Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 11, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | STG Group, Inc. | |
Entity Central Index Key | 1,583,513 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | STGG | |
Entity Common Stock, Shares Outstanding | 16,163,071 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 7,689 | $ 8,503 |
Contract receivables, net | 30,784 | 32,824 |
Investments held in Rabbi Trust | 259 | 4,517 |
Prepaid expenses and other current assets | 1,935 | 1,357 |
Deferred income taxes | 0 | 2,415 |
Total current assets | 40,667 | 49,616 |
Property and equipment, net | 1,288 | 1,698 |
Goodwill | 113,589 | 113,589 |
Intangible assets, net | 33,735 | 38,988 |
Other assets | 423 | 432 |
Total assets | 189,702 | 204,323 |
Current Liabilities | ||
Long-term debt, current portion | 4,088 | 2,555 |
Accounts payable and accrued expenses | 10,803 | 9,605 |
Accrued payroll and related liabilities | 7,236 | 8,441 |
Income taxes payable | 0 | 561 |
Billings in excess of revenue recognized | 185 | 304 |
Deferred compensation plan | 259 | 4,517 |
Deferred rent | 203 | 81 |
Total current liabilities | 22,774 | 26,064 |
Long-term debt, net of current portion and discount | 70,442 | 72,447 |
Deferred income taxes | 7,083 | 12,630 |
Deferred rent | 788 | 837 |
Total liabilities | 101,087 | 111,978 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock; $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock; $0.0001 par value; 100,000,000 shares authorized; 16,163,071 and 16,107,071 shares issued and outstanding as of 09/30/2016 and 12/31/2015 respectively | 2 | 2 |
Additional paid-in capital | 101,065 | 100,547 |
(Accumulated deficit) | (12,452) | (8,204) |
Total stockholders’ equity | 88,615 | 92,345 |
Total liabilities and stockholder's equity | $ 189,702 | $ 204,323 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 | Nov. 23, 2015 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 16,163,071 | 16,107,071 | |
Common Stock, Shares, Outstanding | 16,163,071 | 16,107,071 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Contract revenue | $ 43,346 | $ 124,870 | ||
Direct expenses | 29,994 | 85,130 | ||
Gross profit | 13,352 | 39,740 | ||
Indirect and selling expenses | 14,281 | 40,238 | ||
Impairment of goodwill | 0 | 0 | ||
Impairment of other intangible assets | 0 | 0 | ||
Operating Expenses, Total | 14,281 | 40,238 | ||
Operating (loss) income | (929) | (498) | ||
Other income (expense) | ||||
Other income (expense), net | 20 | (373) | ||
Interest expense | (2,156) | (6,468) | ||
Other (expense) income, net | (2,136) | (6,841) | ||
(Loss) income before income taxes | (3,065) | (7,339) | ||
Income tax benefit | (1,603) | (3,091) | ||
Net (loss) income | $ (1,462) | $ (4,248) | ||
Net (Loss) income per share available to common stockholders | ||||
Basic and diluted | $ (0.09) | $ (0.26) | ||
Weighted average number of common shares outstanding | ||||
Basic and diluted | 16,118,271 | 16,111,133 | ||
Predecessor [Member] | ||||
Contract revenue | $ 50,081 | $ 149,138 | ||
Direct expenses | 34,721 | 102,224 | ||
Gross profit | 15,360 | 46,914 | ||
Indirect and selling expenses | 11,718 | 40,933 | ||
Impairment of goodwill | 2,064 | 2,064 | ||
Impairment of other intangible assets | 906 | 906 | ||
Operating Expenses, Total | 14,688 | 43,903 | ||
Operating (loss) income | 672 | 3,011 | ||
Other income (expense) | ||||
Other income (expense), net | (398) | (259) | ||
Interest expense | (25) | (43) | ||
Other (expense) income, net | (423) | (302) | ||
(Loss) income before income taxes | 249 | 2,709 | ||
Income tax benefit | 0 | 0 | ||
Net (loss) income | $ 249 | $ 2,709 | ||
Net (Loss) income per share available to common stockholders | ||||
Basic and diluted | $ 224 | $ 2,438 | ||
Weighted average number of common shares outstanding | ||||
Basic and diluted | 1,111 | 1,111 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash Flows From Operating Activities | ||
Net (loss) income | $ (4,248) | |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Deferred taxes | (3,132) | |
Bad debt recoveries | (210) | |
Lease termination costs | 0 | |
Loss on disposal of property and equipment | 0 | |
Deferred rent | 73 | |
Amortization of deferred financing costs | 1,061 | |
Depreciation and amortization of property and equipment | 418 | |
Amortization of intangible assets | 5,253 | |
Impairment of goodwill | 0 | |
Impairment of other intangible assets | 0 | |
Stock-based compensation | 518 | |
(Increase) decrease in: | ||
Contract receivables | 2,250 | |
Prepaid expenses and other current assets | (578) | |
Other assets | 9 | |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 637 | |
Accrued payroll and related liabilities | (1,205) | |
Deferred compensation plan | (3,871) | |
Billings in excess of revenue recognized | (119) | |
Net cash (used in) provided by operating activities | (3,144) | |
Cash Flows From Investing Activities | ||
Proceeds from sales of investments held in Rabbi Trust | 3,871 | |
Purchases of property and equipment | (8) | |
Net cash provided by (used in) investing activities | 3,863 | |
Cash Flows From Financing Activities | ||
Net repayments of line-of-credit | 0 | |
Decrease in outstanding checks in excess of bank balance | 0 | |
Payments on long-term debt | (1,533) | |
Distributions to stockholders | 0 | |
Net cash used in financing activities | (1,533) | |
Net (decrease) increase in cash and cash equivalents | (814) | |
Cash and Cash Equivalents | ||
Beginning of period | 8,503 | |
Ending of period | 7,689 | |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 5,380 | |
Cash paid for income taxes | 613 | |
Supplemental Disclosures of Non-Cash Investing Activities | ||
Change in investments held in Rabbi Trust | (387) | |
Change in deferred compensation plan | $ 387 | |
Predecessor [Member] | ||
Cash Flows From Operating Activities | ||
Net (loss) income | $ 2,709 | |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||
Deferred taxes | 0 | |
Bad debt recoveries | 0 | |
Lease termination costs | 703 | |
Loss on disposal of property and equipment | 1,125 | |
Deferred rent | (123) | |
Amortization of deferred financing costs | 0 | |
Depreciation and amortization of property and equipment | 761 | |
Amortization of intangible assets | 594 | |
Impairment of goodwill | 2,064 | |
Impairment of other intangible assets | 906 | |
Stock-based compensation | 0 | |
(Increase) decrease in: | ||
Contract receivables | 20,742 | |
Prepaid expenses and other current assets | 952 | |
Other assets | 17 | |
Increase (decrease) in: | ||
Accounts payable and accrued expenses | 7,606 | |
Accrued payroll and related liabilities | (30) | |
Deferred compensation plan | 0 | |
Billings in excess of revenue recognized | 1 | |
Net cash (used in) provided by operating activities | 38,027 | |
Cash Flows From Investing Activities | ||
Proceeds from sales of investments held in Rabbi Trust | 0 | |
Not receivable issued to stockholder | (2,500) | |
Purchases of property and equipment | (1,371) | |
Net cash provided by (used in) investing activities | (3,871) | |
Cash Flows From Financing Activities | ||
Net repayments of line-of-credit | (13,520) | |
Decrease in outstanding checks in excess of bank balance | (6,141) | |
Payments on long-term debt | 0 | |
Distributions to stockholders | (9,021) | |
Net cash used in financing activities | (28,682) | |
Net (decrease) increase in cash and cash equivalents | 5,474 | |
Cash and Cash Equivalents | ||
Beginning of period | 340 | |
Ending of period | 5,814 | |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 16 | |
Cash paid for income taxes | 0 | |
Supplemental Disclosures of Non-Cash Investing Activities | ||
Change in investments held in Rabbi Trust | (31) | |
Change in deferred compensation plan | $ 31 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies [Text Block] | Note 1. Nature of Business and Significant Accounting Policies STG Group, Inc. (formerly, Global Defense & National Security Systems, Inc. or GDEF) and its subsidiaries (collectively, the Company) was originally incorporated in Delaware on July 3, 2013 as a blank check company, with Global Defense & National Security Holdings LLC (”Global Defense LLC” or the “Sponsor”) as Sponsor, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business combination. On November 23, 2015, the Company consummated its business combination with STG Group Holdings, Inc. (formerly, STG Group, Inc. or “STG Group”) pursuant to the stock purchase agreement, dated as of June 8, 2015, which provided for the purchase of all the capital stock of STG Group by the Company (the “Business Combination”). In connection with the closing of the Business Combination, the Company ceased to be a shell company in accordance with its Amended and Restated Certificate of Incorporation. The Company also changed its name from Global Defense & National Security Systems, Inc. to STG Group, Inc., and the Company’s securities were delisted from The NASDAQ Capital Market. The Company recommenced trading of its common stock under the symbol “STGG” on the OTC Pink Current Information tier of the over-the counter market. The Company’s common stock now trades over-the-counter on the OTCQB. See Note 2 for a further discussion of the Business Combination. The Company provides enterprise engineering, telecommunications, information management and security products and services to the federal government and commercial businesses. Segment information is not presented since all of the Company’s revenue is attributed to a single reportable segment. