Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 31, 2016 | Sep. 13, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Dataram Corporation | |
Entity Central Index Key | 27,093 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,697,637 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jul. 31, 2016 | Apr. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 148,676 | $ 56,262 |
Accounts receivable | 1,616,988 | 2,746,010 |
Inventories, net | 1,269,167 | 1,335,654 |
Other current assets | 216,285 | 122,775 |
Total current assets | 3,251,116 | 4,260,701 |
Property and equipment, net | 39,754 | 50,754 |
Other assets | 34,151 | 29,479 |
Capitalized software development costs | 313,224 | 326,274 |
Goodwill | 1,083,555 | 1,083,555 |
Total assets | 4,721,800 | 5,750,763 |
Current liabilities: | ||
Note payable-revolving credit line | 1,048,726 | 1,775,839 |
Accounts payable | 971,478 | 736,922 |
Accrued liabilities | 132,349 | 158,869 |
Convertible notes payable related parties | 80,000 | 80,000 |
Total current liabilities | 2,232,553 | 2,751,630 |
Other liabilities | 95,555 | 107,499 |
Total liabilities | 2,328,108 | 2,859,129 |
Stockholders' equity: | ||
Common Stock | 3,698 | 1,644 |
Additional paid-in capital | 28,397,992 | 24,556,425 |
Accumulated deficit | (26,638,384) | (25,711,442) |
Total stockholders' equity | 2,393,692 | 2,891,634 |
Total liabilities and stockholders' equity | 4,721,800 | 5,750,763 |
Series A Preferred Shares | ||
Stockholders' equity: | ||
Preferred stock | ||
Series B Preferred Shares | ||
Stockholders' equity: | ||
Preferred stock | $ 630,386 | $ 4,045,007 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jul. 31, 2016 | Apr. 30, 2016 |
Allowance | $ 100,000 | $ 100,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 54,000,000 | 54,000,000 |
Common stock, issued shares | 3,697,637 | 1,643,391 |
Common stock, outstanding shares | 3,697,637 | 1,643,391 |
Series A Preferred Shares | ||
Preferred stock, par value | $ .01 | $ .01 |
Preferred stock, designated shares | 1,300,000 | 1,300,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Series B Preferred Shares | ||
Preferred stock, par value | $ 12.20 | $ 12.20 |
Preferred stock, designated shares | 400,000 | 400,000 |
Preferred stock, issued shares | 51,672 | 331,559 |
Preferred stock, outstanding shares | 51,672 | 331,559 |
Preferred stock, liquidation value | $ 630,386 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 4,914,857 | $ 7,337,682 |
Costs and expenses: | ||
Cost of sales | 4,189,240 | 5,934,477 |
Engineering | 56,026 | 53,958 |
Selling, general and administrative | 1,555,950 | 1,404,266 |
Total costs and expenses | 5,801,216 | 7,392,701 |
Loss from operations | (886,359) | (55,019) |
Other income (expense): | ||
Interest expense | (38,793) | (62,644) |
Other gain (loss) | (1,790) | 408 |
Total other expense, net | (40,583) | (62,236) |
Net loss | (926,942) | (117,255) |
Dividend - Series A preferred stock | 62,660 | |
Net loss allocated to common shareholders | $ (926,942) | $ (179,915) |
Net loss per share of common stock basic and diluted | $ (0.43) | $ (0.19) |
Weighted average common shares outstanding basic and diluted | 2,175,363 | 933,761 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity (Unaudied) (Unaudited) - 3 months ended Jul. 31, 2016 - USD ($) | Preferred Stock Series B | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, value at Apr. 30, 2016 | $ 4,045,007 | $ 1,644 | $ 24,556,425 | $ (25,711,442) | $ 2,891,634 |
Beginning balance, shares at Apr. 30, 2016 | 331,559 | 1,643,391 | |||
Stock-based compensation, value | $ 188 | 428,812 | 429,000 | ||
Stock-based compensation, shares | 188,333 | ||||
Conversion of series B preferred stock to restricted common shares, value | $ (3,414,621) | $ 1,866 | 3,412,755 | 0 | |
Conversion of series B preferred stock to restricted common shares, shares | (279,887) | 1,865,913 | |||
Net loss | (926,942) | (926,942) | |||
Ending balance,value at Jul. 31, 2016 | $ 630,386 | $ 3,698 | $ 28,397,992 | $ (26,638,384) | $ 2,393,692 |
Ending balance,shares at Jul. 31, 2016 | 51,672 | 3,697,637 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (926,942) | $ (117,255) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of deferred gain on sale leaseback | (17,916) | (17,916) |
Depreciation and amortization | 24,050 | 24,000 |
Bad debt expense | 2,078 | |
Stock-based compensation expense | 429,000 | 212,834 |
Changes in assets and liabilities: | ||
Decrease (increase) in accounts receivable | 1,129,022 | (504,137) |
Decrease in inventories | 66,487 | 223,581 |
Increase in other current assets | (93,510) | (13,888) |
Increase in other assets | (4,672) | |
Increase (decrease) in accounts payable | 234,556 | (265,336) |
Decrease in accrued and other liabilities | (20,548) | (55,060) |
Net cash provided by (used in) operating activities | 819,527 | (511,099) |
Cash flows from financing activities: | ||
Net borrowings (repayments) under revolving credit line | (727,113) | 254,136 |
Repayment of convertible notes | (27,500) | |
Proceeds from sale of common shares | 500,000 | |
Net cash provided by (used in) financing activities | (727,113) | 726,636 |
Net increase in cash | 92,414 | 215,537 |
Cash at beginning of period | 56,262 | 327,298 |
Cash at end of period | 148,676 | 542,835 |
Cash paid during the period for: | ||
Interest | 38,793 | 62,644 |
Supplemental disclosures of non-cash flow information: | ||
