Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Oct. 31, 2014 | Dec. 15, 2014 | |
Entity Registrant Name | Comarco Inc | |
Entity Central Index Key | 22252 | |
Current Fiscal Year End Date | -30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 14,684,165 | |
Document Type | 10-Q | |
Document Period End Date | 31-Oct-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
ASSETS | ||
Cash and cash equivalents | $2,442,000 | $1,096,000 |
Other current assets | 23,000 | 17,000 |
Total current assets | 2,587,000 | 1,241,000 |
Property and equipment, net | 9,000 | 14,000 |
Restricted cash | 5,000 | 82,000 |
Total assets | 2,601,000 | 1,337,000 |
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||
Accounts payable | 746,000 | 4,363,000 |
Accrued liabilities | 763,000 | 1,012,000 |
Loan payable | 1,167,000 | |
Derivative liabilities | 2,520,000 | |
Total current liabilities | 1,509,000 | 9,062,000 |
Total liabilities | 1,509,000 | 9,062,000 |
Stockholders' Equity (Deficit): | ||
Preferred stock, no par value, 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.10 par value, 50,625,000 shares authorized; 14,684,165 shares issued and outstanding at October 31, 2014 and January 31, 2014, respectively | 1,468,000 | 1,468,000 |
Additional paid-in capital | 18,310,000 | 15,980,000 |
Accumulated deficit | -18,686,000 | -25,173,000 |
Total stockholders' equity (deficit) | 1,092,000 | -7,725,000 |
Total liabilities and stockholders' equity | 2,601,000 | 1,337,000 |
Suppliers [Member] | ||
ASSETS | ||
Accounts receivable due from suppliers, net | $122,000 | $128,000 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
Preferred Stock, Par Value (in dollars per share) | $0 | $0 |
Preferred Stock Shares Authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, Shares Issued (in shares) | 0 | 0 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
Common Stock, Par Value (in dollars per share) | $0.10 | $0.10 |
Common Stock Shares Authorized (in shares) | 50,625,000 | 50,625,000 |
Common Stock, Shares Issued (in shares) | 14,684,165 | 14,684,165 |
Common Stock, Shares Outstanding (in shares) | 14,684,165 | 14,684,165 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Total Revenues | $1,508 | $4,429 | ||
Cost of revenue | 1,567 | -1,099 | 4,029 | |
Gross profit | -59 | 1,099 | 400 | |
Selling, general and administrative expenses | 241 | 203 | 835 | 1,440 |
Engineering and support expenses | 89 | 69 | 283 | 668 |
330 | 272 | 1,118 | 2,108 | |
Operating loss | -330 | -331 | -19 | -1,708 |
Interest expense, net | -106 | -380 | -283 | |
Change in fair value of derivative liabilities | 988 | 226 | 271 | |
Net Gain on litigation settlement | 6,662 | 5 | ||
Income (loss) from operations before income taxes | -330 | 551 | 6,489 | -1,715 |
Income tax expense | 2 | 2 | ||
Net income (loss) | ($330) | $551 | $6,487 | ($1,717) |
Basic income (loss) per share: (in dollars per share) | ($0.02) | $0.04 | $0.44 | ($0.12) |
Diluted net income (loss) per share (in dollars per share) | ($0.02) | $0.04 | $0.44 | ($0.12) |
Weighted-average shares outstanding: | ||||
Weighted-average shares outstanding-Basic (in shares) | 14,684 | 14,470 | 14,684 | 14,300 |
Weighted average shares outstanding - diluted (in shares) | 14,886 | 14,544 | 14,830 | 14,300 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Oct. 31, 2014 | Oct. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $6,487,000 | ($1,717,000) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Depreciation and amortization | 5,000 | 54,000 |
Loss on sale/retirement of property and equipment | 32,000 | |
Amortization of loan discount | 333,000 | 206,000 |
Stock-based compensation expense | 36,000 | 71,000 |
Provision for doubtful accounts receivable | 6,000 | 12,000 |
Provision for obsolete inventory | 368,000 | |
Change in fair value of derivative liabilities | -226,000 | -271,000 |
Changes in operating assets and liabilities | ||
Accounts receivable due from customers | -170,000 | |
Accounts receivable due from suppliers | 522,000 | |
Inventory | 98,000 | |
Other assets | -6,000 | -15,000 |
Increase (Decrease) in Accounts Payable | -3,617,000 | 706,000 |
Accrued liabilities | -249,000 | -344,000 |
Net cash provided by (used in) operating activities | 2,769,000 | -448,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | -9,000 | |
Change in restricted cash | 77,000 | 28,000 |
Net cash provided by investing activites | 77,000 | 19,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loan proceeds | 1,500,000 | |
Loan repayment | -1,500,000 | -2,000,000 |
Net proceeds from common stock issued | 1,030,000 | |
Net cash (used in) provided by financing activities | -1,500,000 | 530,000 |
Net increase in cash and cash equivalents | 1,346,000 | 101,000 |
Cash and cash equivalents, beginning of period | 1,096,000 | 104,000 |
Cash and cash equivalents, end of period | 2,442,000 | 205,000 |
Noncash investing and financing activities: | ||
Debt discount recorded upon issuance of convertible debt | 624,000 | |
Issurance of common stock upon the vesting of restricted stock units | 19,000 | |
Supplementary disclosures of cash flow information: | ||
Cash paid for interest | 68,000 | 76,000 |
Cash paid for income taxes, net of refunds | $2,000 | $2,000 |
Note_1_Organization
Note 1 - Organization | 9 Months Ended | |
Oct. 31, 2014 | ||
Notes to Financial Statements | ||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1 | Organization |
Comarco, Inc. was incorporated in California in 1960 and its common stock has been publicly traded since 1971, when it was spun-off from Genge Industries, Inc. Comarco Inc.’s wholly-owned subsidiary, Comarco Wireless Technologies, Inc. (“CWT”), was incorporated in the state of Delaware in September 1993. Comarco and CWT are collectively referred to as “we,” “us,” “our,” “Comarco,” or the “Company”. |
Note_2_Current_Developments_Fu
Note 2 - Current Developments, Future Operations, Liquidity and Capital Resources | 9 Months Ended | |
Oct. 31, 2014 | ||
Notes to Financial Statements | ||
Going Concern [Text Block] | 2 | Current Developments, Future Operations, Liquidity and Capital Resources |
The condensed financial statements have been prepared assuming that we will continue to operate as a going concern, which contemplates that we will realize returns on our assets and satisfy our liabilities and commitments in the ordinary course of business. Our consolidated financial statements do not reflect any adjustments related to the outcome of which uncertainty. Our future is highly dependent on our ability to successfully resolve our current litigation, capitalize on our portfolio of patents, generate positive cash flows and/or obtain borrowings or raise capital to meet our liquidity needs. | ||
As previously announced in August 2013, Lenovo Information Products Co., Ltd. (“Lenovo”), our only material customer, notified us of their intention to cease offering our Constellation product, the power adapter we designed and developed for Lenovo, and terminated its relationship with us. We completed shipping product to Lenovo during our third quarter ended November 30, 2013. The loss of Lenovo as a customer has had a material adverse impact on our results of operations. We have reduced and/or eliminated certain operating expenses to minimize future losses and cash burn and will continue our efforts in this regard. | ||
Two of our recent litigation matters have concluded. In the Chicony Power Technology, Co. Ltd., (“Chicony”) matter, effective as of May 15, 2014, Chicony entered into a settlement agreement with us that dismissed all claims between the two parties arising from the litigation. Pursuant to the terms of the settlement agreement, Chicony agreed to pay us $7.6 million in lieu of the jury’s net award of $9.7 million or any other related costs or fees. Settlement amounts of $4.0 million and $3.6 million were paid on May 16, 2014 and May 30, 2014, respectively. Of the $7.6 million, we received $6.5 million, net of $1.1 million in attorneys’ fees and other costs. In connection with the settlement, certain contract manufacturer costs payable to Chicony totaling $1.1 million were discharged and reflected as a reduction of cost of revenues. In our litigation with ACCO Brands USA LLC and its Computer Products Group division (collectively “Kensington”), on February 4, 2014, we entered into a confidential settlement and licensing agreement with an effective date of February 1, 2014 that dismisses all claims between the two parties arising from this matter. | ||
We believe that our patent portfolio covering key technical aspects of our products could potentially generate a future revenue stream based upon royalties paid to us by others for the use of some or all of our patents in third party products. We continue to explore opportunities to expand, protect, and monetize our patent portfolio, including through the sale or licensing of our patent portfolio. We may or may not resume our traditional activities of providing innovative charging solutions for battery powered devices. There are no assurances that any of these possible opportunities or activities will occur or be successful. | ||
We are currently generating de minimis revenues and have ceased traditional operations. Our future is highly dependent on our ability to successfully resolve our current litigation, capitalize on our portfolio of patents, generate positive cash flows and obtain borrowings or raise capital to meet our future liquidity needs. | ||
We continue to analyze a range of alternatives to build and/or preserve value for its stakeholders, including, but not limited to, exploring additional investment and incremental financing from current and/or new investors, the engagement of advisors to assist in exploring strategic options for us as well as identifying potential partnerships for the purpose of monetizing some or all of the our patent portfolio and past, present, and future infringement claims. There can be no assurances that we will be successful in implementing any of these alternatives, or if implemented, that any of these alternatives will successfully preserve or increase shareholder value. | ||
Note_3_Summary_of_Significant_
Note 3 - Summary of Significant Accounting Policies | 9 Months Ended | |
Oct. 31, 2014 | ||
Notes to Financial Statements | ||
Significant Accounting Policies [Text Block] | 3 | Summary of Significant Accounting Policies |
The summary of our significant accounting policies presented below is designed to assist the reader in understanding our condensed consolidated financial statements. | ||
Basis of Presentation | ||