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For additional information, including the Company’s significant accounting policies, refer to the condensed consolidated financial statements and related footnotes in the Company’s condensed consolidated financial statements for the period from January 1, 2015 through November 23, 2015 and for the period from November 24, 2015 through December 31, 2015 included in the Company’s Annual Report on Form 10K for the year ended December 31, 2015. As a result of the Business Combination, the Company was identified as the acquirer for accounting purposes, and STG Group is the acquiree and accounting predecessor. This determination was based upon an evaluation of facts which included, but was not limited to, consideration of the following: 1) the relative voting rights of the stockholders in the combined entity after the Business Combination; 2) the composition of the board of directors of the combined entity; 3) the composition of the senior management team of the combined entity; 4) and the cash consideration that was transferred by the Company to the acquiree’s stockholders. Based upon this evaluation, the preponderance of facts supported the conclusion that the Company was the accounting acquirer. The Company’s financial statement presentation distinguishes a “Predecessor” for STG Group for the periods up to and prior to November 23, 2015 (the “Closing Date”). The Company was subsequently re-named as STG Group, Inc. and is the “Successor” for periods after the Closing Date, which includes the consolidation of STG Group subsequent to the Business Combination. The acquisition was accounted for as a business combination using the acquisition method of accounting, and Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. As a result of the application of the acquisition method of accounting as of the effective date of the acquisition, the financial statements for the Predecessor period and for the Successor period are presented on a different basis and, therefore, are not comparable. In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and nine months ended September 30, 2016 and 2015, are not necessarily indicative of the results that may be expected for the entire fiscal year. Figures are expressed in thousands of dollars unless otherwise indicated. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. Actual results could differ from those estimates. Significant estimates embedded in the condensed consolidated financial statements for the periods presented include revenue recognition on fixed-price contracts, the allowance for doubtful accounts, the valuation and useful lives of intangible assets, the length of certain customer relationships, useful lives of property, plant and equipment, valuation of a Rabbi Trust and related deferred compensation liability. Estimates and assumptions are also used when determining the allocation of the purchase price in a business combination to the fair value of assets and liabilities and determining related useful lives. Revenue is recognized when persuasive evidence of an arrangement exists, services have been rendered or goods delivered, the contract price is fixed or determinable and collectability is reasonably assured. Revenue associated with work performed prior to the completion and signing of contract documents is recognized only when it can be reliably estimated and realization is probable. The Company bases its estimates on previous experiences with the customer, communications with the customer regarding funding status and its knowledge of available funding for the contract. Revenue on cost-plus-fee contracts is recognized to the extent of costs incurred plus a proportionate amount of the fee earned. The Company considers fixed fees under cost-plus-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. The Company considers performance-based fees, including award fees, under any contract type to be earned when it can demonstrate satisfaction of performance goals, based upon historical experience, or when the Company receives contractual notification from the customer that the fee has been earned. Revenue on time-and-materials contracts is recognized based on the hours incurred at the negotiated contract billing rates, plus the cost of any allowable material costs and out-of-pocket expenses. Revenue on fixed-price contracts is primarily recognized using the proportional performance method of contract accounting. Unless it is determined as part of the Company’s regular contract performance review that overall progress on a contract is not consistent with costs expended to date, the Company determines the percentage completed based on the percentage of costs incurred to date in relation to total estimated costs expected upon completion of the contract. Revenue on other fixed-price service contracts is generally recognized on a straight-line basis over the contractual service period, unless the revenue is earned, or obligations fulfilled, in a different manner. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined and are recorded as forward loss liabilities in the condensed consolidated financial statements. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and revenue and are recognized in the period in which the revisions are determined. Multiple agencies of the federal government directly or indirectly provided the majority of the Company's contract revenue during the nine months ended September 30, 2016 and 2015. For the nine months ended September 30, 2016 and 2015, there were two federal agency customers that each provided revenue in excess of 10 79 76 Federal government contract costs, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency. Contract revenue has been recorded in amounts that are expected to be realized upon final settlement. Costs of revenue include all direct contract costs, as well as indirect overhead costs and selling, general and administrative expenses that are allowable and allocable to contracts under federal procurement standards. Costs of revenue also include costs and expenses that are unallowable under applicable procurement standards and are not allocable to contracts for billing purposes. Such costs and expenses do not directly generate revenue, but are necessary for business operations. For the three and nine months ended September 30, 2016 and 2015, there was one vendor that comprised approximately 10 11 11 The Company has investments in mutual funds held in a Rabbi Trust that are classified as trading securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. The securities are classified as trading securities because they are held for resale in anticipation of short-term (generally 90 days or less) fluctuations in market prices. The trading securities are stated at fair value. Realized and unrealized gains and losses and other investment income are included in other income in the accompanying consolidated statements of operations. Contract receivables are generated primarily from prime and subcontracting arrangements with federal governmental agencies. Billed contract receivables represent invoices that have been prepared based on contract terms and sent to the customer. Billed accounts receivable are considered past due if the invoice has been outstanding more than 30 days. The Company does not charge interest on accounts receivable; however, federal governmental agencies may pay interest on invoices outstanding more than 30 days. The Company records interest income from federal governmental agencies when received. All contract receivables are on an unsecured basis. Unbilled amounts represent costs and anticipated profits awaiting milestones to bill, contract retainages, award fees and fee withholdings, as well as amounts currently billable. In accordance with industry practice, contract receivables relating to long-term contracts are classified as current, even though portions of these amounts may not be realized within one year. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Management has recorded an allowance for contract receivables that are considered to be uncollectible. Both billed and unbilled receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. The Company accounts for the valuation of long-lived assets, including amortizable intangible assets, under authoritative guidance issued by the Financial Accounting Standards Board (FASB), which requires that long-lived assets and certain intangible assets be reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived assets is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the assets. 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 estimated fair value of the assets. No indicators of impairment were identified for the nine month period ended September 30, 2016. No impairment losses were recorded during the nine month period ending September 30, 2016. Intangible assets of the Company are comprised of customer relationships and a trade name acquired as a result of the Business Combination described further in Note 2. The Company determined that the customer relationships and trade name represent finite-lived intangible assets with useful lives of eight to fifteen years, respectively. The assets are being amortized proportionately over the term of their useful lives based on the estimated economic benefit derived over the course of the asset life. The Company records the excess of the purchase price of an acquired company over the fair value of the identifiable net assets acquired as goodwill. In accordance with authoritative guidance issued by the FASB, entities can elect to use a qualitative approach to test goodwill for impairment. Under this approach, the Company performs a qualitative assessment (Step zero) to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than the carrying value. If the fair value of the reporting unit is less than the carrying value of the reporting unit, the Company is required to perform a goodwill impairment test using a two-step approach, which is performed at the reporting unit level. In the second step, the implied value of the goodwill is estimated at the fair value of the reporting unit, less the fair value of all other tangible and identifiable intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in the amount equal to that excess, not to exceed the carrying amount of the goodwill. If the fair value of the reporting unit is not less than the carrying value of the reporting unit, the two-step goodwill test is not required. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur and determination of the weighted-average cost of capital. This discounted cash flow analysis is corroborated by top-down analysis, including a market assessment of enterprise value. The Company has elected to perform its annual analysis on October 1 each year at the reporting unit level. As of the Closing Date of the Business Combination, the Company determined that there was one reporting unit and as a result of acquisition accounting for the Business Combination, the carrying value of the reporting unit was equal to its fair value on the Closing Date. No triggering events occurred during the nine month period ending September 30, 2016 requiring an interim impairment test. material. Income taxes: In connection with the Business Combination, STG Group (Predecessor) converted from a Subchapter S Corporation to a C Corporation. Prior to this, STG Group, excluding STG Netherlands and STG Doha, was treated as an S corporation under Subchapter S of the Internal Revenue Code. Therefore, in lieu of corporate income taxes, the Predecessor stockholder separately accounted for his pro-rata share of STG Group’s income, deductions, losses and credits. The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes In accordance with authoritative guidance on accounting for uncertainty in income taxes issued by the FASB, management has evaluated the Company’s tax positions and has concluded that the Company has taken no uncertain tax positions that require adjustment to the quarterly condensed consolidated financial statements to comply with the provisions of this guidance. Interest and penalties related to tax matters are recognized in expense. There was no accrued interest or penalties recorded during the three and nine months ended September 30, 2016 and 2015. The carrying value of the Company’s cash and cash equivalents, contract receivables, line-of-credit, accounts payable and other short-term liabilities are believed to approximate fair value as of September 30, 2016 and December 31, 2015, respectively, because of the relatively short duration of these instruments. The Company also assessed long-term debt and determined that such amounts approximated fair value primarily since its terms and interest approximate current market terms and was negotiated with an unrelated third party lender. The Company considers the inputs related to these estimates to be Level 2 fair value measurements. Certain assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction on the measurement date. The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market. When no principal market exists, the most advantageous market is used. This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid. Fair value is based on assumptions market participants would make in pricing the asset or liability. Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available. When such prices or inputs are not available, the reporting entity should use valuation models. The Company’s assets recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. Fair value measurement standards require an entity to maximize the use of observable inputs (such as quoted prices in active markets) and minimize the use of unobservable inputs (such as appraisals or other valuation techniques) to determine fair value. The inputs used in measuring fair value are categorized into three levels, as follows: Level 1 Inputs that are based upon quoted prices for identical instruments traded in active markets. Level 2 Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar investments in markets that are not active, or models based on valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the investment. Level 3 Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. As of September 30, 2016 and December 31, 2015, the Company has no financial assets or liabilities that are categorized as Level 3. The Company has investments carried at fair value in mutual funds held in a Rabbi Trust, which is included in investments held in Rabbi Trust on the accompanying consolidated balance sheets. The Company does not measure non-financial assets and liabilities at fair value unless there is an event which requires this measurement. The Company’s assets that are exposed to credit risk consist primarily of cash and cash equivalents, investments held in Rabbi Trust and contract receivables. Cash and cash equivalents are deposited with high-credit, quality financial institutions whose balances may, at times, exceed federally insured limits. The Company has not experienced any losses in such amounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents. Investments held in Rabbi Trust are stated at fair value at each reporting period and are subject to market fluctuations. Contract receivables consist primarily of amounts due from various agencies of the federal government or prime contractors doing business with the federal government. Historically, the Company has not experienced significant losses related to contract receivables and, therefore, believes that the credit risk related to contract receivables is minimal. In April 2015, the FASB issued Accounting Standards Update (ASU) 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs 6.36 0.35 0.71 The Company measures compensation expense for stock based equity awards based on the fair value of the awards on the grant date. Compensation is recognized as expense in the accompanying consolidated statements of operations ratably over the required service period or, for performance based awards, when the achievement of the performance targets become probable. Basic net (loss) income per share available to common shareholders of the Company is calculated by dividing the net (loss) income by the weighted average number of common shares outstanding during the year. Common shares issuable upon exercise of the stock options and future vesting of the restricted stock awards (see Note 12) have not been included in the computation because their inclusion would have had an antidilutive effect for all periods presented. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In June 2014, the FASB issued ASU 2014-12, CompensationStock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, the FASB issued ASU 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) Amendments to the Consolidation Analysis In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes 0.6 9.3 8.7 In February 2016, the FASB issued ASU 2016-05, Leases (Topic 842 In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing (ASU 2016-10) In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 2. Business Combination After the close of business on November 23, 2015, the Company and STG Group completed the Business Combination in which the Company acquired STG Group from its current owner. The purchase price consisted of: (a) $ 68 3.4 8,578,199 445,161 35,000 8.50 5.6 8.50 658,513 2.50 Upon consummation of the Business Combination, the Predecessor changed its name to STG Group Holdings, Inc. and the Company changed its name from Global Defense & National Security Systems, Inc. to STG Group, Inc. The Company has recorded an allocation of the purchase price to the Predecessor’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of the Business Combination date. The calculation of purchase price and purchase price allocation is as follows (in thousands): Cash consideration: Cash consideration $ 68,000 Net working capital and other cash consideration adjustments 3,400 Total cash consideration 71,400 Stock consideration, including Conversion Shares 82,632 Total purchase price $ 154,032 Current assets $ 42,716 Property and equipment 1,745 Goodwill 113,589 Identifiable intangible assets 39,840 Other assets 166 Total assets acquired 198,056 Current liabilities 26,639 Deferred income taxes 11,903 Other long-term liabilities 5,482 Total liabilities assumed 44,024 Total purchase price 154,032 Less cash acquired 2,184 Total purchase price, net of cash acquired $ 151,848 The following unaudited pro forma financial information for the three and nine months ended September 30, 2015, assumes the Business Combination occurred on January 1, 2015, after giving effect to certain adjustments for amortization, interest, and income tax effects. The pro forma information is presented for illustrative purposes only and is not indicative of what actual results would have been if the acquisition had taken place on January 1, 2015, or of future results. The table below summarizes unaudited pro forma results for the three and nine months ended September 30, 2015, (in thousands, except for per share information): (Unaudited ProForma) Three Months Nine Months Ended September 30, Ended September 30, 2015 2015 Contract revenue $ 50,081 $ 149,138 Operating loss (774) (1,326) Net loss (1,953) (4,732) The pro forma adjustments increased amortization and interest expense by $ 1.5 2.1 1.3 The pro forma adjustments increased amortization and interest expense by $ 4.3 6.1 3 There were no adjustments made to the purchase price allocation during the nine months ended September 30, 2016. |
Contract Receivables and Billin
