Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 30, 2015 | Jan. 11, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | SOFTECH INC | |
Entity Trading Symbol | soft | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2015 | |
Amendment Flag | false | |
Entity Central Index Key | 354,260 | |
Current Fiscal Year End Date | --05-31 | |
Entity Common Stock, Shares Outstanding | 903,724 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Nov. 30, 2015 | May. 31, 2015 |
ASSETS | ||
Cash | $ 104 | $ 310 |
Accounts receivable (less allowance for uncollectible accounts of $18 as of November 30, 2015 and May 31, 2015) | 969 | 587 |
Earn-out payments from CADRA sale, current portion | 200 | 243 |
Prepaid and other assets | 206 | 315 |
Total current assets | 1,479 | 1,455 |
Property and equipment, net | 86 | 57 |
Goodwill | 948 | 948 |
Capitalized software development costs, net | 625 | 422 |
Capitalized patent costs | 114 | 109 |
Earn-out payments from CADRA sale, net of current portion | 125 | 133 |
Related party note receivable | 134 | 134 |
Other assets | 35 | 35 |
TOTAL ASSETS | 3,546 | 3,293 |
Liabilities: | ||
Accounts payable | 265 | 137 |
Accrued expenses | 393 | 283 |
Deferred maintenance revenue | 1,289 | 1,732 |
Capital lease, current | 24 | 19 |
Current maturities of long-term debt | 926 | 446 |
Total current liabilities | 2,897 | 2,617 |
Capital lease, net of current portion | 50 | 30 |
Other accrued liabilities | 5 | 10 |
Total liabilities | $ 2,952 | $ 2,657 |
Commitments and contingencies | ||
Redeemable Common Stock and Shareholders Deficit: | ||
Redeemable common stock, $0.10 par value, 180,000 and 170,000 shares issued and outstanding at November 30, 2015 and May 31, 2015, respectively. | $ 1,260 | $ 1,190 |
Shareholders' deficit: | ||
Common stock, $0.10 par value 20,000,000 shares authorized, 723,724 issued and outstanding at November 30, 2015 and May 31, 2015 | 73 | 73 |
Additional paid in capital | 27,085 | 27,056 |
Accumulated deficit | (27,596) | (27,400) |
Accumulated other comprehensive loss | (228) | (283) |
Total shareholders' deficit | (666) | (554) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 3,546 | $ 3,293 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICALS - USD ($) shares in Thousands, $ in Thousands | Nov. 30, 2015 | May. 31, 2015 |
Parentheticals | ||
Allowance for uncollectible accounts | $ 18 | $ 18 |
Redeemable common stock, par value | $ 0.10 | $ 0.10 |
Redeemable common Stock, shares issued | 180,000 | 170,000 |
Redeemable common Stock, shares outstanding | 180,000 | 170,000 |
Common Stock, par value | $ 0.10 | $ 0.10 |
Common Stock, shares authorized | 20,000,000 | 20,000,000 |
Common Stock, shares issued | 723,724 | 723,724 |
Common Stock, shares outstanding | 723,724 | 723,724 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Revenue: | ||||
Products | $ 354 | $ 199 | $ 408 | $ 270 |
Services | 950 | 828 | 1,877 | 1,621 |
Total revenue | 1,304 | 1,027 | 2,285 | 1,891 |
Cost of revenue: | ||||
Products | 17 | 33 | 46 | 86 |
Services | 426 | 436 | 803 | 791 |
Total cost of revenue | 443 | 469 | 849 | 877 |
Gross margin | 861 | 558 | 1,436 | 1,014 |
Research and development expenses | 137 | 222 | 291 | 494 |
Selling, general and administrative expenses | 634 | 645 | 1,233 | 1,362 |
Change in fair value of earn-out payments and holdback payment | 61 | (21) | 51 | (60) |
Operating income (loss) | 29 | (288) | (139) | (782) |
Interest expense | 28 | 63 | 41 | 127 |
Other expense | 23 | 28 | 16 | 43 |
Net loss | $ (22) | $ (379) | $ (196) | $ (952) |
Basic and diluted net loss per share: | $ (0.02) | $ (0.44) | $ (0.22) | $ (1.08) |
Weighted average common and redeemable shares outstanding-basic and diluted | 899,109 | 866,911 | 896,402 | 881,653 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Comprehensive Income Loss: | ||||
Net loss | $ (22) | $ (379) | $ (196) | $ (952) |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 49 | 28 | 55 | 85 |
Comprehensive income (loss) | $ 27 | $ (351) | $ (141) | $ (867) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 30, 2015 | Nov. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (196) | $ (952) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 49 | 189 |
Stock-based compensation | 58 | 59 |
Non-cash loss on foreign currency transactions | 16 | 43 |
Non-cash interest expense | 0 | 18 |
Change in fair value of earn-out payments and holdback payment | 51 | (60) |
Change in current assets and liabilities: | ||
Accounts receivable | (382) | (67) |
Prepaid expenses and other assets | 109 | 16 |
Accounts payable and accrued expenses | 224 | (489) |
Deferred maintenance revenue | (443) | (290) |
Net cash used in operating activities | (514) | (1,533) |
Cash flows from investing activities: | ||
Capital expenditures | (17) | (2) |
Proceeds from holdback agreement | 0 | 320 |
Capitalized software development costs | (231) | 0 |
Capitalized patent costs | (5) | (2) |
Net cash provided by (used in) investing activities | (253) | 316 |
Cash flows from financing activities: | ||
Cost of repurchase of common stock | 0 | (37) |
Cost of repurchase of redeemable common stock | 0 | (275) |
Borrowing under debt agreements | 555 | 750 |
Proceeds from issuance of common stock | 50 | 820 |
Repayments under debt agreements | (75) | (770) |
Repayments under capital lease | (7) | (7) |
Net cash provided by financing activities | 523 | 481 |
Effect of exchange rates on cash | 38 | 44 |
Decrease in cash and cash equivalents | (206) | (692) |
Cash and cash equivalents, beginning of period | 310 | 1,209 |
Cash and cash equivalents, end of period | 104 | 517 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 26 | 84 |
Taxes paid | 2 | 2 |
Noncash investing and financing activities: | ||
Accretion of redeemable common stock | 29 | 370 |
Purchase of property and equipment under capital lease | $ 32 | $ 0 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Nov. 30, 2015 | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | A. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION SofTech, Inc. (the Company) was formed in Massachusetts on June 10, 1969. The Company is engaged in the development, marketing, distribution and support of computer software solutions that serve the Product Lifecycle Management (PLM) industry. The Companys operations are organized geographically with offices in the U.S. and in Italy. The Company also has resellers in Asia and Europe. The Company has been actively engaged in acquiring and filing new U.S. patents, evaluating alternatives for monetizing its existing patents and investigating the acquisition of specific patents already awarded that might enhance shareholder value. The unaudited consolidated financial statements of the Company include the accounts of SofTech, Inc. and its wholly-owned subsidiaries, Information Decisions, Inc., Workgroup Technology Corporation, HomeView, Inc., SofTech, GmbH and SofTech, Srl. All significant intercompany accounts and transactions have been eliminated in consolidation. Our unaudited consolidated financial statements presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (the SEC) for quarterly reports on Form 10Q and do not include all of the information and footnote disclosures required by generally accepted accounting principles in the United States of America (GAAP). These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended May 31, 2015 included in our Annual Report on Form 10K (Annual Report), which was filed with the SEC on August 31, 2015. In the opinion of management, the consolidated financial statements include all adjustments necessary for the fair presentation of the consolidated financial position, results of operations, and cash flows of the Company as of and for these interim periods. HOMEVIEW, INC. The Company established a wholly-owned subsidiary, HomeView, Inc. on April 7, 2015 in Massachusetts. HomeView, a technology being developed by HomeView, Inc., is a secure, intelligent home asset management and maintenance system. HomeView allows homeowners to create a virtual home manual that logs, manages and tracks personal assets and attributes about the property. Home ownership is made easier by managing user manuals, warranty periods, service records, maintenance reminders and other projects with HomeView. Our plans are to offer this technology as a hosted solution wherein the software would reside on our servers. CADRA SALE On October 18, 2013, the Company sold substantially all of the assets of its CADRA product line, including all intellectual property related to that technology but specifically excluding cash, billed accounts receivable and liabilities other than the deferred maintenance liability associated with CADRA customer maintenance contracts for support services (the CADRA Sale), to Mentor Graphics Corporation (Mentor), pursuant to an Asset Purchase Agreement dated August 30, 2013 (the Asset Purchase Agreement). The aggregate consideration for the CADRA Sale is up to $3.95 million. Through November 30, 2015, the Company has received a total of approximately $3.5 million from Mentor and could receive up to an additional $423,000 based upon the CADRA revenue generated by Mentor for the period from February 1, 2015 through October 31, 2016. In accordance with the terms of the Asset Purchase Agreement such additional payments would be received in two installments on or before April 1, 2016 and 2017. In conjunction with completing the CADRA Sale, the Company entered into a one-year, exclusive Distributorship Agreement with Mentor allowing us to market and support the CADRA technology as a reseller throughout Europe (except Germany) at a thirty percent (30%) gross margin. That arrangement was extended through January 31, 2016 on a non-exclusive basis. Under the new arrangement, gross margin on software remained at 30% and the gross margin on support contracts increased to either 35% or 40% dependent on annual purchase volume. