Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 18, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | PHOTOMEDEX INC | |
Entity Central Index Key | 711,665 | |
Document Type | 10-Q | |
Trading Symbol | PHMD | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,240,328 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 2,079 | $ 2,335 |
Restricted cash | 250 | 342 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $1,192 respectively | 79 | 4,125 |
Prepaid expenses and other current assets | 2,045 | 3,253 |
Receivable from acquirer | 2,000 | |
Assets held for sale | 8,362 | |
Financial Assets related to future mandatory asset contribution (Note 2) | 5,236 | |
Total current assets | 11,689 | 18,417 |
Property and equipment, net | 77 | |
Investment property (Note 2) | 2,450 | |
Investment in other company (Note 2) | 2,668 | |
Other assets, net | 803 | 7 |
Total assets | 17,610 | 18,501 |
Current liabilities: | ||
Notes payable | 277 | |
Accounts payable | 1,946 | 6,648 |
Accrued compensation and related expenses | 2,613 | 4,029 |
Other accrued liabilities | 3,678 | 8,091 |
Financial Liabilities for optional assets acquisition (Note 2) | 1,222 | |
Current portion of deferred revenues | 1,141 | |
Total current liabilities | 9,736 | 19,909 |
Total liabilities | 9,736 | 19,909 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity (deficit): | ||
Preferred Stock, $.01 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2017 and December 31, 2016 | ||
Common Stock, $.01 par value, 50,000,000 shares authorized; 5,240,328 and 4,361,094 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 230 | 221 |
Additional paid-in-capital | 125,268 | 118,585 |
Accumulated deficit | (116,345) | (115,635) |
Accumulated other comprehensive income (loss) | (1,280) | (4,579) |
Total stockholders' equity (deficit) | 7,874 | (1,408) |
Total liabilities and stockholders' equity (deficit) | 17,610 | 18,501 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred Stock, $.01 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2017 and December 31, 2016 | $ 1 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 5,240,328 | 4,361,094 |
Common stock, outstanding | 5,240,328 | 4,361,094 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, issued | 123,668 | 0 |
Preferred stock, outstanding | 123,668 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 11,243 | $ 3,539 | $ 22,476 | |
Cost of revenues | 3,354 | 100 | 6,108 | |
Gross profit | 7,889 | 3,439 | 16,368 | |
Operating expenses: | ||||
Engineering and product development | 343 | 143 | 657 | |
Selling and marketing | 6,425 | 620 | 14,228 | |
General and administrative | 1,848 | 2,932 | 4,190 | 6,897 |
Other income | (2,650) | (2,650) | ||
Loss on disposal of assets | 2,166 | 4,251 | 843 | |
Total operating expenses | 1,364 | 9,700 | 6,554 | 22,625 |
Loss from continuing operations before interest financing and other expense, net | (1,364) | (1,811) | (3,115) | (6,257) |
Revaluation of asset contribution related financial instruments, net (Note 2) | 2,622 | 2,622 | ||
Interest and other financing expense, net | (46) | (292) | (123) | (625) |
Income (loss) from continuing operations before income taxes | 1,212 | (2,103) | (616) | (6,882) |
Income tax expense | (73) | (135) | (94) | (228) |
Income (loss) from continuing operations | 1,139 | (2,238) | (710) | (7,110) |
Discontinued operations: | ||||
Loss from discontinued operations, net of taxes | (125) | (125) | ||
Net income (loss) | $ 1,139 | $ (2,363) | $ (710) | $ (7,235) |
Basic net income (loss) per share (Note 1): | ||||
Continuing operations (in dollars per share) | $ 0.18 | $ (0.50) | $ (0.14) | $ (1.75) |
Discontinued operations (in dollars per share) | (0.05) | |||
Basic and diluted net loss per share (in dollars per share) | 0.18 | (0.55) | (0.14) | (1.75) |
Diluted net loss per share:(Note 1) | ||||
Continuing operations (in dollars per share) | (0.04) | (0.50) | (0.16) | (1.75) |
Discontinued operations (in dollars per share) | (0.05) | |||
Diluted net loss per share (in dollars per share) | $ (0.04) | $ (0.55) | $ (0.16) | $ (1.75) |
Other comprehensive income (loss): | ||||
Reclassification of cumulative translation adjustment to statement of operations | $ 3,021 | |||
Foreign currency translation adjustments | $ 176 | $ (670) | 278 | (758) |
Total other comprehensive income (loss) | 176 | (670) | 3,299 | (758) |
Comprehensive income (loss) | $ 1,315 | $ (3,033) | $ 2,589 | $ (7,993) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT) (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Common Stock [Member] | Series A Preferred Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total |
Balance at beginning at Dec. 31, 2016 | $ 221 | $ 118,585 | $ (115,635) | $ (4,579) | $ (1,408) | |
Balance at beginning (in shares) at Dec. 31, 2016 | 4,361,094 | 4,361,094 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation related to stock options and restricted stock | 935 | $ 935 | ||||
Common shares issued for asset contribution (Note 2) | $ 9 | 1,266 | 1,275 | |||
Common shares issued for asset contribution (Note 2) (in shares) | 879,234 | |||||
Series A preferred issued for asset contribution (Note 2) | $ 1 | 4,482 | 4,483 | |||
Series A preferred issued for asset contribution (Note 2) (in shares) | 123,668 | |||||
Other comprehensive income | 3,299 | 3,299 | ||||
Net loss | (710) | (710) | ||||
Balance at ending at Jun. 30, 2017 | $ 230 | $ 1 | $ 125,268 | $ (116,345) | $ (1,280) | $ 7,874 |
Balance at ending (in shares) at Jun. 30, 2017 | 5,240,328 | 123,668 | 5,240,328 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (710) | $ (7,235) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 292 | 285 |
Provision for doubtful accounts | 19 | 24 |
Deferred income taxes | (14) | |
Stock-based compensation | 935 | 860 |
Loss on disposal of assets | 4,251 | 843 |
Revaluation of asset contribution related financial instruments, net (Note 2) | (2,622) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,091 | 2,297 |
Inventories | 313 | 745 |
Prepaid expenses and other current assets | 1,581 | (1,048) |
Accounts payable | (3,992) | 585 |
Accrued compensation and related expenses | (1,427) | 447 |
Other accrued liabilities | (6,944) | (22) |
Deferred revenues | (1,146) | (738) |
Adjustments related to operations | (4,649) | 4,264 |
Net cash used in operating activities | (5,359) | (2,971) |
Cash Flows From Investing Activities: | ||
Decrease in restricted cash | 92 | 118 |
Direct expenses related to asset acquisition | (283) | |
Purchases of property and equipment | 15 | (76) |
Proceeds on sale of property and equipment | 5,000 | 110 |
Net cash provided by investing activities | 4,824 | 152 |
Cash Flows From Financing Activities: | ||
Proceeds from notes payable | 5,460 | |
Payments on notes payable | (4,649) | |
Net cash provided by financing activities | 811 | |
Effect of exchange rate changes on cash | 279 | (200) |
Net decrease in cash and cash equivalents | (256) | (2,208) |
Cash and cash equivalents, beginning of period | 2,335 | 3,302 |
Cash and cash equivalents, end of period | 2,079 | 1,094 |
Supplemental information: | ||
Cash paid for income taxes | 73 | 61 |
Cash paid for interest | 0 | 232 |
Receivable from acquirer group of assets | 2,000 | |
Contribution of investment property and investment in other company against stock issue, financial assets related to future mandatory asset contribution and financial liabilities for optional asset acquisition (Note 2) | $ 4,836 |
The Company
The Company | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
The Company | Note 1 The Company: Background PhotoMedex, Inc. (and its subsidiaries) (the “Company”), re-incorporated in Nevada on December 30, 2010, originally formed in Delaware in 1980, is in the process of transitioning from a skin health company providing medical and cosmetic solutions for dermatological conditions to a real estate investment company holding investments in a variety of current and future projects, including residential developments, commercial properties such as gas station sites, and hotels and resort communities, as described further in this report. The Company was originally, until the recent sale of the Company’s last significant business unit (its consumer products division which was sold to ICTV Brands, Inc. on January 23, 2017), as described below and in other sections of this report, a Global Skin Health company providing integrated disease management and aesthetic solutions to dermatologists, professional aestheticians and consumers. The Company provided proprietary products and services that address skin diseases and conditions including psoriasis, acne, actinic keratosis (a precursor to certain types of skin cancer), photo damage and unwanted hair. Starting in August 2014, the Company began to restructure its operations and redirect its efforts in a manner that management expected would result in improved results of operations and address certain defaults in its then commercial bank loan covenants. As part of such redirected efforts, management maintained comprehensive efforts to minimize the Company’s operational costs and capital expenditures. During this time the Company also sold off certain business units and product lines to support this restructuring and on January 31, 2017, sold the last remaining major product line, its consumer products division. The Company did not present the consumer products segment as a discontinued operation, since the consumer products represented the entire remaining major operations of the Company. On March 31, 2017, the Company and its newly-formed subsidiary FC Global Realty Operating Partnership, LLC, a Delaware limited liability company (“Acquiror”) entered into an Interest Contribution Agreement (the “Agreement”) with First Capital Real Estate Operating Partnership, L.P., a Delaware limited partnership (“Contributor”), and First Capital Real Estate Trust Incorporated, a Maryland corporation, (the “Contributor Parent” and, together with Contributor, the “Contributor Parties”), under which the Contributor will contribute mostly certain real estate assets (the “Contributed Properties”) to the Company’s subsidiary in a series of three installments which will conclude no later than December 31, 2017. In exchange, the Contributor will receive shares of the Company’s Common Stock and newly designated Series A Convertible Preferred Stock as described below. As a result of this transaction, the Company has primarily become a real estate investment company for the purpose of investing in a diversified portfolio of quality commercial and residential real estate properties and other real estate investments located both throughout the United States and in various international locales. The first installment of contributed assets (the “First Contribution”) closed on May 17, 2017 (the “Initial Closing”). The main provisions of the Agreement are summarized below. First Contribution In the Initial Closing, the Contributor transferred certain assets comprising the Contributed Properties to the Company. On the Initial Closing date, the Contributor transferred to the Acquiror four vacant land sites set for development into gas stations, which are located in Atwater and Merced, northern California, and which have an agreed upon value of approximately $2.6 million. The Contributor then completed the transfer to the Acquiror of its 17.9% passive interest in a limited liability company that is constructing a single family residential development located in Los Lunas, New Mexico (the “Avalon Property”) on June 26, 2017. This residential development in New Mexico consists of 251, non-contiguous, single family residential lots and a 10,000 square foot club house. 37 of the lots have been finished, and the remaining 214 are platted and engineered lots. The agreed upon value of its share of this property is approximately $7.4 million. In return for the Contributed Properties, the Company issued to the Contributor 879,234 duly authorized, fully paid and non-assessable shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), which represented approximately 19.9% of the Company’s issued and outstanding Common Stock immediately prior to the Initial Closing, at an agreed upon Per Share Value (defined below) of $2.5183, or $2,214,175 in the aggregate. These shares of Common Stock are restricted and unregistered. The Company issued the remaining $7,785,825 of the approximately $10 million agreed upon consideration to the Contributor in the form of 123,668 shares of the Company’s newly designated non-voting Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Stock”). Each share of the Series A Stock is convertible into 25 shares of the Company’s Common Stock, subject to the satisfaction of certain conditions, including stockholder approval in accordance with the rules of The Nasdaq Stock Market (“ Nasdaq VWAP Per Share Value The Series A Convertible Preferred Stock does not have voting rights; however, the Company may not (a) alter or change adversely the powers, preferences or rights of that stock, (b) amend or change its certificate of incorporation in a manner that adversely affects that stock, (c) increase the number of shares of preferred stock, or (d) otherwise enter into an agreement that accomplishes any of the foregoing, without the affirmative vote of a majority of the holders of the outstanding Series A Convertible Preferred Stock prior to any such change. At the Initial Closing, the Company assumed the liabilities associated with the Contributed Properties, except that it did not assume any liabilities with respect to the Avalon Property until that property’s contribution was completed on June 26, 2017. The obligations that the Acquiror assumed at the Initial Closing include the following: Obligations of the Contributor and its affiliates under certain agreements covering the contributed properties, including an Operating Agreement of Central Valley Gas Station Development, LLC, a Delaware limited liability company, dated January 28, 2013, and all amendments thereto; and a Construction Contract dated November 19, 2014 between Central Valley Gas Stations Development, LLC, as owner and First Capital Builders, LLC, as Contractor, with respect to the project known commonly as Green Sands and Buhach Rd., Atwater, CA. Once the full interest in the Avalon Property was contributed to the Company, the Company also assumed the Operating Agreement of Avalon Jubilee, LLC, a New Mexico limited liability company dated as of May 16, 2012, and all amendments thereto; and a Development Services Agreement dated September 15, 2015 by and between UR-FC Contributed Assets, LLC, a Delaware limited liability company, as Owner, and Land Strategies, LLC, a Nevada limited liability company, as Developer, with respect to real property owned by Avalon Jubilee, LLC. As of the Initial Closing, the Company also assumed an installment note dated April 7, 2015 made by First Capital Real Estate Investments, LLC (“FCREI”) in favor of George Zambelli (“Zambelli”) in the original principal amount of $470 (the “Note”) and a Long Form Deed of Trust and Assignment of Rents dated April 7, 2015 between FCREI, as Trustor, Fidelity National Title Company, as Trustee (“Trustee”), and Zambelli, as Beneficiary (the “Deed of Trust”), which secures the Note. The Company is expected to enter into amended agreements with respect to some or all of these agreements. Finally, the Company will assume all ancillary agreements, commitments and obligations with respect to these properties. The Company elected to early adopt ASU 2017-01 B usiness Combinations (Topic 805) Clarifying the Definition of a Business. Acquisition of Real Estate Assets. Second Contribution Contributor Parent is also required to contribute two additional property interests valued at the agreed upon value amount of $20 million if certain conditions as set forth in the Agreement are satisfied by December 31, 2017. This second installment is mandatory. Contributor Parent must contribute to the Acquirer its 100% ownership interest in a private hotel that is currently undergoing renovations to convert to a Wyndham Garden Hotel. This 265 room full service hotel is located in Amarillo, Texas