Contract Receivables and Billings in Excess of Revenue Recognized | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | Note 3. Contract Receivables and Billings in Excess of Revenue Recognized Successor September 30, 2016 December 31, 2015 (Unaudited) Billed accounts receivable $ 21,621 $ 27,875 Unbilled accounts receivable 9,229 5,225 30,850 33,100 Less: allowance for doubtful accounts (66) (276) $ 30,784 $ 32,824 Billings in excess of revenue recognized as of September 30, 2016 and December 31, 2015, are comprised primarily of billings from firm fixed-price contacts, where revenue is recognized in accordance with the proportional performance method. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Note 4. Property and Equipment Successor Estimated September 30, 2016 December 31, 2015 Life (Unaudited) Leasehold improvements Life of lease $ 1,324 $ 1,316 Computer hardware and software 1 - 3 years 329 329 Office furniture and equipment 1 - 7 years 110 110 1,763 1,755 Less: accumulated depreciation and amortization (475) (57) $ 1,288 $ 1,698 Depreciation and amortization expense on property and equipment totaled $ 0.14 0.42 0.14 0.76 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Note 5. Intangible Assets Successor September 30, 2016 Estimated Accumulated Life Cost Amortization Net Customer relationships 8 years $ 26,380 $ 4,775 $ 21,605 Trade name 15 years 13,460 1,330 12,130 $ 39,840 $ 6,105 $ 33,735 Identifiable intangible assets as of December 31, 2015, consist of the following (in thousands): Successor December 31, 2015 Estimated Accumulated Life Cost Amortization Net Customer relationships 8 years $ 26,380 $ 698 $ 25,682 Trade name 15 years 13,460 154 13,306 $ 39,840 $ 852 $ 38,988 Amortization expense amounted to $ 1.75 5.3 0.20 0.60 The Company recorded an impairment loss on goodwill for one of their reporting units (Access) of $ 2.06 0.91 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 6. Fair Value Measurements The Company has investments in mutual funds held in a Rabbi Trust which are classified as trading securities and are included in current assets on the accompanying condensed consolidated balance sheets. The Rabbi Trust assets are used to fund amounts the Company owes to key managerial employees under the Company’s non-qualified deferred compensation plan (See Note 9). Based on the nature of the assets held, the Company uses quoted market prices in active markets for identical assets to determine fair values, which apply to Level 1 investments. The mark to market adjustments are recorded in other income, net in the accompanying condensed consolidated statements of operations totaling a nominal gain and a net loss of ($ 0.40 0.40 0.27 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 7. Debt Successor September 30, 2016 December 31, 2015 (Unaudited) Term loan $ 79,707 $ 81,239 Less: debt discount on term loan (5,177) (6,237) Less: current portion (4,088) (2,555) $ 70,442 $ 72,447 Credit Agreement (Successor): In connection with the consummation of the Business Combination, all indebtedness under STG Group’s prior credit facility was repaid in full and the agreement was terminated. The Company replaced the prior credit facility and entered into a new facility (the Credit Agreement) with a different financial lending group. The Credit Agreement provides for (a) a term loan in an aggregate principal amount of $ 81.75 15 90 November 23, 2020 6.36 The principal amount of the term loan amortizes in quarterly installments which increase after each annual period. The quarterly installments range from 0.625 2.500 Advances under the revolving line-of-credit are limited by a borrowing base which may not exceed the lesser of (x) the difference between $ 15 15 The Company is also subject to certain provisions which will require mandatory prepayments of its term loan and has agreed to certain minimums for its fixed charge coverage ratio and consolidated EBITDA and certain maximums for its senior secured leverage ratio, as defined in the Credit Agreement. As of September 30, 2016, the Company did not meet the required consolidated senior secured leverage ratio and minimum consolidated EBITDA. The Company remained in compliance with the Credit Agreement using a provision of the Credit Agreement that allowed us to cure (the "Cure Right") certain covenant non-compliance by issuances of Common Stock for cash and use of the proceeds to reduce the principal balance of the term loan. On November 14, 2016, we entered into Common Stock Purchase Agreements with Simon Lee Management Trust and Phillip E. Lacombe, our President and Chief Operating Officer (collectively, the “Investors”) that provided for the sale to the Investors of 462,778 3.60 1.7 The Credit Agreement also provides that the senior secured leverage ratio will be lowered on December 31, 2016 and that the minimum consolidated EBITDA requirement will be increased on June 30, 2017. If our business performs at the current level through such periods we may not be able to satisfy these covenants. An inability to meet the required covenant levels could have a material adverse impact on us, including the need for us to effect an additional Cure Right or obtain an amendment, waiver, or other changes in the Credit Agreement. The Credit Agreement does not permit us to exercise a Cure Right in consecutive fiscal quarters, more than three fiscal quarters in the aggregate, in no more than two of any four fiscal quarters. The amount allowed under the Cure Right may not exceed $ 2.5 20 5 If we are not able to effect a Cure Right or otherwise obtain an amendment to or waiver under the Credit Agreement, our covenant non-compliance will give rise to an event of default thereunder, in which case the indebtedness under the Credit Agreement could be declared immediately due and payable, which could have a material adverse effect on the Company. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 8. Commitments and Contingencies Legal matters: From time to time the Company may be involved in litigation in the normal course of its business. Management does not expect that the resolution of these matters would have a material adverse effect on the Company’s business, operations, financial condition or cash flows. |
Deferred Compensation Plan
Deferred Compensation Plan | 9 Months Ended |
Sep. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Compensation and Employee Benefit Plans [Text Block] | Note 9. Deferred Compensation Plan The Company maintains a deferred compensation plan (the Deferred Compensation Plan) in the form of a Rabbi Trust, covering key managerial employees of the Company as determined by the Board of Directors. The Deferred Compensation Plan gives certain senior employees the ability to defer all, or a portion, of their salaries and bonuses on a pre-tax basis and invest the funds in marketable securities that can be bought and sold at the employee’s discretion. The future compensation is payable upon either termination of employment or change of control. The liabilities are classified within current liabilities as of September 30, 2016 and December 31, 2015 on the condensed consolidated balance sheets. The assets held in the Rabbi Trust are comprised of mutual funds and are carried at fair value based on the quoted market prices. As of September 30, 2016 and December 31, 2015, the amount payable under the Deferred Compensation Plan was equal to the value of the assets owned by the Company. These assets total $ 0.26 4.52 0.02 0.04 4.11 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 10. Related Party Transactions A company owned by a party related to the majority stockholder of the Company is both a subcontractor to and customer of the Company on various contracts. As of September 30, 2016 and December 31, 2015, amounts due from this entity totaled $ 0.01 0.03 0.02 0.06 0.03 0.06 No amount was due to this entity as of September 30, 2016 and December 31, 2015 for amounts relating to work performed under subcontracts. The Company also recorded no direct costs for the three and nine months ended September 30, 2016 and $ 0.08 0.02 On November 23, 2015, Global Strategies Group (North America) Inc. and the Company entered into a services agreement, pursuant to which the Company may retain Global Strategies Group (North America) Inc. from time to time to perform certain services: corporate development services such as assisting the Company in post-integration matters, regulatory compliance support services, financial services and financial reporting, business development and strategic services, marketing and public relations services, and human resources services. Global Strategies Group (North America) Inc. is an affiliate of both the Company and a Board member. Amounts paid and expensed under this agreement during the three and nine months ended September 30, 2016 totaled $ 0.2 0.5 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 11. Stockholders’ Equity On November 23, 2015, the Company’s amended and restated certificate of incorporation authorized 110,000,000 100,000,000 0.0001 10,000,000 0.0001 At September 30, 2016 and December 31, 2015, the Company had authorized for issuance 100,000,000 0.0001 16,163,071 56,000 16,107,107 10,000,000 0.0001 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock Based Compensation In connection with the approval of the Business Combination, the 2015 Omnibus Incentive Plan (the Plan) was approved by shareholders to provide incentives to key employees, directors, and consultants of the Company and its subsidiaries. Awards under the Plan are generally not restricted for any specific form or structure and could include, without limitation, stock options, stock appreciation rights, dividend equivalent rights, restricted stock awards, cash-based awards, or other right or benefit under the Plan. The Plan allowed for the lesser of (i) 1.60 8 0.94 1.57 Stock Options Upon completion of the Business Combination, the Company approved initial grants of non-qualified stock option awards under the Plan to the current independent members of the Board of Directors. The stock option awards expire in ten years from the date of grant and vest over a period of one year 20 30 40 six 40 12 100 In June 2016, the Company granted non-qualified stock option awards under the Plan to certain key employees of the Company. The stock option awards expire in ten years from the date of grant and vest in 20 4.5 In September 2016, the Company granted non-qualified stock option awards under the Plan to a key employee of the Company. The stock option awards expire in ten years from the date of grant and vest at 25 25 1.5 Expected dividend yield 0 % Risk-free interest rate 1.5 % Expected option term 6 years Volatility 88.3 % Weighted-average fair value $ 2.66 The Company calculated the expected term of the stock option awards using what the Company predicts for the future exercise pattern because the Company lacks historical data and is unable to make reasonable assumptions using historical exercise patterns. The Company also estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original projections. The Company’s assumptions with respect to stock price volatility are based on the average historical volatility of peers with similar attributes. The Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity rate. The total compensation expense related to stock options granted under the Plan was $ 0.2 0.5 0.1 0.2 1.1 2.7 Weighted Average Weighted Remaining Average Contractual Exercise Term Aggregate Options Price (Years) Intrinsic Value Outstanding, beginning of period 33,336 $ 5.40 Granted 567,972 4.12 Exercised - - Forfeited - - Outstanding, end of period 601,308 $ 4.19 9.76 $ - Exercisable, end of period 133,555 $ 4.12 9.73 $ - There was no aggregate intrinsic value for the options outstanding and exercisable at September 30, 2016 and December 31, 2015 because the exercise price exceeds the underlying share price. Restricted Stock Awards In June 2016, the Company granted restricted stock awards under the Plan to members of the Board of Directors. The awards vest at 20 40 The total compensation expense related to restricted stock awards granted under the Plan was $ 0.02 0.05 0.01 0.02 0.07 0.7 Outstanding (non-vested) and vested restricted awards as of September 30, 2016 totaled 44,800 11,200 11,200 1.99 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 13. Income Taxes The effective income tax rate was 52 42 0 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 14. Segment Information Segment information is not presented since all of the Company’s revenue and operations are attributed to a single reportable segment. In accordance with authoritative guidance on segment reporting under the FASB, the chief operating decision maker has been identified as the President. The President reviews operating results to make decisions about allocating resources and assessing performance for the entire company. |