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Nov. 30, 2015 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | B. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates included in the financial statements pertain to revenue recognition, the allowance for doubtful accounts receivable, the fair value estimate of the Holdback Payment and Earn-Out Payments and the valuation of long term assets including goodwill, capitalized patent costs, capitalized software development costs and deferred tax assets. Actual results could differ from those estimates. SOFTWARE DEVELOPMENT COSTS The Company accounts for its software development costs in accordance with Accounting Standards Codification (ASC) 985-20, Software-Costs of Computer Software to Be Sold, Leased or Marketed ASC 350-40, Intangibles-Goodwill and Other- Internal Use-Software. Under ASC 985-20, costs that are incurred in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software development costs are capitalized until the product is available for general release to customers. Under ASC 350-40 there are three distinct stages associated with development software which include 1) preliminary project; 2) application development; and 3) post implementation-operation. Costs should be capitalized after each of the following has occurred: · The preliminary project stage has been completed; · Management with the relevant authority authorizes the project; · Management with the relevant authority commits to fund the project; · It is probable that the project will be completed; and · It is probable that the software will be used for the intended purpose. Capitalization stops after the software is substantially complete. Capitalized costs are amortized using the straight-line method over the estimated economic life of the product, generally three years. The Company evaluates the realizability of the assets and the related periods of amortization on a regular basis. Judgment is required in determining when costs should begin to be capitalized under both standards as well as the technologys economic life. During the three and six months ended November 30, 2014, the Company did not capitalize software development costs. During the three and six months ended November 30, 2015, the Company capitalized approximately $113,000 and $231,000 of its software development costs, respectively. Amortization expense related to capitalized software development costs for the three and six months ended November 30, 2015 was approximately $12,000 and $28,000, respectively, as compared to approximately $28,000 and $56,000 for the comparable periods in the prior fiscal year. INCOME TAXES The provision for income taxes is based on the earnings or losses reported in the consolidated financial statements. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company provides a valuation allowance against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. REVENUE RECOGNITION The Company follows the provisions of ASC 985-605, Software Revenue Recognition, The Company follows the provisions of ASC 605, Revenue Recognition For multiple element arrangements accounted for under ASC 605-25, a determination is made as to which elements have stand-alone value, and are therefore separable. Total fees are then allocated to each of the separate elements based upon the relative selling price method. Under that method the allocation of fees to the separate elements is based on VSOE, or if it doesnt exist, then based on third party evidence of selling price. If neither exists, then the allocation is based on managements best estimate of the selling price. ACCOUNTING FOR GOODWILL The Company accounts for goodwill pursuant to ASC 350, Intangibles Goodwill and Other As of May 31, 2015, the Company conducted its annual impairment test of goodwill by comparing the fair value of the reporting unit to the carrying amount of the underlying assets and liabilities of its single reporting unit. The Company determined that the fair value of the reporting unit exceeded the carrying amount of the assets and liabilities, therefore no impairment existed as of the testing date. The Company concluded that no facts or circumstances arose during the three and six months ended November 30, 2015 to warrant an interim impairment test. CAPITALIZED PATENT COSTS Costs related to patent applications are capitalized as incurred and are amortized once the patent application is accepted or are expensed if the application is finally rejected. Patent costs are amortized over their estimated economic lives under the straight-line method, and are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable through the estimated undiscounted future cash flows from the use of the associated patent. Capitalized patent costs totaled approximately $3,000 and $5,000 for the three and six month periods ended November 30, 2015, respectively, as compared to $2,000 for both the three and six month periods ended November 30, 2014. LONG-LIVED ASSETS The Company periodically reviews the carrying value of all intangible and other long-lived assets. If indicators of impairment exist, the Company compares the undiscounted cash flows estimated to be generated by those assets over their estimated economic life to the related carrying value of those assets to determine if the assets are impaired. If the carrying value of the asset is greater than the estimated undiscounted cash flows, the carrying value of the assets would be decreased to their fair value through a charge to operations. As of November 30, 2015, the Company does not have any long-lived assets it considers to be impaired. FINANCIAL INSTRUMENTS The Companys financial instruments consist of cash, accounts receivable, Earn-Out Payments, related party notes receivable, accounts payable, notes payable accrued expenses, long-term debt and capital lease obligations. The Companys estimate of the fair value of these financial instruments approximates their carrying value due to the short term maturity of the assets and liabilities at November 30, 2015. FAIR VALUE OF FINANCIAL INSTRUMENTS Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets based on the fair value hierarchy, which groups fair value-measured assets based upon the following levels of inputs: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The assets maintained by the Company that are required to be measured at fair value on a recurring basis are the Earn-Out Payments associated with the Companys sale of the CADRA product line. As of November 30, 2015, the maximum amount that could be received by the Company under the Asset Purchase Agreement totaled $423,000. The actual amount to be received is dependent on the amount of CADRA revenue produced by Mentor for the period from February 1, 2015 through October 31, 2016. The following table summarizes the valuation of the Company's assets and liabilities measured at fair value on a recurring basis as of November 30, 2015: (in thousands) Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Earn-Out Payments $ 325 $ - $ - $ 325 Total assets at fair value $ 325 $ - $ - $ 325 The following table summarizes the valuation of the Company's assets and liabilities measured at fair value on a recurring basis as of May 31, 2015: (in thousands) Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Earn-Out Payments $ 376 $ - $ - $ 376 Total assets at fair value $ 376 $ - $ - $ 376 The table below provides a summary of the changes in fair value of the Level 3 classified Holdback Payment and Earn-Out Payments asset for the six month period ended November 30, 2015. (in thousands) Fair value at May 31, 2014 $ 895 Payments received (604) Change in fair value 85 Fair value at May 31, 2015 376 Change in fair value (51) Fair value at November 30, 2015 $ 325 The fair value of the Earn-Out Payments expected to be collected within twelve months of the balance sheet date have been classified as current assets and the remainder as non-current assets in the accompanying consolidated balance