Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 13, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | FC Global Realty Inc | |
Entity Central Index Key | 711,665 | |
Document Type | 10-Q | |
Trading Symbol | FCRE | |
Document Period End Date | Sep. 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 | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,006 | $ 2,335 |
Restricted cash | 250 | 342 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $1,192 respectively | 49 | 4,125 |
Prepaid expenses and other current assets | 1,326 | 3,253 |
Assets held for sale | 8,362 | |
Financial assets related to future mandatory asset contribution (Note 2) | 5,353 | |
Total current assets | 7,984 | 18,417 |
Property and equipment, net | 77 | |
Investment properties (Note 2) | 2,450 | |
Investment in other company (Note 2) | 2,668 | |
Other assets, net | 962 | 7 |
Total assets | 14,064 | 18,501 |
Current liabilities: | ||
Note payable | 194 | |
Accounts payable | 1,547 | 6,648 |
Accrued compensation and related expenses | 1,491 | 4,029 |
Other accrued liabilities | 4,785 | 8,091 |
Financial liabilities for optional assets acquisition (Note 2) | 1,013 | |
Current portion of deferred revenues | 1,141 | |
Total current liabilities | 9,030 | 19,909 |
Total liabilities | 9,030 | 19,909 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity (deficit): | ||
Preferred Stock, value | ||
Common Stock, $.01 par value, 50,000,000 shares authorized; 5,240,328 and 4,361,094 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 230 | 221 |
Additional paid-in-capital | 125,393 | 118,585 |
Accumulated deficit | (119,501) | (115,635) |
Accumulated other comprehensive loss | (1,089) | (4,579) |
Total stockholders' equity (deficit) | 5,034 | (1,408) |
Total liabilities and stockholders' equity (deficit) | 14,064 | 18,501 |
Series A Preferred Stock [Member] | ||
Stockholders' equity (deficit): | ||
Preferred Stock, value | $ 1 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts receivable, allowance for doubtful accounts | $ 0 | $ 1,192 |
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 7,258 | $ 3,539 | $ 29,734 | |
Cost of revenues | 1,487 | 100 | 7,595 | |
Gross profit | 5,771 | 3,439 | 22,139 | |
Operating expenses: | ||||
Engineering and product development | 326 | 143 | 983 | |
Selling and marketing | 4,529 | 620 | 18,757 | |
General and administrative | 2,705 | 2,894 | 6,895 | 9,791 |
Impairment of goodwill and intangible assets | 3,518 | 3,518 | ||
Other income (expense), net | 183 | (2,467) | ||
Loss on disposal of assets | 594 | 1,731 | 4,845 | 2,574 |
Total operating expenses | 3,482 | 12,998 | 10,036 | 35,623 |
Loss from continuing operations before interest, financing and other expense, net | (3,482) | (7,227) | (6,597) | (13,484) |
Revaluation of asset contribution related financial instruments, net (Note 2) | 326 | 2,948 | ||
Interest and other financing income (expense), net | 20 | 88 | (103) | (537) |
Loss from continuing operations before income taxes | (3,136) | (7,139) | (3,752) | (14,021) |
Income tax expense | (20) | (278) | (114) | (506) |
Loss from continuing operations | (3,156) | (7,417) | (3,866) | (14,527) |
Discontinued operations: | ||||
Loss from discontinued operations, net of taxes | (125) | |||
Loss | $ (3,156) | $ (7,417) | $ (3,866) | $ (14,652) |
Basic and diluted net loss per share: | ||||
Continuing operations (in dollars per share) | $ (0.38) | $ (1.78) | $ (0.61) | $ (3.48) |
Discontinued operations (in dollars per share) | (0.03) | |||
Basic net loss per share (in dollars per share) | $ (0.38) | $ (1.78) | $ (0.61) | $ (3.51) |
Shares used in computing net loss per share: | ||||
Basic and diluted | 8,299,528 | 4,157,917 | 6,296,604 | 4,173,146 |
Other comprehensive income (loss): | ||||
Reclassification of cumulative translation adjustment into comprehensive loss | $ 207 | $ 3,228 | ||
Foreign currency translation adjustments | (16) | (157) | 262 | (915) |
Total other comprehensive income (loss) | 191 | (157) | 3,490 | (915) |
Comprehensive loss | $ (2,965) | $ (7,574) | $ (376) | $ (15,567) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT) (Unaudited) - 9 months ended Sep. 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 | 1,060 | $ 1,060 | ||||
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 | 3,490 | 3,490 | ||||
Net loss | (3,866) | (3,866) | ||||
Balance at ending at Sep. 30, 2017 | $ 230 | $ 1 | $ 125,393 | $ (119,501) | $ (1,089) | $ 5,034 |
Balance at ending (in shares) at Sep. 30, 2017 | 5,240,328 | 123,668 | 5,240,328 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Loss | $ (3,866) | $ (14,652) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 292 | 485 |
Impairment of goodwill and intangible assets | 3,518 | |
Provision for doubtful accounts | 19 | 218 |
Deferred income taxes | (8) | |
Stock-based compensation | 1,060 | 1,478 |
Loss on disposal of assets | 4,845 | 2,787 |