The accompanying condensed consolidated balance sheet as of January 31, 2014, which has been derived from our audited financial statements, and our unaudited interim condensed consolidated financial statements as of October 31, 2014 included herein have been prepared without audit in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by (“GAAP”) for complete financial statements. The Company believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended January 31, 2014. The accounting policies followed by the Company are set forth in Note 2 to the Company’s audited financial statements included in its Form 10-K for its fiscal year ended January 31, 2014 (the “2014 10-K”), which was filed with the SEC on April 30, 2014. The unaudited interim condensed consolidated financial information presented herein reflects all adjustments, consisting only of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of the consolidated results for the interim periods presented. The consolidated results for the three and nine months ended October 31, 2014 are not necessarily indicative of the results to be expected for the fiscal year ending January 31, 2015. | ||
Principles of Consolidation | ||
The unaudited interim condensed consolidated financial statements of the Company include the accounts of Comarco, Inc. and CWT, its wholly owned subsidiary. All material intercompany balances, transactions, and profits and losses have been eliminated. | ||
Cash and Cash Equivalents | ||
All highly liquid investments with original maturity dates of three months or less when acquired are classified as cash and cash equivalents. The fair value of cash and cash equivalents approximates the amounts shown in the consolidated financial statements. Cash and cash equivalents are generally maintained in uninsured accounts, typically Eurodollar deposits with daily liquidity, which are subject to investment risk including possible loss of | ||
principal invested. | ||
Accounts Receivable Due from Suppliers | ||
Oftentimes we were able to source components locally that we later sold to our contract manufacturers, who built the finished goods, and other suppliers. This was especially the case when new products were initially introduced into production. Sales to our contract manufacturers (or “CMs”) and other suppliers were excluded from revenue and were recorded as a reduction to cost of revenue. | ||
Restricted Cash | ||
Our restricted cash balances are secured by separate bank accounts and represents $5,000 which serves as collateral for credit card chargebacks associated with our internet website. | ||
Use of Estimates | ||
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the periods reported. Actual results could materially differ from those estimates. | ||
Certain accounting principles require subjective and complex judgments to be used in the preparation of financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates, or assumptions that are used. Such estimates and assumptions include, but are not specifically limited to, those required in the assessment of the impairment of long-lived assets, allowance for doubtful accounts, valuation allowances for deferred tax assets, valuation of derivative liabilities and determination of stock-based compensation. | ||
Derivative Liabilities | ||
A derivative is an instrument whose value is “derived” from an underlying instrument or index such as a future, forward, swap, option contract, or other financial instrument with similar characteristics, including certain derivative instruments embedded in other contracts and for hedging activities. As a matter of policy, the Company does not invest in separable financial derivatives or engage in hedging transactions. However, the Company entered into certain financing transactions in fiscal 2013 that involved financial equity instruments containing certain features that have resulted in the instruments being deemed derivatives. The Company may engage in other similar complex financing transactions in the future, but not with the intention to enter into derivative instruments. Derivatives are measured at fair value using the Monte Carlo simulation pricing model and marked to market through earnings. However, such new and/or complex instruments may have immature or limited markets. As a result, the pricing models used for valuation of derivatives often incorporate significant estimates and assumptions. Changes in these subjective assumptions can materially affect the estimate of the fair value of derivative liabilities and, consequently, the related amount recognized as loss due to change in fair value of derivative liabilities on the consolidated statement of operations. Furthermore, depending on the terms of a derivative, the valuation of derivatives may be removed from the financial statements upon exercise or conversion of the underlying instrument into some other security. | ||
We evaluate free-standing derivative instruments to properly classify such instruments within stockholders’ equity or as liabilities in our financial statements. Our policy is to settle instruments indexed to our common shares on a first-in-first-out basis. | ||
The classification of a derivative instrument is reassessed at each balance sheet date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. | ||
During the second quarter of fiscal 2013, we adopted the guidance, as codified in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 815-40, | ||
Derivatives and Hedging | ||
, | ||
Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, | ||
that requires us to apply a two-step model in determining whether a financial instrument or an embedded feature is indexed to our own stock and thus enables it to qualify for equity classification. The warrants issued to Broadwood Partners, L.P. (“Broadwood”) contained provisions that adjusted the exercise price in the event of certain dilutive issuance of our securities (see Note 8). Accordingly, the Company considered the warrants to be subject to price protection and classified them as derivative liabilities at the date of issuance with a fair value of $1.4 million and a corresponding discount to the underlying loan payable (see Note 8). On August 13, 2014, we entered into an an Amendment and Release Agreement that canceled and replaced the Broadwood warrants. Accordingly, the derivative liability associated with the Broadwood warrants was reversed on the cancellation date and the replacement warrants, which qualified for classification as equity, were added to additional paid in capital. | ||
Additionally, during the first quarter of fiscal 2014, we entered into a Loan Agreement with Elkhorn Partners Limited Partnership (“Elkhorn”) which contains convertible provisions that allow Elkhorn to convert the loan into common stock. The conversion price could have been adjusted in the event of certain dilutive issuance of our securities. Accordingly, the Company considered the convertible debt to be subject to price protection and created a discount to the underlying loan payable and classified that fair value as derivative liabilities at the date of issuance with a fair value of $0.6 million (see Note 8). On June 3, 2014, the Company repaid the Elkhorn Loan in full and as a result, the discount to the loan payable and related derivative liability were extinguished and charged to earnings for the nine months period ended October 31, 2014. | ||
Fair Value of Financial Instruments | ||
Our financial instruments include cash and cash equivalents, accounts receivable due from customers and suppliers, accounts payable, accrued liabilities, a short-term loan and derivative liabilities. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. | ||
Legal expense classification | ||
Our legal expenses are classified in either selling, general, and administrative expenses or engineering and support expenses depending on the nature of the legal expense. All legal expenses incurred related to our intellectual property, including associated litigation expense and maintenance of our patent portfolio, are included in engineering and support expenses in our consolidated statement of operations. All other legal expenses, including all other litigation expense and public company legal expense are included in selling, general, and administrative expenses in our consolidated statement of operations. |
Note_4_StockBased_Compensation
Note 4 - Stock-Based Compensation | 9 Months Ended | |||||||||||||||||||||||
Oct. 31, 2014 | ||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 4 | Stock-Based Compensation | ||||||||||||||||||||||
We grant stock awards for a fixed number of shares to employees, consultants, and directors pursuant to the Company’s shareholder-approved equity incentive plans. | ||||||||||||||||||||||||
We account for stock-based compensation using the modified prospective method, which requires measurement of compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using a Lattice Binomial model for options with performance-based vesting tied to the Company’s stock price and the Black-Scholes valuation model for options with ratable term vesting. Both the Lattice Binomial and Black-Scholes valuation models require the input of subjective assumptions. These assumptions include estimating the length of time optionees will retain their vested stock options before exercising them (the “expected term”), the estimated volatility of our common stock price over the expected term, and the number of awards that will ultimately not complete their vesting requirements (“forfeitures”). Changes in these subjective assumptions can materially affect the estimate of fair value of stock-based compensation and, consequently, the related amount recognized as an expense on the consolidated statements of operations. As required under applicable accounting rules, we review our valuation assumptions at each grant date and, as a result, we are likely to change our valuation assumptions used to value stock-based awards granted in future periods. The values derived from using either the Lattice Binomial or the Black-Scholes model are recognized as an expense over the vesting period, net of estimated forfeitures. The estimation of stock awards that will ultimately vest requires significant judgment. Actual results, and future changes in estimates, may differ from our current estimates. | ||||||||||||||||||||||||
The compensation expense recognized is summarized in the table below (in thousands except per share amounts): | ||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
October 31, | October 31, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Stock-based compensation expense | $ | 12 | $ | 18 | $ | 36 | $ | 71 | ||||||||||||||||
Impact on basic and diluted earnings per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||||
The total compensation cost related to nonvested awards not yet recognized is approximately $20,000, which will be expensed over a weighted average remaining life of 5 months. | ||||||||||||||||||||||||