sheets. The Company has estimated the fair value of the Earn-Out Payments using a discounted cash flow approach. This valuation is based upon several factors including; i) managements estimate of the amount and timing of future CADRA revenues, ii) the timing of receipt of payments from Mentor, and iii) a discount rate of 7%. A change in any of these unobservable inputs can significantly change the fair value of the asset. The change in fair value of the Earn-Out Payments recognized in the Consolidated Statements of Operations for the three and six months ended November 30, 2015 resulted in losses of approximately ($61,000) and ($51,000), respectively. The change in fair value of the Earn-Out Payments recognized in the Consolidated Statements of Operations for the three and six months ended November 30, 2014 resulted in income of approximately $21,000 and $60,000, respectively. FOREIGN CURRENCY TRANSLATION The functional currency of the Companys foreign operations is the Euro. As a result, assets and liabilities are translated at period-end exchange rates and revenues and expenses are translated at the average exchange rates. Adjustments resulting from translation of such financial statements are classified in accumulated other comprehensive loss. Foreign currency gains and losses arising from transactions were included in the statements of operations. For the three and six month periods ended November 30, 2015, the Company recorded a net loss from foreign currency related transactions of approximately $23,000, and $16,000, respectively, as compared to approximately $28,000 and $43,000, respectively, for the comparable periods in the prior fiscal year, to Other expense in the unaudited Consolidated Statements of Operations. NET (LOSS) INCOME PER COMMON SHARE For the three and six month periods ended November 30, 2015, 1,619 and 619, respectively, options to purchase common shares were anti-dilutive and were excluded from the basic and diluted earnings per share calculation. STOCK-BASED COMPENSATION Stock-based compensation expense for all stock-based payment awards made to employees and directors is measured based on the grant-date fair value of the award. The Company estimated the fair value of each share-based award using the Black-Scholes option valuation model. The Black-Scholes option valuation model incorporates assumptions as to stock price volatility, the expected life of options, a risk-free interest rate and dividend yield. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award. In May 2011, the 2011 Equity Incentive Plan (the 2011 Plan) was approved by the Companys shareholders, pursuant to which 150,000 shares of our common shares are reserved for issuance. Any shares subject to any award under the 2011 Plan that expires, is terminated unexercised or is forfeited will be available for awards under the 2011 Plan. The Company may grant stock options, restricted stock, restricted stock units, stock equivalents and awards of shares of common stock that are not subject to restrictions or forfeiture under the 2011 Plan. As of November 30, 2015, 149,500 options were awarded. The following table summarizes option activity under the 2011 Stock Option Plan: Number of Options Weighted Average Exercise Price Per Share Weighted-Average Remaining Life (in years) Aggregate Intrinsic Value Outstanding options at May 31, 2014 129,500 1.88 9.74 20,825 Granted 30,000 1.84 10.00 - Exercised - - - - Forfeited or expired (12,500) 1.11 - - Outstanding options at May 31, 2015 147,000 1.77 8.54 2,625 Granted 2,500 - - - Exercised - - - - Forfeited or expired - - - - Outstanding options at November 30, 2015 149,500 $ 1.75 8.07 $ 5,625 Exercisable at November 30, 2015 114,867 $ 1.77 7.92 $ 5,063 The Company determined the volatility for options granted using the historical volatility of the Companys common stock. The expected life of options has been determined utilizing the simplified method as prescribed in ASC 718, Compensation, Stock Compensation For the three and six month periods ended November 30, 2015, the Company expensed approximately $27,000 and $58,000 of stock-based compensation, respectively, as compared to approximately $32,000 and $59,000 in the comparable prior periods. REDEEMABLE COMMON STOCK During the year ended May 31, 2013, the Company issued 50,000 shares of common stock, $0.10 par value (the Common Stock), at a purchase price of $5.00 per share to accredited investors (collectively, the Investors) in separate private placement transactions for total proceeds of $250,000. These transactions were completed pursuant to a Securities Purchase Agreement (the Agreement) which the Company entered into with each of the respective Investors. In lieu of registration rights, each $25,000 investment entitled the Investors to a fee of $6,000 (the Fee) to be paid in six equal quarterly installments during the eighteen month period following the investment. The Agreement also provided the Investors with the right to require the Company to redeem the Common Stock held by such Investors (the Put Option) for $5.50 per share in cash for a 30 day period ending between June 1, 2014 and June 30, 2014. Each of the Investors exercised their Put Option and the Common Stock was repurchased by the Company at the agreed upon Put Option price of $5.50 per share for a total of $275,000 during the first quarter of fiscal 2015. During the fiscal quarter ended August 31, 2014, in a transaction structured in a similar fashion to the above described Agreement, the Company issued 110,000 shares of the Common Stock at a purchase price of $5.00 per share to Joseph P. Daly, an accredited investor and existing Company shareholder, in a private placement transaction for total proceeds of $550,000. This transaction was completed pursuant to a securities purchase agreement whereby Mr. Daly shall have the right to require the Company to repurchase some or all of the shares at $7.00 per share during the ninety (90) day period immediately following the three-year anniversary of the transaction. Upon completion of the transaction, the 110,000 shares of Common Stock issued pursuant to the security purchase agreement were recorded as redeemable common stock at its redemption value of $770,000 and accretion of $220,000 was recorded to additional paid in capital. During the fiscal quarter ended November 30, 2014, the Company issued an additional 60,000 shares of the Common Stock at a purchase price of $5.00 per share to four accredited investors (collectively, the New Investors) in private placement transactions for total proceeds of $300,000. These transactions were completed pursuant to Securities Purchase Agreements (the New Agreements) entered into with each of the respective New Investors. In lieu of registration rights, each $50,000 investment entitles the New Investors to a fee (the New Investors Fees) of $5,000 to be paid in eight equal quarterly installments during the twenty-four month period (the Payment Period) following the investment. The New Agreements also provide the New Investors with the right to require the Company to redeem the Common Stock held by such New Investors for $7.00 per share in cash for a 30 day period following the Payment Period. Upon completion of these transactions, the 60,000 shares of Common Stock issued pursuant to the New Agreements were recorded as redeemable common stock at its redemption value of $420,000 and accretion of $120,000 was recorded to additional paid in capital. During the fiscal quarter ended November 30, 2015, the Company issued an additional 10,000 shares of the Common Stock at a purchase price of $5.00 per share to an accredited investor in private placement transactions for total proceeds of $50,000. This transaction was completed pursuant to a Securities Purchase Agreement entered into with the investor. In lieu of registration rights, the investor is entitled to a fee of $5,000 to be paid in eight equal quarterly installments during the twenty-four month period (the Payment Period) following the investment. The Securities Purchase Agreement also provides the investor with the right to require the Company to redeem the Common Stock held by such investor for $7.00 per share in cash for a 30 day period following the Payment Period. Upon completion of this transaction, the 10,000 shares of Common Stock issued pursuant to the Securities Purchase Agreement was recorded as redeemable common stock at its redemption value of $70,000 and accretion of $20,000 was recorded to additional paid in capital. The Company first assessed the redeemable Common Stock to determine whether each of these instruments should be accounted for as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging, Classification and Measurement of Redeemable Securities RECENT ACCOUNTING PRONOUNCEMENTS In May 2015, the FASB issued ASU No. 2015-08, "Business Combinations (Topic 805): Pushdown Accounting Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115." The