Conversion of series B preferred stock into common stock | $ 3,414,621 | |
Non-cash preferred stock dividends | $ 62,600 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 1: Basis of Presentation and Summary of Significant Accounting Policies Organization and Nature of Business Dataram Corporation (Dataram or the Company) is an independent manufacturer and reseller of memory products and provider of performance solutions. The Company provides customized memory solutions for original equipment manufacturers (OEMs) and compatible memory for leading brands including Cisco, Dell, Fujitsu, HP, IBM, Lenovo and Oracle as well as a line of memory products for Intel and AMD motherboard based servers. Dataram manufactures its memory in-house to meet three key criteria - quality, compatibility, and selection - and tests its memory for performance and OEM compatibility as part of the production process. The Company has memory designed for over 50,000 systems and with products that range from energy-efficient DDR4 modules to legacy SDR offerings. The Company is a CMTL Premier Participant and ISO 9001 (2008 Certified). Its products are fully compliant with JEDEC Specifications. Datarams customers include a global network of distributors, resellers, retailers, OEM customers and end users. Dataram competes with several large independent memory manufacturers and OEMs. The primary raw material used in producing memory boards is dynamic random access memory (DRAM) chips. The purchase cost of DRAMs is the largest single component of the total cost of a finished memory board. Consequently, average selling prices for computer memory boards are significantly dependent on the pricing and availability of DRAM chips. Liquidity and Going Concern The Company's condensed consolidated financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP) and have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. For the fiscal year ended April 30, 2016, the Company incurred losses of approximately $1,221,000. The Company also incurred losses of approximately $927,000 in fiscal 2017s first quarter ended July 31, 2016. If current and projected revenue growth does not meet estimates, the Company may need to raise additional capital through debt and/or equity transactions and further reduce certain overhead costs. The Company may require up to $1,000,000 of additional working capital over the next twelve months to support operations. The Company cannot provide assurance that it will obtain any required financing or such financing will be available to it on favorable terms. Based on the above, there is substantial doubt about the Companys ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Companys management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of July 31, 2016 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended July 31, 2016 are not necessarily indicative of the operating results for the full fiscal year or for any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Companys Annual Report on Form 10-K for the year ended April 30, 2016. The Companys accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended April 30, 2016, and updated, as necessary, in this Quarterly Report on Form 10-Q. On July 6, 2016, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Companys issued and outstanding common stock, par value $0.001 per share on a one (1) for three (3) basis, effective on July 8, 2016. The accompanying condensed consolidated financial statements and notes thereto give retrospective effect of the reverse stock split for all periods presented. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including deferred tax asset valuation allowances and certain other reserves and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Some of the more significant estimates made by management include allowance for doubtful accounts and sales returns, reserve for inventory obsolescence, deferred income tax asset and related valuation allowance, fair value of certain financial instruments, impairment assessment of carrying value of goodwill and other intangible assets and other operating allowances and accruals. Actual results could differ from those estimates. Revenue Recognition Revenue is recognized when title passes upon shipment of goods to customers. The Companys revenue earning activities involve delivering or producing goods. The following criteria are met before revenue is recognized: persuasive evidence of an arrangement exists, shipment has occurred, selling price is fixed or determinable and collection is reasonably assured. The Company does experience a minimal level of sales returns and allowances for which the Company accrues a reserve at the time of sale. Estimated warranty costs are accrued by management upon product shipment based on an estimate of future warranty claims. Such amounts were not material for the three months ended July 31, 2016 and 2015. Net Loss per Share Basic net loss per share is computed by dividing the net loss available to common stock holders by the weighted average number of shares of common stock issued and outstanding during the period. The calculation of diluted loss per share for the three months ended July 31, 2016 and 2015 includes only the weighted average number of shares of common stock outstanding. The denominator excludes the dilutive effect of common shares issuable upon exercise or conversion of stock options, warrants, convertible notes and Series A and Series B preferred shares as their effect would be anti-dilutive. Anti-dilutive securities consisted of the following at July 31: 2016 2015 Common stock equivalent of convertible notes 100,000 Common stock equivalent of convertible notes related parties 9,070 9,070 Series A preferred shares 522,167 Series B preferred shares 344,480 Warrants 133,667 1,119,425 Stock options 2,778 99,582 Total 489,995 1,850,244 Recently Issued Accounting Pronouncements On August 26, 2016, the FASB issued Accounting Standards Update (ASU) 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jul. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 2: Related Party Transactions During the three month periods ended July 31, 2016 and 2015, the Company purchased inventories for resale totaling approximately $19,000 and $125,000, respectively, from Sheerr Memory, LLC (Sheerr Memory). Sheerr Memorys owner (Mr. Sheerr) is employed by the Company as an advisor. Approximately $19,000 and $11,000 of accounts payable in the Companys condensed consolidated balance sheets as of July 31, 2016 and April 30, 2016, respectively, is payable to Sheerr Memory. Sheerr Memory offers the Company trade terms of net 30 days and all invoices are settled in the normal course of business. No interest is paid. The Company has not made further purchases from Sheerr Memory subsequent to July 31, 2016. Management anticipates that the Company will make additional purchases, although the Company has no obligation to do so. During the three month periods ended July 31, 2016 and 2015, the Company purchased inventories for resale totaling approximately $420,000, and $408,000 respectively, from Keystone Memory Group (Keystone Memory). Keystone Memorys owner is a relative of Mr. Sheerr. Approximately $117,000 and $190,000 of accounts payable in the Companys condensed consolidated balance sheets as of July 31, 2016 and April 30, 2016 is payable to Keystone Memory. Keystone Memory offers the Company trade terms of net due and all invoices are settled in the normal course of business. No interest is paid. The Company has made approximately $81,000 in purchases from Keystone Memory subsequent to July 31, 2016 and management anticipates that the Company will continue to do so, although the Company has no obligation to do so. On October 31, 2013, the Company entered into an agreement with Mr. Sheerr to leaseback the equipment and furniture that was sold to Mr. Sheerr on October 31, 2013 for $500,000. The lease is for a term of 60 months and the Company is obligated to pay approximately $7,500 per month for the term of the lease. The Company has an option to extend the lease for an additional two year period. The transactions described have been accounted for as a sale-leaseback transaction. Accordingly, the Company recognized a gain on the sale of assets of approximately $103,000, which is the amount of the gain on sale in excess of present value of the future lease payments and will recognize the remaining deferred gain of approximately $358,000 in proportion to the related gross rental charged to expense over the term of the lease, 60 months. The current portion of $72,000 deferred gain was reflected in accrued liabilities and the long-term portion of approximately $96,000 is reflected in other liabilities long-term in the condensed consolidated balance sheet as of July 31, 2016. As of April 30, 2016, the current portion of $72,000 deferred gain is reflected in accrued liabilities and the long-term portion of approximately $107,000 is reflected in other liabilities long-term in the consolidated balance sheet as of April 30, 2016. |
Note Payable - Revolving Credit
Note Payable - Revolving Credit Line | 3 Months Ended |
Jul. 31, 2016 | |
Debt Disclosure [Abstract] | |
Note Payable - Revolving Credit Line | Note 3: Note Payable Revolving Credit Line The Companys financing agreement (the Financing Agreement) with Rosenthal & Rosenthal, Inc. provides for a revolving loan with a maximum borrowing capacity of $3,500,000. The Financing Agreement matures on November 30, 2016 unless such Financing Agreement is either earlier terminated or renewed. The amount outstanding under the Financing Agreement bears interest at a rate of the Prime Rate (as defined in the Financing Agreement) plus 3.25% (the Effective Rate) or on Over-advances (as defined in the Financing Agreement), if any, at a rate of the Effective Rate plus 3%. The Financing Agreement contains other financial and restrictive covenants, including, among others, covenants limiting the Companys ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into mergers and acquisition transactions and declare or make dividends. The Company requested and received a waiver of compliance with respect to certain provisions of the Financing Agreement in connection with certain Bridge Notes issued in July 2014. Borrowings under the Financing Agreement are collateralized by substantially all the assets of the Company. The Financing Agreement provides for advances against eligible accounts receivable and inventory balances based on prescribed formulas of raw materials and finished goods. There was approximately $137,000 of additional availability as of July 31, 2016. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Jul. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 4: Stockholders Equity Series B preferred shares During the quarter ended July 31, 2016, the holders of Series B Preferred Stock converted 279,887 Series B Preferred shares into 1,865,913 shares of common stock. The converted value for each Series B Preferred Share is approximately $12.20 or $3,414,621 and resulted in an offsetting increase to Additional Paid in Capital in the July 31, 2016 consolidated balance sheet. As of July 31, 2016, there were 51,672 shares of Series B Preferred Stock outstanding convertible into approximately 344,480 shares of common stock. Bonus Shares Bonus Shares - Bonus Shares are an award to an eligible person of shares for services to be rendered or for past services already rendered to the Company. The Board will determine the number of shares to be awarded to the eligible individual, in accordance with any restrictions thereon. These restrictions may be based upon completion of a specified number of years of service with the Company or upon satisfaction of performance goals based on performance factors. Payment for the Bonus Shares may be made in the form of cash, whole shares, or a combination thereof, based on the fair market value of the shares on the date of payment, as determined in the sole discretion of the Board. Between May 1, 2016 and July 29, 2016 the Company awarded 188,333 restricted shares of the Companys common stock to employees, executive officers and directors. The Companys condensed consolidated statements of operations for the three months ended July 31, 2016 include approximately $429,000 of stock-based compensation expense. These stock grants have been classified as equity instruments and, as such, a corresponding increase has been reflected in additional paid-in capital in the accompanying consolidated balance sheets. Warrants At July 31, 2016 the Company had 133,667 warrants outstanding with exercise prices between $7.50 and $10.50. A summary of warrant activity for the three months ended July 31, 2016 is as follows: Shares Weighted Weighted Aggregate Balance May 1, 2016 207,625 $ 19.74 1.24 Issued Expired (73,958 ) $ 40.68 Balance July 31, 2016 133,667 $ 8.15 2.32 (1) This amount represents the difference between the conversion price and $1.80, the closing price of Dataram common stock on July 29, 2016 as reported on the NASDAQ Stock Market, for all in-the-money warrants outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5: Commitments and Contingencies Leases Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of July 31, 2016 are as follows: Non-Related Related Party Party Total Year ending April 30: 2017 115,000 67,000 182,000 2018 84,000 90,000 174,000 2019 85,000 45,000 130,000 2020 86,000 86,000 Total $ 370,000 $ 202,000 $ 572,000 Legal Proceedings Effective as of the close of business on December 17, 2014, the Company terminated its agreement with MPP Associates, Inc., pursuant to which Marc P. Palker had been providing CFO services to the Company. On April 8, 2015, MPP Associates, Inc. and Mr. Palker filed a complaint, MPP Associates, Inc. and Marc Palker v. Dataram Corporation, Jon Isaac, David Moylan, Michael Markulec and Richard Butler, in the Superior Court of the State of New Jersey, Essex County, Docket No. ESX-L-002413-15. Effective as of the close of business on January 22, 2015, the Company terminated the employment agreement with John H. Freeman, its former Chief Executive Officer. On April 9, 2015, Mr. Freeman filed a complaint, John Freeman v. Dataram Corporation, David A. Moylan, Jon Isaac, and John Does 1-5, in the Superior Court of the State of New Jersey, Essex County, Docket No. ESX-L-002471-15. Similarly, on April 10, 2015, the Company filed an action against Mr. Freeman, Mr. Palker and MPP Associates, Inc., as Dataram Corporation v. John Freeman, Marc Palker and MPP Associates, Inc., in the Superior Court of the State of New Jersey, Mercer County, Docket No. ESX-L-000886-15. The aforementioned three State Court actions described have been consolidated in Essex County. On March 9, 2015, Marc Palker filed a complaint against the Company with the U.S. Department of Labor, Occupational Safety and Health Administration, alleging a violation of the Sarbanes-Oxley Act of 2002. On June 26, 2015, Alethea Douglas, a former employee, filed a complaint against the Company with the U.S. Equal Employment Opportunity Commission, alleging a claim for age discrimination in connection with the termination of her employment effective May 20, 2015. A range of loss, if any, on the aforementioned matters cannot be estimated at this point in time. |
Financial Information by Geogra
Financial Information by Geographic Location | 3 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