and has an agreed upon value of approximately $16 million and outstanding loans of approximately $10.11 million. Before contributing the property to the Acquiror, Contributor Parent must resolve a lawsuit concerning ownership of the property. Only when Contributor Parent has confirmed that it is the full and undisputed owner of the property may it contribute that interest to the Acquiror. On July 3, 2017, the Company and the Acquiror entered into an Agreement to Waive Second Closing Deliverables (the “Second Waiver”) with the Contributor Parties, amending the Agreement. The Contributor Parties have received an offer to purchase the Amarillo Hotel from a non-related third party. Under the Second Waiver, the Company and the Acquiror agreed to waive the requirement for the Contributor Parties to contribute to the Acquiror their 100% ownership interest in the Amarillo Hotel, and to accept in its place a contribution in cash of not less than $5.89 million from the Contributor Parties from the sale proceeds of the Amarillo Hotel, after the satisfaction of the outstanding loan, provided that the sale is completed and closed upon not later than August 31, 2017. In exchange the Contributor Parties shall receive shares of stock in the Company, such amount to be calculated as set forth in the Second Waiver and Agreement. If the sale of the Amarillo Hotel is not completed and closed by August 31, 2017, the waiver of the requirement for the contribution of the interest in the Amarillo Hotel will lapse. As of the filing of this report, August 21, 2017 the sale of the Amarillo Hotel has not been completed. In addition, Contributor Parent must contribute to the Acquiror its interest in Dutchman’s Bay and Serenity Bay (referred to as the “Antigua Resort Developments”), two planned full service resort hotel developments located in Antigua and Barbuda in which Contributor Parent owns a 75% interest in coordination with the Antigua government. Serenity Bay is a planned five star resort comprised of five contiguous parcels (28.33 acres) zoned for hotel and residential use that are planned for 246 units and 80 one, two and three bedroom condo units. Dutchman’s Bay, is a planned four star condo hotel with 180 guestrooms, 102 two bedroom condos, and 14 three bedroom villas. For the property in Antigua, Contributor Parent must obtain an amendment to its agreement with the government to extend the time for development of these properties and confirm that all development conditions in the original agreement with the government have been either satisfied or waived. In exchange for each of these properties, the Company will issue to Contributor a number of duly authorized, fully paid and non-assessable shares of the Company’s Common Stock or Series A Convertible Preferred Stock, determined by dividing the $20 million agreed upon value of that contribution by the Per Share Value. The shares shall be comprised entirely of shares of Common Stock if the issuance has been approved by the Company’s stockholders prior to the issuance thereof and shall be comprised entirely of shares of Series A Convertible Preferred Stock if such approval has not yet been obtained. The Company has determined in accordance with the updated guidance of ASU 2017-01 B usiness Combinations (Topic 805) Clarifying the Definition of a Business Derivatives and Hedging Derivatives and Hedging Contracts in the Entity’s Own Equity Acquisition of Real Estate Assets Optional Contribution Contributor Parent has the option to contribute either or both of two additional property interests valued at the agreed upon value of $66.5 million if certain conditions as set forth in the Agreement are satisfied by December 31, 2017. This third installment is optional in Contributor Parent’s sole discretion. The Contributor Parent may contribute to the Acquiror its interest in a resort development project on an island just south of Hilton Head, South Carolina (“Melrose”). Contributor Parent currently has the property under a Letter of Intent and expects to close on the property by December 31, 2017. Melrose is valued by Contributor Parent at $22.5 million, based upon a senior lending position that Contributor Parent holds under the Letter of Intent on this property. Contributor Parent also may contribute to the Acquiror a golf and surf club development project on the Baja Peninsula in Mexico (“Punta Brava”). Contributor Parent also has this property under a Letter of Intent and expects to close by December 31, 2017. Punta Brava is valued at the agreed upon value by Contributor Parent at $44 million based on Contributor Parent’s commitment of $5 million upon closing on this property, plus a commitment for an additional $5 million and a second commitment of $34 million for construction of the project. In exchange for each of these properties, the Company will issue to Contributor a number of duly authorized, fully paid and non-assessable shares of the Company’s Common Stock or Series A Convertible Preferred Stock, determined by dividing an agreed upon value of $86,450 (130% of the value of the agreed upon value of $66,500) that contribution) by the Per Share Value. The shares shall be comprised entirely of shares of Common Stock if the issuance has been approved by the Company’s stockholders prior to the issuance thereof and shall be comprised entirely of shares of Series A Convertible Preferred Stock if such approval has not yet been obtained. In addition, the Company will issued to Contributor a five (5) year warrant (the “Warrant”) to purchase up to 25,000,000 shares of the Company’s Common Stock at an exercise price of $3.00 per share that shall vest with respect to the number of underlying shares upon the achievement of the milestone specified in the Agreement. The number of warrant shares and the exercise price will be equitably adjusted in the event of a stock split, stock combination, recapitalization or similar transaction. These optional contributions represent a potential liability to the company as the number of shares to be issued is fixed but the market value of the shares fluctuates. It is possible that the share price could rise to a level that upon contribution of the properties causes the Company to give consideration that exceeds the fair value of the assets acquired. This would represent a potential liability to the Company and to quantify the liability the Company has used the Black Scholes formula. The warrants also represent a potential liability in that the Company may be required to issues shares at $3 when the shares price is significantly higher. To estimate the fair value of the liability associated with optionality granted to the Contributor as well as the warrant liability Management has used the Black Scholes option pricing formula. The key input in the calculation is the assumption of how volatile the Company stock will be over the life of the option. The more volatile the Company is expected to be, the greater its potential liability. Future volatility is unknown, as such Management has used a volatility proxy of 39.45% which equals the average volatility of stocks in the Company’s forward looking peer group of Real Estate Development. After the calculation is performed, additional factors must be considered. It is possible that despite being economically rational to contribute the properties based on the Company stock price relative to the value of the optional properties the Contributor may not have the ability to contribute. Therefore a 50% discount is applied to the option value produced by the Black Scholes formula to arrive at final liability value for the optionality component. The warrants receive a further 50% discount as they contain a vesting schedule with milestones that must be achieved by the Contributor once the property is contributed. As of June 30, 2017 the fair value of such liability is estimated to be $1,222 and is represented on the Balance sheet. The Company has determined that the company’s contractual obligations under the optional contributions does not constitute a derivative instrument in accordance with ASC 815-10 - Derivatives and Hedging Contracts in the Entity’s Own Equity The above optional contributions were determined to represent a financial liabilities related to future contingent assets contributions. See Note 2 Acquisitions and Dispositions . Resignation and Appointment of Officers and Directors Pursuant to the Agreement, there were changes to the Company’s named executive officers and its board of directors that were made on May 17, 2017. Named Executive Officers Dr. Dolev Rafaeli and Dennis McGrath resigned from their positions as officers of the Company and its subsidiaries, and Dr. Yoav Ben-Dror resigned from his position as director of the Company and its subsidiaries. Dr. Rafaeli resigned as Chief Executive Officer, and Mr. McGrath resigned as President and Chief Operating Officer, of the Company; following such resignation both employees assumed other positions within the company and their employment terms were remained unchanged. Suneet Singal was appointed as Chief Executive Officer of the Company, and Stephen Johnson as the Company’s Chief Financial Officer. Mr. Singal had signed an employment agreement with the Company on the date of the First Closing; Mr. Johnson signed an employment agreement with the Company on July 28, 2017. See also Note 14. Dr. Ben-Dror resigned as a director of the Company’s foreign subsidiaries, including Radiancy (Israel) Ltd. and Photo Therapeutics Limited in the United Kingdom. He will not continue his affiliation with those companies. Board of Directors At the closing for the First Contribution, certain members of the Company’s board of directors resigned, and the board was expanded, so that the board consists of seven (7) persons, of whom (i) three (3) were designated by the Company’s departing board, (ii) three (3) were designated by Contributor Parent; and (iii) one (1) (the “Nonaffiliated Director”) was selected by the other six (6) directors At the Closing, Lewis C. Pell, Dr. Yoav Ben-Dror and Stephen P. Connelly each resigned from the Board. Dr. Rafaeli and Mr. McGrath remained on the Board as the Company’s designees, and Michael R. Stewart was appointed as the Company’s Independent Director Designee. Suneet Singal, Richard J. Leider and Dr. Bob Froehlich were appointed as the Contributor Parent’s designees (with Richard J. Leider and Dr. Bob Froehlich serving as Independent Directors). Together, the six board members selected Darrel Menthe as the Nonaffiliated Director. Mr. Menthe also serves as an Independent Director. The Agreement provided that the compensation committee, nominations and corporate governance committee and audit committee of the Company shall each consist of the Company’s designee who is an Independent Director, one of Contributor Parent’s designees who is an Independent Director and the Nonaffiliated Director. General Conditions In each case, the Company’s board of directors will determine whether or not the pre-contribution conditions have been satisfied before accepting the property interests and issuing shares of the Company’s stock to Contributor Parent. The Agreement is subject to the usual pre- and post-closing representations, warranties and covenants, and restricts the Company’s conduct to the conduct to that in the ordinary course of business between the signing and December 31, 2017. Under the Agreement, amounts due to Dr. Dolev Rafaeli and Dennis McGrath under their employment agreements, as well as amounts due to Dr. Yoav Ben-Dror for his services as a board member of the Company’s foreign subsidiaries (see Note 6), will be converted to convertible secured notes (the “Payout Notes”) after approval from the Company’s stockholders. The Payout Notes will be due one year after the stockholder approval and carry a ten percent (10%) interest rate. The principal will convert to shares of the Company’s Common Stock at the lower of (i) the Per Share Value or (ii) the VWAP with respect to on-exchange transactions in the Company’s Common Stock executed on the NASDAQ during the thirty (30) trading days prior to the maturity date as reported by Bloomberg L.P.; provided, however, that the value of the Company’s Common Stock shall in no event be less than $1.75 per share. The Payout Notes will be secured by a security interest in all assets of the Company; provided, however, that such security interest will be subordinated to any (i) claims or liens to the holders of any debt (including mortgage debt) being assumed by the Company as a result of the transaction contemplated by the Agreement, and (ii) all post-closing indebtedness incurred by the Company or its subsidiaries. The holders of the Payout Notes will have demand registration rights which will require the filing of a resale registration statement on appropriate form that registers for re-sale the shares of Common Stock underlying the Payout Notes within thirty (30) days of issuance with best efforts to cause the same to become effective within one-hundred twenty (120) days of issuance. Special Meeting of Stockholders As promptly as possible following the Initial Closing, the Company is required file a proxy statement and hold a special meeting of its stockholders to authorize and approve the following matters: ● an increase in the number of authorized shares of common stock, $.01 par value per share, of the Company from fifty million (50,000,000) shares to five hundred million (500,000,000) shares and increase the number of authorized shares of preferred stock, $.01 par value per share, of the Company from five million (5,000,000) shares to fifty million (50,000,000) shares; • the issuance to the Contributor or its designee or designees of the Company’s common and/or preferred shares in exchange for the contributed assets, and the issuance of the Warrant and, upon exercise of the Warrant, the underlying shares of the Company’s Common Stock in exchange for the contribution of the optional property interests, if any are made; • the amendment and restatement of the Articles of Incorporation of the Company; • the approval of the issuance of the Payout Notes and the issuance of the Company’s Common Stock upon conversion thereof; and • the election of a new Board of Directors as set forth above in Resignation and Appointment of Officers and Directors in this report. Board members, officers and certain insiders of the Company are subject to a voting agreement under which they are obligated to vote in favor of the proposals at the above mentioned stockholder meeting. Registration Rights Promptly following the execution of the Agreement, the Company is required prepare and file with the Securities and Exchange Commission two registration statements on Form S-3 (or such other form available for this purpose) (the “Registration Statements”) to register (a) the primary offering by the Company (i) to the holders of the Payout Notes the Common Stock underlying the Payout Notes, and (ii) to the unaffiliated shareholders of Contributor Parent the Common Stock distributed to such unaffiliated shareholders as a dividend by Contributor Parent and (b) the secondary offering (i) by the Contributor Parties of all the shares of the Company’s Common Stock (including, without limitation, the shares of Common Stock underlying the Warrant) retained by the Contributor Parties, (ii) by Maxim Group LLC of the shares received by it as compensation for services rendered to Contributor Parent, and (ii) by certain affiliates of the Contributor Parent who receive shares from Contributor Parent. Termination Fee Finally, the transaction is subject to a termination provision under which, in the event of a material breach of the terms of the transaction, the breaching company must pay all out-of-pocket expenses of the non-breaching company incurred up to the date of termination of the transaction. The Company will conduct most of its building, construction financing and site management activities through various subsidiaries affiliated with the Contributor Parties. The Company will maintain only a small staff of employees to handle its accounting, legal and compliance activities, including a new Chief Executive Officer and a new Chief