest rate of 0.125%; and dividend yield of $0. | ||||||||||||||||||
The following table summarizes information about the Company’s outstanding common stock warrants as of December 31, 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 | 0.71 | 704,200 | 499,982 | |||||||||||||
Common Stock Investor Warrants * | 13-Aug | 18-Aug | 0.5 | 1,463,667 | 731,834 | |||||||||||||
Placement Agent Warrants - Common Stock * | 13-Aug | 18-Aug | 0.5 | 292,733 | 146,367 | |||||||||||||
Placement Agent Preferred Stock - Class E | 13-Nov | 18-Nov | 0.55 | 818,000 | 449,900 | |||||||||||||
3,555,120 | $ | 2,928,082 | $ 0.82 | |||||||||||||||
* warrants classified as liabilities |
ESOP_Plan
ESOP Plan | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Esop Plan [Abstract] | ' | ||||||||
ESOP PLAN | ' | ||||||||
NOTE 13 - ESOP PLAN | |||||||||
In December 2003, the Company formed an Employee Stock Ownership Plan (the “ESOP”) and loaned the ESOP $1,950,000 (the “ESOP Note”) that the ESOP Trust (“Trust”) used to acquire 1,128,558 shares of the of the Company’s stock from its former stockholder for $1,300,000 and 564,195 shares from the Company for $650,000. The ESOP Note bears interest at a rate of 5.25% with annual principal and interest payments and has a 15-year term. The amount owed to the Company under the Note as of December 31, 2013 and 2012, was $629,000 and $767,000, respectively. The ESOP Note is reflected in the accompanying consolidated balance sheet as unearned ESOP shares in stockholders’ equity. | |||||||||
The ESOP covers all non-union employees. Employees are eligible to participate in the Plan after three months of service. Plan participants start vesting after two years of participation and are fully vested after six years of participation. ESOP contributions are determined annually by the Board of Directors, and are a minimum $130,000 per year, to repay the ESOP Note held by the Company. The Company’s contribution expense for the year ended December 31, 2013, was $178,000 representing $138,000 for the ESOP principal payment and $40,000 for the ESOP interest. The Company’s contribution expense for the year ended December 31, 2012 was $178,000 representing $131,000 for the ESOP principal payment and $47,000 for the ESOP interest. The ESOP Note is secured by the unallocated Company stock held by the Trust. | |||||||||
ESOP shares are allocated to individual employee accounts as the loan obligation of the ESOP to the Company is reduced. As of December 31, 2013, the ESOP held 442,736 shares of unallocated Company stock and 1,238,987 shares of allocated Company stock. As of December 31, 2012, the ESOP held 553,420 shares of unallocated Company stock and 1,128,303 shares of allocated Company stock. 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. Dividends received on ESOP shares are allocated based on shares held for the benefit of each participant and used to purchase additional shares of stock for each participant. The Company has not received any dividends since the inception of the plan. ESOP compensation expense consisting of both cash contributions and shares committed to be released for 2013 and 2012 was approximately $133,000 and $173,000, respectively. For 2013 and 2012, the fair value of the shares was $0.84 and $1.15 per share, based on the average of the daily market closing share price. | |||||||||
ESOP distributions will be made in shares of Company stock, cash or a combination of Company stock and cash at the discretion of the Company. | |||||||||
ESOP shares as of December 31, 2013 and 2012 were as follows: | |||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Allocated shares | 1,128,303 | 1,017,619 | |||||||
Shares committed for allocation | 110,684 | 110,684 | |||||||
Unallocated shares | 442,736 | 553,420 | |||||||
Total ESOP shares | 1,681,723 | 1,681,723 | |||||||
The fair value of the unallocated shares at December 31, 2013 and 2012 was approximately $235,000 and $443,000, based on the closing share price of the Company’s common stock of $0.53 and $0.80, respectively. | |||||||||
Stock_Option_Plan
Stock Option Plan | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||||||||||||
STOCK OPTION PLAN | ' | ||||||||||||||||||||||||||
NOTE 14 - 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. | |||||||||||||||||||||||||||
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 December 31, 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 | ||||||||||||||||||||||||
1-Jan-13 | 455,495 | 544,505 | $ | 1.82 | |||||||||||||||||||||||
Granted | (260,000 | ) | 260,000 | 0.5 | |||||||||||||||||||||||
Exercised | - | - | - | ||||||||||||||||||||||||
Forfeited | - | - | - | ||||||||||||||||||||||||
31-Dec-13 | 195,495 | 804,505 | $ | 1.39 | $ | - | |||||||||||||||||||||
Exercisable options at December 31, 2013 | 710,437 | $ | 1.29 | $ | - | ||||||||||||||||||||||
The following table summarizes information about stock options outstanding as of December 31, 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 | |||||||||||||||||||||
$ | 0.5 | 260,000 | 2.9 | $ | 0.5 | 260,000 | 2.9 | $ | 0.5 | ||||||||||||||||||
$ | 1.33 - 2.03 | 365,620 | 1.33 | 1.65 | 359,524 | 1.3 | 1.64 | ||||||||||||||||||||
$ | 2.06 - 4.34 | 178,885 | 7.35 | 2.16 | 90,913 | 7.29 | 2.16 | ||||||||||||||||||||
Total | 804,505 | 3.17 | $ | 1.39 | 710,437 | 2.65 | $ | 1.29 | |||||||||||||||||||
No awards were exercised during the years ended December 31, 2013 and 2012, respectively. The total fair value of awards vested for the years ended December 31, 2013 and 2012 was $122,000 and $76,000, 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. The fair value of options granted to directors during the year ended December 31, 2013, was $79,000 (no options were granted during the year ended December 31, 2012). The fair values were estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: | |||||||||||||||||||||||||||
Expected term | 1.50 years | ||||||||||||||||||||||||||
Expected volatility | 153.61 | % | |||||||||||||||||||||||||
Dividend yield | 0 | % | |||||||||||||||||||||||||
Risk-free interest rate | 0.215 | % | |||||||||||||||||||||||||
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 years ended December 31, 2013 and 2012, was $125,000 and $57,000, respectively, and is included in selling, general and administrative expense in the accompanying consolidated statements of operations. As of December 31, 2013, total unrecognized estimated employee compensation cost related to stock options granted prior to that date was $98,000 which is expected to be recognized over a weighted-average vesting period of 2.45 years. | |||||||||||||||||||||||||||
The weighted-average fair value on the grant date of options granted to directors during the year ended December 31, 2013 was $0.30. The Company did not grant any stock options during 2012. | |||||||||||||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 15 – COMMITMENTS AND CONTINGENCIES | |||||
Leases - The Company leases its facilities and certain equipment under various operating leases which expire at various dates through fiscal 2020 and require us to pay a portion of the related operating expenses such as maintenance, property taxes, and insurance. Certain facilities contain renewal options for varying periods. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. Certain facilities leases have free or escalating rent payment provisions. Rent expense under such leases is recognized on a straight-line basis over the lease term. | |||||
The corporate headquarters and sales operations, including sales administration, software development, depot operation and the financial management were located in Foothill Ranch, California where the Company leased 7,500 square feet of office space which expired in July 2012. In May 2012, the Company entered into a new office lease agreement for 10,325 square feet beginning in July 2012, the lease expires in July 2017. The property is located in Irvine, California. The current monthly rental expense is approximately $13,000. | |||||
In addition, the Company leased 4,100 square feet in Shelton, Connecticut for its East coast sales and operations which expires in April 2015. In September 2012, the Company notified the landlord of its early termination of the lease as of April 2013. The Company also leases 6,800 square feet in Edison, New Jersey under a lease which expires in December 2014. The current monthly rental expense is approximately $4,200. In December 2013, the Company notified the landlord of its early termination of the lease as of March 2014. The Company has a sales and administrative office located in Alpharetta, Georgia where it leases 5,100 square feet for general office purposes under a lease which expires in July 2018. In addition, the Company has a lease for 4,800 square feet in Alpharetta, Georgia for its technology lab center which expired in April 2012. During April, the lease was extended for an additional 3 years until April 2015, under the same terms and conditions. The current monthly rental expense for the sales and administrative office and the technology lab is approximately $13,000. | |||||
Effective upon the Closing Date of the purchase of Apex in June 2012, the Company assumed Apex’s lease of 7,800 square feet in Burlington, Ontario, Canada, which expires in March 2016. The current monthly rental expense is approximately CDN$10,000 per month. | |||||
Effective upon the Illume Mobile Closing Date, the Company assumed the Illume Mobile lease of 10,000 square feet in Tulsa, Oklahoma which expired in September 2013, with the same terms and conditions as the underlying lease. In May 2013, the Company entered into a new office lease agreement for 6,358 square feet beginning in September 2013, the lease expires in August 2020. The current monthly rental expense is approximately $6,000. | |||||
Certain of our lease agreements provide options to extend the lease for additional specified periods. | |||||
Rent expense for the years ended December 31, 2013 and 2012, was $674,000 and $549,000, respectively. | |||||
The aggregate remaining future minimum payments under these leases expiring after December 31, 2013, are as follows (in thousands): | |||||
Years ending December 31: | Amount | ||||
2014 | $ | 558 | |||
2015 | 529 | ||||
2016 | 404 | ||||
2017 | 304 | ||||
2018 | 158 | ||||
Thereafter | 142 | ||||
$ | 2,095 | ||||
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”). | |||||
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 Company’s Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 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 agreement, both parties have agreed on an accounting expert to issue a report on the earn-out calculation. The accounting expert has not completed their analysis as of the date of this filing. The current balance is reported at its estimated fair value. | |||||
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. The fair value of the bonus was calculated to be approximately CDN$160,000 (US$153,000 at the Closing Date). At December 31, 2013 there is CDN$160,000 (US$149,000) recorded in accrued earn out consideration in the Company’s 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. In August 2013, the Company raised $1,756,000 as part of the Common Stock Purchase Agreement. In November 2013, the Company raised $4,090,000 as part of the Series E 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 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 December 31, 2013. | |||||
The Company has employment agreements with two of our key executive officers as of December 31, 2013. The agreements do not provide for any material, out of ordinary course of business provisions or benefits. | |||||
The Company had an employment agreement with its Former Chief Operating Officer. As of December 3, 2013, the employment of the Company’s Chief Operating Officer was terminated. Pursuant to the Agreement, the officer was entitled to an annual bonus calculated pursuant to terms set forth in the Agreement. The agreement also contained a severance provision providing six months of salary. | |||||
The Company had an employment agreement with Donald Dalicandro, the former Chief Executive Officer of Apex, as a result of the Apex acquisition. As of July 31, 2013, the Company and Mr. Dalicandro agreed to separation terms. Per the separation agreement, it would provide for normal pro-rata salary payments twice monthly, including receiving various employee benefits, to cover the transition period August 1, 2013 through October 31, 2013 and the severance period, November 1, 2013 through April 30, 2014. As part of the Apex Purchase Agreement, the Company is obligated to pay an additional 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 his employment is retained (see further discussion above). | |||||
Profit_Sharing_Plan
Profit Sharing Plan | 12 Months Ended |
Dec. 31, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ' |
PROFIT SHARING PLAN | ' |
NOTE 16 - PROFIT SHARING PLAN | |
The Company maintains a 401(k) Profit Sharing Plan (“401k Plan”). Employees who are 21 years of age and have performed 90 days of service are eligible to participate. Each year, employees can make salary contributions of up to 25% of their salary. The Company matches 100% of employee contributions up to 1% of eligible employee compensation. Employer contributions to the 401k Plan were $220,000 and $263,000, for the years ended December 31, 2013 and 2012, respectively. |
Related_Parties
Related Parties | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||
RELATED PARTIES | ' | |||||||||||||
NOTE 17 - RELATED PARTIES | ||||||||||||||
The Company purchases and sells certain products and services from iTEK Services, Inc. (“iTEK”), a privately held company owned by an unrelated ESOP. iTEK was affiliated with the Company through limited overlapping management and Board representation by the Company's Chief Executive Officer (“CEO”) and former Chief Financial Officer (“former CFO”). Purchases from TEK are on similar terms that Company would have received from an unrelated third-party. | ||||||||||||||
Effective upon the resignation of the Company’s former CFO during July 2012, and the concurrent discontinuance of the CEO’s iTEK Board representation, the parties have no further overlapping management and therefore are no longer considered related parties effective August 2012. | ||||||||||||||
The Company had accounts payable to former CFO that accrued interest at 12% per annum until June 4, 2012, at which time the interest rate increased to 25% pursuant to the Consent and Waiver described in Note 10. The payable was fully paid off in 2012. The Company incurred interest expense to related parties totaling approximately $0 and $114,000, for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||
The Company has a related party receivable of $188,000 from the seller of Apex in connection with the Working Capital requirement as defined in the Purchase Agreement and described in Note 5 | ||||||||||||||
Apex, a wholly owned subsidiary of the Company, leases premises from an entity controlled by a shareholder. Rent expense included in the consolidated financial statements was $130,000 and $84,000, for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||
Separation Agreement - On July 23, 2012, the Company and Donald W. Rowley (“DWR”) entered into a Separation Agreement and General Release (“Separation Agreement”). Pursuant to the Separation Agreement, DWR resigned as the Company’s Chief Financial Officer and Director as of July 23, 2012, and as an employee of the Company on July 23, 2012. Pursuant to the Separation Agreement, the Company agreed to pay DWR a total of $205,000 in equal installments in accordance with the Company’s payroll cycle beginning on August 1, 2012 through December 31, 2012. This amount was fully paid by December 31, 2012. The Separation Agreement also contains a general release from DWR. | ||||||||||||||