During the three and nine months ended October 31, 2014, no stock awards were granted. During the three and nine months ended October 31, 2013, no stock options were granted and 420,000 shares of restricted stock were granted. | ||||||||||||||||||||||||
The Company’s former employee stock option plan (the “Prior Employee Plan”) expired during May 2005. As a result, no new options could be granted under the plan thereafter. This plan provided for the issuance of up to 825,000 shares of common stock. In December 2005, the Board of Directors approved and adopted the Company’s 2005 Equity Incentive Plan (the “2005 Plan”) covering 450,000 shares of common stock. The 2005 Plan was approved by the Company’s shareholders at its annual shareholders’ meeting in June 2006, and subsequently amended at its annual shareholders’ meeting in June 2008 to increase the number of shares issuable under the plan from 450,000 to 1,100,000 shares. In July 2011, the Company’s shareholders approved the 2011 Equity Incentive Plan (the “2011 Plan”) covering 750,000 shares of common stock, as well as the shares that remained available for issuance under the 2005 Plan plus shares that were the subject of outstanding awards under the 2005 Plan, which again become available for grant under that plan. Thus, the 2011 Plan combines the 2011 Plan and the 2005 Plan. Under the 2011 Plan, we may grant stock options, stock appreciation rights, restricted stock, restricted stock units, and performance based awards to employees, consultants and directors. In addition, under the 2011 Plan, awards vest or become exercisable in installments determined by the compensation committee of our Board of Directors. The options granted under Prior Employee Plan expire as determined by the committee, but no later than ten years and one week after the date of grant (five years for 10 percent shareholders). The options granted under the 2011 and 2005 Plan expire as determined by the committee, but no later than ten years after the date of grant (five years for 10 percent shareholders). | ||||||||||||||||||||||||
The options granted under the 2011 and 2005 Plan expire as determined by the committee, but no later than ten years after the date of grant (five years for 10 percent shareholders). | ||||||||||||||||||||||||
In the aggregate, Comarco has stock-based compensation plans under which outside directors, consultants, and employees are eligible to receive stock options and other equity-based awards. The stock option plans provide that officers, key employees, directors and consultants may be granted options to purchase up to 2,675,000 shares of common stock of the Company at not less than 100 percent of the fair market value at the date of grant, unless the grantee is a 10 percent shareholder of the Company, in which case the price must not be less than 110 percent of the fair market value. | ||||||||||||||||||||||||
Transactions and other information related to stock options granted under these plans for the nine months ended October 31, 2014 are summarized below: | ||||||||||||||||||||||||
Outstanding Options | ||||||||||||||||||||||||
Weighted-Ave. | ||||||||||||||||||||||||
Number of | Exercise | |||||||||||||||||||||||
Shares | Price | |||||||||||||||||||||||
Balance, January 31, 2014 | 638,500 | $ | 1.22 | |||||||||||||||||||||
Options granted | - | - | ||||||||||||||||||||||
Options canceled or expired | (38,500 | ) | 5.32 | |||||||||||||||||||||
Options exercise | - | - | ||||||||||||||||||||||
Balance, October 31, 2014 | 600,000 | $ | 0.96 | |||||||||||||||||||||
Stock Options Exercisable at October 31, 2014 | 560,000 | $ | 0.95 | |||||||||||||||||||||
Transactions and other information related to restricted stock granted under these plans for the nine months ended October 31, 2014 are summarized below: | ||||||||||||||||||||||||
Outstanding Restricted | ||||||||||||||||||||||||
Stock Units | ||||||||||||||||||||||||
Weighted-Ave. | ||||||||||||||||||||||||
Number of | Exercise | |||||||||||||||||||||||
Shares | Price | |||||||||||||||||||||||
Balance, January 31, 2014 | 420,000 | $ | 0.18 | |||||||||||||||||||||
Restricted stock granted | - | - | ||||||||||||||||||||||
Restricted stock forfeited | (30,000 | ) | 0.18 | |||||||||||||||||||||
Balance, October 31, 2014 | 390,000 | $ | 0.18 | |||||||||||||||||||||
As of October 31, 2014, the stock awards outstanding have an aggregate intrinsic value of $0, based on a closing market price of $0.17 per share on October 31, 2014. The following table summarizes information about the Company’s stock awards outstanding at October 31, 2014: | ||||||||||||||||||||||||
Awards Outstanding | Options Exercisable | |||||||||||||||||||||||
Weighted-Ave. | ||||||||||||||||||||||||
Range of | Number | Remaining | Weighted-Ave. | Number | Weighted-Ave. | |||||||||||||||||||
Exercise/Grant Prices | Outstanding | Contractual Life | Exercise/Grant Price | Exercisable | Exercise Price | |||||||||||||||||||
$ | 0.4 | 465,000 | 7.95 | $ | 0.4 | 465,000 | $ | 0.4 | ||||||||||||||||
$ | 1.09 | 100,000 | 4.03 | 1.09 | 60,000 | 1.09 | ||||||||||||||||||
$ | 4.9 | 15,000 | 3.33 | 4.9 | 15,000 | 4.9 | ||||||||||||||||||
$ | 10.43 | 20,000 | 1.64 | 10.43 | 20,000 | 10.43 | ||||||||||||||||||
600,000 | 0.96 | 560,000 | 0.95 | |||||||||||||||||||||
At October 31, 2014, shares available for future grants under the 2011 Plan totaled 35,224. |
Note_5_Net_Income_Loss_Per_Sha
Note 5 - Net Income (Loss) Per Share | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Earnings Per Share [Text Block] | 5 | Net Income (Loss) Per Share | |||||||||||||||
The Company calculates basic income (loss) per share by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the effects of potentially dilutive securities. Since the Company incurred a net loss for the nine months ended October 31, 2013, basic and diluted loss per share for this period was the same because the inclusion of dilutive potential common shares related to outstanding stock awards in the calculation would have been antidilutive. | |||||||||||||||||
Potential common shares of 720,000 relating to outstanding stock awards to directors and employees have been excluded from diluted weighted average common shares for the nine months ended October 31, 2013, as the effect would have been antidilutive. Additionally, for the nine months ended October 31, 2013, the 1,704,546 outstanding warrants issued to Broadwood would have been anti-dilutive. | |||||||||||||||||
The following table presents reconciliations of the numerators and denominators of the basic and diluted loss per share computations for net loss. In the tables below, “Net income (loss)” represents the numerator and “Shares” represents the denominator (in thousands, except per share amounts): | |||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income (loss) | $ | (330 | ) | $ | 551 | $ | 6,487 | $ | (1,717 | ) | |||||||
Basic net income (loss) per share: | |||||||||||||||||
Weighted-average shares outstanding-Basic | 14,684 | 14,470 | 14,684 | 14,300 | |||||||||||||
Basic net income (loss) per share | $ | (0.02 | ) | $ | 0.04 | $ | 0.44 | $ | (0.12 | ) | |||||||
Diluted net inome (loss) per share: | |||||||||||||||||
Weighted average shares outstanding - basic | 14,684 | 14,470 | 14,684 | 14,300 | |||||||||||||
Effect of potentially dilutive securities | 202 | 74 | 146 | - | |||||||||||||
Weighted average shares outstanding - diluted | 14,886 | 14,544 | 14,830 | 14,300 | |||||||||||||
Diluted net income (loss) per share | $ | (0.02 | ) | $ | 0.04 | $ | 0.44 | $ | (0.12 | ) |
Note_6_Customer_and_Supplier_C
Note 6 - Customer and Supplier Concentrations | 9 Months Ended | ||||||||||||||||||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||
Customer and Supplier Concentrations [Text Block] | 6 | Customer and Supplier Concentrations | |||||||||||||||||||||||||||||||
Substantially all of the Company’s revenue was derived from a single customer, Lenovo, in fiscal 2014. As discussed in Note 2 above, in August 2013, Lenovo notified us of their intention to cease offering Comarco’s product to its customers. We shipped approximately 20,000 of our Constellation units to Lenovo and 11,000 field replacement units to Lenovo affiliates during our third quarter of fiscal 2014, and we have no further orders from Lenovo or their affiliates. The loss of Lenovo has had a material adverse impact on our revenues and results of operations. | |||||||||||||||||||||||||||||||||
The customers providing 10 percent or more of the Company’s revenue for any of the periods presented below are listed here: | |||||||||||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Total revenue | $ | - | 0 | % | $ | 1,508 | 100 | % | $ | - | 0 | % | $ | 4,429 | 100 | % | |||||||||||||||||
Customer concentration: | |||||||||||||||||||||||||||||||||
Lenovo Information Products Co., Ltd. | - | 0 | % | 1,465 | 97 | % | - | 0 | % | 4,319 | 98 | % | |||||||||||||||||||||
$ | - | 0 | % | $ | 1,465 | 97 | % | $ | - | 0 | % | $ | 4,319 | 98 | % | ||||||||||||||||||
The suppliers comprising 10 percent or more of the Company’s gross accounts receivable due from suppliers at either October 31, 2014 or January 31, 2014 are listed below (in thousands, except percentages). | |||||||||||||||||||||||||||||||||
As of October 31, | As of January 31, | ||||||||||||||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||||||||||||||
Total gross accounts receivable due from | $ | 122 | 100 | % | $ | 128 | 100 | % | |||||||||||||||||||||||||
suppliers | |||||||||||||||||||||||||||||||||
Accounts receivable concentration: | |||||||||||||||||||||||||||||||||
Zheng Ge Electrical Co., Ltd. | $ | 122 | 100 | % | $ | 122 | 95 | % | |||||||||||||||||||||||||
$ | 122 | 100 | % | $ | 122 | 95 | % | ||||||||||||||||||||||||||
Zheng Ge Electrical Co., Ltd. (“Zheng Ge”) was a tip supplier for the Bronx product, which was subject to a recall. We previously sourced some of the component parts that Zheng Ge used in the manufacture of the tips. We ceased paying Zheng Ge during the course of the product recall while we investigated the manufacturing defect which ultimately caused the recall and, likewise, Zheng Ge ceased paying us. | |||||||||||||||||||||||||||||||||
The companies comprising 10 percent or more of our gross accounts payable at either October 31, 2014 or January 31, 2014 are listed below (in thousands, except percentages). | |||||||||||||||||||||||||||||||||
As of October 31, | As of January 31, | ||||||||||||||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||||||||||||||
Total gross accounts payable | $ | 746 | 100 | % | $ | 4,363 | 100 | % | |||||||||||||||||||||||||
Supplier concentration: | |||||||||||||||||||||||||||||||||
Chicony Power Technology, Co. Ltd. | $ | - | 0 | % | $ | 1,100 | 25 | % | |||||||||||||||||||||||||
Pillsbury Winthrop Shaw Pittman, LLP | 432 | 58 | % | 1,953 | 45 | % | |||||||||||||||||||||||||||