Financial Officer, who assumed their duties following the close of the First Contribution. Notification of Delisting of Shares The Company received a written notification (the “Original Notice”) on November 18, 2016 from The NASDAQ Stock Market LLC (“NASDAQ”) that the Company’s stockholder equity reported on its Form 10-Q for the period ended September 30, 2016 had fallen below the minimum requirement of $2.5 million, and that the Company was therefore not in compliance with the requirements for continued listing on the NASDAQ Capital Market under NASDAQ Marketplace Rule 5550(b)(1). The Original Notice provided the Company with a period of 45 calendar days, or until January 2, 2017, to submit a plan to regain compliance with the listing rules; that plan was filed with NASDAQ on January 10, 2017 under a one-week extension due to the holiday period. NASDAQ granted the Company a combined extension of time to comply with the Rule until March 10, 2017. On March 15, 2017, in a letter from Nasdaq to the Company (the “Nasdaq March 15th Letter”), Nasdaq granted the Company a further extension until May 17, 2017, to comply with the Continued Listing Rule, subject to (i) the Company having signed a definitive agreement with the Contributor Parent on or before March 31, 2017, which it did (i.e. the Contribution Agreement), and (ii) the Company having closed the transaction contemplated by such definitive agreement on or before May 17, 2017. As a result of the Company’s acquisition of the Contributed Assets in the Initial Closing on May 17, 2017, the Company, as of May 17, 2017, has complied with the requirements of the Nasdaq March 15th Letter and, as of that date, is in compliance with the Continued Listing Rule, including the requirement to maintain shareholder equity of at least $2.5 million. However, on May 22, 2017, the Company received an additional letter from Nasdaq, notifying the Company that, while it was now in compliance with the Continued Listing Rule, it was not in compliance with Listing Rule 5110(a) because it failed to submit an initial listing application to receive approval to list the post-transaction entities, prior to the Initial Closing. Because of this failure, Nasdaq had determined to delist the Company’s securities from listing and registration on The Nasdaq Stock Market. Under Nasdaq rules, the Company had the right to appeal Nasdaq’s delisting determination and request a hearing, which it did. At the hearing on June 26, 2917, the Company presented to Nasdaq its request that the delisting determination be set aside and its plan to satisfy all necessary criteria for listing on NASDAQ and to comply with the requirements of an initial listing application. Nevertheless, on July 5, 2017, the Company received another notice (the “July 5th Notice”) from NASDAQ indicating that, based upon the Company’s non-compliance with NASDAQ Listing Rule 5110a, which requires an issuer to file an initial listing application and satisfy the initial listing criteria upon completion of a change of control transaction, the NASDAQ Hearings Panel had determined to delist the Company’s common stock from NASDAQ and that trading of the Company’s common stock would be suspended on NASDAQ effective with the open of business on July 7, 2017. The Company has appealed the Panel’s determination; however, the appeal does not stay the suspension of trading of the Company’s securities on NASDAQ. The Company has already filed an initial listing application with NASDAQ, and is working to evidence full compliance with the applicable NASDAQ Listing Rules as soon as possible. The Company cannot determine at this time whether NASDAQ will accepts its initial listing application. Upon the suspension of trading on NASDAQ, the Company’s common stock moved to trade over-the-counter via the OTC Markets’ “Pink” tier. On July 24, 2017, the Company received written notice that its common stock had been up-listed and approved for trading on OTCQB, the higher tier of the OTC Markets, under its existing symbol “PHMD.” The Securities and Exchange Commission (the “SEC”) considers the OTCQB marketplace to be an “established public market” for the purpose of determining the public market price of a company’s stock when registering securities for resale with the SEC, and the majority of broker-dealers trade stocks on the OTCQB marketplace. Listing on the OTCQB generally provides that a company maintain higher reporting standards and requirements and imposes management certification and compliance requirements. The Company believes that trading its stock on the OTCQB will likely enhance liquidity and shareholder value while its NASDAQ appeal is pending. Liquidity and Going Concern As of June 30, 2017, the Company had an accumulated deficit of $116,345. To date, and subsequent to the recent sale of the Company’s last significant business unit, the Company has dedicated most of its financial resources to general and administrative expenses. At present, the Company is not generating any revenues from operating activities. Cash and cash equivalents as of June 30, 2017 were $2,329, including restricted cash of $250. The Company has historically financed its activities with cash from operations, the private placement of equity and debt securities, borrowings under lines of credit and, in the most recent periods with sales of certain assets and business units. The Company will be required to obtain additional liquidity resources in order to support its operations. On January 23, 2017, the Company sold its consumer products division to ICTV Brands, Inc., for a total selling price of $9.5 million. The Company has collected $5 million of that purchase price; the remaining amount of up to $4.5 million was payable through a contingent royalty on the sale of consumer products by ICTV Brands. On July 12, 2017 the Company, along with its subsidiaries Radiancy, Inc. (“Radiancy”); PhotoTherapeutics Ltd. (“PHMD UK”); and Radiancy (Israel) Limited (“Radiancy Israel” and together with the Company, Radiancy and PHMD UK the “Sellers” and each individually a “Seller”) entered into a Termination and Release Agreement (the “Release”) between the Sellers and ICTV Brands Inc. (“ICTV”) and its subsidiary ICTV Holdings, Inc. (“ICTV Holdings”). The Sellers, ICTV and ICTV Holdings are referred to herein individually as a “Party” and collectively as the “Parties.” Under the terms of the Release, the Asset Purchase Agreement among the Parties, dated October 4, 2016, as amended by the First Amendment to the Asset Purchase Agreement, dated January 23, 2017 (as so amended, the “Purchase Agreement”), is terminated and of no further force and effect, except for certain surviving rights, obligations and covenants described in the Release. Pursuant to the Release, each of the Sellers, on one hand, and ICTV and ICTV Holdings, on the other hand, fully release, forever discharge and covenant not to sue any other Party, from and with respect to any and all past and present claims arising out of, based upon or relating to the Purchase Agreement (other than the surviving covenants described in the Purchase Agreement) or the transactions contemplated thereby. Pursuant to the terms of the Release, ICTV paid to the Company, within 3 business days of the date of the Release, $2,000 in cash and in immediately available funds (the “Payment”). Subject to this Payment, neither ICTV nor ICTV Holdings shall have any further royalty or other payment obligations under the Purchase Agreement. The Company received $2,000 on July 13, 2017. As partial consideration for the releases provided by ICTV Holdings to the Sellers pursuant to the Release and |
Acquisition of Real Estate Asse
Acquisition of Real Estate Assets | 6 Months Ended |
Jun. 30, 2017 | |
Acquisition Of Real Estate Assets | |
Acquisition of Real Estate Assets | Note 2 Acquisition of Real Estate Assets: The Company elected to early adopt ASU 2017-01 Business Combinations (Topic 805) Clarifying the Definition of a Business. The consideration of the asset acquisition consists of: Fair value of PHMD common stock $ 1,275 Fair value of PHMD series A preferred stock 4,483 Fair value of financial liability related to Optional contribution (A) 857 Fair value of Warrant (A) 1,925 Fair value of asset related to future mandatory asset contribution (B) (4,175 ) Fair value of note payable on acquired asset 470 Transaction costs 283 Total consideration $ 5,118 A. See Note 1 “Second Contribution” B. See Note 1 “Optional Contribution” Investment property equivalents 2,450 Investment in other company 2,668 Total assets acquired at fair value $ 5,118 The fair value of the assets acquired and liabilities assumed were based on management estimates and values derived from an outside independent appraisal. The following table summarizes the allocation of the consideration to the assets acquired in the transaction. The fair value of options granted was estimated at the dates of grant using the Black-Scholes option pricing model. The following are the data and assumptions used: Options Value: May 17, 2017 June 30, 2017 Dividend yield (%) 0 0 Expected volatility (%) 39.45 39.45 Risk free interest rate (%) 1.25 1.25 Strike price (US dollars) 1.93 1.93 Stock price (US dollars) 1.45 1.18 Probability (%) 50 50 Expected term of options (years) 0.62 0.5 Warrants Value: May 17, 2017 June 30, 2017 Dividend yield (%) 0 0 Expected volatility (%) 39.45 39.45 Risk free interest rate (%) 1.25 1.25 Strike price (US dollars) 3 3 Stock price (US dollars) 1.45 1.18 Probability (%) 50 50 Expected term of options (years) 5 4.88 Asset related to future mandatory asset contribution: May 17, 2017 June 30, 2017 Dividend yield (%) 0 0 Stock price (US dollars) 1.45 1.18 Probability (%) 70 70 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 Inventories: June 30, December 31, (unaudited) Raw materials and work in progress $ — $ 1,968 Finished goods — 5,368 Total Inventories — $ 7,336 Less assets held for sale — (7,336 ) Total inventories $ — $ — Work-in-process was immaterial, given the Company’s typically short manufacturing cycle, and therefore was disclosed in conjunction with raw materials. See Acquisitions and Dispositions regarding inventory balance classified as part of the assets held for sale as of December 31, 2016. During January 2017, all consumer inventory was sold to ICTV. See Acquisitions and Dispositions in Note 1. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 4 Property and Equipment, net: June 30, December 31, (unaudited) Equipment, computer hardware and software $ 314 5,005 Furniture and fixtures 350 433 Leasehold improvements 112 438 776 5,876 Accumulated depreciation and amortization (776 ) (4,888 ) Total property and equipment — $ 988 Less assets held for sale — (911 ) Property and equipment, net $ — $ 77 Depreciation and related amortization expense was $177 and $149 for the six months ended June 30, 2017 and 2016, respectively. |
Patents and Licensed Technologi
Patents and Licensed Technologies, net | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents and Licensed Technologies, net | Note 5 Patents and Licensed Technologies, net: June 30, December 31, (unaudited) Gross amount beginning of period $ — $ 3,376 Additions — (177 ) Translation differences — 36 Gross amount end of period — 3,235 Accumulated amortization — (1,974 ) Impairment — (1,261 ) Patents and licensed technologies, net $ — $ — Related amortization expense was $0 and $116 for the six months ended June 30, 2017 and 2016, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 6 Goodwill and Other Intangible Assets: As part of the purchase price allocation for the 2011 reverse acquisition, the Company recorded goodwill in the amount of $24,005 and definite-lived intangibles in the amount of $12,000. Goodwill reflected the value or premium of the acquisition price in excess of the fair values assigned to specific tangible and intangible assets. Goodwill had an indefinite useful life and therefore was not amortized as an expense, but was reviewed annually for impairment of its fair value to the Company. Activity in goodwill during the year ended December 31, 2016 follows: Balance at January 1, 2016 $ 3,581 Disposal on sale of assets (1,039 ) Impairment of goodwill (2,257 ) Translation differences (285 ) Balance at December 31, 2016 $ 0 See Note 1 Accounting for the Impairment of Goodwill, in the Company’s Form 10-K for the year ending December 31, 2016, for more information. During the third quarter of 2016, we recorded goodwill and other intangible asset impairment charges of $3,518, as we determined that a portion of the value of our goodwill and other intangible assets was impaired in connection with the then pending transaction with ICTV Brands, Inc. See Note 18, Subsequent Event in the Company’s Form 10-K for the year ended December 31, 2016, for more information. The Company recorded an impairment of the entire remaining balance of Consumer segment goodwill in the amount of $2,257 and recorded the impairment of the Consumer segment of the intangibles for its licensed technology in the amount of $1,261. The Company derecognized an amount of $1,039 of goodwill related to the Physician Recurring segment in connection with the asset sale of the Neova product line. Also in connection with the then pending transaction with ICTV Brands, as of December 31, 2016, and based on the expected price of such transaction which management believed represents market approach fair value estimate, the Company recorded an impairment of the Consumer segment intangibles for its Licensed Technology in the amount of $1,261. |
Accrued Compensation and relate
Accrued Compensation and related expenses | 6 Months Ended |
Jun. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Accrued Compensation and related expenses | Note 7 Accrued Compensation and related expenses: June 30, December 31, (unaudited) Accrued payroll and related taxes $ 49 $ 262 Accrued vacation 49 66 Accrued commissions and bonuses 2,515 3,701 Total accrued compensation and related expense $ 2,613 $ 4,029 |
Other Accrued Liabilities