Under the Separation Agreement, the Company also acknowledged that it owes DWR the amount of $891,000 as of July 23, 2012, which was to be paid in accordance with an Accounts Payable Payment Plan agreement, between the Company and DWR dated July 23, 2012 (“Accounts Payable Agreement”). Pursuant to the Account Payable Agreement, the Company agreed to pay interest monthly in arrears (beginning on August 1, 2012) to DWR with interest computed daily on the outstanding balance at an annual interest rate of 25%. Under the Accounts Payable Agreement, the Company was to make payments to DWR of $36,000 per month due on the first day of each month beginning May 1, 2013. The total amount due to DWR under the Accounts Payable Agreement was paid in full during the quarter ended September 30, 2012. | ||||||||||||||
In December 2012, the Company sold 21,200 shares of its Series D Preferred Stock to certain related parties. In August 2013, the Company sold 166,667 shares of common stock to certain related parties. In November 2013, the Company sold 4,500 shares of its Series E Preferred Stock to certain related parties. The shares were sold at the same price as additional shares sold to an independent third party. On December 10, 2013, the Company issued 33,333 shares of common stock to certain related parties pursuant to dilution provisions for the August 2013 private placement as a result of the sales of Series E Preferred Stock. Sales to certain related parties are as follows: | ||||||||||||||
Shares | ||||||||||||||
Series D | Common | Series E | ||||||||||||
Preferred | Stock | Preferred | ||||||||||||
Stock | Stock | |||||||||||||
David Rifkin | Director | 1,000 | - | - | ||||||||||
Lawrence Yelin | Director | 2,200 | - | - | ||||||||||
Jay Sheehy | Director | 1,000 | - | - | ||||||||||
Robert Schroeder | Director | 4,000 | - | 2,000 | ||||||||||
Nicholas R. Toms | CEO, Chairman of the Board | 10,000 | 200,000 | 2,500 | ||||||||||
Paul E. Ross | Former Interim, CFO | 2,000 | - | - | ||||||||||
Ralph S. Hubregsen | Former COO | 1,000 | - | - | ||||||||||
21,200 | 200,000 | 4,500 | ||||||||||||
Basis_of_Presentation_Liquidit1
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation | ' | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The consolidated financial statements of DecisionPoint and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying 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. (the “Seller”) 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”). The operating results of Illume Mobile have been consolidated into the Company’s consolidated results of operations beginning on August 1, 2012. The Company currently operates in one business segment. All intercompany transactions have been eliminated. | |||||||||||||||||
Liquidity and Going Concern | ' | ||||||||||||||||
Liquidity and Going Concern | |||||||||||||||||
The consolidated financial statements were prepared on a going concern basis in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will able to realize its assets and discharge its liabilities and commitments in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raises substantial doubt about the Company ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business, the Company must establish profitable operations through increased sales, successfully implement cost cutting measures, avoid further unforeseen expenses, potentially raise additional equity or debt capital, and successfully refinance its current debt obligations when they come due in February of 2015. There can be no assurance that the Company will be able achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. | |||||||||||||||||
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 consolidated financial statements do not reflect any adjustment that may be required resulting from the adverse outcome relating to this uncertainty. | |||||||||||||||||
For the year ended December 31, 2013, the Company experienced a decrease in revenue of $10.8 million compared to the year ended December 31, 2012. For the year ended December 31, 2013, the Company incurred approximately $2.5 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, the private placement of common stock completed in August 2013, and the Series E Preferred Stock offering completed in November 2013, and associated audit fees, and other matters such as employee termination costs. The Company experienced a net loss of $5.2 million for the year ended December 31, 2013. In addition, the Company has a substantial working capital deficit totaling $9.9 million at December 31, 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 10), 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 reduced non-essential expenses. Such expense reduction measures include, but are not limited to, consolidation of information technology environments, consolidation of our east coast depot facility in to our larger California facility, reduction of outsourced consulting expertise where unnecessary and replacing certain service providers with lower cost providers. The Company has also consolidated administrative personnel and reduced staffing levels by 29% from April 2013 through February 2014, constituting annual savings of $3 million (unaudited). The result of these activities has reduced the expense structure of the consolidated business significantly. The Company is focused on improve processes and continuing cost reduction efforts. The Company has no plans to seek additional capital through the sale of our securities unless deemed necessary. Should additional funding be needed, there is no assurance that such 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. | |||||||||||||||||
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, of which $1.1 million was recorded as a warrant liability. (see Note 12 – Stockholders’ Equity and Note 4 – Warrant Liability). | |||||||||||||||||
In November 2013, the Company entered into definitive subscription agreements (“Series E Purchase Agreement”) with accredited investors for the sales of $4,090,000 in gross proceeds (exclusive of $875,000 in costs) for 409,000 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 $3.5 million (before reduction of the fair value of placement agent warrants of $278,000) 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 818,000 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. | |||||||||||||||||
During 2012 and 2013, all principal and interest 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 December 31, 2013. We currently 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 was not in compliance with the reset covenants at December 31, 2013. Although management of the Company believes it is not likelythat 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 this debt obligation as current at December 31, 2013 (see Note 10 – Term Debt). | |||||||||||||||||
At December 31, 2013, the outstanding balance on the line of credit with Silicon Valley Bank (“SVB”) is $3.9 million, down from $4.1 million at September 30, 2013, and the availability under the line of credit has increased to $3.3 million (see Note 9 – Lines of Credit). The Company relies on the line of credit which expires in February 2015 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 $4.1 million in gross proceeds (exclusive of $875,000 in costs) (See Note 12). In November 2013, the SVB Loan Agreement was amended whereby the minimum Tangible Net Worth requirement of a $(9.7) million deficit was reduced by 25% of funds raised in the sale of Series E Preferred stock to a $(8.7) million deficit. As of December 31, 2013, the Company was in compliance with the Tangible Net Worth financial covenant and had available a $0.8 million cushion over the requirement. The Company currently believes that at the time of this filing it is compliant with the terms and provisions of its SVB lending agreement. 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. | |||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates - The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 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 materially differ from these estimates and assumptions used in preparation of the consolidated financial statements. | |||||||||||||||||
Purchase Accounting and Business Combinations | ' | ||||||||||||||||
Purchase Accounting and Business Combinations - The Company accounts for its business combinations using the purchase method of accounting which requires that intangible assets be recognized apart from goodwill if they are contractual in nature or separately identifiable. Acquisitions are measured on the fair value of consideration exchanged and, if the consideration given is not cash, measurement is based on the fair value of the consideration given or the fair value of the assets acquired, whichever is more reliably measurable. The excess of cost of an acquired entity over the fair value of identifiable acquired assets and liabilities assumed is allocated to goodwill. | |||||||||||||||||
The valuation and allocation process relies on significant assumptions made by management. In certain situations, the allocations of excess purchase price are based upon preliminary estimates and assumptions. Accordingly, the allocations are subject to revision when the Company receives updated information, including appraisals and other analyses, which are completed within one year of the acquisition. Revisions to the fair values, which may be significant, are recorded when pending information is finalized, within one year from the acquisition date. | |||||||||||||||||
Accounts Receivable | ' | ||||||||||||||||
Accounts Receivable - Accounts receivable are stated at net realizable value, and as such, current earnings are charged with an allowance for doubtful accounts based on management’s best estimate of the amount of probable incurred credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience and specific account information available. Accounts receivable are reflected in the accompanying consolidated balance sheets net of a valuation allowance of $377,000 and $246,000, as of December 31, 2013 and 2012, respectively. When internal collection efforts on accounts have been exhausted, the accounts are written off by reducing the allowance for doubtful accounts. | |||||||||||||||||
Inventory | ' | ||||||||||||||||
Inventory - Inventory consists solely of finished goods and is stated at the lower of cost or market. Cost is determined under the first-in, first-out (FIFO) method. The Company periodically reviews its inventory and makes provisions as necessary for estimated obsolete and slow-moving goods. The creation of such provisions results in a write down of inventory to net realizable value and a charge to cost of sales. Inventories are reflected in the accompanying consolidated balance sheets net of a valuation allowance of $41,000 and $83,000, as of December 31, 2013 and 2012, respectively. | |||||||||||||||||
Deferred costs | ' | ||||||||||||||||
Deferred costs – Deferred costs consist primarily of third party extended hardware and software maintenance services which the Company has paid for in advance. The costs are ratably amortized over the life of the contract, generally one to five years. | |||||||||||||||||
Property and Equipment | ' | ||||||||||||||||
Property and Equipment - Property and equipment are recorded at cost. Repairs and maintenance that do not improve or extend the lives of the respective assets are expensed in the period incurred. | |||||||||||||||||
Depreciation of property and equipment is provided for by the straight-line method over the estimated useful lives of the related assets as follows: | |||||||||||||||||
Computer equipment | 3 to 5 years | ||||||||||||||||
Office furniture and fixtures | 5 to 7 years | ||||||||||||||||
Leasehold improvements are amortized over the shorter of the lease term or the life of the improvements. | |||||||||||||||||
Impairment of Long-Lived Assets | ' | ||||||||||||||||
Impairment of Long-Lived Assets - The Company reviews its long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell. To date, the Company has not recorded any impairment charges. | |||||||||||||||||
Goodwill | ' | ||||||||||||||||
Goodwill – Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at December 31 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of reporting unit goodwill with the carrying amount. If the carrying amount exceeds the implied fair value then an impairment loss is recognized equal to that excess. No impairment charges have been recorded as a result of the Company’s annual impairment assessments. | |||||||||||||||||
Intangible assets | ' | ||||||||||||||||
Intangible assets – Purchased intangible assets with finite useful lives are amortized over their respective estimated useful lives (using an accelerated method for customer relationships and trade names) to their estimated residual values, if any. The Company’s finite-lived intangible assets consist of customer relationships, contractor and resume databases, trade names, and internal use software and are being amortized over periods ranging from two to nine years. Purchased intangible assets are reviewed annually to determine if facts and circumstances indicate that the useful life is shorter than originally estimated or that the carrying amount of assets may not be recoverable. If such facts and circumstances exist, recoverability is assessed by comparing the projected undiscounted net cash flows associated with the related asset or group of assets over their remaining lives against their respective carrying amounts. Impairments, if any, are based on the excess of the carrying amount over the fair value of those assets. If the useful life is shorter than originally estimated, the rate of amortization is accelerated and the remaining carrying value is amortized over the new shorter useful life. No impairments were identified or changes to estimated useful lives have been recorded. | |||||||||||||||||
Deferred Financing Costs | ' | ||||||||||||||||
Deferred Financing Costs - Costs incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over the life of the underlying indebtedness, adjusted to reflect any early repayments using the effective interest rate method. Deferred financing costs net of amortization totaled approximately $48,000 and $107,000, as of December 31, 2013 and 2012, respectively, and are included in other assets in the accompanying consolidated balance sheets. | |||||||||||||||||
Fair Value Measurement | ' | ||||||||||||||||
Fair Value Measurement - Fair value is the price that would be received from selling 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 as of the measurement date. Applicable accounting guidance provides a hierarchy for inputs used in measuring fair value that prioritize the use of observable inputs over the use of unobservable inputs, when such observable inputs are available. The three levels of inputs that may be used to measure fair value are as follows: | |||||||||||||||||
· | Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||||||||
· | Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data. | ||||||||||||||||
· | Level 3 - Fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including assumptions and judgments made by the Company. | ||||||||||||||||
Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the observable inputs may result in a reclassification of assets and liabilities within the three levels of the hierarchy outlined above. | |||||||||||||||||
Liabilities Measured and Recorded at Fair Value on a Recurring Basis | |||||||||||||||||
The Company measures certain liabilities at fair value on a recurring basis such as our contingent consideration related to business combinations and recognizes transfers within the fair value hierarchy at the end of the fiscal quarter in which the change in circumstances that caused the transfer occurred. There have been no transfers between Level 1, 2 or 3 assets or liabilities during the fiscal year ended December 31, 2013. | |||||||||||||||||