amendments in this ASU amend various SEC paragraphs pursuant to the issuance of Staff Accounting Bulletin No. 115, Topic 5: Miscellaneous Accounting, regarding various pushdown accounting issues, and did not have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." The amendments in this ASU provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments do not change the accounting for a customer's accounting for service contracts. As a result of the amendments, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other licenses of intangible assets. The amendments in this ASU are effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either: (1) prospectively to all arrangements entered into or materially modified after the effective date; or (2) retrospectively. The Company is currently assessing the impact that ASU 2015-05 will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." The amendments in this ASU are intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments in this ASU are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU 2015-03 to have a material impact on its consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." The amendments in this ASU are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification and improves current GAAP by placing more emphasis on risk of loss when determining a controlling financial interest, reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity ("VIE"), and changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. ASU 2015-02 may be applied retrospectively in previously issued financial statements for one or more years with a cumulative-effect adjustment to retained earnings as of the beginning of the first year restated. The Company does not expect the adoption of ASU 2015-02 to have a material impact on its consolidated financial statements. Accounting Standards Update (ASU) 2014-16, Derivatives and Hedging (Topic 815) Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity was issued by the FASB in November 2014. The primary purpose of the ASU is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. ASU 2014-16 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Company does not believe that this guidance will have a material impact on its consolidated results of operations or financial position or disclosures. Accounting Standards Update (ASU) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern was issued by the FASB in August 2014. The primary purpose of the ASU is to provide guidance in GAAP about managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern and to provide related footnote disclosures. The amendments should reduce diversity in the timing and content of footnote disclosure. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for the annual periods and interim periods thereafter. Early adoption is permitted. The Company is in the process of evaluating if this guidance will have a material impact on its consolidated results of operations or financial position or disclosures. ASU 2014-12, Compensation-Stock Compensation (Topic 718) Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period was issued by the FASB in June 2014. ASU 2014-12 requires that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. ASU 2014-12 is effective for public business entities for annual periods and interim periods within the annual periods beginning after December 15, 2015. Early adoption is permitted. The Company does not believe this guidance will have a material impact on its consolidated results of operations or financial position. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
GEOGRAPHICAL INFORMATION
GEOGRAPHICAL INFORMATION | 6 Months Ended |
Nov. 30, 2015 | |
GEOGRAPHICAL INFORMATION | |
GEOGRAPHICAL INFORMATION | C. GEOGRAPHICAL INFORMATION The Company operates in one reportable segment and is engaged in the development, marketing, distribution and support of computer aided design and product data management and collaboration computer solutions. The Companys operations are organized geographically with offices in the U.S. and Italy. Components of revenue and long-lived assets (consisting primarily of intangible assets, capitalized software and property, plant and equipment) by geographic location, are as follows (in thousands): Three Month Periods Ended Revenue: November 30, 2015 November 30, 2014 North America $ 1,043 $ 859 Europe 274 177 Asia 3 - Eliminations (16) (9) Consolidated Total $ 1,304 $ 1,027 Six Month Periods Ended Revenue: November 30, 2015 November 30, 2014 North America $ 1,818 $ 1,541 Europe 482 366 Asia 6 - Eliminations (21) (16) Consolidated Total $ 2,285 $ 1,891 Long Lived Assets: As of November 30, 2015 As of May 31, 2015 North America $ 2,026 $ 1,797 Europe 41 41 Consolidated Total $ 2,067 $ 1,838 |
DEBT
DEBT | 6 Months Ended |
Nov. 30, 2015 | |
DEBT | |
DEBT | D. DEBT ESSIGPR On June 20, 2014, the Company entered into a promissory note agreement (the Note) with EssigPR, Inc. (EssigPR), a Puerto Rico corporation and related party of the Company. The Note is a three (3) year borrowing arrangement with EssigPR as the lender. The Note is a $750,000 term loan maturing on April 1, 2017, that accrues interest at a 9.5% interest rate, paid quarterly in arrears. The principal on the Note was to be paid from the deferred payments (Holdback Payment and Earn-Out Payments) due over the next three years from Mentor in connection with their purchase of the CADRA product line. On October 1, 2014, the Company entered into an additional short term borrowing arrangement with EssigPR (Short Term Note) whereby it was agreed that the Company would retain $300,000 of the Holdback Payment due from Mentor in October 2014 rather than utilize those monies to pay down the above described Note. The interest rate on the Short Term Note is 9.5%, payable quarterly in arrears. The Short Term Note can be repaid at any time without penalty and was due in full on April 10, 2015. EssigPR was awarded 5,000 fully vested stock options to purchase SofTech common stock at $1.00 per share. The stock options will expire on October 1, 2024 if not exercised. The Short Term Note arrangement did not increase the total principal amount of debt owed to EssigPR. Rather, the arrangement had the effect of establishing new payoff terms for that portion of the debt owed to EssigPR under the Note. On April 2, 2015, the Short Term Note was amended to extend the due date by three months from April 10, 2015 to July 10, 2015. EssigPR was awarded 2,500 fully vested stock options to purchase SofTech common stock at $1.00 per share. The stock options will expire on April 2, 2025 if not exercised. During the three months ended August 31, 2015, the Short Term Note was amended to extend the due date to October 10, 2015 and to increase the borrowings by $200,000 in exchange for 2,500 fully vested stock options to purchase SofTech common stock at $1.00 per share. The stock options will expire on July 15, 2025 if not exercised. During the three months ended November 30, 2015, the Short Term Note was amended to extend the due date to January 10, 2016 and to increase the borrowings by $254,000. On January 8, 2016, the Short Term Note was amended to extend the due date to April 10, 2016. On the occurrence and continuance of an event of default under the Note that is not cured after written notice from EssigPR, all or any part of the indebtedness under the Note may become immediately due at the option of EssigPR. Under the Note, events of default are (1) a default in the payment of any money owed by the Company to EssigPR under the Note or in any other transaction or (2) a default in the Companys performance of any obligation to EssigPR under the Note or any other agreement between the two parties, whether such agreement is presently existing or entered into in the future. If the Company dissolves, becomes insolvent, or makes an assignment for the benefit of creditors, all such indebtedness under the Note shall become automatically due and payable. EssigPR is owned by Joseph P. Daly, a related party of the Company whose beneficial ownership was approximately 19.6% of the Companys outstanding common stock as of November 30, 2015. SHORT TERM ADVANCES FROM RELATED PARTIES Robert Anthonyson, an Officer, Director and beneficial owner of 19.5% of Company common shares as of November 30, 2015, loaned the Company $50,000 on July 29, 2015 which was repaid to Mr. Anthonyson during the second quarter of fiscal year 2016. Joseph Mullaney, an Officer, Director and beneficial owner of 11.2% of Company common shares as of November 30, 2015, loaned the Company $19,300 on September 1, 2015 which was repaid during the second quarter of fiscal year 2016. BLUEVINE In September 2015, the Company arranged for a credit line of up to $80,000 with BlueVine Capital, Inc. (BlueVine). The borrowing arrangement with BlueVine as the lender allows the Company to receive an advance of 85% of the total value of specified invoices. During the three month period ended November 30, 2015 the Company received advances totaling approximately $27,000 against three invoices from one customer. These three invoices were paid subsequent to November 30, 2015. Subsequent to the end of the fiscal quarter, the Company received an advance of $23,000 from BlueVine under the above described credit line against four invoices from one customer. These four invoices were also repaid subsequent to November 30, 2015. |