Other Accrued Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | Note 8 Other Accrued Liabilities: June 30, December 31, (unaudited) Accrued warranty, current, see Note 1 $ — $ 93 Accrued taxes, net 1,671 1,606 Accrued sales returns (1) — 1,975 Other accrued liabilities 2,007 4,417 Total other accrued liabilities $ 3,678 $ 8,091 (1) The activity in the accrued sales returns liability account was as follows: Six Months Ended June 30, 2017 2016 (unaudited) (unaudited) Balance at beginning of year $ 1,975 $ 4,179 Additions that reduce net sales — 4,976 Deductions from reserves (1,975 ) (7,182 ) Balance at end of period $ — $ 1,973 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 Income Taxes: In connection with the former skincare activities, the Company’s tax expense included federal, state and foreign income taxes at statutory rates and the effects of various permanent differences. The difference between the Company’s effective tax rates for the six month period ended June 30, 2017 and the U.S. Federal statutory rate (34%) resulted primarily from current federal and state losses for which no tax benefit is provided due to the 100% valuation allowance for those jurisdictions. In addition, the Israeli and UK subsidiaries’ earnings are taxed at rates lower than the U.S. federal statutory rate (Israel 25% standard corporation tax rate and in the UK 20%). During the six months ended June 30, 2017, the Company had no material changes to liabilities for uncertain tax positions. PhotoMedex files corporate income tax returns in the United States, both in the Federal jurisdiction and in various State jurisdictions. The Company is subject to Federal income tax examination for calendar years 2012 through 2016 and is also generally subject to various State income tax examinations for calendar years 2012 through 2016. Photo Therapeutics Limited files in the United Kingdom. Radiancy (Israel) Limited files in Israel. The Israeli subsidiary is subject to tax examination for calendar years 2011 through 2016. As a result of its anticipated transition into a real estate investment company, such transition to commence after the filing of this report with the closing of the Second Contribution scheduled for September 30, 2017 and with the closing of the First Contribution May 17, 2017, the Company will re-examine its tax status and to re-evaluate the quantity and type of its tax reporting. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 Commitments and contingencies: On June 22, 2017, the United States District Court for the Middle District of Florida, Orlando Division, dismissed the Company and Dr. Dolev Rafaeli, its former Chief Executive Officer, from the case of Linda Andrew v. Radiancy, Inc.; Photomedex, Inc.; and Dolev Rafaeli. Ms. Andrew had filed a product liability suit alleging damages from her use of a no!no! hair device. The claims against the Company and Dr. Rafaeli were dismissed without prejudice. The Company’s subsidiary, Radiancy, Inc., remains a defendant in the suit. As previously reported on Form 10-Q, Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the period ending March 31, 2017, and on the Forms 10-K, Current Report, filed on April 14, 2016 and May 31, 2016, the Company and its subsidiaries had entered into Agreements and Plans of Merger and Reorganization with DSKX and its subsidiaries, under which DSKX’s subsidiaries would merge with the Company’s subsidiaries, in exchange for which DSKX would issue stock in its company to PhotoMedex. On May 27, 2016, the Company and its subsidiaries terminated the Agreements and Plans of Merger and Reorganization with DSKX and filed suit against DSKX in the United States District Court for the Southern District of New York alleging that DSKX breached certain obligations under those Merger Agreements and asserted claims for declaratory judgment, breach of contract, seeking to recover a termination fee of $3.0 million, an expense reimbursement of up to $750,000 and its liabilities and damages suffered as a result of DSKX’s failures and breaches in connection with each of the Merger Agreements. On June 23, 2017, the Company and its subsidiaries, Radiancy, Inc. (“Radiancy”) and PhotoMedex Technology, Inc. (“P-Tech”), entered into a Confidential Settlement and Mutual Release Agreement (the “Settlement Agreement”) with DS Healthcare Group, Inc. (“DSKX”) and its subsidiaries, PHMD Consumer Acquisition Corp. and PHMD Professional Acquisition Corp. The terms of the Settlement Agreement are confidential; the parties dismissed the suit between them with prejudice on June 23, 2017. See Note 11, Commitments and Contingencies, in the Company’s Form 10-K for the year ended December 31, 2016 for further information on pending legal actions involving the Company and its subsidiaries. There have been no significant changes to the status of the items reported in the above Form 10-K. |
Employee Stock Benefit Plans
Employee Stock Benefit Plans | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Stock Benefit Plans | Note 11 Employee Stock Benefit Plans: The Company has a Non-Employee Director Stock Option Plan. This plan has authorized 74,000 shares; of which 2,135 shares had been issued or were reserved for issuance as awards of shares of common stock, and 12,079 shares were reserved for outstanding stock options. The number of shares available for future issuance pursuant to this plan is 71,374 as of June 30, 2017. In addition, the Company has a 2005 Equity Compensation Plan (“2005 Equity Plan”). The 2005 Equity Plan has authorized 1,200,000 shares, of which 467,328 shares had been issued or were reserved for issuance as awards of shares of common stock, and 143,815 shares were reserved for outstanding options as of June 30, 2017. The number of shares available for future issuance pursuant to this plan is 588,857 as of June 30, 2017. Stock option activity under all of the Company’s share-based compensation plans for the six months ended June 30, 2017 was as follows: Number of Options Weighted Outstanding, January 1, 2017 134,150 $ 85.22 Granted — — Exercised — — Cancelled (42,085 ) 71.50 Outstanding, June 30, 2017 92,065 $ 91.43 Options exercisable at June 30, 2017 88,185 $ 91.22 At June 30, 2017, there was $111 of total unrecognized compensation cost related to non-vested option grants and stock awards that is expected to be recognized over a weighted-average period of 0.65 years. Following the completion of the transaction described in Note 1, such compensation will be accelerated. The Company uses the Black-Scholes option-pricing model to estimate fair value of grants of stock options. With respect to grants of options, the risk-free rate of interest is based on the U.S. Treasury rates appropriate for the expected term of the grant or award. On February 26, 2015, the Company issued 299,000 restricted stock units to a number of employees. The restricted shares have a purchase price of $0.01 per share and vest, and cease to be subject to the Company’s right of repurchase, over a four-year period. The Company determined the fair value of the awards to be the quoted market price of the Company’s common stock units on the date of issuance less the value paid for the award. The aggregate fair value of these restricted stock issued was $2,766. Restricted stock vests ratably over a three-to-five year period, depending upon the terms of the grant. Employees must remain employed by the Company on each vesting date in order to have unrestricted ownership in these shares; employees who leave before a vesting date forfeit the shares in which they have not yet vested and the issuance of those shares is cancelled. As of June 30, 2017, 251,250 shares had been cancelled due to forfeiture by employees. Total stock based compensation expense was $935, and $860, for the six months ended June 30, 2017 and 2016 respectively including amounts relating to consultants. |
Business Segments and Geographi
Business Segments and Geographic Data | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segments and Geographic Data | Note 12 Business Segments and Geographic Data: The Company is in the process of transitioning from a skin health company providing medical and cosmetic solutions for dermatological conditions, to a real estate investment company holding investments in a variety of current and future projects, including residential developments, commercial properties such as gas station sites, and hotels and resort communities, as described further in this report. Under the skin care health operations the Company was organized its original business into three operating segments to align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows: The Consumer segment derived its revenues from the design, development, manufacturing and selling of long-term hair reduction and acne consumer products; that segment was sold on January 23, 2017. The Physician Recurring segment derived its revenues mainly from the sales of skincare products; that segment was sold on September 15, 2016. The Professional segment generates revenues from the sale of equipment, such as medical and esthetic light and heat based products; that segment remains with the Company as of the current date. The anticipated real estate investment properties to be transferred to the Company will be classified into one or more additional business segments. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other financing income (expense), net is also not allocated to the operating segments. Unallocated assets include cash and cash equivalents, prepaid expenses and deposits. The following tables reflect results of operations from our business segments for the periods indicated below. The consumer segment reflects operation from January 1, 2017 through January 23, 2017 the date of the sale of the consumer division to ICTV. See Note 1 Acquisitions and Dispositions for more information. Three Months Ended June 30, 2017 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ — $ — $ — $ — Costs of revenues — — — — Gross profit — — — — Gross profit % Allocated operating expenses: Engineering and product development — — — — Selling and marketing expenses — — — — Loss on disposal of assets 2,166 2,166 Unallocated operating expenses — — — (802 ) 2,166 — — 1,364 Loss from continuing operations (2,166 ) — — (1,364 ) Unrealized gain — — — 2,622 Interest and other financing expense, net — — — (46 ) Income (loss) from continuing operations before income taxes ($ 2,166 ) $ — $ — $ 1,212 Three Months Ended June 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 9,660 $ 1,254 $ 329 $ 11,243 Costs of revenues 2,284 926 144 3,354 Gross profit 7,376 328 185 7,889 Gross profit % 76.7 % 26.2 % 56.2 % 70.2 % Allocated operating expenses: Engineering and product development 264 79 — 343 Selling and marketing expenses 5,795 625 5 6,425 Unallocated operating expenses — — — 2,932 6,059 704 5 9,700 Income (loss) from continuing operations 1,317 (376 ) 180 (1,811 ) Interest and other financing expense, net — — — (292 ) Income (loss) from continuing operations before income taxes $ 1,317 ($ 376 ) $ 180 ($ 2,103 ) Six Months Ended June 30, 2017 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 3,539 $ — $ — $ 3,539 Costs of revenues 100 — — 100 Gross profit 3,439 — — 3,439 Gross profit % 97.1 % 97.1 % Allocated operating expenses: Engineering and product development 143 — — 143 Selling and marketing expenses 620 — — 620 Loss on sale of assets 4,222 29 — 4,251 Unallocated operating expenses — — — 1,540 4,985 29 — 6,554 Loss from continuing operations (1,546 ) (29 ) — (3,115 ) Unrealized gain 2,622 Interest and other financing expense, net — — — (123 ) Loss from continuing operations before income taxes ($ 1,546 ) ($ 29 ) $ ($ 616 ) Six Months Ended June 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 19,582 $ 2,462 $ 432 $ 22,476 Costs of revenues 4,503 1,392 213 6,108 Gross profit 15,079 1,070 219 16,368 Gross profit % 77.0 % 43.5 % 50.7 % 72.8 % Allocated operating expenses: Engineering and product development 536 121 — 657 Selling and marketing expenses 12,756 1,454 18 14,228 Loss on sale of assets 843 843 Unallocated operating expenses — — — 6,897 13,292 1,575 861 22,625 Income (loss) from continuing operations 1,787 (505 ) (642 ) (6,257 ) Interest and other financing expense, net — — — (625 ) Income (loss) from continuing operations before income taxes $ 1,787 ($ 505 ) ($ 642 ) ($ 6,882 ) For the three and six months ended June 30, 2017 and 2016 (unaudited), net revenues by geographic area were as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 North America 1 $ — $ 6,806 $ 2,475 $ 14,119 Asia Pacific 2 — 922 — 1,436 Europe (including Israel) — 3,510 1,064 6,901 South America — 5 — 20 $ — $ 11,243 $ 3,539 $ 22,476 1 $ 5,783 $ 2,475 $ 11,877 1 $ 534 $ — $ 1,229 As of June 30, 2017 and December 31, 2016, long-lived assets by geographic area were as follows: June 30, 2016 December 31, 2016 (unaudited) North America $ — $ 71 Asia Pacific — 17 Europe (including Israel) — 900 $ — $ 988 The Company discusses segmental details in its Management Discussion and Analysis found elsewhere in this Quarterly Report on Form 10-Q. |
Significant Customer Concentrat
Significant Customer Concentration | 6 Months Ended |
Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Significant Customer Concentration | Note 13 Significant Customer Concentration: No single customer accounted for more than 10% of total company revenues for either of the three or six months ended June 30, 2017 or 2016. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 Subsequent Events: Notice of Delisting from NASDAQ On July 5, 2017, the Company received another notice (the “ ” ’ ’ ’ The Company has appealed the Panel ’ ’ Upon the suspension of trading on NASDAQ, the Company ’ ’ “ ” “ ” “ ” “ ” ’ Agreement with ICTV Brands, Inc. On July 12, 2017 the Company, along with its subsidiaries Radiancy, Inc. (“Radiancy”); PhotoTherapeutics Ltd. (“PHMD UK”); and Radiancy (Israel) Limited (“Radiancy Israel” and together with the Company, Radiancy and PHMD UK the “Sellers” and each individually a “Seller”) entered into a Termination and Release Agreement (the “Release”) between the Sellers and ICTV Brands Inc. (“ICTV”) and its subsidiary ICTV Holdings, Inc. (“ICTV Holdings”). The Sellers, ICTV and ICTV Holdings are referred to herein individually as a “Party” and collectively as the “Parties.” Under the terms of the Release, the Asset Purchase Agreement among the Parties, dated October 4, 2016, as amended by the First Amendment to the Asset Purchase Agreement, dated January 23, 2017 (as so amended, the “Purchase Agreement”), is terminated and of no further force and effect, except for certain surviving rights, obligations and covenants described in the Release. Pursuant to the Release, each of the Sellers, on one hand, and ICTV and ICTV Holdings, on the other hand, fully release, forever discharge and covenant not to sue any other Party, from and with respect to any and all past and present claims arising out of, based upon or relating to the Purchase Agreement (other than the surviving covenants described in the Purchase Agreement) or the transactions contemplated thereby. Pursuant to the terms of the Release, ICTV paid to PHMD, within 3 business days of the date of the Release, $2,000 in cash and in immediately available funds (the “Payment”). Subject to this Payment, neither ICTV nor ICTV Holdings shall have any further royalty or other payment obligations under the Purchase Agreement. The Company received $2,000 on July 13, 2017. As partial consideration for the releases provided by ICTV Holdings to the Sellers pursuant to the Release and in accordance with the terms therein, on July 12, 2017, the Sellers and ICTV Holdings entered into a Bill of Sale and Assignment (“Bill of Sale”), which provides that each Seller sell, assign, transfer, convey and deliver to ICTV Holdings, and ICTV Holdings purchase and accept from each Seller, all of the right, title and interest, legal or equitable, of each such Seller in and to a deposit in the amount of $210 held by Sigmatron International, Inc. (“Sigmatron”), pursuant to an arrangement between one or more of the Sellers and Sigmatron. Johnson Employment Agreement On July 28, 2017, PhotoMedex, Inc. (the “Company”) (OTCQB, Nasdaq and TASE: PHMD) entered into an Employment Agreement (the “Johnson Agreement”) with Stephen Johnson, under which Mr. Johnson will serve as Chief Financial Officer of the Company. The term of the Johnson Agreement is for a period commencing on May 17, 2017 (the “Effective Date”) and ending on the second (2nd) anniversary of the Effective Date (the “Term”). The Term shall be renewed automatically for additional one (1) year period(s) unless terminated by either the Company or Mr. Johnson in writing delivered no less than ninety (90) days prior to the expiration of the then-applicable Term. Mr. Johnson shall be entitled to a base salary of $300 per annum (the “Base Salary”), payable in accordance with the Company’s normal payroll practices. Increases in the Base Salary during the Term will be determined from time to time in the sole discretion of the Board. Mr. Johnson will also be entitled to a bonus of not less than 35% of his Base Salary, subject to achieving certain milestones to be set by the Company’s compensation committee within thirty (30) days after the committee receives a business plan for the Company from Mr. Johnson and Suneet Singal, the Company’s Chief Executive Officer. In addition, Mr. Johnson will be entitled to receive equity compensation in an amount and with a vesting schedule to be determined by the Company’s compensation committee within thirty (30) days after receipt of the business plan. Mr. Johnson and his family will be eligible to participate in the Company’s healthcare, welfare benefit, life insurance, fringe benefit and any qualified or non-qualified retirement plans in effect at the Company (collectively, the “Employee Benefits”) on the same basis as those benefits are made available to the other senior executives of the Company. If the Company does provide a health insurance plan for which Mr. Johnson is eligible, he will be reimbursed by the Company for the cost of the health insurance paid by him for himself and his family. If the Company does not provide a health insurance plan for which he is eligible, Mr. Johnson will be reimbursed by the