Nature of Business and Signif20
Nature of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Nature of business: STG Group, Inc. (formerly, Global Defense & National Security Systems, Inc. or GDEF) and its subsidiaries (collectively, the Company) was originally incorporated in Delaware on July 3, 2013 as a blank check company, with Global Defense & National Security Holdings LLC (”Global Defense LLC” or the “Sponsor”) as Sponsor, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business combination. On November 23, 2015, the Company consummated its business combination with STG Group Holdings, Inc. (formerly, STG Group, Inc. or “STG Group”) pursuant to the stock purchase agreement, dated as of June 8, 2015, which provided for the purchase of all the capital stock of STG Group by the Company (the “Business Combination”). In connection with the closing of the Business Combination, the Company ceased to be a shell company in accordance with its Amended and Restated Certificate of Incorporation. The Company also changed its name from Global Defense & National Security Systems, Inc. to STG Group, Inc., and the Company’s securities were delisted from The NASDAQ Capital Market. The Company recommenced trading of its common stock under the symbol “STGG” on the OTC Pink Current Information tier of the over-the counter market. The Company’s common stock now trades over-the-counter on the OTCQB. See Note 2 for a further discussion of the Business Combination. The Company provides enterprise engineering, telecommunications, information management and security products and services to the federal government and commercial businesses. Segment information is not presented since all of the Company’s revenue is attributed to a single reportable segment. |
Consolidation, Policy [Policy Text Block] | Basis of presentation: The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial reporting and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For additional information, including the Company’s significant accounting policies, refer to the condensed consolidated financial statements and related footnotes in the Company’s condensed consolidated financial statements for the period from January 1, 2015 through November 23, 2015 and for the period from November 24, 2015 through December 31, 2015 included in the Company’s Annual Report on Form 10K for the year ended December 31, 2015. As a result of the Business Combination, the Company was identified as the acquirer for accounting purposes, and STG Group is the acquiree and accounting predecessor. This determination was based upon an evaluation of facts which included, but was not limited to, consideration of the following: 1) the relative voting rights of the stockholders in the combined entity after the Business Combination; 2) the composition of the board of directors of the combined entity; 3) the composition of the senior management team of the combined entity; 4) and the cash consideration that was transferred by the Company to the acquiree’s stockholders. Based upon this evaluation, the preponderance of facts supported the conclusion that the Company was the accounting acquirer. The Company’s financial statement presentation distinguishes a “Predecessor” for STG Group for the periods up to and prior to November 23, 2015 (the “Closing Date”). The Company was subsequently re-named as STG Group, Inc. and is the “Successor” for periods after the Closing Date, which includes the consolidation of STG Group subsequent to the Business Combination. The acquisition was accounted for as a business combination using the acquisition method of accounting, and Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. As a result of the application of the acquisition method of accounting as of the effective date of the acquisition, the financial statements for the Predecessor period and for the Successor period are presented on a different basis and, therefore, are not comparable. In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and nine months ended September 30, 2016 and 2015, are not necessarily indicative of the results that may be expected for the entire fiscal year. Figures are expressed in thousands of dollars unless otherwise indicated. |
Use of Estimates, Policy [Policy Text Block] | Use of estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. Actual results could differ from those estimates. Significant estimates embedded in the condensed consolidated financial statements for the periods presented include revenue recognition on fixed-price contracts, the allowance for doubtful accounts, the valuation and useful lives of intangible assets, the length of certain customer relationships, useful lives of property, plant and equipment, valuation of a Rabbi Trust and related deferred compensation liability. Estimates and assumptions are also used when determining the allocation of the purchase price in a business combination to the fair value of assets and liabilities and determining related useful lives. |
Revenue Recognition, Loyalty Programs [Policy Text Block] | Revenue recognition: Revenue is recognized when persuasive evidence of an arrangement exists, services have been rendered or goods delivered, the contract price is fixed or determinable and collectability is reasonably assured. Revenue associated with work performed prior to the completion and signing of contract documents is recognized only when it can be reliably estimated and realization is probable. The Company bases its estimates on previous experiences with the customer, communications with the customer regarding funding status and its knowledge of available funding for the contract. Revenue on cost-plus-fee contracts is recognized to the extent of costs incurred plus a proportionate amount of the fee earned. The Company considers fixed fees under cost-plus-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. The Company considers performance-based fees, including award fees, under any contract type to be earned when it can demonstrate satisfaction of performance goals, based upon historical experience, or when the Company receives contractual notification from the customer that the fee has been earned. Revenue on time-and-materials contracts is recognized based on the hours incurred at the negotiated contract billing rates, plus the cost of any allowable material costs and out-of-pocket expenses. Revenue on fixed-price contracts is primarily recognized using the proportional performance method of contract accounting. Unless it is determined as part of the Company’s regular contract performance review that overall progress on a contract is not consistent with costs expended to date, the Company determines the percentage completed based on the percentage of costs incurred to date in relation to total estimated costs expected upon completion of the contract. Revenue on other fixed-price service contracts is generally recognized on a straight-line basis over the contractual service period, unless the revenue is earned, or obligations fulfilled, in a different manner. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined and are recorded as forward loss liabilities in the condensed consolidated financial statements. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and revenue and are recognized in the period in which the revisions are determined. Multiple agencies of the federal government directly or indirectly provided the majority of the Company's contract revenue during the nine months ended September 30, 2016 and 2015. For the nine months ended September 30, 2016 and 2015, there were two federal agency customers that each provided revenue in excess of 10 79 76 Federal government contract costs, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency. Contract revenue has been recorded in amounts that are expected to be realized upon final settlement. |
Cost of Sales, Policy [Policy Text Block] | Costs of revenue: Costs of revenue include all direct contract costs, as well as indirect overhead costs and selling, general and administrative expenses that are allowable and allocable to contracts under federal procurement standards. Costs of revenue also include costs and expenses that are unallowable under applicable procurement standards and are not allocable to contracts for billing purposes. Such costs and expenses do not directly generate revenue, but are necessary for business operations. For the three and nine months ended September 30, 2016 and 2015, there was one vendor that comprised approximately 10 11 11 |
Investments Held In Rabbi Trust [Policy Text Block] | Investments held in Rabbi Trust: The Company has investments in mutual funds held in a Rabbi Trust that are classified as trading securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date. The securities are classified as trading securities because they are held for resale in anticipation of short-term (generally 90 days or less) fluctuations in market prices. The trading securities are stated at fair value. Realized and unrealized gains and losses and other investment income are included in other income in the accompanying consolidated statements of operations. |