NOTE RECEIVABLE, RELATED PARTY
NOTE RECEIVABLE, RELATED PARTY | 6 Months Ended |
Nov. 30, 2015 | |
NOTE RECEIVABLE, RELATED PARTY | |
NOTE RECEIVABLE, RELATED PARTY | E. NOTE RECEIVABLE, RELATED PARTY Joseph Mullaney, the Companys CEO, was extended a non-interest bearing note in the amount of $134,000 related to a stock transaction in May, 1998. The note is partially secured by the Company stock acquired in that transaction. The Company does not expect repayment within the next twelve months. |
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT | 6 Months Ended |
Nov. 30, 2015 | |
STOCK PURCHASE AGREEMENT | |
STOCK PURCHASE AGREEMENT | F. STOCK PURCHASE AGREEMENT In June 2013, the Company purchased 170,000 shares of common stock from Greenleaf, The Ronda E. Stryker and William D. Johnston Foundation, and The L. Lee Stryker 1974 Irrevocable Trust fbo Ronda E. Stryker, for a purchase price of $62,900 or $0.37 per share as detailed in Note K to the consolidated financial statements as of May 31, 2013. On August 8, 2014 the Company repurchased Greenleafs remaining 101,411 shares at $0.37 per share for a total of approximately $37,000. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Nov. 30, 2015 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | G. SUBSEQUENT EVENTS The Company has evaluated all events and transactions that occurred after the balance sheet and through the date that the financial statements were issued. Subsequent to the end of the fiscal quarter, the Company received an advance of $23,000 from BlueVine under the above described credit line against four invoices from one customer. These four invoices were also repaid subsequent to November 30, 2015. On January 8, 2016, the Short Term Note between the Company and EssigPR was amended to extend the due date by three months from January 10, 2016 to April 10, 2016. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Nov. 30, 2015 | |
ACCOUNTING POLICIES: | |
USE OF ESTIMATES | USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates included in the financial statements pertain to revenue recognition, the allowance for doubtful accounts receivable, the fair value estimate of the Holdback Payment and Earn-Out Payments and the valuation of long term assets including goodwill, capitalized patent costs, capitalized software development costs and deferred tax assets. Actual results could differ from those estimates. |
SOFTWARE DEVELOPMENT COSTS | SOFTWARE DEVELOPMENT COSTS The Company accounts for its software development costs in accordance with Accounting Standards Codification (ASC) 985-20, Software-Costs of Computer Software to Be Sold, Leased or Marketed ASC 350-40, Intangibles-Goodwill and Other- Internal Use-Software. Under ASC 985-20, costs that are incurred in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software development costs are capitalized until the product is available for general release to customers. Under ASC 350-40 there are three distinct stages associated with development software which include 1) preliminary project; 2) application development; and 3) post implementation-operation. Costs should be capitalized after each of the following has occurred: · The preliminary project stage has been completed; · Management with the relevant authority authorizes the project; · Management with the relevant authority commits to fund the project; · It is probable that the project will be completed; and · It is probable that the software will be used for the intended purpose. Capitalization stops after the software is substantially complete. Capitalized costs are amortized using the straight-line method over the estimated economic life of the product, generally three years. The Company evaluates the realizability of the assets and the related periods of amortization on a regular basis. Judgment is required in determining when costs should begin to be capitalized under both standards as well as the technologys economic life. During the three and six months ended November 30, 2014, the Company did not capitalize software development costs. During the three and six months ended November 30, 2015, the Company capitalized approximately $113,000 and $231,000 of its software development costs, respectively. Amortization expense related to capitalized software development costs for the three and six months ended November 30, 2015 was approximately $12,000 and $28,000, respectively, as compared to approximately $28,000 and $56,000 for the comparable periods in the prior fiscal year. |
INCOME TAXES | INCOME TAXES The provision for income taxes is based on the earnings or losses reported in the consolidated financial statements. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company provides a valuation allowance against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. |
REVENUE RECOGNITION | REVENUE RECOGNITION The Company follows the provisions of ASC 985-605, Software Revenue Recognition, The Company follows the provisions of ASC 605, Revenue Recognition For multiple element arrangements accounted for under ASC 605-25, a determination is made as to which elements have stand-alone value, and are therefore separable. Total fees are then allocated to each of the separate elements based upon the relative selling price method. Under that method the allocation of fees to the separate elements is based on VSOE, or if it doesnt exist, then based on third party evidence of selling price. If neither exists, then the allocation is based on managements best estimate of the selling price. |
ACCOUNTING FOR GOODWILL | ACCOUNTING FOR GOODWILL The Company accounts for goodwill pursuant to ASC 350, Intangibles Goodwill and Other As of May 31, 2015, the Company conducted its annual impairment test of goodwill by comparing the fair value of the reporting unit to the carrying amount of the underlying assets and liabilities of its single reporting unit. The Company determined that the fair value of the reporting unit exceeded the carrying amount of the assets and liabilities, therefore no impairment existed as of the testing date. The Company concluded that no facts or circumstances arose during the three and six months ended November 30, 2015 to warrant an interim impairment test. |
CAPITALIZED PATENT COSTS | CAPITALIZED PATENT COSTS Costs related to patent applications are capitalized as incurred and are amortized once the patent application is accepted or are expensed if the application is finally rejected. Patent costs are amortized over their estimated economic lives under the straight-line method, and are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable through the estimated undiscounted future cash flows from the use of the associated patent. Capitalized patent costs totaled approximately $3,000 and $5,000 for the three and six month periods ended November 30, 2015, respectively, as compared to $2,000 for both the three and six month periods ended November 30, 2014. |
LONG-LIVED ASSETS | LONG-LIVED ASSETS The Company periodically reviews the carrying value of all intangible and other long-lived assets. If indicators of impairment exist, the Company compares the undiscounted cash flows estimated to be generated by those assets over their estimated economic life to the related carrying value of those assets to determine if the assets are impaired. If the carrying value of the asset is greater than the estimated undiscounted cash flows, the carrying value of the assets would be decreased to their fair value through a charge to operations. As of November 30, 2015, the Company does not have any long-lived assets it considers to be impaired. |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The Companys financial instruments consist of cash, accounts receivable, Earn-Out Payments, related party notes receivable, accounts payable, notes payable accrued expenses, long-term debt and capital lease obligations. The Companys estimate of the fair value of these financial instruments approximates their carrying value due to the short term maturity of the assets and liabilities at November 30, 2015. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Under this guidance, the Company is required to classify certain assets based on the fair value hierarchy, which groups fair value-measured assets based upon the following levels of inputs: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The assets maintained by the Company that are required to be measured at fair value on a recurring basis are the Earn-Out Payments associated with the Companys sale of the CADRA product line. As of November 30, 2015, the maximum amount that could be received by the Company under the Asset Purchase Agreement totaled $423,000. The actual amount to be received is dependent on the amount of CADRA revenue produced by Mentor for the period from February 1, 2015 through October 31, 2016. The following table summarizes the valuation of the Company's assets and liabilities measured at fair value on a recurring basis as of November 30, 2015: (in thousands) Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Earn-Out Payments $ 325 $ - $ - $ 325 Total assets at fair value $ 325 $ - $ - $ 325 The following table summarizes the valuation of the Company's assets and liabilities measured at fair value on a recurring basis as of May 31, 2015: (in thousands) Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Earn-Out Payments $ 376 $ - $ - $ 376 Total assets at fair value $ 376 $ - $ - $ 376 The table below provides a summary of the changes in fair value of the Level 3 classified Holdback Payment and Earn-Out Payments asset for the six month period ended November 30, 2015. (in thousands) Fair value at May 31, 2014 $ 895 Payments received (604) Change in fair value 85 Fair value at May 31, 2015 376 Change in fair value (51) Fair value at November 30, 2015 $ 325 The fair value of the Earn-Out Payments expected to be collected within twelve months of the balance sheet date have been classified as current assets and the remainder as non-current assets in the accompanying consolidated balance sheets. The Company has estimated the fair value of the Earn-Out Payments using a discounted cash flow approach. This valuation is based upon several factors including; i) managements estimate of the amount and timing of future CADRA revenues, ii) the timing of receipt of payments from Mentor, and iii) a discount rate of 7%. A change in any of these unobservable inputs can significantly change the fair value of the asset. The change in fair value of the Earn-Out Payments recognized in the Consolidated Statements of Operations for the three and six months ended November 30, 2015 resulted in losses of approximately ($61,000) and ($51,000), respectively. The change in fair value of the Earn-Out Payments recognized in the Consolidated Statements of Operations for the three and six months ended November 30, 2014 resulted in income of approximately $21,000 and $60,000, respectively. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION The functional currency of the Companys foreign operations is the Euro. As a result, assets and liabilities are translated at period-end exchange rates and revenues and expenses are translated at the average exchange rates. Adjustments resulting from translation of such financial statements are classified in accumulated other comprehensive loss. Foreign currency gains and losses arising from transactions were included in the statements of operations. For the three and six month periods ended November 30, 2015, the Company recorded a net loss from foreign currency related transactions of approximately $23,000, and $16,000, respectively, as compared to approximately $28,000 and $43,000, respectively, for the comparable periods in the prior fiscal year, to Other expense in the unaudited Consolidated Statements of Operations. |
NET (LOSS) INCOME PER COMMON SHARE | NET (LOSS) INCOME PER COMMON SHARE For the three and six month periods ended November 30, 2015, 1,619 and 619, respectively, options to purchase common shares were anti-dilutive and were excluded from the basic and diluted earnings per share calculation. |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense for all stock-based payment awards made to employees and directors is measured based on the grant-date fair value of the award. The Company estimated the fair value of each share-based award using the Black-Scholes option valuation model. The Black-Scholes option valuation model incorporates assumptions as to stock price volatility, the expected life of options, a risk-free interest rate and dividend yield. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award. In May 2011, the 2011 Equity Incentive Plan (the 2011 Plan) was approved by the Companys shareholders, pursuant to which 150,000 shares of our common shares are reserved for issuance. Any shares subject to any award under the 2011 Plan that expires, is terminated unexercised or is forfeited will be available for awards under the 2011 Plan. The Company may grant stock options, restricted stock, restricted stock units, stock equivalents and awards of shares of common stock that are not subject to restrictions or forfeiture under the 2011 Plan. As of November 30, 2015, 149,500 options were awarded. The following table summarizes option activity under the 2011 Stock Option Plan: Number of Options Weighted Average Exercise Price Per Share Weighted-Average Remaining Life (in years) Aggregate Intrinsic Value Outstanding options at May 31, 2014 129,500 1.88 9.74 20,825 Granted 30,000 1.84 10.00 - Exercised - - - - Forfeited or expired (12,500) 1.11 - - Outstanding options at May 31, 2015 147,000 1.77 8.54 2,625 Granted 2,500 - - - Exercised - - - - Forfeited or expired - - - - Outstanding options at November 30, 2015 149,500 $ 1.75 8.07 $ 5,625 Exercisable at November 30, 2015 114,867 $ 1.77 7.92 $ 5,063 The Company determined the volatility for options granted using the historical volatility of the Companys common stock. The expected life of options has been determined utilizing the simplified method as prescribed in ASC 718, Compensation, Stock Compensation For the three and six month periods ended November 30, 2015, the Company expensed approximately $27,000 and $58,000 of stock-based compensation, respectively, as compared to approximately $32,000 and $59,000 in the comparable prior periods. |
REEDEMABLE COMMON STOCK | REDEEMABLE COMMON STOCK During the year ended May 31, 2013, the Company issued 50,000 shares of common stock, $0.10 par value (the Common Stock), at a purchase price of $5.00 per share to accredited investors (collectively, the Investors) in separate private placement transactions for total proceeds of $250,000. These transactions were completed pursuant to a Securities Purchase Agreement (the Agreement) which the Company entered into with each of the respective Investors. In lieu of registration rights, each $25,000 investment entitled the Investors to a fee of $6,000 (the Fee) to be paid in six equal quarterly installments during the eighteen month period following the investment. The Agreement also provided the Investors with the right to require the Company to redeem the Common Stock held by such Investors (the Put Option) for $5.50 per share in cash for a 30 day period ending between June 1, 2014 and June 30, 2014. Each of the Investors exercised their Put Option and the Common Stock was repurchased by the Company at the agreed upon Put Option price of $5.50 per share for a total of $275,000 during the first quarter of fiscal 2015. During the fiscal quarter ended August 31, 2014, in a transaction structured in a similar fashion to the above described Agreement, the Company issued 110,000 shares of the Common Stock at a purchase price of $5.00 per share to Joseph P. Daly, an accredited investor and existing Company shareholder, in a private placement transaction for total proceeds of $550,000. This transaction was completed pursuant to a securities purchase agreement whereby Mr. Daly shall have the right to require the Company to repurchase some or all of the shares at $7.00 per share during the ninety (90) day period immediately following the three-year anniversary of the transaction. Upon completion of the transaction, the 110,000 shares of Common Stock issued pursuant to the security purchase agreement were recorded as redeemable common stock at its redemption value of $770,000 and accretion of $220,000 was recorded to additional paid in capital. During the fiscal quarter ended November 30, 2014, the Company issued an additional 60,000 shares of the Common Stock at a purchase price of $5.00 per share to four accredited investors (collectively, the New Investors) in private placement transactions for total proceeds of $300,000. These transactions were completed pursuant to Securities Purchase Agreements (the New Agreements) entered into with each of the respective New Investors. In lieu of registration rights, each $50,000 investment entitles the New Investors to a fee (the New Investors Fees) of $5,000 to be paid in eight equal quarterly installments during the twenty-four month period (the Payment Period) following the investment. The New Agreements also provide the New Investors with the right to require the Company to redeem the Common Stock held by such New Investors for $7.00 per share in cash for a 30 day period following the Payment Period. Upon completion of these transactions, the 60,000 shares of Common Stock issued pursuant to the New