Financial Information by Geographic Location | Note 6: Financial Information by Geographic Location The Company currently operates in one business segment that develops, manufactures and markets a variety of memory systems for use with network servers and workstations which are manufactured by various companies. Revenues for the three months ended July 31, 2016 and 2015 by geographic region are as follows: Three months Three months United States $ 3,262,000 $ 6,113,000 Europe 1,143,000 1,116,000 Other (principally Asia Pacific Region) 510,000 109,000 Consolidated $ 4,915,000 $ 7,338,000 |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Jul. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Note 7: Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company maintains its cash in financial institutions. To the extent that such deposits exceed the maximum insurance levels, they are uninsured. The Company performs ongoing evaluations of its customers financial condition, as well as general economic conditions and, generally, requires no collateral from its customers. At July 31, 2016 amounts due from three customers totaled approximately 16%, 13% and 10%, of accounts receivable. At April 30, 2016, amounts due from one customer totaled approximately 15%. In the fiscal quarter ended July 31, 2016 the Company had sales to one customer that totaled 27%. For the comparable prior year period ended July 31, 2015 we had sales to four customers that were over 10% of revenues. Two customers were approximately 13% each, the third customer was approximately 14% and the fourth customer was approximately 16% of revenues. |
Entry into a Material Definitiv
Entry into a Material Definitive Agreement | 3 Months Ended |
Jul. 31, 2016 | |
Business Combinations [Abstract] | |
Entry into a Material Definitive Agreement | Note 8: Entry into a Material Definitive Agreement On June 13, 2016, the Company entered into an Agreement and Plan of Merger with its wholly owned subsidiary, Dataram Acquisition Sub, Inc., a Nevada corporation, U.S. Gold Corp., a Nevada corporation and exploration stage company that owns certain mining leases and other mineral rights comprising the Copper King gold and copper development project located in the Silver Crown Ming District of southeast Wyoming and Copper King, LLC, a principal stockholder of U.S. Gold Corp. The closing of the merger is subject to conditions as defined in the agreement. Pursuant to the terms and conditions of the Merger Agreement, at the closing of the Merger, U.S. Golds common stock, Series A Preferred Stock and Series B Preferred Stock will be converted into the right to receive shares of the Companys Common Stock or, at the election of any U.S. Gold stockholder, shares of the Companys newly designated 0% Series C Convertible Preferred Stock, par value $0.001 per share, which are convertible into shares of Common Stock. The Merger Consideration shall be allocated as defined in the agreement. On July 6, 2016, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse split of the Companys issued and outstanding common stock on a 1 for 3 basis, which was effective with the State of Nevada on July 8, 2016 and with The NASDQ Stock Market at the open of trading on July 11, 2016. All share and per share amounts are reflective of the reverse split. On July 29, 2016, the Company, Acquisition Sub, U.S. Gold and Copper King, amended and restated the Merger Agreement in order to reflect the reverse split of the Companys issued and outstanding common stock and to adjust certain aspects of the merger consideration and management consideration as defined in the amended merger agreement. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jul. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9: Subsequent event On August 3, 2016, the Company entered into separate securities purchase agreements with accredited investors for the issuance and sale of the Companys newly designated 0% Series D Convertible Preferred Stock (Preferred Shares) which are convertible into shares of the Companys common stock, par value $0.001 per share and such sale and issuance. The Series D Preferred Shares are governed by a Certificate of Designations, Preferences and Rights of the 0% Series D Convertible Preferred Stock. Each Series D Preferred Share was sold at a per share purchase price of $136.00 and converts into 100 shares of Common Stock, subject to adjustment for dividends and stock splits. On August 5, 2016, the Company closed the private placement and sold 3,699 Series D Preferred Shares convertible into an aggregate of 369,900 shares of common stock with gross proceeds to the Company of $503,000. On August 31, 2016, the Company terminated the employment of David Sheerr. Mr. Sheerr as owner of Sheerr Memory was a related party, (See note 2). The agreements with Sheer Memory and Keystone Memory have not been affected by the change of Mr. Sheerr employment status. |
Basis of Presentation and Sum16
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (SEC). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Companys management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of July 31, 2016 and the results of operations and cash flows for the periods presented. The results of operations for the three months ended July 31, 2016 are not necessarily indicative of the operating results for the full fiscal year or for any future period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Companys Annual Report on Form 10-K for the year ended April 30, 2016. The Companys accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended April 30, 2016, and updated, as necessary, in this Quarterly Report on Form 10-Q. On July 6, 2016, the Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Companys issued and outstanding common stock, par value $0.001 per share on a one (1) for three (3) basis, effective on July 8, 2016. The accompanying condensed consolidated financial statements and notes thereto give retrospective effect of the reverse stock split for all periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including deferred tax asset valuation allowances and certain other reserves and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Some of the more significant estimates made by management include allowance for doubtful accounts and sales returns, reserve for inventory obsolescence, deferred income tax asset and related valuation allowance, fair value of certain financial instruments and other operating allowances and accruals. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition Revenue is recognized when title passes upon shipment of goods to customers. The Companys revenue earning activities involve delivering or producing goods. The following criteria are met before revenue is recognized: persuasive evidence of an arrangement exists, shipment has occurred, selling price is fixed or determinable and collection is reasonably assured. The Company does experience a minimal level of sales returns and allowances for which the Company accrues a reserve at the time of sale. Estimated warranty costs are accrued by management upon product shipment based on an estimate of future warranty claims. Such amounts were not material for the three months ended July 31, 2016 and 2015. |
Net loss per share | Net Loss per Share Basic net loss per share is computed by dividing the net loss available to common stock holders by the weighted average number of shares of common stock issued and outstanding during the period. The calculation of diluted loss per share for the three months ended July 31, 2016 and 2015 includes only the weighted average number of shares of common stock outstanding. The denominator excludes the dilutive effect of common shares issuable upon exercise or conversion of stock options, warrants, convertible notes and Series A and Series B preferred shares as their effect would be anti-dilutive. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements On August 26, 2016, the FASB issued Accounting Standards Update (ASU) 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements. |
Basis of Presentation and Sum17
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Anti-dilutive Securities | 2016 2015 Common stock equivalent of convertible notes 100,000 Common stock equivalent of convertible notes related parties 9,070 9,070 Series A preferred shares 522,167 Series B preferred shares 344,480 Warrants 133,667 1,119,425 Stock options 2,778 99,582 Total 489,995 1,850,244 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Equity [Abstract] | |
Schedule of Warrants Activity | Shares Weighted Weighted Aggregate Balance May 1, 2016 207,625 $ 19.74 1.24 Issued Expired (73,958 ) $ 40.68 Balance July 31, 2016 133,667 $ 8.15 2.32 (1) This amount represents the difference between the conversion price and $1.80, the closing price of Dataram common stock on July 29, 2016 as reported on the NASDAQ Stock Market, for all in-the-money warrants outstanding. |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Non-Related Related Party Party Total Year ending April 30: 2017 115,000 67,000 182,000 2018 84,000 90,000 174,000 2019 85,000 45,000 130,000 2020 86,000 86,000 Total $ 370,000 $ 202,000 $ 572,000 |
Financial Information by Geog20
Financial Information by Geographic Location (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue by geographic location | Three months Three months United States $ 3,262,000 $ 6,113,000 Europe 1,143,000 1,116,000 Other (principally Asia Pacific Region) 510,000 109,000 Consolidated $ 4,915,000 $ 7,338,000 |
Basis of Presentation and Sum21
Basis of Presentation and Summary of Significant Accounting Policies - Net loss per share - Anti-dilutive securities (Details) - shares | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 489,995 | 1,850,244 |
Common Stock Equivalent of Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 0 | 100,000 |
Common Stock Equivalent of Convertible Notes - Related Parties | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 9,070 | 9,070 |
Series A Preferred Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 0 | 522,167 |
Series B Preferred Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 344,480 | 0 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 133,667 | 1,119,425 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 2,778 | 99,582 |
Basis of Presentation and Sum22
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | |
Accounting Policies [Abstract] | |||
Net loss | $ (926,942) | $ (117,255) | $ (1,221,000) |
Reverse stock split, description | The Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Companys issued and outstanding common stock, par value $0.001 per share on a one (1) for three (3) basis, effective on July 8, 2016. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Aug. 31, 2016 | Oct. 31, 2013 | Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | |
Related Party Transactions (Textual) [Abstract] | |||||
Sale leaseback, gain on sale of assets | $ 17,916 | $ 17,916 | |||
Sale leaseback, portion of deferred gain in accrued liabilities | 132,349 | $ 158,869 | |||
Sale leaseback, portion of deferred gain in other long term liabilities | 95,555 | 107,499 | |||
Leaseback Agreement with Mr. Sheerr | |||||
Related Party Transactions (Textual) [Abstract] | |||||
Sale-leaseback transaction date | October 31, 2013 | ||||