$ | 432 | 58 | % | $ | 3,053 | 70 | % | ||||||||||||||||||||||||||
Chicony Power Technology, Co. Ltd., (“Chicony”) was the manufacturer of the Bronx product, which was subject to a recall. We had been in litigation with Chicony (see Note 10). Effective May 15, 2014, Chicony entered into a settlement agreement with us that dismissed all claims between the two parties arising from the litigation. Pursuant to the terms of the settlement agreement, Chicony agreed to pay us $7.6 million in cash in lieu of the previous jury net award of $9.7 million or any other related costs or fees. $4.0 million of the settlement amount was paid on May 16, 2014, with the balance of $3.6 million paid on May 30, 2014. As a result of the settlement agreement, $1.1 million of contract manufacturer obligations to Chicony have been legally dismissed and reversed as of July 31, 2014. The dismissed obligations are reflected in Cost of Revenues for the nine months ended October 31, 2014. | |||||||||||||||||||||||||||||||||
Pillsbury Winthrop Shaw Pittman, LLP (“Pillsbury”) was our former legal counsel for the Kensington litigation as well as other patent and intellectual property matters (see Note 10). On May 28, 2014, we entered into an agreement with Pillsbury in which we paid Pillsbury a lump sum of $1.5 million and the remaining balance of $0.4 million (“the Balance”) was modified and is to be paid, if at all, in the event Comarco obtains any monetary recovery, whether through settlement, judgment or otherwise, from or as a result of the Targus Lawsuit and/or any of the additional lawsuits. The amount payable shall be equal to the Balance plus 20% per annum, compounded annually from the Effective Date of May 28, 2014. In connection with this partial repayment, no gain was recognized. |
Note_7_Accrued_Liabilities
Note 7 - Accrued Liabilities | 9 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 7 | Accrued Liabilities | |||||||
Accrued liabilities consist of the following (in thousands): | |||||||||
October 31, | January 31, | ||||||||
2014 | 2014 | ||||||||
Uninvoiced materials and services received | $ | 331 | $ | 458 | |||||
Accrued legal and professional fees | 78 | 161 | |||||||
Accrued payroll and related expenses | 31 | 58 | |||||||
Accrued warranty | 20 | 20 | |||||||
Other | 303 | 315 | |||||||
$ | 763 | $ | 1,012 | ||||||
As of October 31, 2014, approximately $0.3 million or 98 percent of total uninvoiced materials and services of $0.3 million, respectively, included in accrued liabilities, were payable to Zheng Ge Electrical Co. Ltd. (“Zheng Ge”). |
Note_8_Loan_Related_Agreements
Note 8 - Loan & Related Agreements | 9 Months Ended | |
Oct. 31, 2014 | ||
Notes to Financial Statements | ||
Debt Disclosure [Text Block] | 8 | Loan and Related Agreements |
Secured Loan Agreement with Elkhorn Partners. | ||
On February 11, 2013, the Company and Elkhorn Partners Limited Partnership (“Elkhorn”), entered into a Secured Loan Agreement (the “Elkhorn Loan Agreement”) and a Stock Purchase Agreement (the “Elkhorn SPA”), and certain related agreements, which are described below (collectively, the “Elkhorn Agreements”). Pursuant to those Elkhorn Agreements, Elkhorn made a $1.5 million senior secured loan to the Company with a maturity date of November 30, 2014 and purchased a total of 6,250,000 shares of the Company’s common stock at a cash purchase price of $0.16 per share, generating an additional $1.0 million of cash for the Company. The average of the closing prices of the Company’s common stock in the over-the-counter market for the five trading days immediately preceding February 11, 2013 was $0.14 per share and, for the 29 trading days that began on January 2, 2013 and ended on February 8, 2013, was $0.158 per share. On February 11, 2013, the Company used approximately $2.1 million of the proceeds of $2.5 million from the Elkhorn Loan and the sale of the shares to Elkhorn to pay the entire principal amount of and all accrued interest on the Broadwood Loan. On June 3, 2014, the Company repaid the Elkhorn Loan Agreement in full. | ||
The Elkhorn Loan, which was evidenced by a promissory note (the “Elkhorn Loan”), issued by the Company to Elkhorn, bore interest at 7% for the first 12 months of the Elkhorn Loan, increasing to 8.5% thereafter and continuing until the Elkhorn Loan was paid in full. | ||
The Elkhorn Loan Agreement provided that if and to the extent the Company did not pay the Elkhorn Loan in full by its Maturity Date, then, Elkhorn would have had the right, at its option (but not the obligation), to convert the then unpaid balance of the Elkhorn Loan, in whole or in part, into shares of Company common stock at a conversion price of $0.25 per share. That conversion price was subject to possible adjustment on (i) certain sales of Company common stock at a price lower than $0.25 per share, (ii) stock splits of, stock dividends on and any reclassification of the Company’s outstanding shares, and (iii) certain mergers or reorganizations of the Company, as provided in Article III of the Elkhorn Loan Agreement. This conversion feature created a derivative liability that is described in Note 9. | ||
Elkhorn Stock Purchase Agreement | ||
Concurrently with the Company’s entry into the Elkhorn Loan Agreement, the Company and Elkhorn entered into the Elkhorn SPA Agreement. Pursuant to that Elkhorn SPA Agreement, the Company sold 6,250,000 shares of its common stock to Elkhorn at a price of $0.16 per share, resulting in an aggregate purchase price of $1.0 million. | ||
Senior Secured Six Month Term Loan Agreement and Stock Purchase Agreement | ||
The Company entered into a Senior Secured Six Month Term Loan Agreement dated July 27, 2012 (the “Broadwood Loan Agreement”) with Broadwood, a partnership managed by Broadwood Capital, Inc., the general partner of Broadwood. Broadwood is a significant shareholder of the Company. | ||
Pursuant to that Broadwood Loan Agreement, Broadwood made a $2,000,000 senior secured six month loan (the “Broadwood Loan”) to the Company and to CWT, as co-borrower. The Broadwood Loan bore interest at 5% per annum, ranked senior in right of payment to all other indebtedness of the Company and was due and payable in full on January 28, 2013. | ||
Stock Purchase Agreement and Stock Purchase Warrants | ||
Concurrently with the execution of the Broadwood Loan Agreement, the Company and Broadwood entered into the Broadwood SPA. That agreement provided for the purchase by Broadwood of up to 3,000,000 shares of the Company’s common stock (the “Shares”), at a price of $1.00 per Share, subject to the following conditions: (i) during the six month term of the Broadwood Loan, the Company would use its best commercial efforts to raise at least $3.0 million from the sale of additional equity securities to other investors, which could include other shareholders of the Company, and (ii) the Company remained in compliance with its covenants under the Broadwood Loan Agreement. The Broadwood SPA provided that if, at any time between July 27, 2012 and July 27, 2013, the Company sold any shares of its common stock (or sells or issues securities that are convertible or exercisable into shares of common stock) at a price less than $1.00 per share, the Company would be required to issue outright to Broadwood, without additional consideration from it, a number of additional Shares (the “Make-Whole Shares”) sufficient to reduce the per share price paid by Broadwood for the total number of the Shares and Make-Whole Shares issued under the Broadwood SPA to that lower price. | ||
As consideration for the Broadwood Loan and Broadwood’s entry into the Broadwood SPA, on July 27, 2012 the Company issued stock purchase warrants (the “Warrants”) to Broadwood entitling it to purchase up to a total of 1,704,546 shares of the Company’s common stock (the “Warrant Shares”), at a price of $1.00 per Warrant Share, at any time through July 2020. | ||
On July 27, 2012, the Company also entered into a Warrant Commitment Letter, which provided that if the Company raised less than $3.0 million from sales of equity securities to other investors during the six month term of the Broadwood Loan, then Broadwood will receive an additional Warrant (the “Additional Warrant”) entitling it to purchase, also at a price of $1.00 per share, an amount of shares of the Company’s common stock to be determined based on a formula in the Warrant Commitment Letter, with such amount not to exceed 1,000,000 additional shares (the amount of such additional shares, “Additional Warrant Shares”). The exercise price is to be adjusted if the Company completed subsequent financings at less than the current exercise price as described below. | ||
The Warrants, including the Additional Warrant, provide that if the Company sold shares of its common stock (or any securities that were convertible or exercisable into shares of Company common stock) at a price less than $1.00 per share, then, subject to certain exceptions (including grants of stock incentives and sales of shares to officers, employees or directors under the Company’s equity incentive plans and issuances of shares in business acquisitions), the exercise price of the Warrants, including the Additional Warrant, then outstanding would be reduced to that lower price and the number of Warrant Shares purchasable by Broadwood on exercise of the Warrants and the Additional Warrant will be proportionately increased. The Warrants and the Additional Warrant were accounted for as derivative liabilities resulting from the instruments’ price protection features. | ||
The Warrants and the Additional Warrant (collectively, the “Broadwood Warrants”) also grant to Broadwood the right to require the Company (i) to register the Warrant Shares under the Securities Act of 1933, as amended (the “Securities Act”) for possible resale and (ii) to include the Warrant Shares in any registration statement that the Company may file to register, under the Securities Act, the sale of Company shares for cash. | ||
The Company was informed by Broadwood on January 28, 2013, that it was Broadwood’s position that one or more of the conditions precedent to its obligation to purchase the Company’s shares pursuant to the Broadwood SPA had not been satisfied and, as a result, Broadwood would not consummate that purchase. | ||
The Company’s position was that, contrary to Broadwood’s assertions, all of the conditions under the Broadwood SPA had been satisfied, and Broadwood’s refusal to purchase 3,000,000 shares of Company common stock, at the price of $1.00 per share, constituted a material breach by Broadwood of its obligations under the Broadwood SPA. As a result, as of the date of filing this report, the Company had not issued any Additional Warrant Shares to Broadwood and each party had reserved its rights under and with respect to the Broadwood SPA and the Broadwood Warrants. | ||