Agreements were recorded as redeemable common stock at its redemption value of $420,000 and accretion of $120,000 was recorded to additional paid in capital. During the fiscal quarter ended November 30, 2015, the Company issued an additional 10,000 shares of the Common Stock at a purchase price of $5.00 per share to an accredited investor in private placement transactions for total proceeds of $50,000. This transaction was completed pursuant to a Securities Purchase Agreement entered into with the investor. In lieu of registration rights, the investor is entitled to a fee of $5,000 to be paid in eight equal quarterly installments during the twenty-four month period (the Payment Period) following the investment. The Securities Purchase Agreement also provides the investor with the right to require the Company to redeem the Common Stock held by such investor for $7.00 per share in cash for a 30 day period following the Payment Period. Upon completion of this transaction, the 10,000 shares of Common Stock issued pursuant to the Securities Purchase Agreement was recorded as redeemable common stock at its redemption value of $70,000 and accretion of $20,000 was recorded to additional paid in capital. The Company first assessed the redeemable Common Stock to determine whether each of these instruments should be accounted for as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging, Classification and Measurement of Redeemable Securities |
RECENT ACCOUNTING PRONOUNCEMENTS, Policy | RECENT ACCOUNTING PRONOUNCEMENTS In May 2015, the FASB issued ASU No. 2015-08, "Business Combinations (Topic 805): Pushdown Accounting Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115." The amendments in this ASU amend various SEC paragraphs pursuant to the issuance of Staff Accounting Bulletin No. 115, Topic 5: Miscellaneous Accounting, regarding various pushdown accounting issues, and did not have a material impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement." The amendments in this ASU provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The amendments do not change the accounting for a customer's accounting for service contracts. As a result of the amendments, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other licenses of intangible assets. The amendments in this ASU are effective for public business entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either: (1) prospectively to all arrangements entered into or materially modified after the effective date; or (2) retrospectively. The Company is currently assessing the impact that ASU 2015-05 will have on its consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, "Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." The amendments in this ASU are intended to simplify the presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU. The amendments in this ASU are effective for public business entities for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption of ASU 2015-03 to have a material impact on its consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." The amendments in this ASU are intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). In addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards Codification and improves current GAAP by placing more emphasis on risk of loss when determining a controlling financial interest, reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable interest entity ("VIE"), and changing consolidation conclusions for public and private companies in several industries that typically make use of limited partnerships or VIEs. The amendments in this ASU are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. ASU 2015-02 may be applied retrospectively in previously issued financial statements for one or more years with a cumulative-effect adjustment to retained earnings as of the beginning of the first year restated. The Company does not expect the adoption of ASU 2015-02 to have a material impact on its consolidated financial statements. Accounting Standards Update (ASU) 2014-16, Derivatives and Hedging (Topic 815) Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity was issued by the FASB in November 2014. The primary purpose of the ASU is to eliminate the use of different methods in practice and thereby reduce existing diversity under GAAP in the accounting for hybrid financial instruments issued in the form of a share. ASU 2014-16 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The Company does not believe that this guidance will have a material impact on its consolidated results of operations or financial position or disclosures. Accounting Standards Update (ASU) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern was issued by the FASB in August 2014. The primary purpose of the ASU is to provide guidance in GAAP about managements responsibility to evaluate whether there is substantial doubt about an entitys ability to continue as a going concern and to provide related footnote disclosures. The amendments should reduce diversity in the timing and content of footnote disclosure. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for the annual periods and interim periods thereafter. Early adoption is permitted. The Company is in the process of evaluating if this guidance will have a material impact on its consolidated results of operations or financial position or disclosures. ASU 2014-12, Compensation-Stock Compensation (Topic 718) Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period was issued by the FASB in June 2014. ASU 2014-12 requires that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. ASU 2014-12 is effective for public business entities for annual periods and interim periods within the annual periods beginning after December 15, 2015. Early adoption is permitted. The Company does not believe this guidance will have a material impact on its consolidated results of operations or financial position. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers |
SCHEDULE OF FAIR VALUE OF FINAN
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
SCHEDULE OF FAIR VALUE OF FINANCIAL INSTRUMENTS Table Text Block: | |
Schedule Of Fair Value, Assets Measured on Recurring Basis | The following table summarizes the valuation of the Company's assets and liabilities measured at fair value on a recurring basis as of November 30, 2015: (in thousands) Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Earn-Out Payments $ 325 $ - $ - $ 325 Total assets at fair value $ 325 $ - $ - $ 325 The following table summarizes the valuation of the Company's assets and liabilities measured at fair value on a recurring basis as of May 31, 2015: (in thousands) Total Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Earn-Out Payments $ 376 $ - $ - $ 376 Total assets at fair value $ 376 $ - $ - $ 376 |
Summary of the changes in fair value of the Level 3 classified Holdback Payment and Earn-Out Payments | The table below provides a summary of the changes in fair value of the Level 3 classified Holdback Payment and Earn-Out Payments asset for the six month period ended November 30, 2015. (in thousands) Fair value at May 31, 2014 $ 895 Payments received (604) Change in fair value 85 Fair value at May 31, 2015 376 Change in fair value (51) Fair value at November 30, 2015 $ 325 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
STOCK-BASED COMPENSATION (Tables) | |
SUMMARIZES OPTION ACTIVITY | The following table summarizes option activity under the 2011 Stock Option Plan: Number of Options Weighted Average Exercise Price Per Share Weighted-Average Remaining Life (in years) Aggregate Intrinsic Value Outstanding options at May 31, 2014 129,500 1.88 9.74 20,825 Granted 30,000 1.84 10.00 - Exercised - - - - Forfeited or expired (12,500) 1.11 - - Outstanding options at May 31, 2015 147,000 1.77 8.54 2,625 Granted 2,500 - - - Exercised - - - - Forfeited or expired - - - - Outstanding options at November 30, 2015 149,500 $ 1.75 8.07 $ 5,625 Exercisable at November 30, 2015 114,867 $ 1.77 7.92 $ 5,063 |
SCHEDULE OF GEOGRAPHICAL INFORM
SCHEDULE OF GEOGRAPHICAL INFORMATION (Tables) | 6 Months Ended |
Nov. 30, 2015 | |
SCHEDULE OF GEOGRAPHICAL INFORMATION | |
SCHEDULE OF GEOGRAPHICAL INFORMATION | The Companys operations are organized geographically with offices in the U.S. and Italy. Components of revenue and long-lived assets (consisting primarily of intangible assets, capitalized software and property, plant and equipment) by geographic location, are as follows (in thousands): Three Month Periods Ended Revenue: November 30, 2015 November 30, 2014 North America $ 1,043 $ 859 Europe 274 177 Asia 3 - Eliminations (16) (9) Consolidated Total $ 1,304 $ 1,027 Six Month Periods Ended Revenue: November 30, 2015 November 30, 2014 North America $ 1,818 $ 1,541 Europe 482 366 Asia 6 - Eliminations (21) (16) Consolidated Total $ 2,285 $ 1,891 Long Lived Assets: As of November 30, 2015 As of May 31, 2015 North America $ 2,026 $ 1,797 Europe 41 41 Consolidated Total $ 2,067 $ 1,838 |