Sale leaseback transaction, lease terms | The Company entered into an agreement with Mr. Sheerr to leaseback the equipment and furniture that was sold to Mr. Sheerr on October 31, 2013. The lease is for a term of 60 months and the Company is obligated to pay approximately $7,500 per month for the term of the lease. The Company has an option to extend the lease for an additional two year period. | ||||
Sale leaseback transaction, value | $ 500,000 | ||||
Sale leaseback, monthly rental payments | 7,500 | ||||
Sale leaseback, gain on sale of assets | 103,000 | ||||
Sale leaseback, deferred gain | $ 358,000 | ||||
Sale leaseback, portion of deferred gain in accrued liabilities | 72,000 | 72,000 | |||
Sale leaseback, portion of deferred gain in other long term liabilities | 96,000 | 107,000 | |||
Sheerr Memory, LLC | |||||
Related Party Transactions (Textual) [Abstract] | |||||
Purchase of inventories for resale | 19,000 | 125,000 | |||
Accounts payable | $ 19,000 | 11,000 | |||
Creditor trade cycle term | 30 days | ||||
Keystone Memory Group | |||||
Related Party Transactions (Textual) [Abstract] | |||||
Purchase of inventories for resale | $ 420,000 | $ 408,000 | |||
Accounts payable | $ 117,000 | $ 190,000 | |||
Keystone Memory Group | Subsequent Event | |||||
Related Party Transactions (Textual) [Abstract] | |||||
Purchase of inventories for resale | $ 81,000 |
Note Payable - Revolving Cred24
Note Payable - Revolving Credit Line (Details Narrative) - Revolving Credit Line - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Jul. 31, 2016 | |
Revolving credit line, maximum borrowing capacity | $ 3,500,000 | |
Maturity date | Nov. 30, 2016 | |
Interest rate, description | Prime Rate (as defined in the Financing Agreement) plus 3.25% (the "Effective Rate") or on Over-advances (as defined in the Financing Agreement), if any, at a rate of the Effective Rate plus 3%. | |
Revolving credit line, covenant terms | The Financing Agreement contains other financial and restrictive covenants, including, among others, covenants limiting the Companys ability to incur indebtedness, guarantee obligations, sell assets, make loans, enter into mergers and acquisition transactions and declare or make dividends. | |
Revolving credit line, collateral, description | Borrowings under the Financing Agreement are collateralized by substantially all the assets of the Company. | |
Revolving credit line, borrowing capacity currently available | $ 137,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) | 3 Months Ended | |
Jul. 31, 2016USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Number of Warrants | ||
Warrants outstanding, beginning of period | shares | 207,625 | |
Warrants, issued | shares | 0 | |
Warrants, expired | shares | (73,958) | |
Warrants outstanding, end of period | shares | 133,667 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Grant Date Fair Value | ||
Warrants, weighted average exercise price outstanding, beginning of period | $ / shares | $ 19.74 | |
Warrants, weighted average exercise price, issued | $ / shares | 0 | |
Warrants, weighted average exercise price, expired | $ / shares | 40.68 | |
Warrants, weighted average exercise price outstanding, end of period | $ / shares | $ 8.15 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures | ||
Warrants, weighted average remaining contractual term, beginning of period | 1 year 3 months | |
Warrants, weighted average remaining contractual term, end of period | 2 years 4 months | |
Warrants, aggregate intrinsic value, outstanding, beginning of period | $ | $ 0 | [1] |
Warrants, aggregate intrinsic value, issued | $ | 0 | [1] |
Warrants, aggregate intrinsic value, outstanding, end of period | $ | $ 0 | [1] |
[1] | This amount represents the difference between the conversion price and $1.80, the closing price of Dataram common stock on July 29, 2016 as reported on the NASDAQ Stock Market, for all in-the-money warrants outstanding. |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | |
Jul. 31, 2016 | Apr. 30, 2016 | |
Stockholders' Equity | ||
Restricted stock issued, shares | 188,333 | |
Stock based compensation expense | $ 429,000 | |
Warrant | ||
Stockholders' Equity | ||
Stock warrants outstanding | 133,667 | |
Warrant | Minimum | ||
Stockholders' Equity | ||
Exercise price of warrants | $ 7.50 | |
Warrant | Maximum | ||
Stockholders' Equity | ||
Exercise price of warrants | $ 10.50 | |
Series B Preferred Shares | ||
Stockholders' Equity | ||
Preferred stock, shares converted | 279,887 | |
Common stock issued upon conversion of preferred stock | 1,865,913 | |
Adjustment to additional paid in capital upon redemption of preferred stock | $ 3,414,621 | |
Conversion price, per share | $ 12.20 | |
Number of common shares potentially issuable upon conversion of Series B Preferred Stock | Convertible into 344,480 shares of common stock | |
Series B Preferred Stock, outstanding after giving effect to the exchange | 51,672 | 331,559 |
Commitments and Contingencies27
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Jul. 31, 2016USD ($) |
For fiscal year: | |
2,017 | $ 182,000 |
2,018 | 174,000 |
2,019 | 130,000 |
2,020 | 86,000 |
Total | 572,000 |
Non-Related Party | |
For fiscal year: | |
2,017 | 115,000 |
2,018 | 84,000 |
2,019 | 85,000 |
2,020 | 86,000 |
Total | 370,000 |
Related Party | |
For fiscal year: | |
2,017 | 67,000 |
2,018 | 90,000 |
2,019 | 45,000 |
2,020 | 0 |
Total | $ 202,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 3 Months Ended |
Jul. 31, 2016 | |
Legal Proceeding MPP Associates and Marc Palker v Dataram | |
Lawsuit Filing Date | April 8, 2015 |