On August 13, 2014, the Company and Broadwood entered into an Amendment and Release Agreement that resolves the disputes between the Company and Broadwood concerning the Stock and Warrant Documents and related matters. Pursuant to the Amendment and Release Agreement, the Company issued Broadwood a new stock purchase warrant (“New Warrant”) entitling it to purchase up to a total of 2,350,000 shares of the Company’s common stock, at a price of $0.16 per share, in exchange for cancellation of the Original Warrants and any obligation of the Company to issue the Additional Warrant. The New Warrant expires on July 27, 2020. In addition, the Company and Broadwood released each other from any and all claims concerning the Stock and Warrant Documents and related matters. The derivative liability associated with the Broadwood warrants was reversed on the cancellation date.The replacement warrants qualified for classification as equity and added to additional paid – in capital. | ||
Note_9_Fair_Value_Measurements
Note 9 - Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Fair Value, Measurement Inputs, Disclosure [Text Block] | 9 | Fair Value Measurements | |||||||||||||||
We follow FASB ASC 820, "Fair Value Measurements and Disclosures" (“ASC 820”), in connection with assets and liabilities measured at fair value on a recurring basis subsequent to initial recognition. The guidance applies to our derivative liabilities. We had no assets or liabilities measured at fair value on a non-recurring basis for any period reported. | |||||||||||||||||
ASC 820 requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories. We measure the fair value of applicable financial and non-financial assets based on the following fair value hierarchy: | |||||||||||||||||
Level 1: Quoted market prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. | |||||||||||||||||
Level 3: Unobservable inputs that are not corroborated by market data. | |||||||||||||||||
The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. | |||||||||||||||||
The fair value of our recorded derivative liabilities is determined based on unobservable inputs that are not corroborated by market data, which is a Level 3 classification. We record derivative liabilities on our balance sheet at fair value with changes in fair value recorded in our consolidated statements of operations. | |||||||||||||||||
The table below sets forth a summary of changes in the fair value of our Level 3 financial instruments for the nine months ended October 31, 2014 (in thousands): | |||||||||||||||||
Change in estimated | Change in estimated | ||||||||||||||||
fair value recognized | fair value recognized | ||||||||||||||||
February 1, | in results of | in equity due to | October 31, | ||||||||||||||
Description | 2014 | operations | replacement | 2014 | |||||||||||||
Broadwood warrants | $ | 2,426 | $ | (132 | ) | $ | (2,294 | ) | $ | - | |||||||
Elkhorn conversion features | 94 | (94 | ) | - | - | ||||||||||||
$ | 2,520 | $ | (226 | ) | $ | (2,294 | ) | $ | - | ||||||||
On August 13, 2014, the Company entered into an Amendment and Release Agreement that canceled of the Broadwood warrants. The derivative liability associated with the Broadwood warrants was reversed on the cancellation date.The replacement warrants qualified for classification as equity and added to additional paid – in capital. | |||||||||||||||||
On June 3, 2014, the Company repaid the Elkhorn Loan in full and as a result, the discount to the loan payable and related derivative liability were extinguished and charged to earnings. | |||||||||||||||||
The table below sets forth a summary of changes in the fair value of our Level 3 financial instruments for the nine months ended October 31, 2013 (in thousands): | |||||||||||||||||
February 1, | Recorded New Derivative | Change in estimated fair value recognized in results of operations | October 31, | ||||||||||||||
2013 | Liabilities | 2013 | |||||||||||||||
Derivative liabilities | $ | 2,466 | $ | 624 | $ | (271 | ) | $ | 2,819 |
Note_10_Commitments_and_Contin
Note 10 - Commitments and Contingencies | 9 Months Ended | |
Oct. 31, 2014 | ||
Notes to Financial Statements | ||
Commitments and Contingencies Disclosure [Text Block] | 1 | Commitments and Contingencies |
0 | ||
. | ||
Executive Severance Commitments | ||
We have a severance compensation agreement with our key executive. This agreement requires us to pay this executive, in the event of a termination of employment following a change of control of the Company or other circumstances, the amount of his then current annual base salary and the amount of any bonus amount the executive would have achieved for the year in which the termination occurs plus the acceleration of unvested options. We have not recorded any liability in the consolidated financial statements for this agreement. | ||
Additionally, as a result of the Company’s sale of the 6,250,000 shares of common stock to Elkhorn (see Note 8), Elkhorn’s beneficial ownership of the Company has increased from approximately 9% to approximately 49% of the Company’s outstanding voting stock, making Elkhorn the Company’s largest shareholder and resulting in a change of control for purposes of the severance compensation agreement. The executive who is party to this agreement has waived his right to receive payments under this agreement as a result of the change in Elkhorn’s beneficial ownership of the Company. | ||
Executive and Board of Directors Compensation | ||
On November 2, 2013, the Company approved a deferred compensation plan for its Chief Executive Officer and Board of Directors. As of October 31, 2014, no compensation expense has been accrued under this deferred compensation plan as its goal has not yet been attained. | ||
Legal Contingencies | ||
On March 10, 2014, we filed a lawsuit against Targus Group International, Inc. for patent infringement, breach of contract, intentional interference with contract, violation of business and professional codes, misrepresentation and fraudulent concealment. We are seeking damages of at least $17 million. | ||
Although we intend to vigorously pursue our rights in this case, the outcome of this matter is not determinable as of the date of this report. | ||
On April 26, 2011, Chicony, the contract manufacturer of the Bronx product that was the subject of a product recall, filed a complaint against us for breach of contract, seeking payment of $1.2 million for the alleged non-payment by us of amounts alleged by Chicony to be due it for products purchased from it by the Company. We denied liability and filed a cross-complaint on May 13, 2011 seeking the recovery of damages of $4.9 million caused by Chicony's failure to adhere to our technical specifications when manufacturing the Bronx product, which we believe resulted in the recall of the product. On April 16, 2013, the court approved our first-amended cross-complaint, which added intentional interference to our complaint and increased the damages we were seeking to at least $15.0 million. The trial date was held in October, 2013. In an effort to resolve this litigation before the previous trial date of April, 2013, we sent Chicony a settlement offer, which has since lapsed. On February 4, 2014, a jury returned a verdict in our favor and awarded us damages of approximately $10.8 million, offset by previously accrued liabilities of $1.1 million for a net award of approximately $9.7 million. Effective as of May 15, 2014, Chicony entered into a settlement agreement with us that dismisses all claims between the parties arising from the litigation referenced above. Pursuant to the terms of the settlement agreement, Chicony agreed to pay us $7.6 million in lieu of the jury’s net award of $9.7 million or any other related costs or fees. $4.0 million of the settlement amount was paid to us on May 16, 2014, with the balance of $3.6 million paid to us on June 2, 2014. We recorded a gain of $7.6 million associated with this settlement in the quarter ended July 31, 2014. As a result of the settlement agreement, the $1.1 million payable to Chicony for contract manufacturing costs has been legally dismissed and discharged and recorded as an offset to Cost of Revenues in the quarter ended July 31, 2014. | ||
Further pursuant to the settlement agreement, each party released the other and its affiliates from any and all claims related to the subject matter of the litigation and we covenanted not to sue Chicony on the next 500,000 power adapters sold by Chicony after May 15, 2014 that we allege infringe on our intellectual property rights. The settlement agreement also contains other representations, warranties and covenants of both parties that are customary for an agreement of this type. | ||
On September 1, 2011, subsequent to receiving an infringement notification from us, ACCO Brands USA LLC and its Kensington Computer Products Group division (collectively “Kensington”) filed a lawsuit against us alleging that five of our patents relating to power technology are invalid and/or not infringed by products made and/or sold by Kensington. On February 29, 2012, we denied these claims and filed a cross-complaint alleging infringement by Kensington of each of these five patents. A number of these patents are currently the subject of re-examination proceedings initiated by Kensington or other third parties. On February 4, 2014, Kensington entered into a settlement and licensing agreement with the Company with an effective date of February 1, 2014 that dismisses all claims between the two parties arising from the litigation referenced above. | ||
On March 6, 2012, we filed a lawsuit against EDAC Power Electronics Co. Ltd (“EDAC”) for breach of contract seeking payment of $2.5 million for the failure to deliver goods ordered by us in the time, place, manner and price indicated by each purchase order. As previously reported, the parties entered into a Settlement Agreement on July 24, 2012, ending the litigation between the parties. The settlement involved no cash payments by either of the parties, but allowed us to recover previously incurred product and freight costs and to discharge net liabilities of $1.4 million from our consolidated balance sheet that would otherwise have been due to EDAC had it prevailed in the lawsuit. The settlement resulted in a decrease to cost of revenue of $1.4 million during the fiscal year ended January 31, 2013. | ||
In addition to the pending matters described above, we are, from time to time, involved in various legal proceedings incidental to the conduct of our business. We are unable to predict the ultimate outcome of these matters. |
Significant_Accounting_Policie
Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2014 | |