Receivables, Policy [Policy Text Block] | Contract receivables: Contract receivables are generated primarily from prime and subcontracting arrangements with federal governmental agencies. Billed contract receivables represent invoices that have been prepared based on contract terms and sent to the customer. Billed accounts receivable are considered past due if the invoice has been outstanding more than 30 days. The Company does not charge interest on accounts receivable; however, federal governmental agencies may pay interest on invoices outstanding more than 30 days. The Company records interest income from federal governmental agencies when received. All contract receivables are on an unsecured basis. Unbilled amounts represent costs and anticipated profits awaiting milestones to bill, contract retainages, award fees and fee withholdings, as well as amounts currently billable. In accordance with industry practice, contract receivables relating to long-term contracts are classified as current, even though portions of these amounts may not be realized within one year. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Management has recorded an allowance for contract receivables that are considered to be uncollectible. Both billed and unbilled receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Valuation of long-lived assets: The Company accounts for the valuation of long-lived assets, including amortizable intangible assets, under authoritative guidance issued by the Financial Accounting Standards Board (FASB), which requires that long-lived assets and certain intangible assets be reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived assets is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the assets. 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 estimated fair value of the assets. No indicators of impairment were identified for the nine month period ended September 30, 2016. No impairment losses were recorded during the nine month period ending September 30, 2016. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Identifiable intangible assets: Intangible assets of the Company are comprised of customer relationships and a trade name acquired as a result of the Business Combination described further in Note 2. The Company determined that the customer relationships and trade name represent finite-lived intangible assets with useful lives of eight to fifteen years, respectively. The assets are being amortized proportionately over the term of their useful lives based on the estimated economic benefit derived over the course of the asset life. |
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill: The Company records the excess of the purchase price of an acquired company over the fair value of the identifiable net assets acquired as goodwill. In accordance with authoritative guidance issued by the FASB, entities can elect to use a qualitative approach to test goodwill for impairment. Under this approach, the Company performs a qualitative assessment (Step zero) to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than the carrying value. If the fair value of the reporting unit is less than the carrying value of the reporting unit, the Company is required to perform a goodwill impairment test using a two-step approach, which is performed at the reporting unit level. In the second step, the implied value of the goodwill is estimated at the fair value of the reporting unit, less the fair value of all other tangible and identifiable intangible assets of the reporting unit. If the carrying amount of the goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in the amount equal to that excess, not to exceed the carrying amount of the goodwill. If the fair value of the reporting unit is not less than the carrying value of the reporting unit, the two-step goodwill test is not required. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the business, estimation of the useful life over which cash flows will occur and determination of the weighted-average cost of capital. This discounted cash flow analysis is corroborated by top-down analysis, including a market assessment of enterprise value. The Company has elected to perform its annual analysis on October 1 each year at the reporting unit level. As of the Closing Date of the Business Combination, the Company determined that there was one reporting unit and as a result of acquisition accounting for the Business Combination, the carrying value of the reporting unit was equal to its fair value on the Closing Date. No triggering events occurred during the nine month period ending September 30, 2016 requiring an interim impairment test. For the nine months ended September 30, 2016, the Company has been unable to achieve its targeted revenue forecasts, however, we have taken cost cutting measures to reduce the impact of lower than forecasted revenues on our profitability and cash flows. If we are unable to achieve revenue growth and increased profitability, future impairment tests may result in a goodwill impairment charge, which could be material. |
Income Tax, Policy [Policy Text Block] | Income taxes: In connection with the Business Combination, STG Group (Predecessor) converted from a Subchapter S Corporation to a C Corporation. Prior to this, STG Group, excluding STG Netherlands and STG Doha, was treated as an S corporation under Subchapter S of the Internal Revenue Code. Therefore, in lieu of corporate income taxes, the Predecessor stockholder separately accounted for his pro-rata share of STG Group’s income, deductions, losses and credits. The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes In accordance with authoritative guidance on accounting for uncertainty in income taxes issued by the FASB, management has evaluated the Company’s tax positions and has concluded that the Company has taken no uncertain tax positions that require adjustment to the quarterly condensed consolidated financial statements to comply with the provisions of this guidance. Interest and penalties related to tax matters are recognized in expense. There was no accrued interest or penalties recorded during the three and nine months ended September 30, 2016 and 2015. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair value of financial instruments The carrying value of the Company’s cash and cash equivalents, contract receivables, line-of-credit, accounts payable and other short-term liabilities are believed to approximate fair value as of September 30, 2016 and December 31, 2015, respectively, because of the relatively short duration of these instruments. The Company also assessed long-term debt and determined that such amounts approximated fair value primarily since its terms and interest approximate current market terms and was negotiated with an unrelated third party lender. The Company considers the inputs related to these estimates to be Level 2 fair value measurements. Certain assets and liabilities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction on the measurement date. The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market. When no principal market exists, the most advantageous market is used. This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid. Fair value is based on assumptions market participants would make in pricing the asset or liability. Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available. When such prices or inputs are not available, the reporting entity should use valuation models. The Company’s assets recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. Fair value measurement standards require an entity to maximize the use of observable inputs (such as quoted prices in active markets) and minimize the use of unobservable inputs (such as appraisals or other valuation techniques) to determine fair value. The inputs used in measuring fair value are categorized into three levels, as follows: Level 1 Inputs that are based upon quoted prices for identical instruments traded in active markets. Level 2 Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar investments in markets that are not active, or models based on valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the investment. Level 3 Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques. As of September 30, 2016 and December 31, 2015, the Company has no financial assets or liabilities that are categorized as Level 3. The Company has investments carried at fair value in mutual funds held in a Rabbi Trust, which is included in investments held in Rabbi Trust on the accompanying consolidated balance sheets. The Company does not measure non-financial assets and liabilities at fair value unless there is an event which requires this measurement. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Financial credit risk: The Company’s assets that are exposed to credit risk consist primarily of cash and cash equivalents, investments held in Rabbi Trust and contract receivables. Cash and cash equivalents are deposited with high-credit, quality financial institutions whose balances may, at times, exceed federally insured limits. The Company has not experienced any losses in such amounts and believes that it is not exposed to any significant credit risk on cash and cash equivalents. Investments held in Rabbi Trust are stated at fair value at each reporting period and are subject to market fluctuations. Contract receivables consist primarily of amounts due from various agencies of the federal government or prime contractors doing business with the federal government. Historically, the Company has not experienced significant losses related to contract receivables and, therefore, believes that the credit risk related to contract receivables is minimal. |