Plaintiff | MPP Associates, Inc. and Marc P. Palker |
Defendant | Dataram Corporation, Jon Isaac, David Moylan, Michael Markulec and Richard Butler |
Domicile | Superior Court of the State of New Jersey, Essex County |
Legal Proceeding John Freeman v Dataram | |
Lawsuit Filing Date | April 9, 2015 |
Plaintiff | John H. Freeman |
Defendant | Dataram Corporation, David A. Moylan, Jon Isaac, and John Does 1-5 |
Domicile | Superior Court of the State of New Jersey, Essex County |
Legal Proceeding Dataram v John Freeman, Marc Palker and MPP Associates, Inc. | |
Lawsuit Filing Date | April 10, 2015 |
Plaintiff | Dataram |
Defendant | John Freeman, Marc Palker and MPP Associates, Inc. |
Domicile | Superior Court of the State of New Jersey, Essex County |
Legal Proceeding Marc Palker complaint | |
Lawsuit Filing Date | March 9, 2015 |
Plaintiff | Marc Palker |
Defendant | Dataram Corporation |
Domicile | U.S. Department of Labor, Occupational Safety and Health Administration |
Allegations | Violation of the Sarbanes-Oxley Act of 2002 |
Legal Proceeding Alethea Douglas complaint | |
Lawsuit Filing Date | June 26, 2015 |
Plaintiff | Alethea Douglas |
Defendant | Dataram Corporation |
Domicile | U.S. Equal Employment Opportunity Commission |
Allegations | A claim for age discrimination in connection with the termination of her employment effective May 20, 2015. |
Financial Information by Geog29
Financial Information by Geographic Location (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues by geographic location | $ 4,915,000 | $ 7,338,000 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues by geographic location | 3,262,000 | 6,113,000 |
Europe | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues by geographic location | 1,143,000 | 1,116,000 |
Other (principally Asia Pacific Region) | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues by geographic location | $ 510,000 | $ 109,000 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details Narrative) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | |
Accounts Receivable | One Customer | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 15.00% | ||
Accounts Receivable | Customer #3 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 10.00% | ||
Accounts Receivable | Customer #2 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 13.00% | ||
Accounts Receivable | Customer #1 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 16.00% | ||
Sales Revenue | Customer #4 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 16.00% | ||
Sales Revenue | Two Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 13.00% | ||
Sales Revenue | Four Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 10.00% | ||
Sales Revenue | Customer #3 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 14.00% | ||
Sales Revenue | Customer #1 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage, approximate | 27.00% |
Entry into a Material Definit31
Entry into a Material Definitive Agreement (Details Narrative) | 3 Months Ended |
Jul. 31, 2016 | |
Business Combinations [Abstract] | |
Business acquisition, date of acquisition agreement | Jun. 13, 2016 |
Business acquisition, description | The Company entered into an Agreement and Plan of Merger with its wholly owned subsidiary, Dataram Acquisition Sub, Inc., a Nevada corporation, U.S. Gold Corp., a Nevada corporation and exploration stage company that owns certain mining leases and other mineral rights comprising the Copper King gold and copper development project located in the Silver Crown Ming District of southeast Wyoming and Copper King, LLC, a principal stockholder of U.S. Gold Corp. The closing of the merger is subject to conditions as defined in the agreement. |
Business acquisition, description of equity interests | At the closing of the Merger, the holders of U.S. Golds common stock, Series A Preferred Stock and Series B Preferred Stock will be converted into the right to receive shares of the Companys Common Stock or, at the election of any U.S. Gold stockholder, shares of the Companys newly designated 0% Series C Convertible Preferred Stock, par value $0.001 per share, which are convertible into shares of Common Stock. The Merger Consideration shall be allocated as defined in the agreement. |
Reverse stock split, description | The Company filed a certificate of amendment to its Articles of Incorporation with the Secretary of State of the State of Nevada in order to effectuate a reverse stock split of the Companys issued and outstanding common stock, par value $0.001 per share on a one (1) for three (3) basis, effective on July 8, 2016. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event - Series D Preferred Shares | 1 Months Ended |
Aug. 31, 2016USD ($)shares | |
Subsequent Event [Line Items] | |
Convertible preferred stock, terms of conversion | The Companys newly designated 0% Series D Convertible Preferred Stock are convertible into shares of the Companys common stock, par value $0.001 per share and such sale and issuance. Each Series D Preferred Share was sold at a per share purchase price of $136.00 and converts into 100 shares of Common Stock, subject to adjustment for dividends and stock splits. Series D Preferred Shares are convertible into an aggregate of 369,900 shares of common stock |
Sale of Series D Preferred Shares | shares | 3,699 |
Proceeds from the issuance of Series D Preferred Shares | $ | $ 503,000 |