Accounting Policies [Abstract] | |
Selling, General and Administrative Expenses, Policy [Policy Text Block] | Legal expense classification |
Our legal expenses are classified in either selling, general, and administrative expenses or engineering and support expenses depending on the nature of the legal expense. All legal expenses incurred related to our intellectual property, including associated litigation expense and maintenance of our patent portfolio, are included in engineering and support expenses in our consolidated statement of operations. All other legal expenses, including all other litigation expense and public company legal expense are included in selling, general, and administrative expenses in our consolidated statement of operations. | |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments |
Our financial instruments include cash and cash equivalents, accounts receivable due from customers and suppliers, accounts payable, accrued liabilities, a short-term loan and derivative liabilities. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. | |
Derivatives, Policy [Policy Text Block] | Derivative Liabilities |
A derivative is an instrument whose value is “derived” from an underlying instrument or index such as a future, forward, swap, option contract, or other financial instrument with similar characteristics, including certain derivative instruments embedded in other contracts and for hedging activities. As a matter of policy, the Company does not invest in separable financial derivatives or engage in hedging transactions. However, the Company entered into certain financing transactions in fiscal 2013 that involved financial equity instruments containing certain features that have resulted in the instruments being deemed derivatives. The Company may engage in other similar complex financing transactions in the future, but not with the intention to enter into derivative instruments. Derivatives are measured at fair value using the Monte Carlo simulation pricing model and marked to market through earnings. However, such new and/or complex instruments may have immature or limited markets. As a result, the pricing models used for valuation of derivatives often incorporate significant estimates and assumptions. Changes in these subjective assumptions can materially affect the estimate of the fair value of derivative liabilities and, consequently, the related amount recognized as loss due to change in fair value of derivative liabilities on the consolidated statement of operations. Furthermore, depending on the terms of a derivative, the valuation of derivatives may be removed from the financial statements upon exercise or conversion of the underlying instrument into some other security. | |
We evaluate free-standing derivative instruments to properly classify such instruments within stockholders’ equity or as liabilities in our financial statements. Our policy is to settle instruments indexed to our common shares on a first-in-first-out basis. | |
The classification of a derivative instrument is reassessed at each balance sheet date. If the classification changes as a result of events during a reporting period, the instrument is reclassified as of the date of the event that caused the reclassification. There is no limit on the number of times a contract may be reclassified. | |
During the second quarter of fiscal 2013, we adopted the guidance, as codified in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 815-40, | |
Derivatives and Hedging | |
, | |
Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, | |
that requires us to apply a two-step model in determining whether a financial instrument or an embedded feature is indexed to our own stock and thus enables it to qualify for equity classification. The warrants issued to Broadwood Partners, L.P. (“Broadwood”) contained provisions that adjusted the exercise price in the event of certain dilutive issuance of our securities (see Note 8). Accordingly, the Company considered the warrants to be subject to price protection and classified them as derivative liabilities at the date of issuance with a fair value of $1.4 million and a corresponding discount to the underlying loan payable (see Note 8). On August 13, 2014, we entered into an an Amendment and Release Agreement that canceled and replaced the Broadwood warrants. Accordingly, the derivative liability associated with the Broadwood warrants was reversed on the cancellation date and the replacement warrants, which qualified for classification as equity, were added to additional paid in capital. | |
Additionally, during the first quarter of fiscal 2014, we entered into a Loan Agreement with Elkhorn Partners Limited Partnership (“Elkhorn”) which contains convertible provisions that allow Elkhorn to convert the loan into common stock. The conversion price could have been adjusted in the event of certain dilutive issuance of our securities. Accordingly, the Company considered the convertible debt to be subject to price protection and created a discount to the underlying loan payable and classified that fair value as derivative liabilities at the date of issuance with a fair value of $0.6 million (see Note 8). On June 3, 2014, the Company repaid the Elkhorn Loan in full and as a result, the discount to the loan payable and related derivative liability were extinguished and charged to earnings for the nine months period ended October 31, 2014. | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates |
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the periods reported. Actual results could materially differ from those estimates. | |
Certain accounting principles require subjective and complex judgments to be used in the preparation of financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates, or assumptions that are used. Such estimates and assumptions include, but are not specifically limited to, those required in the assessment of the impairment of long-lived assets, allowance for doubtful accounts, valuation allowances for deferred tax assets, valuation of derivative liabilities and determination of stock-based compensation. | |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | Restricted Cash |
Our restricted cash balances are secured by separate bank accounts and represents $5,000 which serves as collateral for credit card chargebacks associated with our internet website. | |
Accounts Receivable from Suppliers [Policy Text Block] | Accounts Receivable Due from Suppliers |
Oftentimes we were able to source components locally that we later sold to our contract manufacturers, who built the finished goods, and other suppliers. This was especially the case when new products were initially introduced into production. Sales to our contract manufacturers (or “CMs”) and other suppliers were excluded from revenue and were recorded as a reduction to cost of revenue. | |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents |
All highly liquid investments with original maturity dates of three months or less when acquired are classified as cash and cash equivalents. The fair value of cash and cash equivalents approximates the amounts shown in the consolidated financial statements. Cash and cash equivalents are generally maintained in uninsured accounts, typically Eurodollar deposits with daily liquidity, which are subject to investment risk including possible loss of | |
principal invested. | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation |
The unaudited interim condensed consolidated financial statements of the Company include the accounts of Comarco, Inc. and CWT, its wholly owned subsidiary. All material intercompany balances, transactions, and profits and losses have been eliminated. | |
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation |
The accompanying condensed consolidated balance sheet as of January 31, 2014, which has been derived from our audited financial statements, and our unaudited interim condensed consolidated financial statements as of October 31, 2014 included herein have been prepared without audit in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by (“GAAP”) for complete financial statements. The Company believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended January 31, 2014. The accounting policies followed by the Company are set forth in Note 2 to the Company’s audited financial statements included in its Form 10-K for its fiscal year ended January 31, 2014 (the “2014 10-K”), which was filed with the SEC on April 30, 2014. The unaudited interim condensed consolidated financial information presented herein reflects all adjustments, consisting only of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of the consolidated results for the interim periods presented. The consolidated results for the three and nine months ended October 31, 2014 are not necessarily indicative of the results to be expected for the fiscal year ending January 31, 2015. |
Note_4_StockBased_Compensation1
Note 4 - Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||||||||||||
Oct. 31, 2014 | ||||||||||||||||||||||||
Notes Tables | ||||||||||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 31, | October 31, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Stock-based compensation expense | $ | 12 | $ | 18 | $ | 36 | $ | 71 | ||||||||||||||||
Impact on basic and diluted earnings per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Outstanding Options | |||||||||||||||||||||||
Weighted-Ave. | ||||||||||||||||||||||||
Number of | Exercise | |||||||||||||||||||||||
Shares | Price | |||||||||||||||||||||||
Balance, January 31, 2014 | 638,500 | $ | 1.22 | |||||||||||||||||||||
Options granted | - | - | ||||||||||||||||||||||
Options canceled or expired | (38,500 | ) | 5.32 | |||||||||||||||||||||
Options exercise | - | - | ||||||||||||||||||||||
Balance, October 31, 2014 | 600,000 | $ | 0.96 | |||||||||||||||||||||
Stock Options Exercisable at October 31, 2014 | 560,000 | $ | 0.95 | |||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | Outstanding Restricted | |||||||||||||||||||||||
Stock Units | ||||||||||||||||||||||||
Weighted-Ave. | ||||||||||||||||||||||||
Number of | Exercise | |||||||||||||||||||||||
Shares | Price | |||||||||||||||||||||||
Balance, January 31, 2014 | 420,000 | $ | 0.18 | |||||||||||||||||||||
Restricted stock granted | - | - | ||||||||||||||||||||||
Restricted stock forfeited | (30,000 | ) | 0.18 | |||||||||||||||||||||
Balance, October 31, 2014 | 390,000 | $ | 0.18 | |||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | Awards Outstanding | Options Exercisable | ||||||||||||||||||||||
Weighted-Ave. | ||||||||||||||||||||||||
Range of | Number | Remaining | Weighted-Ave. | Number | Weighted-Ave. | |||||||||||||||||||
Exercise/Grant Prices | Outstanding | Contractual Life | Exercise/Grant Price | Exercisable | Exercise Price | |||||||||||||||||||