Debt issuance costs [Policy Text Block] | Debt issuance costs: In April 2015, the FASB issued Accounting Standards Update (ASU) 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs 6.36 0.35 0.71 |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock based compensation: The Company measures compensation expense for stock based equity awards based on the fair value of the awards on the grant date. Compensation is recognized as expense in the accompanying consolidated statements of operations ratably over the required service period or, for performance based awards, when the achievement of the performance targets become probable. |
Earnings Per Share, Policy [Policy Text Block] | Basic net (loss) income per share available to common shareholders of the Company is calculated by dividing the net (loss) income by the weighted average number of common shares outstanding during the year. Common shares issuable upon exercise of the stock options and future vesting of the restricted stock awards (see Note 12) have not been included in the computation because their inclusion would have had an antidilutive effect for all periods presented. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent accounting pronouncements: In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In June 2014, the FASB issued ASU 2014-12, CompensationStock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, the FASB issued ASU 2014-15, Presentation of Financial StatementsGoing Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) Amendments to the Consolidation Analysis In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes 0.6 9.3 8.7 In February 2016, the FASB issued ASU 2016-05, Leases (Topic 842 In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606), Identifying Performance Obligations and Licensing (ASU 2016-10) In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The calculation of purchase price and purchase price allocation is as follows (in thousands): Cash consideration: Cash consideration $ 68,000 Net working capital and other cash consideration adjustments 3,400 Total cash consideration 71,400 Stock consideration, including Conversion Shares 82,632 Total purchase price $ 154,032 Current assets $ 42,716 Property and equipment 1,745 Goodwill 113,589 Identifiable intangible assets 39,840 Other assets 166 Total assets acquired 198,056 Current liabilities 26,639 Deferred income taxes 11,903 Other long-term liabilities 5,482 Total liabilities assumed 44,024 Total purchase price 154,032 Less cash acquired 2,184 Total purchase price, net of cash acquired $ 151,848 |
Business Acquisition, Pro Forma Information [Table Text Block] | The table below summarizes unaudited pro forma results for the three and nine months ended September 30, 2015, (in thousands, except for per share information): (Unaudited ProForma) Three Months Nine Months Ended September 30, Ended September 30, 2015 2015 Contract revenue $ 50,081 $ 149,138 Operating loss (774) (1,326) Net loss (1,953) (4,732) |
Contract Receivables and Bill22
Contract Receivables and Billings in Excess of Revenue Recognized (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Schedule of Contract Receivables [Table Text Block] | At September 30, 2016 and December 31, 2015, contract receivables consist of the following (in thousands): Successor September 30, 2016 December 31, 2015 (Unaudited) Billed accounts receivable $ 21,621 $ 27,875 Unbilled accounts receivable 9,229 5,225 30,850 33,100 Less: allowance for doubtful accounts (66) (276) $ 30,784 $ 32,824 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | At September 30, 2016 and December 31, 2015, property and equipment consists of the following (in thousands): Successor Estimated September 30, 2016 December 31, 2015 Life (Unaudited) Leasehold improvements Life of lease $ 1,324 $ 1,316 Computer hardware and software 1 - 3 years 329 329 Office furniture and equipment 1 - 7 years 110 110 1,763 1,755 Less: accumulated depreciation and amortization (475) (57) $ 1,288 $ 1,698 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | Identifiable intangible assets as of September 30, 2016, consist of the following (in thousands): Successor September 30, 2016 Estimated Accumulated Life Cost Amortization Net Customer relationships 8 years $ 26,380 $ 4,775 $ 21,605 Trade name 15 years 13,460 1,330 12,130 $ 39,840 $ 6,105 $ 33,735 Identifiable intangible assets as of December 31, 2015, consist of the following (in thousands): Successor December 31, 2015 Estimated Accumulated Life Cost Amortization Net Customer relationships 8 years $ 26,380 $ 698 $ 25,682 Trade name 15 years 13,460 154 13,306 $ 39,840 $ 852 $ 38,988 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | The Company’s debt as of September 30, 2016 and December 31, 2015 consists of the following: Successor September 30, 2016 December 31, 2015 (Unaudited) Term loan $ 79,707 $ 81,239 Less: debt discount on term loan (5,177) (6,237) Less: current portion (4,088) (2,555) $ 70,442 $ 72,447 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each option was estimated on the date of grant using the Black-Scholes model that used the following assumptions: Expected dividend yield 0 % Risk-free interest rate 1.5 % Expected option term 6 years Volatility 88.3 % Weighted-average fair value $ 2.66 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Stock option awards as of September 30, 2016, and changes during the nine months ended September 30, 2016 were as follows: Weighted Average Weighted Remaining Average Contractual Exercise Term Aggregate Options Price (Years) Intrinsic Value Outstanding, beginning of period 33,336 $ 5.40 Granted 567,972 4.12 Exercised - - Forfeited - - Outstanding, end of period 601,308 $ 4.19 9.76 $ - Exercisable, end of period 133,555 $ 4.12 9.73 $ - |
Nature of Business and Signif27
Nature of Business and Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Nov. 30, 2015 | |
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Debt Related Commitment Fees and Debt Issuance Costs | $ 6,360 | |||||
Amortization of Debt Discount (Premium) | $ 350 | 710 | ||||
Deferred Tax Assets, Net, Current | 0 | 0 | $ 2,415 | |||
Deferred Tax Liabilities, Net, Noncurrent | $ 7,083 | $ 7,083 | $ 12,630 | |||
Accounting Standards Update 2015-17 [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Deferred Tax Assets, Net, Current | $ 600 | |||||
Deferred Tax Liabilities, Net, Current | 9,300 | |||||
Deferred Tax Liabilities, Net, Noncurrent | $ 8,700 | |||||
Sales Revenue, Net [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 79.00% | |||||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 10.00% | |||||
Sales Revenue, Net [Member] | Predecessor [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 76.00% | |||||
Sales Revenue, Net [Member] | Predecessor [Member] | Customer Concentration Risk [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 10.00% | |||||
Cost of Goods, Product Line [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 10.00% | 11.00% | ||||
Concentration Risk, Supplier | one vendor | one vendor | ||||
Cost of Goods, Product Line [Member] | Predecessor [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 11.00% | 11.00% | ||||
Concentration Risk, Supplier | one vendor | one vendor | ||||
Cost of Goods, Product Line [Member] | Predecessor [Member] | Customer Concentration Risk [Member] | ||||||
Nature of Business and Significant Accounting Policies Disclosure [Line Items] | ||||||
Concentration Risk, Percentage | 11.00% | 10.00% |
Business Combination (Details)
Business Combination (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Cash consideration: | ||
Cash consideration | $ 68,000 | |
Net working capital and other cash consideration adjustments | 3,400 | |
Total cash consideration | 71,400 | |
Stock consideration, including Conversion Shares | 82,632 | |
Total purchase price | 154,032 | |
Current assets | 42,716 | |
Property and equipment | 1,745 | |
Goodwill | 113,589 | $ 113,589 |
Identifiable intangible assets | 39,840 | |
Other assets | 166 | |
Total assets acquired | 198,056 | |
Current liabilities | 26,639 | |
Deferred income taxes | 11,903 | |
Other long-term liabilities | 5,482 | |
Total liabilities assumed | 44,024 | |
Total purchase price | 154,032 | |
Less cash acquired | 2,184 | |
Total purchase price, net of cash acquired | $ 151,848 |
Business Combination (Details 1
Business Combination (Details 1) - Predecessor [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Pro Forma Of Financial Information [Line Items] | ||
Contract revenue | $ 50,081 | $ 149,138 |
Operating loss | (774) | (1,326) |
Net loss | $ (1,953) | $ (4,732) |
Business Combination (Details T
Business Combination (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combination Disclosure [Line Items] | |||
Cash consideration per Stock Purchase Agreement | $ 68,000 | ||
Net Working Capital And Other Cash Consideration Adjustments | 3,400 | ||
Payments to Acquire Notes Receivable | $ 2,500 | ||
Predecessor [Member] | |||
Business Combination Disclosure [Line Items] | |||
Increased Amortization | $ 1,500 | $ 4,300 | |
Increased Interest Expense | 2,100 | 6,100 | |
Decreased Income Tax Benefit | $ 1,300 | $ 3,000 | |
Private Placement [Member] | Common Stock [Member] | |||
Business Combination Disclosure [Line Items] | |||
Business Acquisition, Share Price | $ 8.50 | ||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 5,600 | ||
Conversion of Stock, Shares Issued | 658,513 | ||
STG Group Holdings Inc [Member] | Common Stock [Member] | |||
Business Combination Disclosure [Line Items] | |||
Stock Issued During Period, Shares, Acquisitions | 8,578,199 | ||
Stock Issued During Period, Shares, Share-based Compensation, Forfeited | 445,161 | ||
Stock Issued During Period, Shares, Share-based Compensation, Gross | 35,000 | ||
Business Acquisition, Share Price | $ 8.50 |
Contract Receivables and Bill31
Contract Receivables and Billings in Excess of Revenue Recognized (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Billed accounts receivable | $ 21,621 | $ 27,875 |
Unbilled accounts receivable | 9,229 | 5,225 |
Accounts Receivable, Gross | 30,850 | 33,100 |
Less: allowance for doubtful accounts | (66) | (276) |
Accounts and Other Receivables, Net, Current | $ 30,784 | $ 32,824 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment, Gross | $ 1,763 | $ 1,755 |
Less: accumulated depreciation and amortization | (475) | (57) |
Property, Plant and Equipment, Net, Total | $ 1,288 | 1,698 |