The Company has classified its contingent consideration related to the acquisitions as a Level 3 liability (see Note 5). Revenue and other assumptions used in the calculation require significant management judgment. The Company reassesses the fair value of the contingent consideration liabilities on a quarterly basis. Based on that assessment, the Company recognized an adjustment of $820,000 and $0 to the actual calculation of the earn-out obligations during the fiscal years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
The Company has classified certain warrants related to the August 2013 issuance and sale of Common Stock in a private offering as a Level 3 Liability. Assumptions used in the calculation require significant judgment. The Company reassesses the fair value of the warrant liabilities on a quarterly basis. Based on that assessment, the Company recognized a $296,000 reduction to the fair value of the warrant liability during the fiscal year ended December 31, 2013 | |||||||||||||||||
As of December 31, 2013, liabilities recorded at fair value on a recurring basis consist of the following (in thousands): | |||||||||||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 468 | $ | - | $ | - | $ | 468 | |||||||||
Fair value of derivative warrants issued | |||||||||||||||||
in connection with share purchase agreement | 803 | - | - | 803 | |||||||||||||
Balance at December 31, 2013 | $ | 1,271 | $ | - | $ | - | $ | 1,271 | |||||||||
The following table summarizes changes to the fair value of the contingent consideration and derivative warrants, which are Level 3 liabilities (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Derivative | ||||||||||||||||
consideration | warrants | ||||||||||||||||
Balance at December 31, 2012 | $ | 1,346 | $ | - | |||||||||||||
Adjustments to fair value of Apex earn-out (reflected in operating expenses) | (713 | ) | - | ||||||||||||||
Adjustments to fair value of Illume Mobile earn-out (reflected in operating expenses) | (107 | ) | - | ||||||||||||||
Fair value of warrants accounted for as a liability | - | 1,099 | |||||||||||||||
Adjustments to fair value of derivative warrants (reflected in other income) | - | (296 | ) | ||||||||||||||
Effect of currency translation | (58 | ) | - | ||||||||||||||
Balance at December 31, 2013 | $ | 468 | $ | 803 | |||||||||||||
Assets Measured and Recorded at Fair Value on a Nonrecurring Basis | |||||||||||||||||
The Company's non-financial assets and liabilities, such as goodwill, intangible assets, and other long lived assets resulting from business combinations are measured at fair value using income and market comparable valuation methodologies at the date of acquisition and subsequently re-measured if there are indicators of impairment. There were no indicators of impairment identified during the fiscal year ended December 31, 2013. | |||||||||||||||||
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 (Apex) 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. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenue Recognition - Revenues are generated through product sales, warranty and maintenance agreements, software customization, and professional services. Product sales are recognized when the following criteria are met (1) there is persuasive evidence that an arrangement exits; (2) delivery has occurred and title has passed to the customer which generally happens at the point of shipment provided that no significant obligations remain; (3) the price is fixed and determinable; and (4) collectability is reasonably assured. The Company generates revenues from the sale of extended warranties on wireless and mobile hardware and systems. Revenue related to extended warranty and service contracts is recorded as unearned revenue and is recognized over the life of the contract as the Company maintains financial risk throughout the term of these contracts and may be liable to refund a customer for amounts paid in certain circumstances. Our policy is to classify shipping and handling costs billed to customers and the related expenses as cost of sales. | |||||||||||||||||
The Company also generates revenue from professional services and customer specified software customization on either a fee-for-service or fixed fee basis. Revenue from software customization and professional services that is contracted as fee-for-service is recognized in the period in which the services are performed or delivered. Adjustments to contract price and estimated labor costs are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. The Company records sales net of sales tax. | |||||||||||||||||
The Company enters into revenue arrangements that contain multiple deliverables. Judgment is required to properly identify the accounting units of the multiple deliverable transactions and to determine the manner in which revenue should be allocated among the accounting units. Moreover, judgment is used in interpreting the commercial terms and determining when all criteria of revenue recognition have been met for each deliverable in order for revenue recognition to occur in the appropriate accounting period. In an arrangement with multiple deliverables, the delivered item or items shall be considered a separate unit of accounting if both of the following criteria are met: (i) the delivered item or items have value to the customer on a standalone basis; (ii) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item or items is considered probable and substantially in the control of the vendor. A delivered item or items that do not qualify as a separate unit of accounting within the arrangement shall be combined with the other applicable undelivered item(s) within the arrangement and the allocation of arrangement consideration and the recognition of revenue then shall be determined for those combined deliverables as a single unit of accounting. While changes in the allocation of the arrangement consideration between the units of accounting will not affect the amount of total revenue recognized for a particular sales arrangement, any material changes in these allocations could impact the timing of revenue recognition, which could affect the Company’s results of operations. When the Company enters into an arrangement that includes multiple elements, we allocate revenue base on their relative selling prices. We use the a hierarchy to determine the selling price to be used for allocating revenue to deliverables: (i) vendor specific objective evidence of fair value (“VSOE”), (ii) third party evidence of selling prices (“TPE”) and (iii) best estimate of selling price (“ESP”) as a proxy for VSOE. When both VSOE and TPE are unavailable, we use ESP. We determine ESP by considering all relevant factors in establishing the price, which is demonstrated in a gross margin model used revenue from software licenses may contain arrangements with multiple deliverables, including post-contract customer support, that are subject to software revenue recognition guidance. The revenue for these arrangements is allocated to the software and non-software deliverable based on the relative selling prices of all components in the arrangement using the criteria above. Post-contract support is recognized ratably over the support period. When a contract contains multiple elements wherein the only undelivered element is post-contract customer support and VSOE of the fair value of post-contract customer support does not exist, revenue from the entire arrangement is recognized ratably over the support period. Software royalty revenue is recognized in arrears on a quarterly basis, based upon reports received from licensees during the period, unless collectability is not reasonably assured, in which case revenue is recognized when payment is received from the licensee. | |||||||||||||||||
Concentration of Risk | ' | ||||||||||||||||
Concentration of Risk - Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, and accounts payable. Beginning January 1, 2013, all of our cash balances were insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor at each financial institution. This coverage is available at all FDIC member institutions. The Company uses Silicon Valley Bank, which is an FDIC insured institution. Based on these facts, collectability of bank balances appears to be adequate. | |||||||||||||||||
For the year ended December 31, 2013, the Company had sales to two customers which represented a total of 10% and 8%, of total revenues. Accounts receivable from two customers at December 31, 2013, were approximately 19% and 12%. For the year ended December 31, 2012, the Company had sales to two customers which represented a total of 13% and 7%, of total revenues. Accounts receivable from two customers at December 31, 2012, accounted for 14% and 10% of accounts receivable. The loss of a significant customer could have a material adverse impact on the Company. | |||||||||||||||||
The Company has the same four primary vendors in both periods presented. For the year ended December 31, 2013, the Company had purchases from these four vendors that collectively represented 58% of total purchases and 61% of the total outstanding accounts payable at December 31, 2013. For the year ended December 31, 2012, the Company had purchases from these four vendors that collectively represented 71% of total purchases and 67% of the total outstanding accounts payable at December 31, 2012. The same single vendor represented 18% and 28% of the total purchases for the years ended December 31, 2013 and 2012, respectively. Loss of this certain vendor could have a material adverse effect on our operations. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments - The Company’s financial instruments include cash, accounts receivable, accounts payable, accrued expenses, line of credit and long term debt. The carrying value of the short term financial instruments approximates their fair values at December 31, 2013 and 2012, due to their short-term maturities. The carrying value of the Company’s long-term debt approximates its fair value, net of a discount related to a final payment to be made on the due date which is equal to two percent of the original loan amount. | |||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
Stock-Based Compensation - The Company records the fair value of all stock-based compensation awards in its consolidated financial statements. The terms and vesting schedules for stock-based awards vary by type of grant and generally vest based on the passage of time. The fair value of stock options and warrants is calculated using the Black-Scholes option-pricing model and the expense is recognized on a straight-line basis over the requisite service period, net of estimated forfeitures. | |||||||||||||||||
Employee Stock Ownership Plan (ESOP) | ' | ||||||||||||||||
Employee Stock Ownership Plan (ESOP) - The cost of shares issued to the ESOP, but not yet earned is shown as a reduction of equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. As shares of common stock acquired by the ESOP are committed to be released to each employee, the Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per share computations. | |||||||||||||||||
Comprehensive Loss | ' | ||||||||||||||||
Comprehensive Loss - Comprehensive loss consists of net loss and accumulated other comprehensive loss, which includes certain changes in equity that are excluded from net loss. Comprehensive loss for the year ended December 31, 2013 is equal to the net loss of $5,218,000 plus other comprehensive loss totaling $23,000 (relating to exchange translation adjustments arising from the consolidation of the Company’s Canadian Apex subsidiary) to arrive at comprehensive loss of $5,241,000. Comprehensive loss for the year ended December 31, 2012 is equal to the net loss of $3,866,000 plus other comprehensive income totaling $22,000 (relating to exchange translation adjustments arising from the consolidation of the Company’s Canadian Apex subsidiary) to arrive at comprehensive loss of $3,844,000. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
Income Taxes – The Company accounts for income taxes in accordance with the Financial Accounting Standards Board (“FASB”) guidance, which requires deferred tax assets and liabilities, be recognized using enacted tax rates to measure the effect of temporary differences between book and tax basis on recorded assets and liabilities. FASB guidance also requires that deferred tax assets be reduced by a valuation allowance, if it is more likely than not some portion or all of the deferred tax assets will not be recognized. | |||||||||||||||||
The Company evaluates on an annual basis its ability to realize deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are forecasts of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. | |||||||||||||||||
In accordance with FASB guidance on accounting for uncertainty in income taxes, the Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not of being sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement. For tax positions that are not more likely than not of being sustained upon audit, the Company does not recognize any portion of the benefit. If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period. | |||||||||||||||||
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. | |||||||||||||||||
Restatement on previously issued Consolidated Financial Statements | ' | ||||||||||||||||
Restatement on previously issued Consolidated Financial Statements – The Company identified a misstatement with respect to the manner in which it presented cost of sales and selling, general and administrative expenses in its Consolidated Statement of Operations and Comprehensive Loss as of December 31, 2012. The Company has historically included the amortization of acquired intangibles within selling, general and administrative expenses for consistency. Commencing January 31, 2013, the Company has started classifying acquired technology as a cost of sales in order to align the intangible asset amortization with the related revenue. | |||||||||||||||||
This restatement has no impact on the balance sheet as of December 31, 2012 or on net loss or basic and diluted loss per share for the year then ended. The Company has assessed this misstatement in the financial statement presentation and has determined that, on both a qualitative and quantitative basis, the adjustment is immaterial to the consolidated financial statements, and thus the Company will not amend any of its prior quarterly and annual reports on Form 10-Q and 10-K, and that it will adjust presentation on a prospective basis. In order to provide consistency in the Company’s financial reporting, the December 31, 2012 Consolidated Statement of Operations and Comprehensive Loss has been restated to appropriately reflect the corrections described above. The following table summarizes the effect of this correction on the previously filed Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012, which was restated for comparative purposes only (in thousands): | |||||||||||||||||
31-Dec-12 | |||||||||||||||||
As Previously | As | ||||||||||||||||
Reported | Adjustment | Restated | |||||||||||||||
Cost of sales | $ | 55,949 | $ | 509 | $ | 56,458 | |||||||||||
Gros profit | 15,552 | (509 | ) | 15,043 | |||||||||||||
Selling, general and administrative expense | 18,661 | (509 | ) | 18,152 | |||||||||||||
Recently Issued Accounting Pronouncements | ' | ||||||||||||||||
Recently Issued Accounting Pronouncements | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, which amends guidance in ASC740, Income Taxes. ASU No. 2013-11 amends existing guidance related to the financial presentation of unrecognized tax benefits by requiring an entity to net its unrecognized tax benefits against the deferred tax assets for all available same-jurisdiction loss or other tax carryforwards that would apply in settlement of the uncertain tax positions. The amendments will be effective beginning in the first quarter of 2014 with early adoption permitted, will be applied prospectively to all unrecognized tax benefits that exist at the effective date, and are not expected to have a material effect on our consolidated financial position or results of operations. | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-10, which amends the guidance in ASC 815, Derivatives and Hedging. ASU No. 2013-10 permits the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to the U.S. government rate and LIBOR. This amended guidance is to be applied prospectively and is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The implementation of the amended accounting guidance has not had, and is not expected to have, a material impact on our consolidated financial position or results of operations. | |||||||||||||||||