$ | 0.4 | 465,000 | 7.95 | $ | 0.4 | 465,000 | $ | 0.4 | ||||||||||||||||
$ | 1.09 | 100,000 | 4.03 | 1.09 | 60,000 | 1.09 | ||||||||||||||||||
$ | 4.9 | 15,000 | 3.33 | 4.9 | 15,000 | 4.9 | ||||||||||||||||||
$ | 10.43 | 20,000 | 1.64 | 10.43 | 20,000 | 10.43 | ||||||||||||||||||
600,000 | 0.96 | 560,000 | 0.95 |
Note_5_Net_Income_Loss_Per_Sha1
Note 5 - Net Income (Loss) Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
Notes Tables | |||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income (loss) | $ | (330 | ) | $ | 551 | $ | 6,487 | $ | (1,717 | ) | |||||||
Basic net income (loss) per share: | |||||||||||||||||
Weighted-average shares outstanding-Basic | 14,684 | 14,470 | 14,684 | 14,300 | |||||||||||||
Basic net income (loss) per share | $ | (0.02 | ) | $ | 0.04 | $ | 0.44 | $ | (0.12 | ) | |||||||
Diluted net inome (loss) per share: | |||||||||||||||||
Weighted average shares outstanding - basic | 14,684 | 14,470 | 14,684 | 14,300 | |||||||||||||
Effect of potentially dilutive securities | 202 | 74 | 146 | - | |||||||||||||
Weighted average shares outstanding - diluted | 14,886 | 14,544 | 14,830 | 14,300 | |||||||||||||
Diluted net income (loss) per share | $ | (0.02 | ) | $ | 0.04 | $ | 0.44 | $ | (0.12 | ) |
Note_6_Customer_and_Supplier_C1
Note 6 - Customer and Supplier Concentrations (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | (in thousands, except percentages) | ||||||||||||||||||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||||
Total revenue | $ | - | 0 | % | $ | 1,508 | 100 | % | $ | - | 0 | % | $ | 4,429 | 100 | % | |||||||||||||||||
Customer concentration: | |||||||||||||||||||||||||||||||||
Lenovo Information Products Co., Ltd. | - | 0 | % | 1,465 | 97 | % | - | 0 | % | 4,319 | 98 | % | |||||||||||||||||||||
$ | - | 0 | % | $ | 1,465 | 97 | % | $ | - | 0 | % | $ | 4,319 | 98 | % | ||||||||||||||||||
Schedule of Accounts Receivable by Major Suppliers by Reporting Segments [Table Text Block] | As of October 31, | As of January 31, | |||||||||||||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||||||||||||||
Total gross accounts receivable due from | $ | 122 | 100 | % | $ | 128 | 100 | % | |||||||||||||||||||||||||
suppliers | |||||||||||||||||||||||||||||||||
Accounts receivable concentration: | |||||||||||||||||||||||||||||||||
Zheng Ge Electrical Co., Ltd. | $ | 122 | 100 | % | $ | 122 | 95 | % | |||||||||||||||||||||||||
$ | 122 | 100 | % | $ | 122 | 95 | % | ||||||||||||||||||||||||||
Equity Method Investments [Table Text Block] | As of October 31, | As of January 31, | |||||||||||||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||||||||||||||
Total gross accounts payable | $ | 746 | 100 | % | $ | 4,363 | 100 | % | |||||||||||||||||||||||||
Supplier concentration: | |||||||||||||||||||||||||||||||||
Chicony Power Technology, Co. Ltd. | $ | - | 0 | % | $ | 1,100 | 25 | % | |||||||||||||||||||||||||
Pillsbury Winthrop Shaw Pittman, LLP | 432 | 58 | % | 1,953 | 45 | % | |||||||||||||||||||||||||||
$ | 432 | 58 | % | $ | 3,053 | 70 | % |
Note_7_Accrued_Liabilities_Tab
Note 7 - Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Accrued Liabilities [Table Text Block] | October 31, | January 31, | |||||||
2014 | 2014 | ||||||||
Uninvoiced materials and services received | $ | 331 | $ | 458 | |||||
Accrued legal and professional fees | 78 | 161 | |||||||
Accrued payroll and related expenses | 31 | 58 | |||||||
Accrued warranty | 20 | 20 | |||||||
Other | 303 | 315 | |||||||
$ | 763 | $ | 1,012 |
Note_9_Fair_Value_Measurements1
Note 9 - Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
Notes Tables | |||||||||||||||||
Change in Fair Value Of Level3 Financial Instruments [Table Text Block] | Change in estimated | Change in estimated | |||||||||||||||
fair value recognized | fair value recognized | ||||||||||||||||
February 1, | in results of | in equity due to | October 31, | ||||||||||||||
Description | 2014 | operations | replacement | 2014 | |||||||||||||
Broadwood warrants | $ | 2,426 | $ | (132 | ) | $ | (2,294 | ) | $ | - | |||||||
Elkhorn conversion features | 94 | (94 | ) | - | - | ||||||||||||
$ | 2,520 | $ | (226 | ) | $ | (2,294 | ) | $ | - | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | February 1, | Recorded New Derivative | Change in estimated fair value recognized in results of operations | October 31, | |||||||||||||
2013 | Liabilities | 2013 | |||||||||||||||
Derivative liabilities | $ | 2,466 | $ | 624 | $ | (271 | ) | $ | 2,819 |
Note_2_Current_Developments_Fu1
Note 2 - Current Developments, Future Operations, Liquidity and Capital Resources (Details Textual) (USD $) | 9 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Oct. 31, 2014 | Oct. 31, 2013 | Jun. 02, 2014 | 30-May-14 | 15-May-14 | 16-May-14 | Feb. 04, 2014 | 30-May-14 | |
Increase (Decrease) in Accounts Payable | ($3,617,000) | $706,000 | ||||||
Chicony Power Technology Company Ltd [Member] | ||||||||
Litigation Settlement, Amount | 7,600,000 | 7,600,000 | 9,700,000 | |||||
Proceeds from Legal Settlements | 3,600,000 | 3,600,000 | 4,000,000 | |||||
Professional Fees | 1,100,000 | |||||||
Chicony Power Technology Company Ltd [Member] | Net of Attorneys Fees [Member] | ||||||||
Proceeds from Legal Settlements | 6,500,000 | |||||||
Cost of Sales [Member] | Chicony Power Technology Company Ltd [Member] | ||||||||
Increase (Decrease) in Accounts Payable | ($1,100,000) |
Note_3_Summary_of_Significant_1
Note 3 - Summary of Significant Accounting Policies (Details Textual) (USD $) | Oct. 31, 2014 |
Warrant [Member] | Broadwood Partners, L.P. [Member] | |
Derivative Financial Instruments Liabilities Fair Value Disclosure at Issuance Date | $1,400,000 |
Conversion Feature [Member] | Chicony Power Technology Company Ltd [Member] | |
Derivative Financial Instruments Liabilities Fair Value Disclosure at Issuance Date | 600,000 |
Collateral for Credit Card [Member] | |
Restricted Cash and Cash Equivalents | $5,000 |
Note_4_StockBased_Compensation2
Note 4 - Stock-Based Compensation (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 | Feb. 11, 2013 | Feb. 08, 2013 | Jun. 30, 2008 | Dec. 31, 2005 | Jul. 31, 2011 | 31-May-05 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $20,000 | $20,000 | ||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 150 days | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 0 | 0 | 0 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,675,000 | 2,675,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 100.00% | |||||||||
Share Based Compensation Arrangement by Share Based Payment Award Purchase Price of Common Stock Percent Condition | 110.00% | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $0 | $0 | ||||||||
Share Price | $0.17 | $0.17 | $0.14 | $0.16 | ||||||
Share Based Compensation Arrangement by Share Based Payment Award Percentage of Optionee Condition | 10.00% | |||||||||
Equity Incentive Plan 2005 And 2011 [Member] | ||||||||||
Share Based Compensation Options Maximum Expiration Period Following Grant Date | 10 years | |||||||||
Share Based Compensation Options Maximum Expiration Period Following Grant Date for Specified Percentage Ownership | 5 years | |||||||||
Share Based Compensation Determination of Expiration Period Specified Percentage | 10.00% | |||||||||
Equity Incentive Plan 2005 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 450,000 | |||||||||
Share Based Compensation Arrangement by Share Based Payment Award Number of Shares Authorized Including Additional Shares Authorized | 1,100,000 | |||||||||
Equity Incentive Plan 2011 [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 750,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 35,224 | 35,224 | ||||||||
Prior Employee Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 825,000 | |||||||||
Share Based Compensation Options Maximum Expiration Period Following Grant Date | 10 years | |||||||||
Share Based Compensation Options Maximum Expiration Period Following Grant Date for Specified Percentage Ownership | 5 years | |||||||||
Share Based Compensation Determination of Expiration Period Specified Percentage | 10.00% | |||||||||
Restricted Stock [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 420,000 | 420,000 |
Note_4_StockBased_Compensation3
Note 4 - Stock-Based Compensation - Share-Based Compensation Expense (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Stock-based compensation expense | $12 | $18 | $36 | $71 |
Impact on basic and diluted earnings per share (in dollars per share) | $0 | $0 | $0 | $0 |
Note_4_StockBased_Compensation4
Note 4 - Stock-Based Compensation - Stock Option Activity (Details) (USD $) | 9 Months Ended | |
Oct. 31, 2014 | Jan. 31, 2014 | |
Balance, January 31, 2014 (in shares) | 600,000 | 638,500 |
Balance, January 31, 2014 (in dollars per share) | $1.22 | |
Options canceled or expired (in shares) | -38,500 | |
Options canceled or expired (in dollars per share) | $5.32 | |
Balance, October 31, 2014 (in shares) | 600,000 | 638,500 |
Balance, October 31, 2014 (in dollars per share) | $0.96 | |
Stock Options Exercisable at October 31, 2014 (in shares) | 560,000 | |
Stock Options Exercisable at October 31, 2014 (in dollars per share) | $0.95 |
Note_4_StockBased_Compensation5
Note 4 - Stock-Based Compensation - Restricted Stock Activity (Details) (USD $) | 9 Months Ended |
Oct. 31, 2014 | |
Balance, October 31, 2014 (in dollars per share) | $0.96 |
Restricted Stock Units (RSUs) [Member] | |
Balance, January 31, 2014 (in shares) | 420,000 |
Balance, January 31, 2014 (in dollars per share) | $0.18 |
Restricted stock forfeited (in shares) | -30,000 |
Restricted stock forfeited (in dollars per share) | $0.18 |
Balance, October 31, 2014 (in shares) | 390,000 |
Balance, October 31, 2014 (in dollars per share) | $0.18 |
Note_4_StockBased_Compensation6
Note 4 - Stock-Based Compensation - Stock Awards Outstanding (Details) (USD $) | 9 Months Ended |
Oct. 31, 2014 | |
Range 1 (in shares) | 600,000 |
Range 1 (in dollars per share) | $0.96 |
Range 1 (in shares) | 560,000 |
Range 1 (in dollars per share) | $0.95 |
Range 1 [Member] | |
Range 1 (in shares) | 465,000 |
Range 1 | 7 years 346 days |
Range 1 (in dollars per share) | $0.40 |
Range 1 (in shares) | 465,000 |
Range 1 (in dollars per share) | $0.40 |
Range 2 [Member] | |
Range 1 (in shares) | 100,000 |
Range 1 | 4 years 10 days |
Range 1 (in dollars per share) | $1.09 |
Range 1 (in shares) | 60,000 |
Range 1 (in dollars per share) | $1.09 |
Range 3 [Member] | |
Range 1 (in shares) | 15,000 |
Range 1 | 3 years 120 days |
Range 1 (in dollars per share) | $4.90 |
Range 1 (in shares) | 15,000 |
Range 1 (in dollars per share) | $4.90 |
Range 4 [Member] | |
Range 1 (in shares) | 20,000 |
Range 1 | 1 year 233 days |
Range 1 (in dollars per share) | $10.43 |
Range 1 (in shares) | 20,000 |