Revaluation of asset contribution related financial instruments, net (Note 2) | (2,948) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 4,122 | 4,004 |
Inventories | 313 | 318 |
Prepaid expenses and other current assets | 2,023 | (959) |
Accounts payable | (4,429) | (227) |
Accrued compensation and related expenses | (2,548) | 262 |
Other accrued liabilities | (5,942) | 803 |
Deferred revenues | (1,146) | (1,035) |
Adjustments related to operations | (4,339) | 11,644 |
Net cash used in operating activities | (8,205) | (3,008) |
Cash Flows From Investing Activities: | ||
Decrease in restricted cash | 92 | 382 |
Direct expenses related to asset acquisition | (283) | |
Purchases of property and equipment | 15 | (81) |
Payment note receivable | (159) | |
Proceeds on sale of property and equipment | 110 | |
Proceeds on sale of other assets | 7,000 | 1,750 |
Net cash provided by investing activities | 6,665 | 2,161 |
Cash Flows From Financing Activities: | ||
Proceeds from notes payable | 5,460 | |
Payments on notes payable | (5,983) | |
Net cash used in financing activities | (523) | |
Effect of exchange rate changes on cash | 211 | (638) |
Net decrease in cash and cash equivalents | (1,329) | (2,008) |
Cash and cash equivalents, beginning of period | 2,335 | 3,302 |
Cash and cash equivalents, end of period | 1,006 | 1,294 |
Supplemental information: | ||
Cash paid for income taxes | 73 | 110 |
Cash paid for interest | 281 | |
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 | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
The Company | Note 1 The Company: Background FC Global Realty Incorporated (and its subsidiaries) (the “Company”), re-incorporated in Nevada on December 30, 2010, originally formed in Delaware in 1980, is a real estate investment company holding or in the process of acquiring investments in a variety of current and future real estate projects, including residential developments, commercial properties such as gas station sites, and hotels and resort communities, as described further in this report. Under its previous name, PhotoMedex, Inc., the Company was, 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 addressed 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 23, 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 at that time. 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 up to 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/or 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 was 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 assumed 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. If the contribution is made, the Company will account for this transaction as a business combination under ASC 805, Business Combinations. 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 had 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 would receive shares of stock in the Company, such amount to be calculated as set forth in the Second Waiver and Agreement. The sale of the Amarillo Hotel was not completed and closed by August 31, 2017, therefor the waiver of the requirement for the contribution of the interest in the Amarillo Hotel lapsed. On September 22, 2017, the Company and Acquiror entered into a Second Agreement to Waive Closing Deliverables (the “Second Agreement”) with the Contributor Parties, amending the Contribution Agreement. Pursuant to the terms of the Second Agreement, the Company and the Acquiror agreed to extend the date for the closing of the sale of the Amarillo Hotel until October 18, 2017, with the contribution of the funds from the sale to be made not later than October 23, 2017. In exchange the Contributor Parties shall receive shares of stock in the Company, such amount to be calculated as set forth in the Contribution Agreement, as amended by the Agreement to Waive Closing Deliverables and the Second Agreement. If the sale of the Amarillo Hotel is not completed and closed by October 18, 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, November 14, 2017, the sale of the Amarillo Hotel has not been completed. As the sale was not completed by the stated deadline, the Contributor Parent is now re-evaluating how best to contribute this asset to our company. 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 an agreed upon value of $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) 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 issue 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 and warrants 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 share 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 September 30, 2017, the fair value of such liability is estimated to be $1,013 and is presented in the consolidated 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 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 Financial 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 that the Company’s conduct is in the ordinary course of business between the signing and December 31, 2017. Payout Notes 