Company for the cost of health insurance paid by him for himself and his family, grossed-up to cover any taxes Mr. Johnson would be required to pay for that reimbursement. Additionally, Mr. Johnson will receive such perquisites as are or have previously been made available to other senior executives of the Company, as well as four (4) weeks paid vacation per year, and will be paid annually in cash for vacation days not taken by him so long as no more than four (4) weeks of vacation are accrued each year for purposes of cash payments. Mr. Johnson’s employment may be terminated by the Company for Cause, as defined in the Agreement, upon delivery of a Notice of Termination by the Company to him, except where he is entitled to a cure period, in which case the Date of Termination will be upon the expiration of the cure period if the matter constituting Cause was not cured. His employment will terminate automatically upon his resignation (other than for Good Reason or due to the Executive’s death or Disability). If Mr. Johnson’s employment is terminated by the Company for Cause, or if he resigns other than for Good Reason, he is entitled to receive (a) any earned but unpaid Base Salary and/or accrued but unused vacation days, all vested equity, and any earned but unpaid bonus awards through the Date of Termination, (b) reimbursement for any unreimbursed business expenses incurred by him in accordance with the Company’s policy prior to the Date of Termination, and (c) such Employee Benefits, if any, to which he may be entitled upon termination of employment under the terms of the plan documents and applicable law (including under the applicable provisions of Consolidated Omnibus Budget Reconciliation Act of 1985, as amended). If Mr. Johnson’s employment is terminated by the Company other than for Cause, immediately upon delivery of a Notice of Termination by the Company to him, or if it terminates automatically and immediately upon his resignation for Good Reason at the end of any applicable cure period (if the circumstances giving rise to Good Reason are not cured), then Mr. Johnson will receive (a) any earned but unpaid Base Salary and/or accrued but unused vacation, all vested equity, and any earned but unpaid bonus awards through the Date of Termination, plus an additional twelve (12) months of Annual Compensation, together in a lump sum payment; (b) acceleration of any then-unvested stock options, restricted stock grants or other equity awards; (c) payment or reimbursement, as applicable, of the full health insurance costs for Mr. Johnson and his family under a Company-provided group health plan or otherwise for twenty-four (24) months, in compliance with the provisions regarding deferred compensation under Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”), if applicable; (d) if any bonus or other form of additional compensation was paid to any other executive(s) of the Company for the fiscal year during which Mr. Johnson’s employment ceased pursuant to this Section 5(c), a cash amount equal to the largest bonus or other form of additional compensation payment made by the Company to any other executive of the Company during that fiscal year; (e) reimbursement for any accrued but unused vacation days and/or unreimbursed business expenses incurred by Mr. Johnson in accordance with the Company’s policy prior to the Date of Termination; and (f) other Employee Benefits, if any, as to which he may be entitled upon termination of employment. Moreover, if Mr. Johnson resigns for Good Reason due to a Change of Control, as defined in the Johnson Agreement, then he will be entitled to payment of an additional eighteen (18) months of Annual Compensation, not twelve (12) months as provided in the previous paragraph, along with payment of the other amounts and benefits as provided in that paragraph. Finally, Mr. Johnson’s employment terminates upon his death and may be terminated by the Company, within ten (10) days after the delivery of a Notice of Termination by the Company to Mr. Johnson (or his legal representative) in the event of his disability. In such instances, Mr. Johnson will receive the same payments and other items as he would be entitled to receive if his employment was terminated for other than Cause, or if he resigned for Good Cause, except that he (in case of disability) or his estate (in the event of death) will have the right to exercise any unexercised and vested options for a period of 90 days, and, in addition, to receive payment for accrued but unpaid vacation time, if any. The Agreement is governed by the laws of the State of New York and contains customary general contract provisions. Singal Agreement Additionally, the Company has amended the Employment Agreement of Suneet Singal, entered into on May 17, 2017, to provide that Mr. Singal’s annual compensation (his “Base Salary”) will be set initially at $250; that amount will be adjusted going forward as Mr. Singal transitions to the provision of services to the Company on a full-time basis. Mr. Singal will also be entitled to a bonus, amount to be determined and subject to achieving certain milestones, to be set by the Company’s compensation committee within thirty (30) days after the committee receives a business plan for the Company from Mr. Johnson and Suneet Singal, the Company’s Chief Executive Officer, and he will be entitled to receive equity compensation in an amount and with a vesting schedule to be determined by the Company’s compensation committee within thirty (30) days after receipt of the business plan. First Amendment to the Interest Contribution Agreement On August 3, 2017, the Company entered into a First Amendment (the “First Amendment”) to the Interest Contribution Agreement, dated March 31, 2017, by and among First Capital Real Estate Operating Partnership, L.P., First Capital Real Estate Trust Incorporated (together, the “Contributor Parties”), FC Global Realty Operating Partnership, LLC and PhotoMedex, Inc. (together, the “Acquiror Parties”), as modified by the Agreement to Waive First Closing Deliverables, dated May 17, 2017, and the Agreement to Waive Second Closing Deliverables, dated July 3, 2017 (collectively, the “Contribution Agreement”). Under the First Amendment, the Contributor Parties irrevocably waived any conditions to the closings set under the Contribution Agreement, including those conditions contained in Section 7 of the Contribution Agreement that require the Company to maintain its listing and active trading of its securities on any of the NASDAQ markets. The Contributor Parties also reaffirmed their obligation to use their best efforts to satisfy the Mandatory Contribution Conditions and contribute the Mandatory Entity Interests, both as defined in the Contribution Agreement, on or before December 31, 2017. Additionally, the Acquiror Parties confirmed the Contributor Parties’ understanding that the failure of the Contributor Parties to satisfy the Mandatory Contribution Conditions after using commercially reasonable efforts to do so does not give rise to a unilateral right of the Acquiror Parties to terminate the Contribution Agreement pursuant to Article 10 of the Contribution Agreement. Finally, the First Amendment clarified that references in the Contribution Agreement and its Exhibits to NASDAQ shall, to the extent necessary, be deemed to be references to NASDAQ or such other trading market as the Company’s securities may be trading on, including, without limitation, the OTCQB. For purposes of calculating the number of the Company’s shares into which the principal of the Payout Notes under the Contribution Agreement will be converted, if the Company’s shares are not traded on NASDAQ on the approval date of those Payout Notes, VWAP shall be calculated with respect to the transaction in the Company’s shares executed on the OTCQB or such other market as the Company’s shares may then be traded on instead of NASDAQ. The First Amendment contains customary representations and warranties and general contract terms. |
The Company (Policies)
The Company (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles The accompanying condensed consolidated financial statements and related notes should be read in conjunction with our consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (“fiscal 2016”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) related to interim financial statements. As permitted under those rules, certain information and footnote disclosures normally required or included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. The financial information contained herein is unaudited; however, management believes all adjustments have been made that are considered necessary to present fairly the results of the Company’s financial position and operating results for the interim periods. All such adjustments are of a normal recurring nature. The results for the three and six months ended June 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or for any future period. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and the wholly- and majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Held for Sale Classification | Held for Sale Classification and Discontinued Operations A disposal group is reported as held for sale when management has approved or received approval to sell and is committed to a formal plan, the disposal group is available for immediate sale, the business is being actively marketed, the sale is anticipated to occur during the next 12 months and certain other specified criteria are met. A disposal group classified as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying value of the business exceeds its estimated fair value less cost to sell, a loss is recognized. However, when disposal group meets the held for sale criteria, the Company first evaluates whether the carrying amounts of the assets not covered by ASC 360-10 included in the disposal group (such as goodwill) are required to be adjusted in accordance with other applicable GAAP before measuring the disposal group at fair value less cost to sell. Assets and liabilities related to a disposal group classified as held for sale are segregated in the consolidated balance sheet in the period in which the disposal group is classified as held for sale. Commencing January 1, 2015 (the effective date of the ASU 2014-08), only disposal of a component of an entity or a group of components of an entity that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results shall be reported as discontinued operations. The revised guidance did not change the criteria required to qualify for held for sale presentation. The revised guidance includes several new disclosures and among others, required to reclassify the assets and liabilities of discontinued operations to separate line items in the balance sheets for all periods presented (including comparatives). In connection with the sale of the Consumer Division to ICTV Brands, Inc., announced on October 4, 2016 and subsequently completed on January 23, 2017, the assets related to this transaction were classified as of December 31, 2016 as Assets Held for Sale, as follows: Inventory $ 7,336 Property and equipment 911 Other assets 115 Assets held for sale as of December 31, 2016 $ 8,362 |
Revenue Recognition | Revenue Recognition The following is a description of the revenue recognition policy related to the previous skin care business The Company recognizes revenues from product sales when the following four criteria have been met: (i) the product has been delivered and the Company has no significant remaining obligations; (ii) persuasive evidence of an arrangement exists; (iii) the price to the buyer is fixed or determinable; and (iv) collection is reasonably assured. Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, expected returns and cash discounts. The Company shipped most of its products FOB shipping point, although from time to time certain customers, for example governmental customers, will be granted FOB destination terms. Among the factors the Company takes into account when determining the proper time at which to recognize revenue are (i) when title to the goods transfers and (ii) when the risk of loss transfers. Shipments to distributors or physicians that do not fully satisfy the collection criteria are recognized when invoiced amounts are fully paid or fully assured and included in deferred revenues until that time. For revenue arrangements with multiple deliverables within a single, contractually binding arrangement (usually sales of products with separately priced extended warranty), each element of the contract was accounted for as a separate unit of accounting when it provides the customer value on a stand-alone basis and there is objective evidence of the fair value of the related unit. With respect to sales arrangements under which the buyer has a right to return the related product, revenue is recognized only if all the following conditions are met: the price is fixed or determinable at the date of sale; the buyer has paid, or is obligated to pay and the obligation is not contingent on resale of the product; the buyer’s obligation would not be changed in the event of theft or physical destruction or damage of the product; the buyer has economic substance; the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and the amount of future returns can be reasonably estimated. The Company provided a provision for product returns based on the experience with historical sales returns, in accordance with ASC Topic 605-15 with respect to sales of product when a right of return exists. Reported revenues are shown net of the returns provision. Such allowance for sales returns is included in Other Accrued Liabilities Note 8 Deferred revenue included amounts received with respect to extended warranty maintenance, repairs and other billable services and amounts not yet recognized as revenues. Revenues with respect to such activities were deferred and recognized on a straight-line basis over the duration of the warranty period, the service period or when service is provided, as applicable to each service. |
Functional Currency | Functional Currency The currency of the primary economic environment in which the operations of the Company, its U.S. subsidiaries and Radiancy Ltd., its subsidiary in Israel, are conducted is the US dollar (“$” or “dollars”). Thus, the functional currency of the Company and its subsidiaries (other than the foreign subsidiaries mentioned below) is the dollar (which is also the reporting currency of the Group). The operations of the other foreign subsidiaries are each conducted in the local currency of the subsidiary. These currencies include: Great Britain Pounds (GBP) and Hong Kong Dollar (HKD). Substantially all of the Group’s revenues are derived in dollars or in other currencies linked to the dollar. Purchases of most materials and components are carried out in, or linked to the dollar. Balances denominated in, or linked to, foreign currencies are stated on the basis of the exchange rates prevailing at the balance sheet date. For foreign currency transactions included in the statement of comprehensive income (loss), the exchange rates applicable to the relevant transaction dates are used. Transaction gains or losses arising from changes in the exchange rates used in the translation of such balances are carried to financing income or expenses. Assets and liabilities of foreign subsidiaries, whose functional currency is their local currency, are translated from their respective functional currency to U.S. dollars at the balance sheet date exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the year. Translation adjustments are reflected in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). Deferred taxes are not provided on translation adjustments as the earnings of the subsidiaries are considered to be permanently reinvested . Upon sale of a foreign subsidiary or upon sale of group of asset within a consolidated foreign subsidiary, in a transaction that was determined to represent a complete liquidation of that foreign subsidiary, the cumulative translation adjustment related to that foreign entity is reclassified from accumulated other comprehensive income (loss) and reported as part of gain or loss from the sale. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820, Fair Value Measurements and Disclosures ● Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. ● Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. ● Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The fair value of cash and cash equivalents and restricted cash are based on its demand value, which is equal to its carrying value. The estimated fair values of notes payable which are based on borrowing rates that are available to the Company for loans with similar terms, collateral and maturity approximate the carrying values. Additionally, the carrying value of all other monetary assets and liabilities is estimated to be equal to their fair value due to the short-term nature of these instruments. Derivative financial instruments are measured at fair value, on a recurring basis. The fair value of derivatives generally reflects the estimated amounts that the Group would receive or pay to terminate the contracts at the reporting dates, based on the prevailing currency prices and the relevant interest rates. Such measurement is classified within Level 2. Financial liabilities and financial assets related to the mandatory Second Contribution and the Optional Contribution described in Note 2 Acquisition of Real Estate Assets above were accounted for at fair value on a recurring basis. The estimated fair value was based on appraised value, such measurement resides within level 3 of the fair value hierarchy. In addition to items that are measured at fair value on a recurring basis, there are also assets and liabilities that are measured at fair value on a nonrecurring basis. Assets and liabilities that are measured at fair value on a nonrecurring basis include certain long-lived assets, including goodwill. As such, we have determined that each of these fair value measurements reside within Level 3 of the fair value hierarchy. |