Leasehold Improvements [Member] | ||
Estimated Life | Life of lease | |
Property, Plant and Equipment, Gross | $ 1,324 | 1,316 |
Computer Hardware and Software [Member] | ||
Estimated Life | 1 - 3 years | |
Property, Plant and Equipment, Gross | $ 329 | 329 |
Office Equipment [Member] | ||
Estimated Life | 1 - 7 years | |
Property, Plant and Equipment, Gross | $ 110 | $ 110 |
Property and Equipment (Detai33
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Depreciation, Depletion and Amortization, Total | $ 140 | $ 420 | ||
Predecessor [Member] | ||||
Depreciation, Depletion and Amortization, Total | $ 140 | $ 760 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Cost | $ 39,840 | $ 39,840 |
Accumulated Amortization | 6,105 | 852 |
Net | $ 33,735 | $ 38,988 |
Customer Relationships [Member] | ||
Estimated Life | 8 years | 8 years |
Cost | $ 26,380 | $ 26,380 |
Accumulated Amortization | 4,775 | 698 |
Net | $ 21,605 | $ 25,682 |
Trade name | ||
Estimated Life | 15 years | 15 years |
Cost | $ 13,460 | $ 13,460 |
Accumulated Amortization | 1,330 | 154 |
Net | $ 12,130 | $ 13,306 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Amortization of Intangible Assets | $ 1,750 | $ 5,253 | ||
Goodwill, Impairment Loss | $ 0 | $ 0 | ||
Predecessor [Member] | ||||
Amortization of Intangible Assets | $ 200 | $ 600 | ||
Goodwill, Impairment Loss | $ 2,064 | 2,064 | ||
Access [Member] | Predecessor [Member] | ||||
Goodwill, Impairment Loss | 2,060 | |||
Access [Member] | Customer Relationships [Member] | Predecessor [Member] | ||||
Impairment of Intangible Assets (Excluding Goodwill), Total | $ 910 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Investment Income, Net, Total | $ 400 | $ 400 | ||
Predecessor [Member] | ||||
Investment Income, Net, Total | $ 400 | $ 270 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||
Less: debt discount on term loan | $ (5,177) | $ (6,237) |
Less: current portion | (4,088) | (2,555) |
Long-term Debt, Excluding Current Maturities, Total | 70,442 | 72,447 |
Loans Payable [Member] | ||
Short-term Debt [Line Items] | ||
Long-term Debt, Total | $ 79,707 | $ 81,239 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Nov. 14, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||||
Debt Related Commitment Fees and Debt Issuance Costs | $ 6,360 | |||
Investor [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Sale of Stock, Price Per Share | $ 0 | |||
Stock Issued During Period, Shares, New Issues | 0 | |||
Investor [Member] | Subsequent Event [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Sale of Stock, Price Per Share | $ 3.60 | |||
Stock Issued During Period, Value, New Issues | $ 1,700 | |||
Stock Issued During Period, Shares, New Issues | 462,778 | |||
Predecessor [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Long-term Line of Credit | $ 15,000 | |||
Scenario, Forecast [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Percentage Of Line Of Credit Facility Current Borrowing Capacity On EBITDA | 20.00% | |||
Line of Credit Facility, Current Borrowing Capacity | $ 2,500 | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000 | |||
Minimum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument Quarterly Installments Percentage of Principal Amount | 0.625% | |||
Maximum [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument Quarterly Installments Percentage of Principal Amount | 2.50% | |||
Loans Payable [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Face Amount | $ 81,750 | |||
Debt Instrument, Maturity Date | Nov. 23, 2020 | |||
Long-term Line of Credit | $ 15,000 | |||
Line of Credit Facility, Description | Advances under the revolving line-of-credit are limited by a borrowing base which may not exceed the lesser of (x) the difference between $15 million and amounts outstanding under letters of credit issued pursuant to the Credit Agreement; and (y) an amount equal to the sum of: (i) up to 85% of certain accounts receivable of the Company plus (ii) up to 100% of unrestricted cash on deposit in the Company’s accounts with the Collateral Agent, minus (iii) amounts outstanding under letters of credit issued pursuant to the Credit Agreement, minus (iv) reserves established by the Collateral Agent from time to time in its reasonable credit judgment exercised in good faith. | |||
Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Face Amount | $ 15,000 | |||
Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Related Commitment Fees and Debt Issuance Costs | 6,360 | |||
Uncommitted Accordion Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Face Amount | $ 90,000 |
Deferred Compensation Plan (Det
Deferred Compensation Plan (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Jan. 25, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred Compensation Arrangement with Individual, Distributions Paid | $ 4,110 | ||||
Deferred Compensation Plan [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred Compensation Plan Assets | $ 260 | $ 4,520 | |||
Deferred Compensation Plan [Member] | Predecessor [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred Compensation Arrangement with Individual, Employer Contribution | $ 20 | $ 40 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Due from Related Parties | $ 10 | $ 10 | $ 30 | ||
Revenue from Related Parties | 20 | 60 | |||
Related Party Costs | 80 | 80 | |||
Related Party Transaction, Amounts of Transaction | $ 200 | $ 500 | |||
Predecessor [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | $ 30 | $ 60 | |||
Related Party Costs | $ 20 | $ 20 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 | Nov. 23, 2015 |
Class of Stock [Line Items] | |||
Capital Units, Authorized | 110,000,000 | ||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares, Issued | 16,163,071 | 16,107,071 | |
Common Stock, Shares, Outstanding | 16,163,071 | 16,107,071 | |
Common Stock Shares Subject To Vesting Of Restricted Stock Awards | 56,000 | 56,000 | |
Preferred Stock, Shares Outstanding | 0 | 0 | |
Preferred Stock, Shares Issued | 0 | 0 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 9 Months Ended |
Sep. 30, 2016$ / shares | |
Expected dividend yield | 0.00% |
Risk-free interest rate | 1.50% |
Expected option term | 6 years |
Volatility | 88.30% |
Weighted-average fair value | $ 2.66 |
Stock Based Compensation (Det43
Stock Based Compensation (Details 1) | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Outstanding, beginning of period, Options | shares | 33,336 |
Granted, Options | shares | 567,972 |
Exercised, Options | shares | 0 |
Forfeited, Options | shares | 0 |
Outstanding, end of period, Options | shares | 601,308 |
Exercisable, end of period, Options | shares | 133,555 |
Outstanding, beginning of period, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 5.40 |
Granted, Weighted Average Exercise Price (in dollars per share) | $ / shares | 4.12 |
Exercised, Weighted Average Exercise Price (in dollars per share) | $ / shares | 0 |
Forfeited, Weighted Average Exercise Price (in dollars per share) | $ / shares | 0 |
Outstanding, end of period, Weighted Average Exercise Price (in dollars per share) | $ / shares | 4.19 |
Exercisable, end of period, Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 4.12 |
Weighted Average Remaining Contractual Term (Years), Outstanding, end of period | 9 years 9 months 4 days |
Weighted Average Remaining Contractual Term (Years), Exercisable, end of period | 9 years 8 months 23 days |
Aggregate Intrinsic Value, Outstanding, end of period (in dollars) | $ | $ 0 |
Aggregate Intrinsic Value, Exercisable, end of period (in dollars) | $ | $ 0 |
Stock Based Compensation (Det44
Stock Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 8 months 12 days | ||||
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ 100 | $ 200 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 1,100 | 1,100 | $ 1,100 | ||
Restricted Stock [Member] | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 8 months 12 days | ||||
Restricted Stock or Unit Expense | 20 | $ 50 | |||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 10 | 20 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 70 | $ 70 | $ 70 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 44,800 | 44,800 | 44,800 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 11,200 | 11,200 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.99 | ||||
Employee Stock Option [Member] | |||||
Restricted Stock or Unit Expense | $ 200 | $ 500 | |||
Non-qualified Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | 10 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year 6 months | 4 years 6 months | |||
Share-based Compensation Award, Tranche I [Member] | Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 40.00% | ||||
Share-based Compensation Award, Tranche I [Member] | Non-qualified Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | 20.00% | |||
Share-based Compensation Award, Tranche II [Member] | Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | ||||
Share-based Compensation Award, Tranche II [Member] | Non-qualified Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25.00% | ||||
Omnibus Incentive Plan 2015 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,600,000 | 1,600,000 | 1,600,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 8.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 940,000 | 940,000 | 940,000 | 1,570,000 | |
Share Based Compensation Arrangement By Share Based Payment Award, Award Exercise Price Percentage Limit | 100.00% | ||||
Omnibus Incentive Plan 2015 [Member] | Share-based Compensation Award, Tranche I [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 30 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 20.00% | ||||
Omnibus Incentive Plan 2015 [Member] | Share-based Compensation Award, Tranche II [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 6 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 40.00% | ||||
Omnibus Incentive Plan 2015 [Member] | Share-based Compensation Award, Tranche III [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 40.00% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 52.00% | 42.00% | ||
Predecessor [Member] | ||||
Effective Income Tax Rate Reconciliation, Percent, Total | 0.00% | 0.00% |