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), were to be converted to convertible secured notes (the “Payout Notes”) after approval from the Company’s stockholders. The Payout Notes would be due one year after the stockholder approval and carry a ten percent (10%) interest rate. The principal would 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 should in no event be less than $1.75 per share. The Payout Notes would be secured by a security interest in all assets of the Company; provided, however, that such security interest would 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 would have demand registration rights which would require the filing of a re-sale 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. The form of those Payout Notes was agreed to at the time of signing of the Contribution Agreement and was attached as an exhibit thereto. In connection with the Payout Notes, the parties also agreed to a form of security agreement (the “Security Agreement”), which was also attached as an exhibit to the Contribution Agreement. On October 12, 2017, the Company issued the Payout Notes to Dolev Rafaeli, Dennis M. McGrath and Yoav Ben-Dror in the principal amounts of $3,134, $978 and $1,515, respectively. The Payout Notes are due on October 12, 2018 and carry a ten percent (10%) interest rate, payable monthly in arrears commencing on December 1, 2017 (each such payment, a “Monthly Interest Payment” and each date of such payment, an “Interest Payment Date”). As of September 30, 2017 the Company has accrued for the Payout Notes to Dolev Rafaeli, Dennis M. McGrath and Yoav Ben-Dror in the amounts of $1,262, $168 and $1,292, respectively. The Payout Notes may not be prepaid by the Company without the written consent of the holder. Notwithstanding the foregoing, if the Company sells any of its securities, whether equity, equity-linked or debt securities (a “Capital Raising Transaction”), prior to the maturity date, then forty percent (40%) of the funds raised in such Capital Raising Transaction shall be used to pay down the Payout Notes on a pro rata basis based upon the relative principal amounts; provided, however, that if the investors in such Capital Raising Transaction stipulate that the proceeds cannot be used to pay down indebtedness, then none of the proceeds of such Capital Raising Transaction shall be used to pay down the Payout Notes on an accelerated basis; provided further, however, that a committee consisting of board members Michael R. Stewart and Dennis M. McGrath unanimously consent to the use of proceeds from such Capital Raising Transaction. The principal will convert to shares of the Company’s common stock at maturity at the lower of (i) $2.5183 or (ii) the volume-weighted average price (“VWAP”) with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) 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. In addition, each holder of a Payout Note may elect to have a Monthly Interest Payment paid in shares of common stock, at the VWAP with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) during the thirty (30) trading days ending five (5) trading days prior to the applicable Interest Payment Date, as reported by Bloomberg L.P. The holders of the Payout Notes have demand registration rights which require the filing of a re-sale 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. The Payout Notes contain standard events of default, including: (i) if the Company shall default in the payment of the principal amount or any interest as and when the same shall become due and payable; or (ii) if the Company shall violate or breach to a material extent any of the representations, warranties and covenants contained in the Payout Notes or the Security Agreement and such violation or breach shall continue for thirty (30) days after written notice of such breach shall been received by the Company from the holder; or (iii) in the event of any voluntary or involuntary bankruptcy, liquidation or winding up of the Company, as more particularly described in the Payout Notes. The foregoing summary of the terms and conditions of the Payout Notes does not purport to be complete and is qualified in its entirety by reference to the full text of those documents filed as exhibits to the Company’s Form 8-K filed with the SEC on October 18, 2017. Special Meeting of Stockholders As promptly as possible following the Initial Closing, the Company was required to 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 were obligated to vote in favor of the proposals at the above mentioned stockholder meeting. The Annual Meeting of Shareholders was convened on September 14, 2017, then adjourned and reconvened on October 12, 2017, at which meeting all of the proposals specified in the Company’s Definitive Proxy and further described in that Proxy and in this filing were approved by the shareholders. Registration Rights Promptly following the execution of the Agreement, the Company is required to 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. As of the date of this filing, the Company has not filed these registration statements. 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 and Resumption of Trading on NASDAQ 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) be |