Derivatives | Derivatives The Company applies the provisions of Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging From time to time the Company carries out transactions involving foreign exchange derivative financial instruments (mainly forward exchange contracts) which are expected to be paid with respect to forecasted expenses of the Israeli subsidiary (Radiancy) denominated in Israeli local currency (NIS) which is different than its functional currency. Such derivatives were not designated as hedging instruments, and accordingly they were recognized in the balance sheet at their fair value, with changes in the fair value carried to the Statement of Comprehensive Income (Loss) and included in interest and other financing expenses, net. At June 30, 2017, the balance of such derivative instruments amounted to approximately $0 in assets and approximately $0 were recognized as financing income in the Statement of Comprehensive (Loss) Income during the three and six month periods ended that date. There are no foreign currency derivatives as of June 30, 2017. |
Accrued Warranty Costs | Accrued Warranty Costs The Company offered a standard warranty on product sales generally for a one to two-year period. The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in Other Accrued Liabilities June 30, 2017 2016 (unaudited) (unaudited) Accrual at beginning of year $ 241 $ 330 Additions charged to warranty expense — 61 Expiring warranties — (135 ) Claims satisfied — (93 ) Sale of consumer segment (241 ) — Total $ — $ 163 For extended warranty on the consumer products, see Revenue Recognition |
Net Loss Per Share | Net Loss Per Share The loss and the weighted average number of shares used in computing basic and diluted loss per share for the three and six months ended June 30, 2017 and 2016, are as follows: For the three months For the six months 2017 2016 2017 2016 Income (loss) for the year 1,139 (2,238 ) (710 ) (7,110 ) Adjustment related to revaluation of asset contribution related financial instruments, net securities (2,622 ) — (2,622 ) — Income (loss) for the period attributable to common stockholders (1,483 ) (2,238 ) (3,332 ) (7,110 ) For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 6,157,529 4,153,714 5,278,543 4,167,600 Incremental shares related to assumed exercise of asset contribution financial instruments 31,399,337 — 15,786,407 — Diluted number of common and common stock equivalent shares outstanding 37,556,866 4,153,714 21,064,950 4,167,600 The Company computes earnings (net loss) per share in accordance with ASC Topic. 260, Earnings per share. Basic earnings (loss) per share are computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, net of the weighted average number of treasury shares (if any). Securities that may participate in dividends with the ordinary shares (such as the convertible preferred shares) are considered in the computation of basic loss per share under the two class method. The participating securities are considered also in periods of net loss, since such preferred shares have a contractual obligation to share in the losses of the Company, in accordance with the guidance of ASC Topic 260-10. Diluted loss per common share are computed similar to basic earnings per share, except that the denominator is increased to include the number of additional potential common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Also, when applicable, the nominator is adjusted to reflect the effect of financial instruments that might be settled for shares. Potential common shares are excluded from the computation if their effect is anti-dilutive. The Company’s potential common shares consist of preferred shares, financial instruments related to future contribution of assets for issuance of shares, and of stock options, warrants and restricted stock awards issued under the Company’s stock incentive plans. Diluted loss per share for the three and six months ended June 30, 2017, exclude the impact of common stock options and warrants, totaling 156,565 shares, as the effect of their inclusion would be anti-dilutive, due to the loss from continuing operations for the periods. Diluted earnings per share for the three and six months ended June 30, 2016, excluded the impact of common stock options and warrants, totaling 190,598 shares, as the effect of their inclusion would be anti-dilutive, due to the loss from continuing operations for the periods. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)” and Related Updates In May of 2014, the FASB issued ASC Update 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASC Update 2014-09 provides guidance for the recognition, measurement and disclosure of revenue related to the transfer of promised goods or services to customers. This update was effective for fiscal years beginning after December 15, 2016, for which early adoption was prohibited. However, in August of 2015, the FASB issued ASC Update 2014-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date,” deferring the effective date of ASC Update 2014-09 to fiscal years beginning after December 15, 2017 (the first quarter of fiscal year 2018 for the Company), and permitting early adoption of this update, but only for annual reporting periods beginning after December 15, 2016, and interim reporting periods within that reporting period. During 2016, the FASB issued several Accounting Standard Updates that focuses on certain implementation issues of the new revenue recognition guidance including Narrow-Scope Improvements and Practical Expedients, Principal versus Agent Considerations and Identifying Performance Obligations and Licensing. An entity should apply the amendments in this ASU using one of the following two methods: 1. retrospectively to each prior reporting period presented with a possibility to elect certain practical expedients, or, 2. retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. If an entity elects the latter transition method, it also should provide certain additional disclosures. The Company intends to adopt ASU 2014-09 as of January 1, 2018. The Company is in the process of evaluating the impact of ASU 2014-09 on its potential revenue streams, if any, and on its financial reporting and disclosures. Management is expecting to complete the evaluation of the impact of the accounting and disclosure changes on the business processes, controls and systems throughout 2017. Since the company currently does not have any revenue streams, Management believes that the adoption of ASU 2014-09 will not have significant impact on its financial statements. ASU 2016 - 02 “ Leases (Topic 842): Section A – Leases: Amendments to the FASB Accounting Standards Codification; Section B – Conforming Amendments Related to Leases: Amendments to the FASB Accounting Standards Codification; Section C – Background Information and Basis for Conclusions In February of 2016, the FASB issued ASC Update 2016 - 02, “Leases (Topic 842): Section A – Leases: Amendments to the FASB Accounting Standards Codification; Section B – Conforming Amendments Related to Leases: Amendments to the FASB Accounting Standards Codification; Section C – Background Information and Basis for Conclusions.” ASC Update 2016-02 amends guidance related to the recognition, measurement, presentation and disclosure of leases for lessors and lessees. This update is effective for fiscal years beginning after December 15, 2018, including the interim periods within those years, with early adoption permitted. The Company is in the process of evaluating the effect that ASU 2016-02 will have on the results of operations and financial statements. ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” In June 2016, the FASB issued ASC Update 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASC Update 2016-13 revised the criteria for the measurement, recognition, and reporting of credit losses on financial instruments to be recognized when expected. This update is effective for fiscal years beginning after December 15, 2019, including the interim periods within those years, with early adoption permitted for fiscal years beginning after December 15, 2018, including interim periods within those years. The Company is in the process of evaluating the effect that ASU 2016-13 will have on the results of operations and financial statements. ASU 2016-09 “ Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB has issued ASC Update (ASU) No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The amendments also simplify two areas specific to private companies. For public companies, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period periods (i.e., in the first quarter of 2017 for calendar year-end companies). The Company is in the process of assessing the impact, if any, of ASU 09-2016 on its financial statements. ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business, clarifying the definition of a business” In January 2017, the FASB has issued ASC Update (ASU) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, clarifying the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The amendments in ASU 2017-01 are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a more robust framework to use in determining when a set of assets and activities is a business. They also provide more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. The amendments in ASU 2017-01 provide a screen to determine when a set is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. If the screen is not met, the amendments in this Update (1) require that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. The amendments provide a framework to assist entities in evaluating whether both an input and a substantive process are present. The framework includes two sets of criteria to consider that depend on whether a set has outputs. Although outputs are not required for a set to be a business, outputs generally are a key element of a business; therefore, the Board has developed more stringent criteria for sets without outputs. Also, ASU 2017- 01 narrows the definition of the term output so that the term is consistent with how outputs are described in Topic 606 For public companies, the amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early application of the amendments in this Update is allowed for transactions for which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The amendments of ASU 2017-01should be applied prospectively on or after the effective date. No disclosures are required at transition. The company decided to early apply ASU 2017-01, and thus the assets contributed to the company in connection with the asset contribution described in Note (which its first installment was closed on May 17, 2017) were evaluated in accordance with ASU 2017-01 updated guidance. |
The Company (Tables)
The Company (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of clarified specifications regarding the lease | In connection with the sale of the Consumer Division to ICTV Brands, Inc., announced on October 4, 2016 and subsequently completed on January 23, 2017, the assets related to this transaction were classified as of December 31, 2016 as Assets Held for Sale, as follows: Inventory $ 7,336 Property and equipment 911 Other assets 115 Assets held for sale as of December 31, 2016 $ 8,362 |
Schedule of activity in the warranty accrual | The activity in the warranty accrual during the six months ended June 30, 2017 and 2016 is summarized as follows: June 30, 2017 2016 (unaudited) (unaudited) Accrual at beginning of year $ 241 $ 330 Additions charged to warranty expense — 61 Expiring warranties — (135 ) Claims satisfied — (93 ) Sale of consumer segment (241 ) — Total $ — $ 163 |
Schedule of loss and the weighted average number of shares used in computing basic and diluted loss per share | The loss and the weighted average number of shares used in computing basic and diluted loss per share for the three and six months ended June 30, 2017 and 2016, are as follows: For the three months For the six months 2017 2016 2017 2016 Income (loss) for the year 1,139 (2,238 ) (710 ) (7,110 ) Adjustment related to revaluation of asset contribution related financial instruments, net securities (2,622 ) — (2,622 ) — Income (loss) for the period attributable to common stockholders (1,483 ) (2,238 ) (3,332 ) (7,110 ) |
Schedule of basic and diluted earnings per common share using weighted-average shares outstanding | For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 6,157,529 4,153,714 5,278,543 4,167,600 Incremental shares related to assumed exercise of asset contribution financial instruments 31,399,337 — 15,786,407 — Diluted number of common and common stock equivalent shares outstanding 37,556,866 4,153,714 21,064,950 4,167,600 |
Acquisition of Real Estate As23
Acquisition of Real Estate Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Acquisition Of Real Estate Assets Tables | |
Schedule of purchase price of the real estate assets, paid in stock | The consideration of the asset acquisition consists of: Fair value of PHMD common stock $ 1,275 Fair value of PHMD series A preferred stock 4,483 Fair value of financial liability related to Optional contribution (A) 857 Fair value of Warrant (A) 1,925 Fair value of asset related to future mandatory asset contribution (B) (4,175 ) Fair value of note payable on acquired asset 470 Transaction costs 283 Total consideration $ 5,118 A. See Note 1 “Second Contribution” B. See Note 1 “Optional Contribution” |
Schedule of provisional fair value amounts of the assets acquired and liabilities | Investment property equivalents 2,450 Investment in other company 2,668 Total assets acquired at fair value $ 5,118 |