Range 1 (in dollars per share) | $10.43 |
Note_5_Net_Income_Loss_Per_Sha2
Note 5 - Net Income (Loss) Per Share (Details Textual) | 9 Months Ended | 6 Months Ended |
Oct. 31, 2013 | Jul. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 720,000 | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,704,546 |
Note_5_Net_Income_Loss_Per_Sha3
Note 5 - Net Income (Loss) Per Share - Summary of Basic and Diluted Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Net income (loss) | ($330) | $551 | $6,487 | ($1,717) |
Weighted-average shares outstanding-Basic (in shares) | 14,684 | 14,470 | 14,684 | 14,300 |
Basic net income (loss) per share (in dollars per share) | ($0.02) | $0.04 | $0.44 | ($0.12) |
Effect of potentially dilutive securities (in shares) | 202 | 74 | 146 | |
Weighted average shares outstanding - diluted (in shares) | 14,886 | 14,544 | 14,830 | 14,300 |
Diluted net income (loss) per share (in dollars per share) | ($0.02) | $0.04 | $0.44 | ($0.12) |
Note_6_Customer_and_Supplier_C2
Note 6 - Customer and Supplier Concentrations (Details Textual) (USD $) | 0 Months Ended | |||||||||
Jun. 02, 2014 | 30-May-14 | 15-May-14 | 16-May-14 | Feb. 04, 2014 | Oct. 31, 2014 | Jan. 31, 2014 | 28-May-14 | Oct. 31, 2013 | Jul. 31, 2014 | |
Major Suppliers Accounts Payable Current | $432,000 | $3,053,000 | ||||||||
Pillsbury Winthrop Shaw Pittman L L P [Member] | ||||||||||
Major Suppliers Accounts Payable Current | 432,000 | 1,953,000 | ||||||||
Lump Sum Legal Fee | 1,500,000 | |||||||||
Accrued Professional Fees | 400,000 | |||||||||
Interest Rate for Outstanding Legal Fees Payable Solely with Settlement | 20.00% | |||||||||
Constellation Units [Member] | ||||||||||
Units Shipped | 20,000 | |||||||||
Field Replacement Units [Member] | ||||||||||
Units Shipped | 11,000 | |||||||||
Chicony Power Technology Company Ltd [Member] | ||||||||||
Litigation Settlement, Amount | 7,600,000 | 7,600,000 | 9,700,000 | |||||||
Proceeds from Legal Settlements | 3,600,000 | 3,600,000 | 4,000,000 | |||||||
Chicony Power Technology Company Ltd [Member] | Reversed in Second Quarter [Member] | ||||||||||
Major Suppliers Accounts Payable Current | $1,100,000 |
Note_6_Customer_and_Supplier_C3
Note 6 - Customer and Supplier Concentrations - Customer Concentration Risk Revenue (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2014 | Oct. 31, 2013 |
Total Revenues | $1,508 | $4,429 | ||
Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | ||||
Customer Concentration | 0.00% | 100.00% | 0.00% | 100.00% |
Total Revenues | 1,508 | 4,429 | ||
Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | Lenovo Information Products Co Ltd [Member] | ||||
Customer Concentration | 0.00% | 97.00% | 0.00% | 98.00% |
Total Revenues | $1,465 | $4,319 |
Note_6_Customer_and_Supplier_C4
Note 6 - Customer and Supplier Concentrations - Supplier Concentration Risk Accounts Receivable (Details) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
In Thousands, unless otherwise specified | ||
Total gross accounts receivable due from suppliers | $122 | $128 |
Total gross accounts receivable due from suppliers | 100.00% | 100.00% |
Zheng Ge Electrical Company Ltd [Member] | ||
Zheng Ge Electrical Co., Ltd. | $122 | $122 |
Zheng Ge Electrical Co., Ltd. | 100.00% | 95.00% |
Note_6_Customer_and_Supplier_C5
Note 6 - Customer and Supplier Concentrations - Supplier Concentration Risk Accounts Payable (Details) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
Accounts payable | $746,000 | $4,363,000 |
Total gross accounts payable | 100.00% | 100.00% |
Chicony Power Technology, Co. Ltd. | 58.00% | 70.00% |
Chicony Power Technology, Co. Ltd. | 432,000 | 3,053,000 |
Chicony Power Technology Company Ltd [Member] | ||
Chicony Power Technology, Co. Ltd. | 0.00% | 25.00% |
Chicony Power Technology, Co. Ltd. | 1,100,000 | |
Pillsbury Winthrop Shaw Pittman L L P [Member] | ||
Chicony Power Technology, Co. Ltd. | 58.00% | 45.00% |
Chicony Power Technology, Co. Ltd. | $432,000 | $1,953,000 |
Note_7_Accrued_Liabilities_Det
Note 7 - Accrued Liabilities (Details Textual) (Zheng Ge Electrical Company Ltd [Member], Uninvoiced Materials and Services [Member], USD $) | 0 Months Ended | |
In Millions, unless otherwise specified | Oct. 31, 2014 | Jan. 31, 2014 |
Zheng Ge Electrical Company Ltd [Member] | Uninvoiced Materials and Services [Member] | ||
Payables and Accruals [Abstract] | ||
Accounts Payable and Other Accrued Liabilities | $0.30 | $0.30 |
Percent of Total Uninvoiced Materials and Services | 98.00% |
Note_7_Accrued_Liabilities_Acc
Note 7 - Accrued Liabilities - Accrued Liabilities (Details) (USD $) | Oct. 31, 2014 | Jan. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities | $763 | $1,012 |
Accrued Legal and Professional Fees [Member] | ||
Accrued Liabilities | 78 | 161 |
Accrued Other Liabilities [Member] | ||
Accrued Liabilities | 303 | 315 |
Accrued Payroll and Related Expenses [Member] | ||
Accrued Liabilities | 31 | 58 |
Accrued Warranty [Member] | ||
Accrued Liabilities | 20 | 20 |
Uninvoiced Materials and Services Received [Member] | ||
Accrued Liabilities | $331 | $458 |
Note_8_Loan_Related_Agreements1
Note 8 - Loan & Related Agreements (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended | 1 Months Ended | ||||
Feb. 11, 2013 | Oct. 31, 2013 | Jul. 27, 2012 | Oct. 31, 2014 | Jan. 31, 2014 | Feb. 08, 2013 | Aug. 13, 2014 | |
Debt Disclosure [Abstract] | |||||||
Common Stock, Shares, Issued | 6,250,000 | 14,684,165 | 14,684,165 | ||||
Sale of Stock, Price Per Share | $0.16 | ||||||
Proceeds from Issuance of Common Stock | $1,000,000 | $1,030,000 | |||||
Share Price | $0.14 | $0.17 | $0.16 | ||||
Proceeds from Loans | 2,500,000 | 1,500,000 | |||||
Debt Instrument, Convertible, Conversion Price | $0.25 | ||||||
Senior Secured [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Debt Instrument, Face Amount | 1,500,000 | 2,000,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||||||
Maximum [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Debt Instrument, Convertible, Conversion Price | $0.25 | ||||||
After First 12 Months of Loan [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.50% | ||||||
First 12 Months of Loan [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | ||||||
Pay Principal Amount and Accrued Interest [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Proceeds from Loans | 2,100,000 | ||||||
NewWarrant [Member] | Subsequent Event [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.16 | ||||||
Class of Warrant or Right, Outstanding | 2,350,000 | ||||||
Stock Purchase and Warrant Agreement [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Stock Purchase Agreement Shares Agreed | 3,000,000 | ||||||
Stock Purchase Agreement Share Price | $1 | ||||||
Stock Purchase Agreement Minimum Additional Equity Securities to be Sold | 3,000,000 | ||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,704,546 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1 | ||||||
Stock Purchase and Warrant Agreement [Member] | Warrant Commitment Letter Terms [Member] | |||||||
Debt Disclosure [Abstract] | |||||||
Sales of Equity Securities to Other Investors Threshold | 3,000,000 | ||||||
Investment Warrants, Exercise Price | $1 | ||||||
Stock PurchaseAgreementAdditionalWarrantSharesMaximum | $1,000,000 |
Note_9_Fair_Value_Measurements2
Note 9 - Fair Value Measurements - Changes in Fair Value of Level 3 Financial Instruments (Details) (Fair Value, Inputs, Level 3 [Member], USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Oct. 31, 2014 |
Broadwood warrants | $2,520 |
Broadwood warrants | -226 |
Broadwood warrants | -2,294 |
Warrant [Member] | Broadwood Partners, L.P. [Member] | |
Broadwood warrants | 2,426 |
Broadwood warrants | -132 |
Broadwood warrants | -2,294 |
Conversion Feature [Member] | Elkhorn Partners Limited Partnership [Member] | |
Broadwood warrants | 94 |
Broadwood warrants | ($94) |
Note_9_Fair_Value_Measurements3
Note 9 - Fair Value Measurements - Fair Value Measurements (Details) (USD $) | 9 Months Ended | |
Oct. 31, 2014 | Oct. 31, 2013 | |
Fair Value, Inputs, Level 3 [Member] | ||
Change in estimated fair value recognized in results of operations | ($226,000) | |
Fair Value, Inputs, Level 3 [Member] | New Derivative Liabilities [Member] | ||
Derivative liabilities | 2,466,000 | |
Recorded New Derivative Liabilities | 624,000 | |
Change in estimated fair value recognized in results of operations | -271,000 | |
Derivative liabilities | $2,819,000 |
Note_10_Commitments_and_Contin1
Note 10 - Commitments and Contingencies (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||
Mar. 10, 2014 | Mar. 06, 2012 | Apr. 26, 2011 | Oct. 31, 2014 | Jun. 02, 2014 | 30-May-14 | 15-May-14 | 16-May-14 | Feb. 04, 2014 | Jan. 31, 2013 | Jul. 31, 2014 | Feb. 29, 2012 | Sep. 02, 2011 | 13-May-11 | Apr. 16, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 6,250,000 | ||||||||||||||
Legal Contingency Damage Seeking Value | $17,000,000 | ||||||||||||||
Loss Contingency, Damages Sought, Value | 1,200,000 | ||||||||||||||
Loss Contingency Amount Claimed for Recovery of Damages | 4,900,000 | ||||||||||||||
Former Gain Contingency, Recognized in Current Period | 7,600,000 | ||||||||||||||
Number of Patents Relating to Power Technology | 5 | ||||||||||||||
Number of Comaro Patents | 5 | ||||||||||||||
Damages Sought in Lawsuit | 2,500,000 | ||||||||||||||
Deferred Compensation Liability, Current and Noncurrent | 0 | ||||||||||||||
Additional Damages Sought [Member] | |||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Gain Contingency, Unrecorded Amount | 15,000,000 | ||||||||||||||
New Ownership Percentage [Member] | |||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.00% | ||||||||||||||
Previous Ownership Percentage [Member] | |||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 9.00% | ||||||||||||||
Chicony Power Technology Company Ltd [Member] | |||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Litigation Settlement, Amount | 7,600,000 | 7,600,000 | 9,700,000 | ||||||||||||
Previously Accrued Seeking Payments | 1,100,000 | ||||||||||||||
Litigation Settlement, Amount | 7,600,000 | 7,600,000 | 9,700,000 | ||||||||||||
Proceeds from Legal Settlements | 3,600,000 | 3,600,000 | 4,000,000 | ||||||||||||
Number of Units Under Indemnity Agreement | 500,000 | ||||||||||||||
Chicony Power Technology Company Ltd [Member] | Gross Amount [Member] | |||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Litigation Settlement, Amount | 10,800,000 | ||||||||||||||
Litigation Settlement, Amount | 10,800,000 | ||||||||||||||
Cost of Sales [Member] | Product and Freight Costs [Member] | |||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||
Litigation Settlement Noncash Recovery of Previously Incurred Costs | 1,400,000 | ||||||||||||||
Decrease in Cost Of Revenue Due to Settlement Agreement | $1,400,000 |