In February 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-02, which amends the guidance in Accounting Standard Codification (“ASC”) 220 on Comprehensive Income. ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. The implementation of this accounting guidance on January 1, 2013 did not have a material impact on our consolidated financial position or results of operations. |
Basis_of_Presentation_Liquidit2
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies(Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Schedule of estimated useful life of property and equipment | ' | ||||||||||||||||
Computer equipment | 3 to 5 years | ||||||||||||||||
Office furniture and fixtures | 5 to 7 years | ||||||||||||||||
Schedule of liabilities recorded at fair value on a recurring basis | ' | ||||||||||||||||
Quoted prices in | Significant other | Significant other | |||||||||||||||
active markets | observable inputs | unobservable inputs | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | |||||||||||||||||
recorded for business combinations | $ | 468 | $ | - | $ | - | $ | 468 | |||||||||
Fair value of derivative warrants issued | |||||||||||||||||
in connection with share purchase agreement | 803 | - | - | 803 | |||||||||||||
Balance at December 31, 2013 | $ | 1,271 | $ | - | $ | - | $ | 1,271 | |||||||||
Schedule of changes in fair value of contingent consideration | ' | ||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Derivative | ||||||||||||||||
consideration | warrants | ||||||||||||||||
Balance at December 31, 2012 | $ | 1,346 | $ | - | |||||||||||||
Adjustments to fair value of Apex earn-out (reflected in operating expenses) | (713 | ) | - | ||||||||||||||
Adjustments to fair value of Illume Mobile earn-out (reflected in operating expenses) | (107 | ) | - | ||||||||||||||
Fair value of warrants accounted for as a liability | - | 1,099 | |||||||||||||||
Adjustments to fair value of derivative warrants (reflected in other income) | - | (296 | ) | ||||||||||||||
Effect of currency translation | (58 | ) | - | ||||||||||||||
Balance at December 31, 2013 | $ | 468 | $ | 803 | |||||||||||||
Summarizes the effect of this correction on the previously filed Consolidated Statement of Operations and Comprehensive Loss | ' | ||||||||||||||||
31-Dec-12 | |||||||||||||||||
As Previously | As | ||||||||||||||||
Reported | Adjustment | Restated | |||||||||||||||
Cost of sales | $ | 55,949 | $ | 509 | $ | 56,458 | |||||||||||
Gros profit | 15,552 | (509 | ) | 15,043 | |||||||||||||
Selling, general and administrative expense | 18,661 | (509 | ) | 18,152 | |||||||||||||
Loss_Per_Common_Share_Tables
Loss Per Common Share (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of reconciliation of the fully dilutive securities effect with net income | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Net loss attributable to common shareholders | $ | (7,801 | ) | $ | (4,820 | ) | |||
Weighted average common shares outstanding - basic and diluted | 9,802,810 | 7,900,693 | |||||||
Loss per common share - basic and diluted | $ | (0.80 | ) | $ | (0.61 | ) | |||
Schedule of potentially dilutive securities | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Convertible preferred stock - Series A | 270 | 270 | |||||||
Convertible preferred stock - Series B | 131 | 131 | |||||||
Convertible preferred stock - Series D | 9,918 | 7,042 | |||||||
Convertible preferred stock - Series E | 8,180 | - | |||||||
Warrants to purchase common stock | 3,555 | 981 | |||||||
Options to purchase common stock | 805 | 544 | |||||||
Total potentially dilutive securities | 22,859 | 8,968 |
Warrant_Liability_Tables
Warrant Liability (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Warrant Liability [Abstract] | ' | ||||||||||||||||||||
Schedule of fair values estimated using the Black-Scholes option-pricing model with the weighted-average assumptions | ' | ||||||||||||||||||||
Placement Agent Warrants | Investor Warrants | ||||||||||||||||||||
Investor Warrants | December | August | December | August | August | ||||||||||||||||
31, 2013 | 21, 2013 | 31, 2013 | 21, 2013 | 15, 2013 | |||||||||||||||||
Closing price per share of common stock | $ | 0.53 | $ | 0.84 | $ | 0.53 | $ | 0.84 | $ | 0.69 | |||||||||||
Exercise price per share (range) | 0.5 | 0.6 | 0.5 | 1 | 1 | ||||||||||||||||
Expected volatility | 123.5 | % | 134.9 | % | 123.5 | % | 134.9 | % | 134.1 | % | |||||||||||
Risk-free interest rate | 1.6 | % | 1.6 | % | 1.6 | % | 1.6 | % | 1.6 | % | |||||||||||
Dividend yield | - | - | - | - | - | ||||||||||||||||
Remaining expected term of underlying securities (years) | 4.6 | 5 | 4.6 | 5 | 5 | ||||||||||||||||
Business_Combinations_Tables
Business Combinations (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Business Acquisition [Line Items] | ' | ||||||||
Schedule of pro forma financial information | ' | ||||||||
December 31, | |||||||||
2012 | 2012 | ||||||||
as reported | pro forma | ||||||||
Net sales | $ | 71,501 | $ | 73,703 | |||||
Net loss attributable to common shareholders | (4,820 | ) | (6,887 | ) | |||||
Net loss per share - basic and diluted | (0.61 | ) | (0.87 | ) | |||||
Illume Mobile | ' | ||||||||
Business Acquisition [Line Items] | ' | ||||||||
Schedule of fair value of the intangible assets acquired and the estimated useful lives over which they are being amortized | ' | ||||||||
Assets acquired: | |||||||||
Accounts receivable | $ | 16 | |||||||
Other current assets | 15 | ||||||||
Property and equipment | 26 | ||||||||
Intangible assets | 630 | ||||||||
Goodwill | 444 | ||||||||
Total assets | 1,131 | ||||||||
Liabilities assumed: | |||||||||
Accounts payable and other accrued liabilities | 39 | ||||||||
Unearned revenue | 37 | ||||||||
Total liabilities assumed | 76 | ||||||||
Net assets acquired | $ | 1,055 | |||||||
Purchase consideration: | |||||||||
Cash paid at closing | $ | 250 | |||||||
Shares issued at closing | 698 | ||||||||
Earn out consideration | 107 | ||||||||
Total purchase consideration | $ | 1,055 | |||||||
Apex | ' | ||||||||
Business Acquisition [Line Items] | ' | ||||||||
Schedule of fair value of the intangible assets acquired and the estimated useful lives over which they are being amortized | ' | ||||||||
Assets acquired: | |||||||||
Accounts receivable | $ | 243 | |||||||
Due from related party | 412 | ||||||||
Other current assets | 62 | ||||||||
Property and equipment | 30 | ||||||||
Intangible assets | 4,466 | ||||||||
Goodwill | 2,449 | ||||||||
Total assets | 7,662 | ||||||||
Liabilities assumed: | |||||||||
Accounts payable and other accrued liabilities | 194 | ||||||||
Unearned revenue | 297 | ||||||||
Deferred tax liability | 1,184 | ||||||||
Total liabilities assumed | 1,675 | ||||||||
Net assets acquired | $ | 5,987 | |||||||
Purchase consideration: | |||||||||
Cash paid at closing | $ | 4,801 | |||||||
Accrued earn out consideration | 1,186 | ||||||||
Total purchase consideration | $ | 5,987 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of property and equipment | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Computer equipment | $ | 225 | $ | 238 | |||||
Office furniture and fixtures | 109 | 113 | |||||||
Leasehold improvements | 26 | 43 | |||||||
Total property and equipment | 360 | 394 | |||||||
Less accumulated depreciation and amortization | (224 | ) | (215 | ) | |||||
Property and equipment, net | $ | 136 | $ | 179 |
Recovered_Sheet1
Goodwill And Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
Schedule of transactions effecting goodwill | ' | ||||||||||||||||||||||||||||||||
Balance as of January 1, 2012 | $ | 5,538 | |||||||||||||||||||||||||||||||
Acquisition of Apex in June | 2,449 | ||||||||||||||||||||||||||||||||
Adjustment to Apex goodwill | 37 | ||||||||||||||||||||||||||||||||
Tax adjustment to Apex goodwill | (9 | ) | |||||||||||||||||||||||||||||||
Acquisition of Illume in July | 444 | ||||||||||||||||||||||||||||||||
Impact of foreign currency translation | 112 | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2012 | 8,571 | ||||||||||||||||||||||||||||||||
Impact of foreign currency translation | (176 | ) | |||||||||||||||||||||||||||||||
Balance as of December 31, 2013 | $ | 8,395 | |||||||||||||||||||||||||||||||
Schedule of intangible assets and accumulated amortization | ' | ||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||
Accumulated | WA | Accumulated | WA | ||||||||||||||||||||||||||||||
Gross | Amortization | Net | Life | Gross | Amortization | Net | Life | ||||||||||||||||||||||||||
Customer relationships | $ | 3,264 | $ | (1,654 | ) | $ | 1,610 | 6.5 | $ | 3,373 | $ | (966 | ) | $ | 2,407 | 7.6 | |||||||||||||||||
Contractor and resume databases | 675 | (405 | ) | 270 | 2 | 675 | (270 | ) | 405 | 3 | |||||||||||||||||||||||
Tradename | 862 | (364 | ) | 498 | 4.6 | 893 | (193 | ) | 700 | 5.3 | |||||||||||||||||||||||
Internal use software | 2,802 | (1,299 | ) | 1,503 | 2.1 | 2,978 | (545 | ) | 2,433 | 3.1 | |||||||||||||||||||||||
Covenant not to compete | 104 | (78 | ) | 26 | 0.6 | 105 | (27 | ) | 78 | 1.5 | |||||||||||||||||||||||
$ | 7,707 | $ | (3,800 | ) | $ | 3,907 | 4.2 | $ | 8,024 | $ | (2,001 | ) | $ | 6,023 | 5.1 | ||||||||||||||||||
Schedule of expected emortization expense in the next five years | ' | ||||||||||||||||||||||||||||||||
Year | Amount | ||||||||||||||||||||||||||||||||
2014 | $ | 1,593 | |||||||||||||||||||||||||||||||
2015 | 1,357 | ||||||||||||||||||||||||||||||||
2016 | 318 | ||||||||||||||||||||||||||||||||
2017 | 243 | ||||||||||||||||||||||||||||||||
2018 | 189 | ||||||||||||||||||||||||||||||||
Thereafter | 207 | ||||||||||||||||||||||||||||||||
Total | $ | 3,907 |
Accrued_Expenses_and_Other_Cur1
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Schedule of accrued liabilities and other current liabilities | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Salaries and benefits | $ | 1,873 | $ | 1,937 | |||||
Interest payable | 23 | 139 | |||||||
Professional fees | 30 | 33 | |||||||
Vendor purchases | 161 | 92 | |||||||
Sales tax payable | 94 | 293 | |||||||
Customer deposits | 194 | 139 | |||||||
Other fees and expenses | 601 | 262 | |||||||
Total accrued expenses and other current liabilities | $ | 2,976 | $ | 2,895 |
Term_Debt_Tables
Term Debt (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
Long-Term Debt, Unclassified [Abstract] | ' | ||||||||||||||||||||||||
Schedule of long term debt | ' | ||||||||||||||||||||||||
Amortization | |||||||||||||||||||||||||
Balance | of Note | Currency | Balance | ||||||||||||||||||||||
1-Jan-13 | Additions | Payments | Discount | Translation | 31-Dec-13 | ||||||||||||||||||||
RBC term loan | $ | 2,090 | $ | - | $ | (804 | ) | $ | - | $ | (117 | ) | $ | 1,169 | |||||||||||
BDC term loan | 1,705 | - | - | - | (116 | ) | 1,589 | ||||||||||||||||||
SVB term loan | 1,000 | - | (1,000 | ) | - | - | - | ||||||||||||||||||
SVB term loan 2 | - | 1,000 | (278 | ) | - | - | 722 | ||||||||||||||||||
Total note discounts | (73 | ) | (19 | ) | - | 43 | 4 | (45 | ) | ||||||||||||||||
Total debt | $ | 4,722 | $ | 981 | $ | (2,082 | ) | $ | 43 | $ | (229 | ) | 3,435 | ||||||||||||
less current portion | (1,086 | ) | |||||||||||||||||||||||
less RBC debt long term classified as current | (388 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 1,961 | |||||||||||||||||||||||
Amortization | |||||||||||||||||||||||||
Balance | of Note | Currency | Balance | ||||||||||||||||||||||
1-Jan-12 | Additions | Payments | Discount | Translation | 31-Dec-12 | ||||||||||||||||||||
RBC term loan | $ | - | $ | 2,401 | $ | (419 | ) | $ | - | $ | 108 | $ | 2,090 | ||||||||||||
BDC term loan | - | 1,632 | - | - | 73 | 1,705 | |||||||||||||||||||
SVB term loan | 2,000 | - | (1,000 | ) | - | - | 1,000 | ||||||||||||||||||
Total note discounts | (30 | ) | (92 | ) | 49 | (73 | ) | ||||||||||||||||||
Total debt | $ | 1,970 | $ | 3,941 | $ | (1,419 | ) | $ | 49 | $ | 181 | 4,722 | |||||||||||||
less current portion | (1,800 | ) | |||||||||||||||||||||||
Debt, net of current portion | $ | 2,922 | |||||||||||||||||||||||
Schedule of maturities of long-term obligations for the next five fiscal years | ' | ||||||||||||||||||||||||
Year | Amount | ||||||||||||||||||||||||
2014 | $ | 1,086 | |||||||||||||||||||||||
2014 RBD debt long term classified as current | 388 | ||||||||||||||||||||||||
2015 | 321 | ||||||||||||||||||||||||
2016 | 1,640 | ||||||||||||||||||||||||
Total | $ | 3,435 | |||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||||||
Schedule of provision for income taxes | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Current income tax expense (benefit): | |||||||||||||||||
Federal | $ | - | $ | - | |||||||||||||
State | 47 | 63 | |||||||||||||||
Foreign | 25 | 68 | |||||||||||||||
72 | 131 | ||||||||||||||||
Deferred income tax expense (benefit): | |||||||||||||||||
Federal | 24 | 16 | |||||||||||||||
State | 6 | 6 | |||||||||||||||
Foreign | (301 | ) | (278 | ) | |||||||||||||
(271 | ) | (256 | ) | ||||||||||||||
Valuation allowance | - | - | |||||||||||||||
Total income tax expense (benefit) | $ | (199 | ) | $ | (125 | ) | |||||||||||
Schedule of deferred tax assets and liabilities | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Allowance for doubtful accounts | $ | 163 | $ | 98 | |||||||||||||
Inventory reserve and uniform capitalization | 41 | 44 | |||||||||||||||
Accrued expenses and other liabilities | 305 | 365 | |||||||||||||||
Unearned revenue | 343 | 226 | |||||||||||||||
Valuation allowance | (748 | ) | (685 | ) | |||||||||||||
Deferred tax assets - current | 104 | 48 | |||||||||||||||
Other assets | -295 | 42 | |||||||||||||||
Property and equipment | 18 | 5 | |||||||||||||||
Intangibles | 658 | 405 | |||||||||||||||
Net operating loss carryforward | 4,201 | 2,009 | |||||||||||||||
Valuation allowance | (4,631 | ) | (2,459 | ) | |||||||||||||
Deferred tax assets - long term | -49 | 2 | |||||||||||||||
Total net deferred tax asset | $ | 55 | $ | 50 | |||||||||||||
Long term debt | $ | (17 | ) | $ | (18 | ) | |||||||||||
Intangibles | (662 | ) | (1,022 | ) | |||||||||||||
Goodwill | (67 | ) | (40 | ) | |||||||||||||
Total net deferred tax liability | $ | (746 | ) | $ | (1,080 | ) | |||||||||||
Total | $ | (691 | ) | $ | (1,030 | ) | |||||||||||
Schedule of effective income tax rate reconciliation | ' | ||||||||||||||||
31-Dec-13 | 31-Dec-12 | ||||||||||||||||
Amount | Rate (%) | Amount | Rate (%) | ||||||||||||||
Tax at the Federal statutory rate | $ | (1,842 | ) | 34 | $ | (1,357 | ) | 34 | |||||||||
State taxes | (464 | ) | 8.6 | (130 | ) | 3.3 | |||||||||||
Permanent differences | 92 | (1.7 | ) | 752 | (18.9 | ) | |||||||||||
Valuation allowance | 2,195 | (40.5 | ) | 147 | (3.7 | ) | |||||||||||
True up items | 13 | (0.2 | ) | 288 | (7.2 | ) | |||||||||||
Miscellaneous | 22 | (0.4 | ) | 22 | (0.6 | ) | |||||||||||
Stock transaction | 21 | (0.4 | ) | 57 | (1.4 | ) | |||||||||||
Foreign rate | (236 | ) | 4.3 | 96 | (2.4 | ) | |||||||||||
Effective tax rate | $ | (199 | ) | 3.7 | $ | (125 | ) | 3.1 | |||||||||
Schedule of unrecognized tax benefits reconciliation roll forward | ' | ||||||||||||||||
Balance as of December 31, 2012 | $ | 170 | |||||||||||||||
Additions based on tax positions related to the current year | - | ||||||||||||||||
Additions for tax positions of prior years | - | ||||||||||||||||
Reductions for tax positions of prior years | - | ||||||||||||||||
Balance as of December 31, 2013 | $ | 170 | |||||||||||||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 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 $363 | $ | 1,338 | ||||||||||||||||
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 $92 | 472 | |||||||||||||||||