Acquisition of Real Estate Asse
Acquisition of Real Estate Assets | 9 Months Ended |
Sep. 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 as of May 17, 2017 consists of the following: Fair value of FC Global common stock $ 1,275 Fair value of FC Global 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 assumed 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” ● Based on first contribution date values. 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 allocation of total consideration: Investment properties 2,450 Investment in other company 2,668 Total assets acquired at fair value $ 5,118 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 September 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 1.15 Probability (%) 50 50 Expected term of options (years) 0.62 0.25 Warrants Value: May 17, 2017 September 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 1.15 Probability (%) 50 50 Expected term of options (years) 5 4.63 Asset related to future mandatory asset contribution: May 17, 2017 September 30, 2017 Dividend yield (%) 0 0 Stock price (US dollars) 1.45 1.15 Probability (%) 70 70 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 Inventories: September 30, 2017 December 31, 2016 (unaudited) Raw materials and work in progress $ — $ 1,968 Finished goods — 5,368 Total Inventories — $ 7,336 Less assets held for sale (see Note 1) — (7,336 ) Total inventories $ — $ — 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 | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 4 Property and Equipment, net: September 30, 2017 December 31, 2016 (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 $218 for the nine months ended September 30, 2017 and 2016, respectively. |
Patents and Licensed Technologi
Patents and Licensed Technologies, net | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents and Licensed Technologies, net | Note 5 Patents and Licensed Technologies, net: September 30, 2017 December 31, 2016 (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 $230 for the nine months ended September 30, 2017 and 2016, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 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 ended 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. |
Accrued Compensation and relate
Accrued Compensation and related expenses | 9 Months Ended |
Sep. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Accrued Compensation and related expenses | Note 7 Accrued Compensation and related expenses: September 30, 2017 December 31, 2016 (unaudited) Accrued payroll and related taxes $ 41 $ 262 Accrued vacation 20 66 Accrued commissions and bonuses 1,430 3,701 Total accrued compensation and related expense $ 1,491 $ 4,029 |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities | Note 8 Other Accrued Liabilities: September 30, 2017 December 31, 2016 (unaudited) Accrued warranty, current, see Note 1 $ — $ 93 Accrued taxes, net 1,662 1,606 Accrued sales returns (1) — 1,975 Other accrued liabilities 3,123 4,417 Total other accrued liabilities $ 4,785 $ 8,091 (1) The activity in the accrued sales returns liability account was as follows: Nine Months Ended September 30, 2017 2016 (unaudited) (unaudited) Balance at beginning of year $ 1,975 $ 4,179 Additions that reduce net sales — 7,124 Deductions from reserves (1,975 ) (9,615 ) Balance at end of period $ — $ 1,688 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 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 nine month period ended September 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 nine months ended September 30, 2017, the Company had no material changes to liabilities for uncertain tax positions. The Company 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 to close before December 31, 2017 and with the closing of the First Contribution on May 17, 2017, the Company will re-examine its tax status and re-evaluate the quantity and type of its tax reporting. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 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.; the Company (under the name 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 the Company. 