Schedule of fair value of options granted was estimated at the dates of grant using the Black-Scholes option pricing model | The fair value of options granted was estimated at the dates of grant using the Black-Scholes option pricing model. The following are the data and assumptions used: Options Value: May 17, 2017 June 30, 2017 Dividend yield (%) 0 0 Expected volatility (%) 39.45 39.45 Risk free interest rate (%) 1.25 1.25 Strike price (US dollars) 1.93 1.93 Stock price (US dollars) 1.45 1.18 Probability (%) 50 50 Expected term of options (years) 0.62 0.5 Warrants Value: May 17, 2017 June 30, 2017 Dividend yield (%) 0 0 Expected volatility (%) 39.45 39.45 Risk free interest rate (%) 1.25 1.25 Strike price (US dollars) 3 3 Stock price (US dollars) 1.45 1.18 Probability (%) 50 50 Expected term of options (years) 5 4.88 Asset related to future mandatory asset contribution: May 17, 2017 June 30, 2017 Dividend yield (%) 0 0 Stock price (US dollars) 1.45 1.18 Probability (%) 70 70 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | June 30, December 31, (unaudited) Raw materials and work in progress $ — $ 1,968 Finished goods — 5,368 Total Inventories — $ 7,336 Less assets held for sale — (7,336 ) Total inventories $ — $ — |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | June 30, December 31, (unaudited) Equipment, computer hardware and software $ 314 5,005 Furniture and fixtures 350 433 Leasehold improvements 112 438 776 5,876 Accumulated depreciation and amortization (776 ) (4,888 ) Total property and equipment — $ 988 Less assets held for sale — (911 ) Property and equipment, net $ — $ 77 |
Patents and Licensed Technolo26
Patents and Licensed Technologies, net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of patents and licensed technologies | June 30, December 31, (unaudited) Gross amount beginning of period $ — $ 3,376 Additions — (177 ) Translation differences — 36 Gross amount end of period — 3,235 Accumulated amortization — (1,974 ) Impairment — (1,261 ) Patents and licensed technologies, net $ — $ — |
Goodwill and Other Intangible27
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of activity in goodwill | Activity in goodwill during the year ended December 31, 2016 follows: Balance at January 1, 2016 $ 3,581 Disposal on sale of assets (1,039 ) Impairment of goodwill (2,257 ) Translation differences (285 ) Balance at December 31, 2016 $ 0 |
Accrued Compensation and rela28
Accrued Compensation and related expenses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Schedule of accrued compensation and related expenses | June 30, December 31, (unaudited) Accrued payroll and related taxes $ 49 $ 262 Accrued vacation 49 66 Accrued commissions and bonuses 2,515 3,701 Total accrued compensation and related expense $ 2,613 $ 4,029 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other accrued liabilities | June 30, December 31, (unaudited) Accrued warranty, current, see Note 1 $ — $ 93 Accrued taxes, net 1,671 1,606 Accrued sales returns (1) — 1,975 Other accrued liabilities 2,00 7 4,417 Total other accrued liabilities $ 3,678 $ 8,091 |
Schedule of sales returns liability account | (1) The activity in the accrued sales returns liability account was as follows: Six Months Ended June 30, 2017 2016 (unaudited) (unaudited) Balance at beginning of year $ 1,975 $ 4,179 Additions that reduce net sales — 4,976 Deductions from reserves (1,975 ) (7,182 ) Balance at end of period $ — $ 1,973 |
Employee Stock Benefit Plans (T
Employee Stock Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock options | Stock option activity under all of the Company’s share-based compensation plans for the six months ended June 30, 2017 was as follows: Number of Options Weighted Average Exercise Price Outstanding, January 1, 2017 134,150 $ 85.22 Granted — — Exercised — — Cancelled (42,085 ) 71.50 Outstanding, June 30, 2017 92,065 $ 91.43 Options exercisable at June 30, 2017 88,185 $ 91.22 |
Business Segments and Geograp31
Business Segments and Geographic Data (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of results of operations from business segments | The following tables reflect results of operations from our business segments for the periods indicated below. The consumer segment reflects operation from January 1, 2017 through January 23, 2017 the date of the sale of the consumer division to ICTV. See Note 1 Acquisitions and Dispositions for more information. Three Months Ended June 30, 2017 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ — $ — $ — $ — Costs of revenues — — — — Gross profit — — — — Gross profit % Allocated operating expenses: Engineering and product development — — — — Selling and marketing expenses — — — — Loss on disposal of assets 2,166 2,166 Unallocated operating expenses — — — (802 ) 2,166 — — 1,364 Loss from continuing operations (2,166 ) — — (1,364 ) Unrealized gain — — — 2,622 Interest and other financing expense, net — — — (46 ) Income (loss) from continuing operations before income taxes ($ 2,166 ) $ — $ — $ 1,212 Three Months Ended June 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 9,660 $ 1,254 $ 329 $ 11,243 Costs of revenues 2,284 926 144 3,354 Gross profit 7,376 328 185 7,889 Gross profit % 76.7 % 26.2 % 56.2 % 70.2 % Allocated operating expenses: Engineering and product development 264 79 — 343 Selling and marketing expenses 5,795 625 5 6,425 Unallocated operating expenses — — — 2,932 6,059 704 5 9,700 Income (loss) from continuing operations 1,317 (376 ) 180 (1,811 ) Interest and other financing expense, net — — — (292 ) Income (loss) from continuing operations before income taxes $ 1,317 ($ 376 ) $ 180 ($ 2,103 ) Six Months Ended June 30, 2017 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 3,539 $ — $ — $ 3,539 Costs of revenues 100 — — 100 Gross profit 3,439 — — 3,439 Gross profit % 97.1 % 97.1 % Allocated operating expenses: Engineering and product development 143 — — 143 Selling and marketing expenses 620 — — 620 Loss on sale of assets 4,222 29 — 4,251 Unallocated operating expenses — — — 1,540 4,985 29 — 6,554 Loss from continuing operations (1,546 ) (29 ) — (3,115 ) Unrealized gain 2,622 Interest and other financing expense, net — — — (123 ) Loss from continuing operations before income taxes ($ 1,546 ) ($ 29 ) $ ($ 616 ) Six Months Ended June 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 19,582 $ 2,462 $ 432 $ 22,476 Costs of revenues 4,503 1,392 213 6,108 Gross profit 15,079 1,070 219 16,368 Gross profit % 77.0 % 43.5 % 50.7 % 72.8 % Allocated operating expenses: Engineering and product development 536 121 — 657 Selling and marketing expenses 12,756 1,454 18 14,228 Loss on sale of assets 843 843 Unallocated operating expenses — — — 6,897 13,292 1,575 861 22,625 Income (loss) from continuing operations 1,787 (505 ) (642 ) (6,257 ) Interest and other financing expense, net — — — (625 ) Income (loss) from continuing operations before income taxes $ 1,787 ($ 505 ) ($ 642 ) ($ 6,882 ) |
Schedule of net revenues by geographic area | For the three and six months ended June 30, 2017 and 2016 (unaudited), net revenues by geographic area were as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 North America 1 $ — $ 6,806 $ 2,475 $ 14,119 Asia Pacific 2 — 922 — 1,436 Europe (including Israel) — 3,510 1,064 6,901 South America — 5 — 20 $ — $ 11,243 $ 3,539 $ 22,476 1 $ 5,783 $ 2,475 $ 11,877 1 $ 534 $ — $ 1,229 |
Schedule of long-lived assets by geographic area | As of June 30, 2017 and December 31, 2016, long-lived assets by geographic area were as follows: June 30, 2016 December 31, 2016 (unaudited) North America $ — $ 71 Asia Pacific — 17 Europe (including Israel) — 900 $ — $ 988 |
The Company (Details)
The Company (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Inventory | $ 7,336 | |
Property and equipment | 911 | |
Other assets | 115 | |
Assets held for sale | $ 8,362 |
The Company (Details 1)
The Company (Details 1) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||
Accrual at beginning of year | $ 241 | $ 330 |
Additions charged to warranty expense | 61 | |
Expiring warranties | (135) | |
Claims satisfied | (93) | |
Sale of consumer segment | (241) | |
Total | $ 163 |
The Company (Details 2)
The Company (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Income (loss) for the year | $ 1,139 | $ (2,238) | $ (710) | $ (7,110) |
Income attributable to participating securities (Preferred Stock) | (2,622) | (2,622) | ||
Income (loss) for the period attributable to common stockholders | $ (1,483) | $ (2,238) | $ (3,332) | $ (7,110) |
The Company (Details 3)
The Company (Details 3) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Weighted-average number of common and common equivalent shares outstanding: | ||||
Basic number of common shares outstanding | 6,157,529 | 4,153,714 | 5,278,543 | 4,167,600 |
Dilutive effect of assets related to future mandatory asset contribution and liabilities for optional assets acquisition options and warrants | 31,399,377 | 15,786,407 | ||
Diluted number of common and common stock equivalent shares outstanding | 37,556,866 | 4,153,714 | 21,064,950 | 4,167,600 |
The Company (Details Narrative)
The Company (Details Narrative) - USD ($) | Jul. 03, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Preferred stock, authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||
Common stock, authorized | 50,000,000 | 50,000,000 | 50,000,000 | |||
Revised preferred stock, authorized | 50,000,000 | 50,000,000 | ||||
Revised common stock, authorized | 500,000,000 | 500,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | 0.01 | |||
Description of standard warranty | The Company offered a standard warranty on product sales generally for a one to two-year period. | |||||
Anti-dilutive common stock options and warrants | 156,565 | 190,598 | 156,565 | 190,598 | ||
Series A Preferred Stock [Member] | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Interest Contribution Agreement [Member] | FC Global Realty Operating Partnership, LLC [Member] | First Capital Real Estate Operating Partnership, L.P & First Capital Real Estate Trust Incorporated [Member] | ||||||
Description of first contribution purchase price consideration | In the Initial Closing, the Contributor transferred certain assets comprising the Contributed Properties to the Company. On the Initial Closing date, the Contributor transferred to the Acquiror four vacant land sites set for development into gas stations, which are located in Atwater and Merced, northern California, and which have an agreed upon value of approximately $2.6 million. The Contributor then completed the transfer to the Acquiror of its 17.9% passive interest in a limited liability company that is constructing a single family residential development located in Los Lunas, New Mexico (the “Avalon Property”) on June 26, 2017. This residential development in New Mexico consists of 251, non-contiguous, single family residential lots and a 10,000 square foot club house. 37 of the lots have been finished, and the remaining 214 are platted and engineered lots. The agreed upon value of its share of this property is approximately $7.4 million. | |||||
Gas stations appraised value | $ 2,600,000 | |||||
Residential development appraised value | $ 7,400,000 | |||||
Percentage of interest in residential development | 17.90% | |||||
Description of business combination share price | The Company issued to the Contributor 879,234 duly authorized, fully paid and non-assessable shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), which represented approximately 19.9% of the Company’s issued and outstanding Common Stock immediately prior to the Initial Closing, at an agreed upon Per Share Value (defined below) of $2.5183, or $2,214,175 in the aggregate. These shares of Common Stock are restricted and unregistered. The Company issued the remaining $7,785,825 of the approximately $10 million agreed upon consideration to the Contributor in the form of 123,668 shares of the Company’s newly designated non-voting Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Stock”). Each share of the Series A Stock is convertible into 25 shares of the Company’s Common Stock, subject to the satisfaction of certain conditions, including stockholder approval in accordance with the rules of The Nasdaq Stock Market (“ Nasdaq VWAP Per Share Value | |||||
Description of second contribution purchase price consideration | Contributor Parent must contribute to the Acquirer its 100% ownership interest in a private hotel that is currently undergoing renovations to convert to a Wyndham Garden Hotel. This 265 room full service hotel is located in Amarillo, Texas and has an agreed upon value of approximately $16 million and outstanding loans of approximately $10.11 million. | |||||
Percentage of interest in private hotel | 100.00% | |||||
Private hotel appraised value | $ 16,000,000 | |||||
Outstanding loans | $ 10,110,000 | $ 10,110,000 | ||||
Description of additional second contribution purchase price consideration | In addition, First Capital must contribute to the Acquiror its interest in Dutchman’s Bay and Serenity Bay (referred to as the “Antigua Resort Developments”), two planned full service resort hotel developments located in Antigua and Barbuda in which First Capital owns a 75% interest in coordination with the Antigua government. Serenity Bay is a planned five star resort comprised of five contiguous parcels (28.33 acres) zoned for hotel and residential use that are planned for 246 units and 80 one, two and three bedroom condo units. Dutchman’s Bay, is a planned four star condo hotel with 180 guestrooms, 102 two bedroom condos, and 14 three bedroom villas. | |||||
Second contribution business combination purchase price | $ 20,000,000 | |||||
Two additional property appraised value | 66,500,000 | |||||
Resort development project appraised value | 22,500,000 | |||||
Punta brava appraised value | 44,000,000 | |||||
Contributor parent's commitment | 5,000,000 | |||||
Contributor parent's additional commitment | 5,000,000 | |||||
Contributor parent's second commitment | 34,000,000 | |||||
Optional contribution business combination purchase price | $ 86,450,000 | |||||
Percentage of value contribution | 130.00% | |||||
Common stock, authorized | 879,234 | 879,234 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Interest Contribution Agreement [Member] | FC Global Realty Operating Partnership, LLC [Member] | First Capital Real Estate Operating Partnership, L.P & First Capital Real Estate Trust Incorporated [Member] | Series A Preferred Stock [Member] | ||||||
Description of business combination share price | 7.5% premium above the volume-weighted average price (“ VWAP | |||||
Interest Contribution Agreement [Member] | FC Global Realty Operating Partnership, LLC [Member] | First Capital Real Estate Operating Partnership, L.P & First Capital Real Estate Trust Incorporated [Member] | Warrant [Member] | ||||||
Maximum number of warrant called | 25,000,000 | 25,000,000 | ||||
Warrant exercise price (in dollars per share) | $ 3 | $ 3 | ||||
Warrant term | 5 years | |||||
Interest Contribution Agreement [Member] | FC Global Realty Operating Partnership, LLC [Member] | First Capital Real Estate Operating Partnership, L.P & First Capital Real Estate Trust Incorporated [Member] | Subsequent Event [Member] | ||||||
Description of second contribution purchase price consideration | The Company and the Acquiror entered into an Agreement to Waive Second Closing Deliverables (the “Second Waiver”) with the Contributor Parties, amending the Agreement. The Contributor Parties have received an offer to purchase the Amarillo Hotel from a non-related third party. Under the Second Waiver, the Company and the Acquiror agreed to waive the requirement for the Contributor Parties to contribute to the Acquiror their 100% ownership interest in the Amarillo Hotel, and to accept in its place a contribution in cash of not less than $5.89 million from the Contributor Parties from the sale proceeds of the Amarillo Hotel, after the satisfaction of the outstanding loan, provided that the sale is completed and closed upon not later than August 31, 2017. In exchange the Contributor Parties shall receive shares of stock in the Company, such amount to be calculated as set forth in the Second Waiver and Agreement. If the sale of the Amarillo Hotel is not completed and closed by August 31, 2017, the waiver of the requirement for the contribution of the interest in the Amarillo Hotel will lapse. | |||||
Interest Contribution Agreement [Member] | First Capital Real Estate Investments, LLC [Member] | George Zambelli [Member] | ||||||
Principal amount | $ 470,000 | $ 470,000 | ||||
Employment Agreements [Member] | Dr. Dolev Rafaeli, Dennis McGrath & Dr. Yoav Ben-Dror [Member] | 10% Convertible Notes Payable [Member] | ||||||