Series D Preferred, $0.001 par value per share, 4,000,000 shares designated, | ||||||||||||||||||
704,200 shares issued and outstanding (net of $1,374 in issuance costs), | ||||||||||||||||||
liquidation preference of $7,042 plus accrued PIK dividends of $213; cumulative | 7,168 | |||||||||||||||||
impued dividends and beneficial convesion feature of $1,500 | ||||||||||||||||||
Series E Preferred, $0.001 par value per share, 2,000,000 shares designated, | ||||||||||||||||||
409,000 shares issued and outstanding (net of $875 in issuance costs); | ||||||||||||||||||
liquidation preference of $4,090 plus accrued PIK dividends of $76 | 3,215 | |||||||||||||||||
Total convertible preferred stock | $ | 12,193 | ||||||||||||||||
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 | 0.71 | 704,200 | 499,982 | |||||||||||||
Common Stock Investor Warrants * | 13-Aug | 18-Aug | 0.5 | 1,463,667 | 731,834 | |||||||||||||
Placement Agent Warrants - Common Stock * | 13-Aug | 18-Aug | 0.5 | 292,733 | 146,367 | |||||||||||||
Placement Agent Preferred Stock - Class E | 13-Nov | 18-Nov | 0.55 | 818,000 | 449,900 | |||||||||||||
3,555,120 | $ | 2,928,082 | $ 0.82 | |||||||||||||||
* warrants classified as liabilities | ||||||||||||||||||
ESOP_Plan_Tables
ESOP Plan (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Esop Plan [Abstract] | ' | ||||||||
Schedule of employee stock ownership plan (ESOP) Shares | ' | ||||||||
December 31, | |||||||||
2013 | 2012 | ||||||||
Allocated shares | 1,128,303 | 1,017,619 | |||||||
Shares committed for allocation | 110,684 | 110,684 | |||||||
Unallocated shares | 442,736 | 553,420 | |||||||
Total ESOP shares | 1,681,723 | 1,681,723 | |||||||
Stock_Option_Plan_Tables
Stock Option Plan (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||
Option Indexed to Issuer's Equity [Line Items] | ' | ||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
1-Jan-13 | 455,495 | 544,505 | $ | 1.82 | |||||||||||||||||||||||
Granted | (260,000 | ) | 260,000 | 0.5 | |||||||||||||||||||||||
Exercised | - | - | - | ||||||||||||||||||||||||
Forfeited | - | - | - | ||||||||||||||||||||||||
31-Dec-13 | 195,495 | 804,505 | $ | 1.39 | $ | - | |||||||||||||||||||||
Exercisable options at December 31, 2013 | 710,437 | $ | 1.29 | $ | - | ||||||||||||||||||||||
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 | |||||||||||||||||||||
$ | 0.5 | 260,000 | 2.9 | $ | 0.5 | 260,000 | 2.9 | $ | 0.5 | ||||||||||||||||||
$ | 1.33 - 2.03 | 365,620 | 1.33 | 1.65 | 359,524 | 1.3 | 1.64 | ||||||||||||||||||||
$ | 2.06 - 4.34 | 178,885 | 7.35 | 2.16 | 90,913 | 7.29 | 2.16 | ||||||||||||||||||||
Total | 804,505 | 3.17 | $ | 1.39 | 710,437 | 2.65 | $ | 1.29 | |||||||||||||||||||
Schedule of fair values estimated using the Black-Scholes option-pricing model with the weighted-average assumptions | ' | ||||||||||||||||||||||||||
Placement Agent Warrants | Investor Warrants | ||||||||||||||||||||||||||
Investor Warrants | December | August | December | August | August | ||||||||||||||||||||||
31, 2013 | 21, 2013 | 31, 2013 | 21, 2013 | 15, 2013 | |||||||||||||||||||||||
Closing price per share of common stock | $ | 0.53 | $ | 0.84 | $ | 0.53 | $ | 0.84 | $ | 0.69 | |||||||||||||||||
Exercise price per share (range) | 0.5 | 0.6 | 0.5 | 1 | 1 | ||||||||||||||||||||||
Expected volatility | 123.5 | % | 134.9 | % | 123.5 | % | 134.9 | % | 134.1 | % | |||||||||||||||||
Risk-free interest rate | 1.6 | % | 1.6 | % | 1.6 | % | 1.6 | % | 1.6 | % | |||||||||||||||||
Dividend yield | - | - | - | - | - | ||||||||||||||||||||||
Remaining expected term of underlying securities (years) | 4.6 | 5 | 4.6 | 5 | 5 | ||||||||||||||||||||||
Stock Option [Member] | ' | ||||||||||||||||||||||||||
Option Indexed to Issuer's Equity [Line Items] | ' | ||||||||||||||||||||||||||
Schedule of fair values estimated using the Black-Scholes option-pricing model with the weighted-average assumptions | ' | ||||||||||||||||||||||||||
Expected term | 1.50 years | ||||||||||||||||||||||||||
Expected volatility | 153.61 | % | |||||||||||||||||||||||||
Dividend yield | 0 | % | |||||||||||||||||||||||||
Risk-free interest rate | 0.215 | % | |||||||||||||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of future minimum rental payments under these leases | ' | ||||
Years ending December 31: | Amount | ||||
2014 | $ | 558 | |||
2015 | 529 | ||||
2016 | 404 | ||||
2017 | 304 | ||||
2018 | 158 | ||||
Thereafter | 142 | ||||
$ | 2,095 | ||||
Related_Parties_Tables
Related Parties (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||
Schedule of sales of series D preferred Stock to related parties | ' | |||||||||||||
Shares | ||||||||||||||
Series D | Common | Series E | ||||||||||||
Preferred | Stock | Preferred | ||||||||||||
Stock | Stock | |||||||||||||
David Rifkin | Director | 1,000 | - | - | ||||||||||
Lawrence Yelin | Director | 2,200 | - | - | ||||||||||
Jay Sheehy | Director | 1,000 | - | - | ||||||||||
Robert Schroeder | Director | 4,000 | - | 2,000 | ||||||||||
Nicholas R. Toms | CEO, Chairman of the Board | 10,000 | 200,000 | 2,500 | ||||||||||
Paul E. Ross | Former Interim, CFO | 2,000 | - | - | ||||||||||
Ralph S. Hubregsen | Former COO | 1,000 | - | - | ||||||||||
21,200 | 200,000 | 4,500 | ||||||||||||
Basis_of_Presentation_Liquidit3
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies - Estimated useful lives of assets (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Computer equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '3 to 5 years |
Office furniture and fixtures | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful lives | '5 to 7 years |
Basis_of_Presentation_Liquidit4
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies - Liabilities recorded at fair value on recurring basis (Details 1) (Fair Value, Measurements, Recurring Basis, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Total | ' |
Liabilities | ' |
Contingent consideration liability recorded for business combinations | $468 |
Fair value of derivative warrants issued in connection with share purchase agreement | 803 |
Balance at December 31, 2013 | 1,271 |
Fair Value Measurements Level 1 | ' |
Liabilities | ' |
Contingent consideration liability recorded for business combinations | ' |
Fair value of derivative warrants issued in connection with share purchase agreement | ' |
Balance at December 31, 2013 | ' |
Fair Value Measurements Level 2 | ' |
Liabilities | ' |
Contingent consideration liability recorded for business combinations | ' |
Fair value of derivative warrants issued in connection with share purchase agreement | ' |
Balance at December 31, 2013 | ' |
Fair Value Measurements Level 3 | ' |
Liabilities | ' |
Contingent consideration liability recorded for business combinations | 468 |
Fair value of derivative warrants issued in connection with share purchase agreement | 803 |
Balance at December 31, 2013 | $1,271 |
Basis_of_Presentation_Liquidit5
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies - Fair value of contingent consideration (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Adjustments to fair value of derivative warrants (reflected in other income) | ($296) | ' |
Fair Value Measurements Level 3 | Derivative warrants [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Balance at December 31, 2012 | ' | ' |
Fair value of warrants accounted for as a liability | 1,099 | ' |
Adjustments to fair value of derivative warrants (reflected in other income) | -296 | ' |
Effect of currency translation | ' | ' |
Balance at December 31, 2013 | 803 | ' |
Fair Value Measurements Level 3 | Contingent Consideration [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Balance at December 31, 2012 | 1,346 | ' |
Fair value of warrants accounted for as a liability | ' | ' |
Adjustments to fair value of derivative warrants (reflected in other income) | ' | ' |
Effect of currency translation | -58 | ' |
Balance at December 31, 2013 | 468 | ' |
Fair Value Measurements Level 3 | Apex | Derivative warrants [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Adjustments to fair value liabilities | ' | ' |
Fair Value Measurements Level 3 | Apex | Contingent Consideration [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Adjustments to fair value liabilities | -713 | ' |
Fair Value Measurements Level 3 | Illume Mobile | Derivative warrants [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Adjustments to fair value liabilities | ' | ' |
Fair Value Measurements Level 3 | Illume Mobile | Contingent Consideration [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Adjustments to fair value liabilities | ($107) | ' |
Basis_of_Presentation_Liquidit6
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies - Restatement on previously issued Consolidated Financial Statements (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Cost Of Sales | $47,965 | $56,458 | [1] |
Gross profit | 12,727 | 15,043 | [1] |
Selling, General and Administrative Expense | 18,338 | 18,152 | [1] |
Previously Reported [Member] | ' | ' | |
Cost Of Sales | ' | 55,949 | |
Gross profit | ' | 15,552 | |
Selling, General and Administrative Expense | ' | 18,661 | |
Adjustment [Member] | ' | ' | |
Cost Of Sales | ' | 509 | |
Gross profit | ' | -509 | |
Selling, General and Administrative Expense | ' | ($509) | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Basis_of_Presentation_Liquidit7
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies (Detail Textuals) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | |||||||
Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 15, 2013 | Aug. 21, 2013 | Nov. 30, 2013 | Aug. 22, 2013 | Aug. 16, 2013 | Nov. 30, 2013 | Aug. 15, 2013 | Aug. 15, 2013 | Nov. 30, 2013 | Nov. 30, 2013 | ||
Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Series E Purchase Agreement [Member] | BDC Credit Agreement [Member] | BDC Credit Agreement [Member] | Placement agent warrants | Placement agent warrants | Warrant [Member] | Series E Preferred Stock [Member] | Series E Preferred Stock [Member] | |||||
Securities Purchase Agreement [Member] | Svb Loan Agreement [Member] | |||||||||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Decrease in revenue | ' | $10,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Increased expenses due to professional fees | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net loss | ' | -5,218,000 | -3,866,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Working capital deficit | ' | 9,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Percentage of administrative personnel and reduced staffing | ' | 29.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Annual savings | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Gross proceeds | ' | ' | ' | 1,756,400 | 200,000 | 4,090,000 | ' | ' | 3,500,000 | ' | ' | 4,100,000 | ' | |
Offering Closing Price | ' | ' | ' | 1,556,400 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stocks, including management and existing shareholders | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Exercise price of warrants | ' | ' | ' | ' | ' | 0.55 | ' | ' | ' | 0.6 | 1 | ' | ' | |
Common stock, shares issued | ' | 100,000,000 | 9,300,439 | 2,927,333 | ' | ' | ' | ' | ' | 292,733 | 1,463,667 | ' | ' | |
Offering price | ' | ' | ' | $0.60 | ' | $10 | ' | ' | ' | ' | ' | ' | ' | |
Net proceeds from private placement offering after deductions | ' | 403,000 | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Placement agent fees percentage | ' | ' | ' | 10.00% | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | |
Fair value of warrants accounted for as a liability | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Preferred stock, shares issued | ' | 1,514,155 | 1,105,155 | ' | ' | 409,000 | ' | ' | ' | ' | ' | ' | ' | |
Conversion price | ' | ' | ' | ' | ' | $0.50 | ' | ' | ' | ' | ' | ' | ' | |
Change in fair value of warrants | ' | -296,000 | ' | ' | ' | ' | ' | ' | 278,000 | ' | ' | ' | ' | |
Term of warrant | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | |
Capital raising cost, preferred stock | ' | ' | ' | ' | ' | 875,000 | ' | ' | ' | ' | ' | ' | ' | |
Line of credit, covenant terms | ' | ' | ' | ' | ' | ' | '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. | '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. | ' | ' | ' | ' | ' | |
Outstanding balance on the line of credit | 4,100,000 | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Availability under the line of credit | ' | 3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Capital raised by sale of preferred stock | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 875,000 | ' | |
Funds raised through sales of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | |
Minimum tangible net worth requirement | ' | -9,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -8,700,000 | -9,700,000 | |
Minimum tangible net worth's pro forma effect in capital raise | 300,000 | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Accounts receivable, valuation allowance | ' | 377,000 | 246,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Inventory, valuation allowance | ' | 41,000 | 83,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Adjustment to earn out obligations | ' | 820,000 | ' | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred financing costs net of amortization | ' | $48,000 | $107,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Basis_of_Presentation_Liquidit8
Basis of Presentation, Liquidity And Summary of Significant Accounting Policies (Detail Textuals 1) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred Cost [Line Items] | ' | ' | |
Cash balances insured by FDIC | $250 | ' | |
Tax benefits recognized provided percentage of likelihood of realization is greater than | 50.00% | ' | |
Net loss | -5,218 | -3,866 | [1] |
Comprehensive loss | -5,241 | -3,844 | [1] |
Other comprehensive loss | ($23) | $22 | [1] |
Revenues | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Number of customers | 2 | 2 | |
Revenues | Customer One | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 10.00% | 13.00% | |
Revenues | Customer Two | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 8.00% | 7.00% | |
Accounts Receivable | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Number of customers | 2 | 2 | |
Accounts Receivable | Customer One | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 19.00% | 14.00% | |
Accounts Receivable | Customer Two | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 12.00% | 10.00% | |
Total purchases | Individual Supplier | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 18.00% | 28.00% | |
Total purchases | Supplier Concentration Risk [Member] | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 58.00% | 71.00% | |
Number of vendors | 4 | 4 | |
Accounts Payable | Supplier Concentration Risk [Member] | ' | ' | |
Deferred Cost [Line Items] | ' | ' | |
Total percent of revenues from various customers | 61.00% | 67.00% | |
Number of vendors | 4 | 4 | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Loss_Per_Common_Share_Reconcil
Loss Per Common Share - Reconciliation of fully dilutive securities effect for period with net income (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share [Abstract] | ' | ' | |
Net loss attributable to common shareholders | ($7,801) | ($4,820) | [1] |
Weighted average common shares outstanding - basic and diluted | 9,802,810 | 7,900,693 | [1] |
Loss per common share - basic and diluted (in dollars per share) | ($0.80) | ($0.61) | [1] |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Loss_Per_Common_Share_Potentia
Loss Per Common Share - Potential dilutive securities (Details 1) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 22,859 | 8,968 |
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 D | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 9,918 | 7,042 |
Convertible Preferred stock | Series E | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 8,180 | ' |
Warrants to purchase common stock | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 3,555 | 981 |
Options to purchase common stock | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Total potentially dilutive securities | 805 | 544 |