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 “DS Settlement Agreement”) with DS Healthcare Group, Inc. (“DSKX”) and its subsidiaries, PHMD Consumer Acquisition Corp. and PHMD Professional Acquisition Corp. The terms of the DS Settlement Agreement are confidential; the parties dismissed the suit between them with prejudice on June 23, 2017. During the three months ended September 30, 2017, Radiancy, Inc. (“Radiancy”), a subsidiary of the Company entered into a Settlement Agreement and Release (the “Mouzon Settlement Agreement”) with regard to Mouzon, et al. v. Radiancy, Inc., a civil action filed in the United States District Court for the District of Columbia. The Mouzon civil action alleged certain marketing and warranty claims against Radiancy and its President, Dolev Rafaeli, who was earlier dismissed from the suit, on behalf of a purported class of individuals who had purchased the nono! Hair® removal product marketed and sold by Radiancy. The settlement also includes the potential plaintiffs under April Cantley v. Radiancy, Inc., a purported class action lawsuit originally filed in the Superior Court in the State of California, County of Kern, which was removed to the Federal Court system and consolidated with the Mouzon litigation. Additional information on these cases was previously reported in the Form 10-K, Annual Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange Act Of 1934, filed for the year ending December 31, 2016, and in earlier filings on Forms 10-K; Forms 10-Q, Quarterly Report Pursuant To Section 13 Or 15(D) Of The Securities Exchange Act Of 1934; and Forms 8-K, Current Reports. The terms and conditions of the Mouzon Settlement Agreement are also confidential; the parties will dismiss the suit between them with prejudice. The Company is a party to JFURTI, LLC, et al v. Suneet Singal, et al, filed in the United States District Court for the Southern District of New York. The suit names as Defendants Suneet Singal, an officer of various First Capital companies as well as the Chairman and President of the Company, Frank Grant and Richard Leider, board members of First Capital Real Estate Investments, LLC, First Capital Real Estate Advisors, LP, Presidential Realty Corporation, Presidential Realty Operating Partnership, Downey Brand LLP and now the Company (under its previous name, Photomedex Inc., as well as nominal derivative defendants First Capital Real Estate Trust Incorporated and First Capital Real Estate Operating Partnership, L.P. The suit is the ninth filed by Jacob Frydman and/or JFURTI, LLC in a dispute between the plaintiffs and the First Capital group of companies, which entered into a series of agreements with Mr. Frydman beginning in September 2015. Mr. Frydman had founded, sponsored, and taken public United Realty Trust Incorporated, a Real Estate Investment Trust (“REIT”). Mr. Frydman was the CEO and Chairman of the REIT as well as the owner of various other United Realty branded companies affiliated with the REIT business. In September 2015, Mr. Frydman and Singal negotiated and agreed to a transaction between various First Capital branded companies, on the one hand, and the United Realty branded companies affiliated with the REIT business, on the other hand, as a result of which the REIT was rebranded as First Capital REIT. After the September 2015 transaction was concluded, several disputes arose between the parties. This suit is the ninth action brought by Mr. Frydman in state and federal courts relating to these disputes, and the second attempt by Mr. Frydman and JFURTI to bring federal claims derivatively in this Court against First Capital entities and other parties. The first action, titled JFURTI, LLC and Jacob Frydman v. Forum Partners Investment Management LLC et al., No. 16 Civ. 8633 (the “Prior Action”), commenced on November 7, 2016 and asserted, inter alia, derivative RICO and securities fraud claims. The Court dismissed the action in a decision and order dated April 27, 2017. Following dismissal of the Prior Action, Mr. Frydman sent letters to each member of the REIT’s Board of Directors (the “Demand Letter”) demanding that the Board investigate and remediate the dissipation of assets as alleged by plaintiffs. In particular, the Demand Letter questioned (i) a letter of intent with Presidential announced in an 8K filed by First Capital REIT on or about July 18, 2016; (ii) First Capital REIT’s use of funds raised between September 15, 2015 and February 28, 2016; (iii) an interest contribution agreement with Presidential entered into on or about December 16, 2016; (iii) the REIT’s failure to file quarterly and annual reports; (iv) an interest contribution agreement entered into on March 31, 2017 with Photomedex; and (v) other purportedly fraudulent acts such as publishing an artificially inflated NAV, defaulting on certain mortgage loans, misrepresentations by Singal with respect to certain properties contributed to the REIT through the Master Agreement executed on September 15, 2015, and various loan agreements with Forum Partners Investment Management LLC. The Demand Letter also demanded inspection of certain corporate documents pursuant to Md. Code § 2-512. The REIT commenced such an investigation, and offered such an inspection, but Mr. Frydman and JFURTI failed to wait for the results of the investigation or make any inspection, and instead brought suit in the same court as the Prior Action. The suit