Debt term | 1 year | |||||
Debt interest rate | 10.00% | 10.00% |
The Company (Details Narrative
The Company (Details Narrative 1) - USD ($) $ in Thousands | Oct. 04, 2016 | Sep. 23, 2016 | Sep. 15, 2016 | May 27, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Description of reverse stock split | one for five | ||||||||
Accumulated deficit | $ (116,345) | $ (116,345) | $ (115,635) | ||||||
Cash and cash equivalents | 2,329 | 2,329 | |||||||
Restricted cash | 250 | 250 | 342 | ||||||
Loss from sale of asset | (4,251) | $ (843) | |||||||
Current asset | 11,689 | 11,689 | 18,417 | ||||||
Net loss | 1,139 | $ (2,238) | (710) | $ (7,110) | |||||
Neova Asset Purchase Agreement [Member] | |||||||||
Loss from sale of asset | $ (1,731) | ||||||||
Proceeds from acquisitions and dispositions | $ 1,500 | ||||||||
Royalty receivable | 4,500 | 4,500 | |||||||
Current asset | 2 | $ 2 | |||||||
Net loss | $ 2,000 | ||||||||
Escrow amount | $ 250 | ||||||||
Neova Asset Purchase Agreement [Member] | ICTV Brands, Inc & ICTV Holdings, Inc [Member] | Consumer Products [Member] | |||||||||
Total purchase price | $ 9,500 | ||||||||
Cash received | $ 5,000 | ||||||||
Merger And Reorganization Agreement [Member] | DS Healthcare Group, Inc [Member] | |||||||||
Termination fee | $ 3,000 | ||||||||
Merger And Reorganization [Member] | Merger And Reorganization Agreement [Member] | |||||||||
Expense reimbursement | $ 750 |
The Company (Details Narrativ38
The Company (Details Narrative 2) - USD ($) $ / shares in Units, $ in Thousands | Jul. 13, 2017 | Jul. 12, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Nov. 18, 2016 | Dec. 31, 2015 |
Goodwill | $ 0 | $ 3,581 | |||||
Liability for Optional asset acquisition | $ 1,222 | $ 1,222 | |||||
Gain loss on derivative instruments | $ 0 | $ 0 | |||||
Series A Preferred Stock [Member] | |||||||
Share price | $ 3 | $ 3 | |||||
Minimum net capital required | $ 2,500 | ||||||
ICTV Brands, Inc & ICTV Holdings, Inc [Member] | Subsequent Event [Member] | |||||||
Proceeds from agreements | $ 2 | ||||||
Interest Contribution Agreement [Member] | FC Global Realty Operating Partnership, LLC [Member] | First Capital Real Estate Operating Partnership, L.P & First Capital Real Estate Trust Incorporated [Member] | Series A Preferred Stock [Member] | |||||||
Goodwill | $ 7,479 | $ 7,479 | |||||
Volatility rate | 39.45% | ||||||
Description of warrants | The warrants receive a further 50% discount as they contain a vesting schedule with milestones that must be achieved by the Contributor once the property is contributed. | ||||||
Liability for Optional asset acquisition | $ 1,222 | $ 1,222 | |||||
Neova Asset Purchase Agreement [Member] | Sigmatron International, Inc [Member] | Consumer Products [Member] | Subsequent Event [Member] | |||||||
Proceeds from agreements | $ 2 | ||||||
Bill of Sale And Assignment [Member] | Sigmatron International, Inc [Member] | Subsequent Event [Member] | |||||||
Deposits | $ 210 |
Acquisition of Real Estate As39
Acquisition of Real Estate Assets (Details) $ in Thousands | Jun. 30, 2017USD ($) | |
Fair value of financial liability related to Optional contribution | $ 857 | [1] |
Fair value of Warrant | 1,925 | [1] |
Fair value of asset related to future mandatory asset contribution | (4,175) | [2] |
Fair value of note payable on acquired asset | 470 | |
Transaction costs | 283 | |
Total consideration | 5,118 | |
Common Stock [Member] | ||
Fair value of PHMD | 1,275 | |
Series A Preferred Stock [Member] | ||
Fair value of PHMD | $ 4,483 | |
[1] | See Note 1 "Second Contribution" | |
[2] | See Note 1 "Optional Contribution" |
Acquisition of Real Estate As40
Acquisition of Real Estate Assets (Details 1) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Acquisition Of Real Estate Assets Details 1 | ||
Investment property equivalents | $ 2,450 | |
Investment in other company | 2,668 | |
Total assets acquired at fair value | $ 5,118 |
Acquisition of Real Estate As41
Acquisition of Real Estate Assets (Details 2) - $ / shares | May 17, 2017 | Jun. 30, 2017 | Jun. 30, 2017 |
Options [Member] | |||
Dividend yield (%) | 0.00% | 0.00% | |
Expected volatility (%) | 39.45% | 39.45% | |
Risk free interest rate (%) | 1.25% | 1.25% | |
Strike price (US dollars) | $ 1.93 | $ 1.93 | $ 1.93 |
Stock price (US dollars) | $ 1.45 | $ 1.18 | $ 1.18 |
Probability (%) | 50.00% | 50.00% | |
Expected term of options (years) | 7 months 13 days | 6 months | |
Warrants [Member] | |||
Dividend yield (%) | 0.00% | 0.00% | |
Expected volatility (%) | 39.45% | 39.45% | |
Risk free interest rate (%) | 1.25% | 1.25% | |
Strike price (US dollars) | $ 3 | $ 3 | $ 3 |
Stock price (US dollars) | $ 1.45 | $ 1.18 | $ 1.18 |
Probability (%) | 50.00% | 50.00% | |
Expected term of options (years) | 5 years | 4 years 10 months 18 days | |
Asset Contribution [Member] | |||
Dividend yield (%) | 0.00% | 0.00% | |
Stock price (US dollars) | $ 1.45 | $ 1.18 | $ 1.18 |
Probability (%) | 70.00% | 70.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in progress | $ 1,968 | |
Finished goods | 5,368 | |
Total Inventories | 7,336 | |
Less assets held for sale | (7,336) | |
Total inventories |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 776 | $ 5,876 |
Accumulated depreciation and amortization | (776) | (4,888) |
Total property and equipment | 988 | |
Less assets held for sale | (911) | |
Property and equipment, net | 77 | |
Equipment, Computer Hardware And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 314 | 5,005 |
Furniture And Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 350 | 433 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 112 | $ 438 |
Property and Equipment, net (44
Property and Equipment, net (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 177 | $ 149 |
Patents and Licensed Technolo45
Patents and Licensed Technologies, net (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets, Net [RollForward] | ||
Translation differences | $ (285) | |
Patents And Licensed Technologies [Member] | ||
Finite-Lived Intangible Assets, Net [RollForward] | ||
Gross amount beginning of period | $ 3,235 | 3,376 |
Additions | (177) | |
Translation differences | 36 | |
Gross amount end of period | 3,235 | |
Accumulated amortization | (1,974) | |
Impairment | (1,261) | |
Patents and licensed technologies, net |
Patents and Licensed Technolo46
Patents and Licensed Technologies, net (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Patents And Licensed Technologies [Member] | ||
Amortization expense | $ 0 | $ 116 |
Goodwill and Other Intangible47
Goodwill and Other Intangible Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning | $ 3,581 |
Disposal on sale of assets | (1,039) |
Impairment of goodwill | (2,257) |
Translation differences | (285) |
Balance at ending | $ 0 |
Goodwill and Other Intangible48
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2016 | Jun. 30, 2017 | Dec. 31, 2015 | |
Goodwill | $ 0 | $ 3,581 | ||
Impairment of goodwill | 2,257 | |||
Impairment of intangibles for licensed technology | $ 1,261 | |||
CONSUMER [Member] | ||||
Impairment of goodwill and intangible assets | $ 3,518 | |||
PHYSICIAN RECURRING [Member] | ||||
Goodwill | $ 1,039 | |||
Other Intangible Assets [Member] | ||||
Goodwill | 24,005 | |||
Definite-lived intangibles | $ 12,000 |
Accrued Compensation and rela49
Accrued Compensation and related expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Compensation Related Costs [Abstract] | ||
Accrued payroll and related taxes | $ 49 | $ 262 |
Accrued vacation | 49 | 66 |
Accrued commissions and bonuses | 2,515 | 3,701 |
Total accrued compensation and related expense | $ 2,613 | $ 4,029 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | ||
Other Liabilities Disclosure [Abstract] | ||||||
Accrued warranty, current, see Note 1 | $ 93 | |||||
Accrued taxes, net | 1,671 | 1,606 | ||||
Accrued sales returns | [1] | 1,975 | [1] | $ 1,973 | $ 4,179 | |
Other accrued liabilities | 2,007 | 4,417 | ||||
Total other accrued liabilities | $ 3,678 | $ 8,091 | ||||
[1] | The activity in the accrued sales returns liability account was as follows: |
Other Accrued Liabilities (De51
Other Accrued Liabilities (Details 1) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | ||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 1,975 | [1] | $ 4,179 |
Additions that reduce net sales | 4,976 | ||
Deductions from reserves | (1,975) | (7,182) | |
Balance at end of period | [1] | $ 1,973 | |
[1] | The activity in the accrued sales returns liability account was as follows: |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 6 Months Ended |
Jun. 30, 2017 | |
U.S. Federal statutory rate | 34.00% |
Foreign Tax Authority [Member] | Her Majesty's Revenue and Customs (HMRC) [Member] | |
Standard corporate income tax rate | 20.00% |
Foreign Tax Authority [Member] | Her Majesty's Revenue and Customs (HMRC) [Member] | Photo Therapeutics Limited [Member] | |
Percentage of valuation allowance | 100.00% |
Foreign Tax Authority [Member] | Israel Tax Authority [Member] | |
Standard corporate income tax rate | 25.00% |
Commitments and contingencies (
Commitments and contingencies (Details Narrative) - USD ($) $ in Thousands | Jun. 23, 2017 | May 27, 2016 |
Loss Contingencies [Line Items] | ||
Name of plantiff | Radiancy, Inc., a wholly-owned subsidiary of PhotoMedex | |
Name of defendent | Linda Andrew v. Radiancy, Inc.; Photomedex, Inc. | |
Domicile of litigation | United States District Court for the Middle District of Florida, Orlando Division | |
Description of allegation | Dolev Rafaeli. Ms. Andrew had filed a product liability suit alleging damages from her use of a no!no! hair device. | |
Merger And Reorganization Agreement [Member] | DS Healthcare Group, Inc [Member] | ||
Loss Contingencies [Line Items] | ||
Termination fee | $ 3,000 | |
Merger And Reorganization [Member] | Merger And Reorganization Agreement [Member] | ||
Loss Contingencies [Line Items] | ||
Expense reimbursement | $ 750 |
Employee Stock Benefit Plans (D
Employee Stock Benefit Plans (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning of year | shares | 134,150 |
Granted | shares | |
Exercised | shares | |
Cancelled | shares | (42,085) |
Outstanding, end of year | shares | 92,065 |
Exercisable, end of year | shares | 88,185 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding, beginning of year | $ / shares | $ 85.22 |
Granted | $ / shares | |
Exercised | $ / shares | |
Cancelled | $ / shares | 71.50 |
Outstanding, end of year | $ / shares | 91.43 |
Exercisable, end of year | $ / shares | $ 91.22 |
Employee Stock Benefit Plans 55
Employee Stock Benefit Plans (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 26, 2015 | Jun. 30, 2017 | Jun. 30, 2016 |
Value of shares issued | $ 1,275 | ||
Unrecognized compensation cost | $ 111 | ||
Unrecognized compensation cost expected to recognized period | 7 months 24 days | ||
Number of shares cancelled | 251,250 | ||
Consultant [Member] | |||
Share-based compensation | $ 935 | $ 860 | |
Employee [Member] | Restricted Stock [Member] | |||
Number of shares issued/granted | 299,000 | ||
Purchase price (in dollars per share) | $ 0.01 | ||
Stock options expiration period | 4 years | ||
Aggregate fair value | $ 2,766 | ||
Description of vesting | Stock vests ratably over a three-to-five year period. | ||
Non-Employee Director Stock Option Plan [Member] | |||
Number of shares authorized | 74,000 | ||
Number of shares reserved for future issuance under stock option | 2,135 | ||
Number of shares available for future issuance | 71,374 | ||
Number of shares reserved for outstanding options | 12,079 | ||
2005 Equity Compensation Plan [Member] | |||
Number of shares authorized | 1,200,000 | ||
Number of shares reserved for future issuance under stock option | 467,328 | ||
Number of shares available for future issuance | 588,857 | ||
Number of shares reserved for outstanding options | 143,815 |
Business Segment and Geographic
Business Segment and Geographic Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | $ 11,243 | $ 3,539 | $ 22,476 | |
Costs of revenues | 3,354 | 100 | 6,108 | |
Gross profit | $ 7,889 | $ 3,439 | $ 16,368 | |
Gross profit % | 70.20% | 97.10% | 72.80% | |
Allocated operating expenses: | ||||
Engineering and product development | $ 343 | $ 143 | $ 657 | |
Selling and marketing expenses | 6,425 | 620 | 14,228 | |
Loss on disposal of assets | 2,166 | 4,251 | 843 | |
Unallocated operating expense | (802) | 2,932 | 1,540 | 6,897 |
Total | 1,364 | 9,700 | 6,554 | 22,625 |
Loss from continuing operations | (1,364) | (1,811) | (3,115) | (6,257) |
Unrealized gain | 2,622 | 2,622 | ||
Interest and other financing expense, net | (46) | (292) | (123) | (625) |
Loss from continuing operations before taxes | 1,212 | (2,103) | (616) | (6,882) |
CONSUMER [Member] | ||||
Revenues | 9,660 | 3,539 | 19,582 | |
Costs of revenues | 2,284 | 100 | 4,503 | |
Gross profit | $ 7,376 | $ 3,439 | $ 15,079 | |
Gross profit % | 76.70% | 97.10% | 77.00% | |
Allocated operating expenses: | ||||
Engineering and product development | $ 264 | $ 143 | $ 536 | |
Selling and marketing expenses | 5,795 | 620 | 12,756 | |
Loss on disposal of assets | 2,166 | 4,222 | ||
Unallocated operating expense | ||||
Total | 2,166 | 6,059 | 4,985 | 13,292 |
Loss from continuing operations | (2,166) | 1,317 | (1,546) | 1,787 |
Unrealized gain | ||||
Interest and other financing expense, net | ||||
Loss from continuing operations before taxes | (2,166) | 1,317 | (1,546) | 1,787 |
PHYSICIAN RECURRING [Member] | ||||
Revenues | 1,254 | 2,462 | ||
Costs of revenues | 926 | 1,392 | ||
Gross profit | $ 328 | $ 1,070 | ||
Gross profit % | 26.20% | 43.50% | ||
Allocated operating expenses: | ||||
Engineering and product development | $ 79 | $ 121 | ||
Selling and marketing expenses | 625 | 1,454 | ||
Loss on disposal of assets | 29 | |||
Unallocated operating expense | ||||
Total | 704 | 29 | 1,575 | |
Loss from continuing operations | (376) | (29) | (505) | |
Unrealized gain | ||||
Interest and other financing expense, net | ||||
Loss from continuing operations before taxes | (376) | (29) | (505) | |
PROFESSIONAL [Member] | ||||
Revenues | 329 | 432 | ||
Costs of revenues | 144 | 213 | ||
Gross profit | $ 185 | $ 219 | ||
Gross profit % | 56.20% | 50.70% | ||
Allocated operating expenses: | ||||
Engineering and product development | ||||
Selling and marketing expenses | 5 | 18 | ||
Loss on disposal of assets | 843 | |||
Unallocated operating expense | ||||
Total | 5 | 861 | ||
Loss from continuing operations | 180 | (642) | ||
Unrealized gain | ||||
Interest and other financing expense, net | ||||
Loss from continuing operations before taxes | $ 180 | $ (642) |
Business Segment and Geograph57
Business Segment and Geographic Data (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net revenues | $ 11,243 | $ 3,539 | $ 22,476 | |
North America [Member] | ||||
Net revenues | 6,806 | 2,475 | 14,119 | |
Asia Pacific [Member] | ||||
Net revenues | 922 | 1,436 | ||
Europe (including Israel) [Member] | ||||
Net revenues | 3,510 | 1,064 | 6,901 | |
South America [Member] | ||||
Net revenues | 5 | 20 | ||
United States [Member] | ||||
Net revenues | 5,783 | 2,475 | 11,877 | |
Canada [Member] | ||||
Net revenues | $ 534 | $ 1,229 |
Business Segment and Geograph58
Business Segment and Geographic Data (Details 2) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Long-lived assets | $ 77 | |
North America [Member] | ||
Long-lived assets | 71 | |
Asia Pacific [Member] | ||
Long-lived assets | 17 | |
Europe (including Israel) [Member] | ||
Long-lived assets | $ 900 |
Business Segment and Geograph59
Business Segment and Geographic Data (Details Narrative) | 6 Months Ended |
Jun. 30, 2017Number | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) $ in Thousands | Jul. 28, 2017 | Jul. 13, 2017 | Jul. 12, 2017 |
Johnson Employment Agreement [Member] | Mr. Johnson [Member] | |||
Annual base salary | $ 300 | ||
Singal Agreement [Member] | Mr. Suneet Singal [Member] | |||
Annual base salary | $ 250 | ||
ICTV Brands Inc. [Member] | Purchase Agreement [Member] | |||
Amount receivable from acquirer | $ 2,000 | ||
Cash received | $ 2,000 | ||
Sigmatron International, Inc [Member] | |||
Amount of deposits | $ 210 |