Loss_Per_Common_Share_Detail_T
Loss Per Common Share (Detail Textuals) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
ESOP shares that have not been committed to be released | 0.4 | 0.6 |
Warrant_Liability_Details
Warrant Liability (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | |
Aug. 15, 2013 | Nov. 08, 2011 | Aug. 21, 2013 | Dec. 31, 2013 | Aug. 21, 2013 | Dec. 31, 2013 | |
Placement agent warrants | Placement agent warrants | Investor Warrants | Investor Warrants | |||
Warrant Liability Textual [Abstract] | ' | ' | ' | ' | ' | ' |
Closing price per share of common stock | $0.69 | $1.33 | $0.84 | $0.53 | $0.84 | $0.53 |
Exercise price per share (range) | $1 | ' | $0.60 | $0.50 | $1 | $0.50 |
Expected volatility | 134.10% | ' | 134.90% | 123.50% | 134.90% | 123.50% |
Risk-free interest rate | 1.60% | ' | 1.60% | 1.60% | 1.60% | 1.60% |
Dividend yield | ' | ' | ' | ' | ' | ' |
Remaining expected term of underlying securities (years) | '5 years | ' | '5 years | '4 years 7 months 6 days | '5 years | '4 years 7 months 6 days |
Warrant_Liability_Detail_Textu
Warrant Liability (Detail Textuals) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Warrant Liability Textual [Abstract] | ' | ' |
Estimated fair value of the outstanding warrant liabilities | $803 | ' |
Change in fair value of the derivative liabilities | ($296) | ' |
Business_Combinations_Fair_val
Business Combinations - Fair value of Illume Mobile assets acquired and liabilities assumed (Details ) (Illume Mobile, Fair Value, USD $) | Jul. 31, 2012 |
Illume Mobile | Fair Value | ' |
Assets acquired: | ' |
Accounts receivable | $16,000 |
Other current assets | 15,000 |
Property and equipment | 26,000 |
Intangible assets | 630,000 |
Goodwill | 444,000 |
Total assets | 1,131,000 |
Liabilities assumed: | ' |
Accounts payable and other accrued liabilities | 39,000 |
Unearned revenue | 37,000 |
Total liabilities assumed | 76,000 |
Net assets acquired | 1,055,000 |
Purchase consideration: | ' |
Cash paid at closing | 250,000 |
Shares issued at closing | 698,000 |
Earn out consideration | 107,000 |
Total purchase consideration | $1,055,000 |
Business_Combinations_Fair_val1
Business Combinations - Fair value of Apex assets acquired and liabilities assumed (Details 1) (Apex, Fair Value, USD $) | Jun. 04, 2012 |
Apex | Fair Value | ' |
Assets acquired: | ' |
Accounts receivable | $243,000 |
Due from related party | 412,000 |
Other current assets | 62,000 |
Property and equipment | 30,000 |
Intangible assets | 4,466,000 |
Goodwill | 2,449,000 |
Total assets | 7,662,000 |
Liabilities assumed: | ' |
Accounts payable and other accrued liabilities | 194,000 |
Unearned revenue | 297,000 |
Deferred tax liability | 1,184,000 |
Total liabilities assumed | 1,675,000 |
Net assets acquired | 5,987,000 |
Purchase consideration: | ' |
Cash paid at closing | 4,801,000 |
Accrued earn out consideration | 1,186,000 |
Total purchase consideration | $5,987,000 |
Business_Combinations_Unaudite
Business Combinations - Unaudited consolidated results of operations (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | ' | ' | |
Net sales | $60,692 | $71,501 | [1] |
Net loss attributable to common shareholders | -7,801 | -4,820 | [1] |
Loss per common share - basic and diluted (in dollars per share) | ($0.80) | ($0.61) | [1] |
Pro forma | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Net sales | ' | 73,703 | |
Net loss attributable to common shareholders | ' | ($6,887) | |
Loss per common share - basic and diluted (in dollars per share) | ' | ($0.87) | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Business_Combinations_Detail_T
Business Combinations (Detail Textuals) (Asset purchase agreement, Illume Mobile, USD $) | 1 Months Ended |
Jul. 31, 2012 | |
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 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% |
Earn out consideration | $107,000 |
Business_Combinations_Detail_T1
Business Combinations (Detail Textuals 1) (Apex) | 0 Months Ended | 12 Months Ended | |||||||
Jun. 04, 2012 | Jun. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 04, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | |
USD ($) | CAD | USD ($) | CAD | Fair Value | Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | Securities Purchase Agreement [Member] | |
USD ($) | USD ($) | CAD | USD ($) | CAD | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid in consideration, Apex shares acquired | $4,801,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' |
Undiscounted payment in consideration for Apex achieving certain levels of EBITDA | 3,360,700 | 3,500,000 | ' | ' | ' | ' | ' | ' | ' |
Earn out consideration | ' | ' | ' | ' | 1,186,000 | 331,000 | 341,000 | 1,033,000 | 1,076,000 |
Additional purchase consideration | 319,000 | 341,000 | ' | ' | ' | ' | ' | ' | ' |
Operating Expenses | ' | ' | $713,000 | 735,000 | ' | ' | ' | ' | ' |
Business_Combinations_Detail_T2
Business Combinations (Detail Textuals 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | ||
Business Acquisition [Line Items] | ' | ' | |
Revenue | $60,692,000 | $71,501,000 | [1] |
Net loss | -5,218,000 | -3,866,000 | [1] |
Apex | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Amortization of intangible assets | ' | 572,000 | |
Net increase in interest expense | ' | 291,000 | |
Number of common stock issued (in shares) | ' | 325,000 | |
Illume Mobile | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Amortization of intangible assets | ' | 125,000 | |
Number of common stock issued (in shares) | ' | 617,284 | |
Apex and Illume Mobile's | ' | ' | |
Business Acquisition [Line Items] | ' | ' | |
Revenue | ' | 1,500,000 | |
Net loss | ' | $1,800,000 | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Total property and equipment | $360 | $394 |
Less accumulated depreciation and amortization | -224 | -215 |
Property and equipment, net | 136 | 179 |
Computer equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total property and equipment | 225 | 238 |
Office furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total property and equipment | 109 | 113 |
Leasehold improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Total property and equipment | $26 | $43 |
Property_and_Equipment_Detail_
Property and Equipment (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation and amortization expense | $73,000 | $67,000 |
Goodwill_And_Intangible_Assets1
Goodwill And Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 |
Goodwill [Roll Forward] | ' | ' | ' |
Balance as of January, Beginning balance | $8,571 | $5,538 | $5,509 |
Acquisition of Apex in June | ' | 2,449 | ' |
Adjustment to Apex goodwill | ' | 37 | ' |
Tax adjustment to Apex goodwill | ' | -9 | ' |
Acquisition of Illume in July | ' | 444 | ' |
Impact of foreign currency translation | -176 | 112 | ' |
Balance as of December, Ending balance | $8,395 | $8,571 | $5,509 |
Goodwill_And_Intangible_Assets2
Goodwill And Intangible Assets (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | $7,707 | $8,024 |
Accumulated Amortization | -3,800 | -2,001 |
Net | 3,907 | 6,023 |
WA Life | '4 years 2 months 12 days | '5 years 1 month 6 days |
Customer relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 3,264 | 3,373 |
Accumulated Amortization | -1,654 | -966 |
Net | 1,610 | 2,407 |
WA Life | '6 years 6 months | '7 years 7 months 6 days |
Contractor and resume databases | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 675 | 675 |
Accumulated Amortization | -405 | -270 |
Net | 270 | 405 |
WA Life | '2 years | '3 years |
Tradename | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 862 | 893 |
Accumulated Amortization | -364 | -193 |
Net | 498 | 700 |
WA Life | '4 years 7 months 6 days | '5 years 3 months 18 days |
Internal use software | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 2,802 | 2,978 |
Accumulated Amortization | -1,299 | -545 |
Net | 1,503 | 2,433 |
WA Life | '2 years 1 month 6 days | '3 years 1 month 6 days |
Covenant not to compete | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross | 104 | 105 |
Accumulated Amortization | -78 | -27 |
Net | $26 | $78 |
WA Life | '7 months 6 days | '1 year 6 months |
Goodwill_And_Intangible_Assets3
Goodwill And Intangible Assets (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
2014 | $1,593 | ' |
2015 | 1,357 | ' |
2016 | 318 | ' |
2017 | 243 | ' |
2018 | 189 | ' |
Thereafter | 207 | ' |
Net | $3,907 | $6,023 |
Goodwill_And_Intangible_Assets4
Goodwill And Intangible Assets (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' |
Amortization of intangible assets | $1,903,000 | $1,486,000 |
Effect of foreign currency translation on intangible assets | ($213,000) | $199,000 |
Accrued_Expenses_and_Other_Cur2
Accrued Expenses and Other Current Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ' | ' |
Salaries and benefits | $1,873 | $1,937 |
Interest payable | 23 | 139 |
Professional fees | 30 | 33 |
Vendor purchases | 161 | 92 |
Sales tax payable | 94 | 293 |
Customer deposits | 194 | 139 |
Other fees and expenses | 601 | 262 |
Total accrued expenses and other current liabilities | $2,976 | $2,895 |
Line_of_Credit_Detail_Textuals
Line of Credit (Detail Textuals) | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Sep. 30, 2013 | Dec. 31, 2013 | Nov. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 27, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 04, 2012 | Aug. 16, 2013 | |
USD ($) | USD ($) | Series E Preferred Stock [Member] | Line of credit | Line of credit | SVB Loan Agreement | SVB Loan Agreement | SVB Loan Agreement | RBC Credit Agreement | RBC Credit Agreement | Forbearance Agreement | |
USD ($) | USD ($) | USD ($) | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | |||
Line of credit | Line of credit | Line of credit | Line of credit | Line of credit | Line of credit | ||||||
USD ($) | USD ($) | USD ($) | USD ($) | CAD | 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 | 3,900,000 | ' | ' | ' | ' | 3,900,000 | 3,300,000 | 0 | ' | ' |
Annual Interest Rate | ' | ' | ' | ' | ' | 3.75% | 7.00% | ' | 4.50% | ' | ' |
Annual interest rate, Additional percentage | ' | ' | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' |
Availability under the line of credit | ' | 3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Terms of the BDC 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 10), 4) a modification of the rate of interest of the line of credit to 3.75% above the bank'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 | ' | ' | ' | 362,000 | 375,000 | ' | ' | ' | ' | ' | ' |
Minimum Tangible Net Worth | ' | ' | -9,700,000 | ' | ' | ' | ' | ' | ' | ' | -9,700,000 |
Funds raised through sales of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% |
Line of credit mature period | ' | ' | ' | ' | ' | 28-Feb-15 | ' | ' | ' | ' | ' |
Gross proceeds | ' | ' | 4,100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum tangible net worth's pro forma effect in capital raise | 300,000 | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum tangible net worth requirement | ' | -9,700,000 | -8,700,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Paid in Capital, Preferred Stock | ' | $1,500,000 | $875,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Term_Debt_Summary_of_long_term
Term Debt - Summary of long term debt (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | $4,722 | $1,970 |
Additions | 981 | 3,941 |
Repayment of debt | 2,082 | 1,393 |
Amortization of Note Discount | 43 | 49 |
Currency Translation | -229 | 181 |
Ending Balance | 3,435 | 4,722 |
Less current portion | -1,086 | -1,800 |
less RBC debt long term classified as current | -388 | ' |
Debt, net of current portion | 1,961 | 2,922 |
RBC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 2,090 | ' |
Additions | ' | 2,401 |
Repayment of debt | -804 | -419 |
Amortization of Note Discount | ' | ' |
Currency Translation | -117 | 108 |
Ending Balance | 1,169 | 2,090 |
BDC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 1,705 | ' |
Additions | ' | 1,632 |
Repayment of debt | ' | ' |
Amortization of Note Discount | ' | ' |
Currency Translation | -116 | 73 |
Ending Balance | 1,589 | 1,705 |
SVB term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | 1,000 | 2,000 |
Additions | ' | ' |
Repayment of debt | -1,000 | -1,000 |
Amortization of Note Discount | ' | ' |
Currency Translation | ' | ' |
Ending Balance | ' | 1,000 |
SVB term loan-2 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | ' | ' |
Additions | 1,000 | ' |
Repayment of debt | -278 | ' |
Amortization of Note Discount | ' | ' |
Currency Translation | ' | ' |
Ending Balance | 722 | ' |
Note discount | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Beginning Balance | -73 | -30 |
Additions | -19 | -92 |
Repayment of debt | ' | ' |
Amortization of Note Discount | 43 | 49 |
Currency Translation | 4 | ' |
Ending Balance | -45 | -73 |
Note discount | RBC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Ending Balance | ' | -38 |
Note discount | BDC term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Ending Balance | ' | -31 |
Note discount | SVB term loan | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Ending Balance | ' | ($4) |
TermDebt_Maturities_of_longter
TermDebt - Maturities of long-term obligations (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Long-Term Debt, Unclassified [Abstract] | ' | ' | ' |
2014 | $1,086 | ' | ' |
2014 RBD debt long term classified as current | 388 | ' | ' |
2015 | 321 | ' | ' |
2016 | 1,640 | ' | ' |
Total | $3,435 | $4,722 | $1,970 |
Term_Debt_RBC_Term_Loan_Detail
Term Debt - RBC Term Loan (Detail Textuals) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 04, 2012 | Jun. 04, 2012 | Jun. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | USD ($) | RBC term loan | Apex | Apex | Apex | Apex | Apex | Apex | Other assets | Other assets | |
RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | RBC term loan | USD ($) | USD ($) | ||||
Line of credit | Line of credit | Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||||
USD ($) | CAD | CAD | USD ($) | USD ($) | USD ($) | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized deferred financing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | $48,000 | $107,000 |
Aggregate amount of credit facility | ' | ' | ' | 2,641,000 | 2,750,000 | 2,500,000 | ' | ' | 2,401,000 | ' | ' |
Term Loan, Interest percentage | ' | ' | ' | ' | ' | 4.00% | 7.00% | ' | ' | ' | ' |
Interest Rate Basis | ' | ' | ' | ' | ' | 'RBP | ' | ' | ' | ' | ' |
Principal and interest payable period | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' |
Fixed principal amount | ' | ' | ' | ' | ' | 70,000 | ' | ' | ' | ' | ' |
Frequency of repayment | ' | ' | ' | ' | ' | 'Monthly | ' | ' | ' | ' | ' |
Financing costs paid | 119,000 | 270,000 | ' | ' | ' | ' | 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 | ($1,086,000) | ($1,800,000) | ' | ' | ' | ' | $0 | $0 | ' | ' | ' |
Term loan and financial covenant, Description | ' | ' | 'On August 16, 2013 the RBC Credit Agreement was amended and certain financial covenants were modified. Pursuant to the amended credit agreement and commencing with the fiscal year ending December 31, 2013, the Company is required to maintain a fixed coverage ratio, calculated on a consolidated basis of not less than 1.15:1 with a step-up to 1.25:1 as of March 31, 2014, tested on a rolling four quarter basis thereafter and a ratio of funded debt to EBITDA, calculated on an annual consolidated basis of not greater than 3.0:1, tested on a rolling four quarter basis thereafter | ' | ' | ' | ' | ' | ' | ' | ' |
Term_Debt_BDC_Term_Loan_Detail
Term Debt - BDC Term Loan (Detail Textuals 1) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 04, 2012 | |
USD ($) | USD ($) | BDC term loan | Apex | Apex | Apex | Apex | |
BDC term loan | BDC term loan | BDC term loan | BDC term loan | ||||
Term credit facility | Term credit facility | Term credit facility | Term credit facility | ||||
CAD | USD ($) | USD ($) | USD ($) | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Aggregate amount of credit facility | ' | ' | ' | 1,700,000 | ' | ' | $1,632,000 |