DESCRIPTION OF THE BUSINESS A18
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) | Nov. 30, 2015 | Aug. 30, 2013 |
CADRA Sale | ||
The aggregate consideration for the CADRA Sale is up to | $ 3,950,000 | |
The Company has received a total of approximately from mentor | $ 3,500,000 | |
CADRA revenue generated by Mentor for the period from February 1, 2015 through October 31, 2016 | 423,000 | |
Gross margin | 0.3000 | |
Gross margin on software | 0.3000 | |
Gross margin on support contracts increased to either 35% or | $ 0.4000 |
SOFTWARE DEVELOPMENT COSTS (Det
SOFTWARE DEVELOPMENT COSTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
SOFTWARE DEVELOPMENT COSTS DURING: | ||||
Capitalized software development costs amounted | $ 113,000 | $ 231,000 | ||
Amortization expense related to capitalized software development costs | $ 12,000 | $ 28,000 | $ 28,000 | $ 56,000 |
PATENT COSTS (Details)
PATENT COSTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
PATENT COSTS DETAILS | ||||
Capitalized patent costs totaled | $ 3,000 | $ 2,000 | $ 5,000 | $ 2,000 |
Assets and liabilities measured
Assets and liabilities measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Nov. 30, 2015 | May. 31, 2015 |
Assets: | ||
Earn-Out Payments | $ 325 | $ 376 |
Total assets at fair value | 325 | 376 |
Assets: | ||
Earn-Out Payments | 0 | |
Total assets at fair value | 0 | |
Assets: | ||
Earn-Out Payments | 0 | |
Total assets at fair value | 0 | |
Assets: | ||
Earn-Out Payments | 325 | 376 |
Total assets at fair value | $ 325 | $ 376 |
Summary of the changes in fair
Summary of the changes in fair value of the Level 3 (Details) $ in Thousands | Nov. 30, 2015USD ($) |
Changes in fair value of the Level 3 classified Holdback Payment Earn-Out Payments asset | |
Fair value at May 31, 2014 | $ 895 |
Payments received | (604) |
Change in fair value | 85 |
Fair value at May 31, 2015 | 376 |
Change in fair value | (51) |
Fair value at November 30, 2015 | $ 325 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS NARRATIVE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS NARRATIVE DETAILS | ||||
The change in the fair value of the asset resulted in losses | $ 61,000 | $ 51,000 | ||
The change in the fair value of the asset resulted in gains | $ 21,000 | $ 60,000 | ||
Discount rate | 0.0700 | |||
Asset Purchase Agreement totaled | $ 423,000 |
FOREIGN CURRENCY TRANSLATION (D
FOREIGN CURRENCY TRANSLATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
FOREIGN CURRENCY TRANSLATION DETAILS | ||||
Net (gain) loss from foreign currency related transactions | $ 23,000 | $ 28,000 | $ 16,000 | $ 43,000 |
NET (LOSS) INCOME PER COMMON SH
NET (LOSS) INCOME PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
NET (LOSS) INCOME PER COMMON SHARE {1} | ||||
Options to purchase common shares were anti-dilutive | $ 1,619 | $ 2,368 | $ 619 | $ 1,184 |
STOCK-BASED COMPENSATION - 2011
STOCK-BASED COMPENSATION - 2011 EQUITY INCENTIVE PLAN (Details) - shares | Nov. 30, 2015 | May. 31, 2011 |
2011 EQUITY INCENTIVE PLAN DETAILS | ||
Shares of common stock are reserved for issuance | 150,000 | |
Options were awarded | 149,500 |
SUMMARIZES OPTION ACTIVITY UNDE
SUMMARIZES OPTION ACTIVITY UNDER 2011 STOCK OPTION PLAN (Details) {Stockholders'Equity} | 6 Months Ended |
Nov. 30, 2015shares | |
Number of Options | |
Outstanding options | 129,500 |
Options Granted | 30,000 |
Options Exercised | 0 |
Options Forfeited or expired | (12,500) |
Outstanding options | 147,000 |
Options Granted | 2,500 |
Options Exercised | 0 |
Options Forfeited or expired | 0 |
Outstanding options | 149,500 |
Options Exercisable | 114,867 |
Weighted Average Exercise Price Per Share | |
Outstanding options | 1.88 |
Options Granted | 1.84 |
Options Forfeited or expired | 1.11 |
Outstanding options | 1.77 |
Outstanding options | 1.75 |
Options Exercisable | 1.77 |
Weighted-Average Remaining Life (in years) | |
Outstanding options | 9.74 |
Options Granted | 10 |
Outstanding options | 8.54 |
Outstanding options | 8.07 |
Options Exercisable | 7.92 |
Aggregate Intrinsic Value | |
Outstanding options | 20,825 |
Outstanding options | 2,625 |
Outstanding options | 5,625 |
Options Exercisable | 5,063 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
STOCK-BASED COMPENSATION {1} | ||||
Company expensed stock-based compensation | $ 27,000 | $ 32,000 | $ 58,000 | $ 59,000 |
REEDEMABLE COMMON STOCK (Detail
REEDEMABLE COMMON STOCK (Details) - USD ($) | Nov. 30, 2015 | Nov. 30, 2014 | Aug. 31, 2014 | May. 31, 2013 |
Reedemable common stock | ||||
Company issued common stock shares | 10,000 | 60,000 | 110,000 | 50,000 |
Par value of the share | $ 0.10 | |||
Purchase price of the share | $ 5 | $ 5 | $ 5 | $ 5 |
Private placement transactions for total proceeds | $ 50,000 | $ 300,000 | $ 550,000 | $ 250,000 |
Each investment entitled the investors in lieu of registrations | $ 5,000 | 50,000 | 25,000 | |
Investors fee | $ 5,000 | $ 6,000 | ||
Redemption price of the Common Stock per share (Put option) | $ 5.50 | |||
Common Stock was repurchased by the Company at the agreed upon Put Option price per share | $ 5.50 | |||
Common Stock was repurchased by the Company at the agreed upon Put Option price for a total | $ 275,000 | |||
New investor price | $ 7 | $ 7 | $ 7 | |
Common Stock recorded at its redemption value | $ 70,000 | $ 420,000 | $ 770,000 | |
Recorded accretion to additional paid in capital | $ 20,000 | $ 120,000 | $ 220,000 | |
Put price on the most recent private placement | $ 7 |
GEOGRAPHICAL INFORMATION - REVE
GEOGRAPHICAL INFORMATION - REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2015 | Nov. 30, 2014 | |
Revenues: | ||||
North America | $ 1,043 | $ 859 | $ 1,818 | $ 1,541 |
Europe | 274 | 177 | 482 | 366 |
Asia | 3 | 6 | ||
Eliminations | (16) | (9) | (21) | (16) |
Consolidated Total | $ 1,304 | $ 1,027 | $ 2,285 | $ 1,891 |
GEOGRAPHICAL INFORMATION - LONG
GEOGRAPHICAL INFORMATION - LONG-LIVED ASSETS (Details) - USD ($) $ in Thousands | Nov. 30, 2015 | Nov. 30, 2014 |
Long-Lived Assets: | ||
North America | $ 2,026 | $ 1,797 |
Europe | 41 | 41 |
Consolidated Total | $ 2,067 | $ 1,838 |
DEBT - ESSIGPR (Details)
DEBT - ESSIGPR (Details) - USD ($) | Nov. 30, 2015 | Aug. 31, 2015 | Jul. 10, 2015 | Apr. 02, 2015 | Oct. 01, 2014 | Jun. 20, 2014 |
ESSIGPR DETAILS | ||||||
Note term loan maturing on April 1, 2017 | $ 750,000 | |||||
Note term loan maturing on April 1, 2017 accrues interest rate | $ 0.0950 | |||||
Short term borrowing arrangement with EssigPR whereby it was agreed that the Company would retain of the Holdback Payment due from Mentor | $ 300,000 | |||||
Short term borrowing arrangement with EssigPR interest rate | $ 0.0950 | |||||
EssigPR was awarded fully vested stock options to purchase SofTech common stock | 2,500 | 2,500 | 5,000 | |||
Purchase common stock at per share | $ 1 | $ 1 | $ 1 | |||
Additional amount borrowed | $ 254,000 | $ 200,000 | ||||
Fully vested stock options to purchase SofTech common stock | $ 2,500 | |||||
Fully vested stock options to purchase SofTech common stock per share | $ 1 | |||||
EssigPR is owned by Joseph P. Daly, an affiliate of the Company owns percent of Company's outstanding common stock | $ 0.1960 |
SHORT TERM ADVANCES FROM RELATE
SHORT TERM ADVANCES FROM RELATED PARTIES(Details) - USD ($) | Nov. 30, 2015 | Sep. 30, 2015 | Jul. 29, 2015 | Nov. 30, 2014 |
SHORT TERM ADVANCES FROM RELATED PARTIES details | ||||
Robert Anthonyson, an Officer, Director and beneficial owner of the company common shares | $ 0.1950 | |||
Robert Anthonyson loaned the company which was repaid to Mr. Anthonyson on September 17, 2015 | $ 50,000 | |||
Joseph Mullaney, an Officer, Director and beneficial owner of the company | 0.1120 | |||
Joseph Mullaney, an Officer, loaned the company | $ 19,300 | |||
Company arranged for a credit line with BlueVine Capital, Inc | $ 80,000 | |||
Company to receive an advance of total value of specified invoices | $ 0.8500 | |||
Company received advances totaling against three invoices | $ 27,000 | |||
Company received an advance from BlueVine | $ 23,000 |
NOTE RECEIVABLE, RELATED PARTY
NOTE RECEIVABLE, RELATED PARTY (Details) | Nov. 30, 2015USD ($) |
NOTE RECEIVABLE, RELATED PARTY DETAILS | |
Non-interest bearing note in the amount related to a stock transaction | $ 134,000 |
STOCK PURCHASE AGREEMENT (Detai
STOCK PURCHASE AGREEMENT (Details) - USD ($) | Aug. 08, 2014 | Jun. 30, 2013 |
STOCK PURCHASE AGREEMENT DETAILS | ||
Purchased shares of common stock from Greenleaf | 170,000 | |
Purchase price, value | $ 62,900 | |
Purchase price, per share value | $ 0.37 | |
Repurchased remaining shares from Greenleaf | 101,411 | |
Repurchased remaining shares from Greenleaf, per share value | $ 0.37 | |
Repurchased shares from Greenleaf in exchange for transactions, value | $ 37,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Nov. 30, 2015USD ($) |
SUBSEQUENT EVENTS Details | |
Company received an advance from BlueVine | $ 23,000 |