Interest rate | ' | ' | ' | ' | ' | ' | 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 | ' | ' | ' |
Percentage of Apex's free cash flow for mandatory repayments of term loan | ' | ' | ' | 50.00% | ' | ' | ' |
Maximum annual cash flow sweep | ' | ' | ' | 425,000 | ' | ' | ' |
Estimated amount of term loan under mandatory repayments | ' | ' | ' | ' | 0 | ' | ' |
Financing costs paid | 119,000 | 270,000 | ' | ' | ' | 70,000 | ' |
Terms of the BDC 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, | ' | ' | ' | ' |
Deferred finance costs | ' | ' | ' | ' | 22,000 | 35,000 | ' |
Note discount | ' | ' | ' | ' | $22,000 | $35,000 | ' |
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. |
Term_Debt_SVB_Term_Loan_Detail
Term Debt - SVB Term Loan (Detail Textuals 2) (USD $) | 0 Months Ended | 12 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | ||
Sep. 30, 2013 | Dec. 31, 2013 | Feb. 27, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 | Nov. 30, 2013 | |
Term credit facility | Term credit facility | Term credit facility | Term credit facility | Term credit facility | |||
Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | Silicon Valley Bank ("SVB") | |||
Installment | Series E | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Outstanding balance on the line of credit | $4,100,000 | $3,900,000 | ' | ' | ' | $3,000,000 | ' |
Number of equal monthly installments | ' | ' | 36 | ' | ' | ' | ' |
Percent of aggregate amount of the term loan equal to final payment | ' | ' | ' | 2.00% | ' | ' | ' |
Final payment recorded as discount | ' | ' | ' | 60,000 | ' | ' | ' |
Interest rate | ' | ' | 75.00% | 9.00% | ' | ' | ' |
Additional term loan | ' | ' | 1,000,000 | ' | ' | ' | ' |
Interest expense for the lines of credit, including amortization of deferred financing costs | ' | ' | ' | 564,000 | 509,000 | ' | ' |
Increase in gross capital | ' | ' | ' | 1,500,000 | ' | ' | ' |
Minimum Tangible Net Worth requirement | ' | ' | ' | ' | ' | ' | 9,700,000 |
Gross proceeds from sale of preferred stock | ' | ' | ' | ' | ' | ' | 4,100,000 |
Cost related to sale of preferred stock | ' | ' | ' | ' | ' | ' | 875,000 |
Minimum net worth required for compliance, Amendment | ' | ' | ' | ' | ' | ' | 8,700,000 |
Minimum tangible net worth's pro forma effect in capital raise | $300,000 | $800,000 | ' | ' | ' | ' | ' |
Funds raised through sales of common stock | ' | ' | ' | ' | ' | ' | 25.00% |
Income_Taxes_Provision_for_inc
Income Taxes - Provision for income taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Current income tax expense (benefit): | ' | ' | |
Federal | ' | ' | |
State | 47 | 63 | |
Foreign | 25 | 68 | |
Current income tax expense (benefit), Total | 72 | 131 | |
Deferred income tax expense (benefit): | ' | ' | |
Federal | 24 | 16 | |
State | 6 | 6 | |
Foreign | -301 | -278 | |
Deferred income tax expense (benefit), Total | -271 | -256 | |
Valuation allowance | ' | ' | |
Total income tax expense (benefit) | ($199) | ($125) | [1] |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Income_Taxes_Deferred_tax_asse
Income Taxes - Deferred tax assets and liabilities (Details 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ' | ' |
Allowance for doubtful accounts | $163 | $98 |
Inventory reserve and uniform capitalization | 41 | 44 |
Accrued expenses and other liabilities | 305 | 365 |
Unearned revenue | 343 | 226 |
Valuation allowance | -748 | -685 |
Deferred tax assets - current | 49 | 48 |
Other assets | -295 | 42 |
Property and equipment | 18 | 5 |
Intangibles | 658 | 405 |
Net operating loss carryforward | 4,201 | 2,009 |
Valuation allowance | -4,631 | -2,459 |
Deferred tax assets - long term | -49 | 2 |
Total net deferred tax asset | 55 | 50 |
Long term debt | -17 | -18 |
Intangibles | -662 | -1,022 |
Goodwill | -67 | -40 |
Total net deferred tax liability | -746 | -1,080 |
Total | ($691) | ($1,030) |
Income_Taxes_Effective_income_
Income Taxes - Effective income tax rate (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' | |
Tax at the Federal statutory rate | ($1,842) | ($1,357) | |
State taxes | -464 | -130 | |
Permanent differences | 92 | 752 | |
Valuation allowance | 2,195 | 147 | |
True up items | 13 | 288 | |
Miscellaneous | 22 | 22 | |
Stock transaction | 21 | 57 | |
Foreign rate | -236 | 96 | |
Effective tax rate | ($199) | ($125) | [1] |
Tax at the Federal statutory rate | 34.00% | 34.00% | |
State taxes | 8.60% | 3.30% | |
Permanent differences | -1.70% | -18.90% | |
Valuation allowance | -40.50% | -3.70% | |
True up items | -0.20% | -7.20% | |
Miscellaneous | -0.40% | -0.60% | |
Stock transaction | -0.40% | -1.40% | |
Foreign rate | 4.30% | -2.40% | |
Effective tax rate | 3.70% | 3.10% | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
Income_Taxes_Unrecognized_tax_
Income Taxes - Unrecognized tax benefits (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2011 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' |
Balance as of December 31, 2012 | $170 | ' |
Additions based on tax positions related to the current year | ' | ' |
Additions for tax positions of prior years | ' | ' |
Reductions for tax positions of prior years | ' | ' |
Balance as of December 31, 2013 | $170 | ' |
Income_Taxes_Detail_Textuals
Income Taxes (Detail Textuals) (USD $) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Interest and penalties from examination | $170,000 | ' |
Operating loss carryforwards, domestic | ' | 10,700,000 |
Operating loss carryforwards, state and local | ' | 9,200,000 |
Limitations on use, federal amount | ' | 9,900,000 |
Limitations on use, state and local amount | ' | $9,200,000 |
Stockholders_Equity_Preferred_
Stockholders' Equity - Preferred Stock Outstanding (Details) (Cumulative Convertible Preferred Stock, USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total Preferred Stock outstanding | $12,193 |
Series A Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total Preferred Stock outstanding | 1,338 |
Series B Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total Preferred Stock outstanding | 472 |
Series D Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total Preferred Stock outstanding | 7,168 |
Series E Preferred Stock | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' |
Total Preferred Stock outstanding | $3,215 |
Stockholders_Equity_Preferred_1
Stockholders' Equity- Preferred Stock Outstanding (Parentheticals) - (Details) (USD $) | Dec. 31, 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 | 1,514,155 | 1,105,155 |
Shares outstanding | 1,514,155 | 1,105,155 |
Cumulative preferred dividends | $1,956 | $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 | 363 | ' |
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 | 92 | ' |
Cumulative Convertible Preferred Stock | Series C Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Shares designated | 5,000,000 | ' |
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 | 213 | ' |
Preferred stock, issuance costs | 1,374 | ' |
Conversion benefits on preferred stock | 1,500 | ' |
Cumulative Convertible Preferred Stock | Series E Preferred Stock | ' | ' |
Cumulative Convertible Preferred Stock [Line Items] | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | ' |
Shares designated | 2,000,000 | ' |
Shares issued | 409,000 | ' |
Shares outstanding | 409,000 | ' |
Liquidation preference | 4,090 | ' |
Cumulative preferred dividends | 76 | ' |
Preferred stock, issuance costs | $875 | ' |
Stockholders_Equity_Outstandin
Stockholders' Equity - Outstanding Common Stock Warrants (Details 1) (Warrants, USD $) | Dec. 31, 2013 | Nov. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||
Senior Subordinated Notes Strike Price 3.62 | Senior Subordinated Notes Strike Price 4.34 | Placement Agent Preferred Stock - Class D | Common Stock Investor Warrants | Placement Agent Warrants - Common Stock | Placement Agent Preferred Stock - Class E | ||||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Outstanding common stock warrants, date issued | ' | ' | ' | '2009 December | '2009 December | '2012 December | '2013 August | [1] | '2013 August | [1] | '2013 November |
Outstanding common stock warrants expiration date | ' | ' | ' | '2014 December | '2014 December | '2017 December | '2018 August | [1] | '2018 August | [1] | '2018 November |
Strike price of common stock warrant | ' | ' | ' | $3.62 | $4.34 | $0.71 | $0.50 | [1] | $0.50 | [1] | $0.55 |
Outstanding common stock warrants, total warrants outstanding and exercisable | $3,555,120 | ' | ' | $138,260 | $138,260 | $704,200 | $1,463,667 | [1] | $292,733 | [1] | $818,000 |
Outstanding common stock warrants total exercise price | $2,928,082 | ' | ' | $500,000 | $600,000 | $499,982 | $731,834 | [1] | $146,367 | [1] | $449,900 |
Outstanding common stock warrants weighted average exercise price | 0.82 | 0.55 | 1.1 | ' | ' | ' | ' | ' | ' | ||
[1] | warrants classified as liabilities |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | Dec. 31, 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 | 1,514,155 | 1,105,155 |
Preferred stock, shares outstanding | 1,514,155 | 1,105,155 |
Preferred Stock | Series A Preferred Stock | ' | ' |
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 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 | ' |
Preferred Stock | Series E Preferred Stock | ' | ' |
Class of Stock [Line Items] | ' | ' |
Number of preferred stock, shares authorized | 2,000,000 | ' |
Preferred stock, shares issued | 409,000 | ' |
Preferred stock, shares outstanding | 409,000 | ' |
Stockholders_Equity_Cumulative
Stockholders' Equity - Cumulative convertible preferred stock (Details Textual 1) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 12, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Series E Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | |||
Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | ||||
Minimum | Maximum | Minimum | Maximum | |||||||||
Dividends Payable [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated value of the Preferred per share | ' | ' | ' | $4 | $3.20 | ' | $10 | ' | ' | $10 | ' | ' |
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 our 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. | ' | ' | 'The Series E Preferred Stock entitles the holder to cumulative dividends (subject to the prior dividend rights of the Company's Series D Preferred Stock), payable quarterly, at an annual rate of (i) 10% of the Stated Value during the three year period commencing on the date of issue, and (ii) 14% of the Stated Value commencing three years after the date of issue. We may, at our option (subject to certain conditions), pay dividends in PIK shares, in which event the applicable dividend rate will be 14% and the number of shares issuable as a dividend 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 our common stock for the five prior consecutive trading days. | ' | ' |
Dividend Rate | ' | ' | ' | 8.00% | 8.00% | ' | 8.00% | ' | ' | ' | ' | ' |
Conversion Price Per Share | ' | ' | $0.50 | $4 | $3.20 | ' | $1 | $0.71 | ' | ' | ' | ' |
Shares designated | 10,000,000 | 10,000,000 | ' | 500,000 | 500,000 | 5,000,000 | 4,000,000 | ' | ' | 2,000,000 | ' | ' |
Par value of preferred stock (in dollars per share) | $0.00 | $0.00 | ' | $0.00 | $0.00 | ' | $0.00 | ' | ' | $0.00 | ' | ' |
Liquidation Price Per Share | ' | ' | ' | ' | ' | ' | $10 | ' | ' | $10 | ' | ' |
Partial liquidated damage percentages of purchase price paid by each investor | ' | ' | ' | ' | ' | ' | ' | 0.10% | 0.60% | ' | 0.10% | 0.60% |
Minimum closing price of common stock | ' | ' | ' | ' | ' | ' | $2 | ' | ' | $1.35 | ' | ' |
Minimum average daily trading volume | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | 10,000 | ' | ' |
Redemption purchase price per share | ' | ' | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' |
Contingent beneficial conversion feature recorded as coversion price | ' | ' | ' | ' | ' | ' | $1,300,000 | ' | ' | ' | ' | ' |
Liquidated damages | ' | ' | ' | ' | ' | ' | $18,000 | ' | ' | ' | ' | ' |
Stockholders_Equity_Issuance_a
Stockholders' Equity - Issuance activity (Details Textual 2) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||
Aug. 15, 2013 | Nov. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Nov. 30, 2013 | |
Warrants | Warrants | Warrants | Cumulative Convertible Preferred Stock | Cumulative Convertible Preferred Stock | ||
Series D Preferred Stock | Series E Preferred Stock | |||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' |
Number of preferred stock issued for cash consideration | ' | ' | ' | ' | 704,200 | 409,000 |
Value of preferred stock issued for cash consideration | ' | ' | ' | ' | $7,042,000 | $4,090,000 |
Issuance cost | ' | ' | ' | ' | 1,374,000 | 875,000 |
Placement fees | ' | ' | ' | ' | 879,000 | 327,000 |
Legal and other expenses | ' | ' | ' | ' | 141,000 | 270,000 |
Number of common stock called for warrants | ' | 818,000 | ' | 704,200 | ' | ' |
Exercise price of warrants | ' | 0.55 | 0.82 | 1.1 | ' | ' |
Estimated fair value of warrants | ' | $278,000,000 | ' | $354,000 | ' | ' |
Stock price | $1 | $0.47 | ' | $0.80 | ' | ' |
Expected term | '5 years | '2 years 6 months | ' | ' | '2 years 6 months | ' |
Risk-free interest rate | 1.60% | 0.44% | ' | ' | 0.13% | ' |
Expected volatility | 134.10% | 143.00% | ' | ' | 126.00% | ' |
Dividend yield | ' | 0.00% | ' | ' | 0.00% | ' |
Stockholders_Equity_Common_Sto
Stockholders' Equity - Common Stock (Details Textual 3) (USD $) | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Aug. 15, 2013 | Dec. 31, 2013 | Nov. 15, 2012 | Dec. 10, 2013 | Nov. 12, 2013 | Apr. 26, 2013 | Aug. 15, 2013 | Aug. 21, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2012 | Jun. 04, 2012 | Dec. 31, 2013 | Apr. 26, 2013 | ||
Purchase Agreement | Purchase Agreement | Series C Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | Common Stock | Investor Warrants | Investor Warrants | Placement agent warrants | Warrants | Illume Mobile | Apex | Apex | Apex | ||||
Sigma Agreement | Purchase Agreement | Purchase Agreement | Common Stock | Common Stock | Common Stock | Common Stock | |||||||||||
Sigma Opportunity Fund II, LLC and Sigma Capital Advisors, LLC | Asset purchase agreement | Selling, General and Administrative Expenses | Selling, General and Administrative Expenses | ||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Number of shares issued as consideration for acquisition related expenses | ' | ' | ' | ' | 175,364 | ' | ' | 70,207 | ' | ' | ' | ' | 617,284 | 325,000 | ' | ' | |
Value of shares issued as consideration for acquisition related expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $698,000 | ' | $341,000 | $83,000 | |
Aggregate number of common stock sold | ' | ' | ' | ' | ' | ' | ' | ' | 2,594,000 | 333,333 | ' | ' | ' | ' | ' | ' | |
Sale of stock price per Share | ' | ' | ' | ' | ' | ' | ' | ' | $0.60 | $0.60 | ' | ' | ' | ' | ' | ' | |
Exercise price of warrants | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | 0.6 | ' | ' | ' | ' | ' | |
Purchase of aggregate shares by investor warrants sold | ' | ' | ' | ' | ' | ' | ' | ' | 1,297,000 | ' | ' | ' | ' | ' | ' | ' | |
Term of warrants | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | |
Gross proceeds from private placement | 403,000 | ' | ' | ' | ' | ' | ' | ' | 1,556,400 | 200,000 | ' | ' | ' | ' | ' | ' | |
Investor warrants sold | ' | ' | ' | ' | ' | ' | ' | ' | ' | 166,667 | ' | ' | ' | ' | ' | ' | |
Common stock purchase price per share, Minimum | ' | ' | ' | $0.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock deemed dividend | 263,000 | ' | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 100,000,000 | 9,300,439 | ' | ' | ' | 585,467 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Conversion Price Per Share | ' | ' | ' | ' | ' | ' | $0.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Placement agent commision, Value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 175,600 | ' | ' | ' | ' | ' | |
Placement agent fees percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | |
Common stock purchased by Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 292,733 | ' | ' | ' | ' | ' | |
Gross proceeds from warrants offering | 1,099,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' | ' | ' | ' | |
Issuance costs, Net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | |
Change in fair value of warrants | -296,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | |
Balance of warrant liability recorded as equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | |
Common stock issued as an antidilution adjustment | ' | $173,000 | ' | ' | $174,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | The Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2012 has been restated as described in Note 2 herein. |
StockholdersEquity_Warrants_De
StockholdersEquity - Warrants (Details Textual 4) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 15, 2013 | Aug. 21, 2013 |
Warrant [Member] | Warrant [Member] | Investor Warrants | Placement agent warrants | |||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Inputs, Level 3 [Member] | |||||
Class Of Warrant Or Right [Line Items] | ' | ' | ' | ' | ' | ' |
Issuance of warrants | ' | ' | ' | ' | 1,463,667 | 292,733 |
Fair value of warrants accounted for as a liability | ' | ' | $1,099 | ' | ' | ' |
Change in fair value of warrants | -296 | ' | -296 | ' | ' | ' |
Fair Value, Net Asset (Liability) | ' | ' | $803 | ' | ' | ' |
ESOP_Plan_Summary_of_ESOP_shar
ESOP Plan - Summary of ESOP shares (Details) (Employee Stock Ownership Plan (the "ESOP")) | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Stock Ownership Plan (the "ESOP") | ' | ' |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ' | ' |
Allocated shares | 1,128,303 | 1,017,619 |
Shares committed for allocation | 110,684 | 110,684 |
Unallocated shares | 442,736 | 553,420 |
Total ESOP shares | 1,681,723 | 1,681,723 |
ESOP_Plan_Detail_Textual
ESOP Plan (Detail Textual) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2003 | Dec. 31, 2003 |
Employee Stock Ownership Plan (the "ESOP") | Employee Stock Ownership Plan (the "ESOP") | |||
Former stockholder | ||||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ' | ' | ' | ' |
Amount loaned to ESOP | ' | ' | $1,950,000 | ' |
Number of shares acquired | ' | ' | 564,195 | 1,128,558 |
Value of shares acquired | ' | ' | 650,000 | 1,300,000 |
Interest rate | ' | ' | 5.25% | ' |
Term of ESOP note | ' | ' | '15 years | ' |
Unearned ESOP shares | $629,000 | $767,000 | ' | ' |
ESOP_Plan_Detail_Textual_1
ESOP Plan (Detail Textual 1) (Employee Stock Ownership Plan (the "ESOP"), USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Stock Ownership Plan (the "ESOP") | ' | ' |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ' | ' |
Term of completed year of service | '3 months | ' |
Number of period for vesting | '2 years | ' |
Fully Vesting period | '6 years | ' |
Minimum amount of ESOP contributions | $130,000 | ' |
Contribution expense | 178,000 | 178,000 |
ESOP principal payment | 138,000 | 131,000 |
ESOP interest expenses | 40,000 | 47,000 |
Shares of unallocated company stock | 442,736 | 553,420 |
Number of allocated company stock | 1,128,303 | 1,017,619 |
ESOP compensation expenses | $133,000 | $173,000 |
Fair value of the shares | $0.84 | $1.15 |
ESOP_Plan_Detail_Textual_2
ESOP Plan (Detail Textual 2) (USD $) | Aug. 15, 2013 | Nov. 08, 2011 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Stock Ownership Plan (the "ESOP") | Employee Stock Ownership Plan (the "ESOP") | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | ' | ' | ' | ' |
The fair value of the unallocated shares | ' | ' | $235,000 | $443,000 |
Market Price Per Share (in dollars per share) | $0.69 | $1.33 | $0.53 | $0.80 |
Stock_Option_Plan_Summary_of_s
Stock Option Plan - Summary of status of Plans (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
2010 Stock Option Plan (the "Plan") | 2010 Stock Option Plan (the "Plan") | 2010 Stock Option Plan (the "Plan") | ||
Number Of Options Available For Grant [Roll Forward] | ' | ' | ' | ' |
Options Available for Grant, January 1, 2013 | 455,495 | ' | 455,495 | 298,037 |
Options Available for Grant, Granted | -260,000 | ' | ' | ' |
Options Available for Grant, Exercised | ' | ' | ' | ' |
Options Available for Grant, Forfeited | ' | ' | ' | ' |
Options Available for Grant, December 31, 2013 | 195,495 | ' | 455,495 | 298,037 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' | ' |
Options Outstanding, January 1, 2013 | 544,505 | 804,505 | ' | ' |
Options Outstanding, Granted | 260,000 | ' | ' | ' |
Options Outstanding, Exercised | ' | ' | ' | ' |
Options Outstanding, Forfeited | ' | ' | ' | ' |
Options Outstanding, December 31, 2013 | 804,505 | 804,505 | ' | ' |
Exercisable options at December 31, 2013 | 710,437 | 710,437 | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award, Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' |
Weighted - Average Exercise Price, January 1, 2013 | $1.82 | $1.39 | $1.82 | ' |
Weighted - Average Exercise Price, Granted | $0.50 | ' | ' | ' |
Weighted - Average Exercise Price, Exercised | ' | ' | ' | ' |
Weighted - Average Exercise Price, Forfeited | ' | ' | ' | ' |
Weighted - Average Exercise Price, December 31, 2013 | $1.39 | $1.39 | $1.82 | ' |
Weighted Average Exercise Price, Exercisable options at December 31, 2012 | $1.29 | $1.29 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' | ' | ' | ' |
Aggregate Intrinsic Value, December 31, 2013 | ' | ' | ' | ' |
Aggregate Intrinsic Value, Exercisable options at December 31, 2013 | ' | ' | ' | ' |
Stock_Option_Plan_Summary_of_i
Stock Option Plan - Summary of information about stock options outstanding (Details 1) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 804,505 | 544,505 |
Options Outstanding Weighted Average Exercise Price | $1.39 | $1.82 |
Number Of Options Exercisable | 710,437 | ' |
Options Exercisable Weighted Average Exercise Price | $1.29 | ' |
2010 Stock Option Plan (the "Plan") | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 804,505 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '3 years 2 months 1 day | ' |
Options Outstanding Weighted Average Exercise Price | $1.39 | $1.82 |
Number Of Options Exercisable | 710,437 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '2 years 7 months 24 days | ' |
Options Exercisable Weighted Average Exercise Price | $1.29 | ' |
2010 Stock Option Plan (the "Plan") | Exercise Price $ 0.50 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 260,000 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '2 years 10 months 24 days | ' |
Options Outstanding Weighted Average Exercise Price | $0.50 | ' |
Number Of Options Exercisable | 260,000 | ' |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '2 years 10 months 24 days | ' |
Options Exercisable Weighted Average Exercise Price | $0.50 | ' |
2010 Stock Option Plan (the "Plan") | Exercise Price $ 1.33 - 2.03 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 365,620 | 178,885 |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '1 year 3 months 29 days | ' |
Options Outstanding Weighted Average Exercise Price | $1.65 | $2.16 |
Number Of Options Exercisable | 359,524 | 60,460 |
Options Exercisable Weighted Average Remaining Contractual Life (Years) | '1 year 3 months 18 days | ' |
Options Exercisable Weighted Average Exercise Price | $1.64 | $1.37 |
Minimum Range of Exercise Prices | $1.33 | ' |
Maximum Range of Exercise Prices | $2.03 | ' |
2010 Stock Option Plan (the "Plan") | Exercise price $ 2.06 - 4.34 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number Of Options Outstanding | 178,885 | ' |
Options Outstanding Weighted Average Remaining Contractual Life (Years) | '7 years 4 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 3 months 15 days | ' |
Options Exercisable Weighted Average Exercise Price | $2.16 | ' |
Minimum Range of Exercise Prices | $2.06 | ' |
Maximum Range of Exercise Prices | $4.34 | ' |
Stock_Option_Plan_Weightedaver
Stock Option Plan - Weighted-average assumptions (Details 2) | 0 Months Ended | 12 Months Ended |
Aug. 15, 2013 | Dec. 31, 2013 | |
2010 Stock Option Plan (the "Plan") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '5 years | '1 year 6 months |
Expected volatility | 134.10% | 153.61% |
Dividend yield | ' | 0.00% |
Risk-free interest rate | 1.60% | 0.22% |
Stock_Option_Plan_Detail_Textu
Stock Option Plan (Detail Textual) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Samplings | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of common stock, shares authorized | 100,000,000 | 100,000,000 |
2010 Stock Option Plan (the "Plan") | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Term of stock option granted | '10 years | ' |
Percentage of voting power of common stock | 10.00% | ' |
Vested period of stock option | '5 years | ' |
Percentage of exercise price to market value of common stock | 100.00% | ' |
Total fair value of stock option awards vested | $122,000 | $76,000 |
Fair value of options granted to employees | 79,000 | ' |
Number of expected sampling volatility of companies | 5 | ' |
Weighted-average vesting period | '2 years 5 months 12 days | ' |
Maximum percentage of fair market of a share of common stock | 110.00% | ' |
Unrecognized estimated employee compensation cost | 98,000 | ' |
Weighted-average fair value on the grant date of options granted to employees | $0.30 | ' |
2010 Stock Option Plan (the "Plan") | Selling, General and Administrative Expenses | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Employee stock-based compensation cost | $125,000 | $57,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Aggregate remaining future minimum payments under leases (Details) (USD $) | Dec. 31, 2013 |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 | $558 |
2015 | 529 |
2016 | 404 |
2017 | 304 |
2018 | 158 |
Thereafter | 142 |
Operating leases, future minimum payments receivable | $2,095 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||
31-May-13 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2012 | 30-May-12 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | Apex Earn Out Obligation | Apex Earn Out Obligation Note. | Apex Earn Out Obligation Note. | Foothill Ranch, California | Irvine, California | Shelton Connecticut | Edison New Jersey | Alpharetta Georgia | Alpharetta Georgia One | Apex | Illume Mobile | |
sqft | CAD | CAD | USD ($) | sqft | USD ($) | sqft | USD ($) | sqft | USD ($) | Burlington Ontario Canada | Tulsa, Oklahoma | |||
Installment | sqft | sqft | sqft | CAD | sqft | |||||||||
sqft | ||||||||||||||
Operating Leased Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Leases of office space | 6,358 | ' | ' | ' | ' | ' | 7,500 | 10,325 | 4,100 | 6,800 | 5,100 | 4,800 | 7,800 | 10,000 |
Rental expense | $6,000 | $674,000 | $549,000 | ' | ' | ' | ' | $13,000 | ' | $4,200,000 | ' | $13,000 | 10,000,000 | ' |
Lease expiration date | 31-Aug-20 | ' | ' | ' | ' | ' | 31-Jul-12 | 31-Jul-17 | 30-Apr-15 | 31-Dec-14 | 31-Jul-18 | 30-Apr-12 | 31-Mar-16 | 30-Sep-13 |
Extended lease term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' |
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 | ' | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' |
Threashold EBITDA limit for earn out to former owner of Apex | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum of earn out payable to former owner of Apex | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details Textual 1) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Jun. 04, 2012 | Jun. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2013 | Aug. 31, 2013 | |
USD ($) | USD ($) | Apex | Apex | Apex | Apex | Apex | Apex | |
USD ($) | CAD | CAD | Convertible Preferred stock | Convertible Preferred stock | Convertible Preferred stock | |||
Series D Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | ||||||
USD ($) | USD ($) | 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 | ' | ' | ' | 7,042,000 | 4,090,000 | 1,756,000 |
Amount paid in consideration, Apex shares acquired | ' | ' | 4,801,000 | 5,000,000 | ' | ' | ' | ' |
Undiscounted payment in consideration for Apex achieving certain levels of EBITDA | ' | ' | 3,360,700 | 3,500,000 | ' | ' | ' | ' |
Fair value of bonus to be paid to CEO | ' | ' | ' | ' | 160,000 | ' | ' | ' |
Fair value of bonus to be paid to CEO, Accrued earn out recognized | ' | ' | ' | ' | 160,000 | ' | ' | ' |
Fair value earn out payment due | $1,600,000 | ' | ' | ' | ' | ' | ' | ' |
Profit_Sharing_Plan_Detail_Tex
Profit Sharing Plan (Detail Textual) (401(k) Profit Sharing Plan, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
401(k) Profit Sharing Plan | ' | ' |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ' | ' |
Minimum service period required of employees to participate in plan | '90 days | ' |
Minimum required age of employees to participate in ESOP | '21 years | ' |
Contributions to participants' annual compensation | 25.00% | ' |
Defined contribution plan, description | 'The Company matches 100% of employee contributions up to 1% of eligible employee compensation. | ' |
Percentage of employee contributions | 100.00% | ' |
Base percentage of eligible employee compensation | 1.00% | ' |
Employer contributions to the 401k Plan | $220,000 | $263,000 |
Related_Parties_Sales_of_Serie
Related Parties - Sales of Series D Preferred Stock to certain related parties (Details) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||
Aug. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 15, 2011 | Dec. 31, 2013 | Nov. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Series D Preferred Stock | Series D Preferred Stock | Common Stock | Common Stock | Series E Preferred Stock | Series E Preferred Stock | David Rifkin | David Rifkin | Lawrence Yelin | Jay Sheehy | Robert Schroeder | Robert Schroeder | Nicholas R. Toms | Nicholas R. Toms | Nicholas R. Toms | Paul E. Ross | Ralph S. Hubregsen | ||
Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | Series E Preferred Stock | Series D Preferred Stock | Common Stock | Series E Preferred Stock | Series D Preferred Stock | Series D Preferred Stock | ||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued in exchange for services (in shares) | 166,667 | 17,200 | 21,200 | 39,063 | 200,000 | 4,500 | 4,500 | 1,000 | 21,200 | 2,200 | 1,000 | 4,000 | 2,000 | 10,000 | 200,000 | 2,500 | 2,000 | 1,000 |
Related_Parties_Detail_Textual
Related Parties (Detail Textual) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 5 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 10, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 04, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Jul. 23, 2012 | |
Private placement | Apex | Series D Preferred Stock | Series D Preferred Stock | Series E Preferred Stock | Series E Preferred Stock | Chief Financial Officer | Chief Financial Officer | Chief Financial Officer | Separation Agreement | Separation Agreement | Separation Agreement | Separation Agreement | ||||
Note Purchase Agreement (the "Purchase Agreement") | Series D Preferred Stock | Chief Financial Officer | Chief Financial Officer | Chief Financial Officer | Chief Financial Officer | |||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of interest accrued on outstanding accounts payable balance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | 12.00% | ' | ' | ' | ' | ' |
Interest expense to related parties | ' | $0 | $114,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due from related party | ' | 188,000 | 202,000 | ' | 188,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount paid per month | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 205,000 | ' | ' | ' |
Amount payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 891,000 |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' |
Payment due from first day of each month beginning may 1 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,000 | ' |
Rent expense | ' | $130,000 | $84,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued in exchange for services (in shares) | 166,667 | ' | ' | 33,333 | ' | 17,200 | 21,200 | 4,500 | 4,500 | ' | ' | 2,000 | ' | ' | ' | ' |