alleges, among other claims, violations of § 10(b) of the Exchange Act and Rule 10b-5 (1) against Singal and FCREI for misrepresentations in connection with the Master Agreement entered into on September 15, 2015 and related agreements; (2) against Downey Brand for failure to file certain deeds; (3) against the First Capital Defendants (except Grant and Leider), the Forum Defendants, and the Presidential Defendants for a fraudulent scheme to sell REIT assets to Presidential; and (4) against the First Capital Defendants, the Forum Defendants, and Photomedex for the transfer of First Capital REIT and First Capital OP assets to Photomedex in exchange for allegedly worthless shares. There are also claims under state law for common law fraud, conversion, fraudulent conveyance, waste and mismanagement, accounting, injunctive relief, and violation of Cal. Bus. & Prof. Code § 17-200. Many of the claims asserted in the Complaint, including the securities fraud claims, were never raised in the Demand Letter, as required by law. The suit seeks damages against all defendants for the failure of the REIT to respond to the Demand Letter, and an injunction against the sale of the assets to the Presidential defendants. The parties submitted a motion for an order (i) staying all proceedings in this action for 60 days, or until the end of 2017, and (ii) extending the defendants time to respond to the Complaint, or to make a motion with respect to the Complaint, until 45 days after First Capital REIT’s response to the Demand Letter. The Court granted that motion on October 31, 2017. The Company intends to defend itself vigorously against this suit. At this time, the amount of any loss, or range of loss, cannot be reasonably estimated as the case has only been initiated and no discovery has been conducted to determine the validity of any claim or claims made by plaintiffs. Therefore, the Company has not recorded any reserve or contingent liability related to these particular legal matters. However, in the future, as the cases progress, the Company may be required to record a contingent liability or reserve for these matters. 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 | 9 Months Ended |
Sep. 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 71,865 as of September 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 September 30, 2017. The number of shares available for future issuance pursuant to this plan is 588,857 as of September 30, 2017. Stock option activity under all of the Company’s share-based compensation plans for the nine months ended September 30, 2017 was as follows: Number of Weighted Outstanding, January 1, 2017 134,150 $ 85.22 Granted — — Exercised — — Cancelled (42,085 ) 71.50 Outstanding, September 30, 2017 92,065 $ 91.43 Options exercisable at September 30, 2017 88,185 $ 91.22 At September 30, 2017, there was $69 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 0.41 years. 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 September 30, 2017, 251,250 shares had been cancelled due to forfeiture by employees. Total stock based compensation expense was $1,060, and $1,478, for the nine months ended September 30, 2017 and 2016, respectively, including amounts relating to consultants. |
Business Segments and Geographi
Business Segments and Geographic Data | 9 Months Ended |
Sep. 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 had 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 generated 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, but is not active. The anticipated real estate investment properties to be transferred to the Company will be classified into one or more additional operating and reportable 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 September 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 594 594 Unallocated operating expenses — — — 2,888 594 — — 3,482 Loss from continuing operations (594 ) — — (3.482 ) Revaluation of asset contribution related financial instruments, net — — — 326 Interest and other financing income, net — — — 20 Loss from continuing operations before income taxes ($ 594 ) $ — $ — ($ 3,136 ) Three Months Ended September 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 6,142 $ 840 $ 276 $ 7,258 Costs of revenues 909 461 117 1,487 Gross profit 5,233 379 159 5,771 Gross profit % 85.2 % 45.1 % 57.6 % 79.5 % Allocated operating expenses: Engineering and product development 243 83 — 326 Selling and marketing expenses 3,921 591 17 4,529 Impairment 3,518 3,518 Loss on sale of assets 1,731 1,731 Unallocated operating expenses — — — 2,894 7,682 2,405 17 12,998 Income (loss) from continuing operations (2,449 ) (2,026 ) 142 (7,227 ) Interest and other financing income, net — — — 88 Income (loss) from continuing operations before income taxes ($ 2,449 ) ($ 2,026 ) $ 142 ($ 7,139 ) Nine Months Ended September 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 4,816 29 — 4,845 Unallocated operating expenses — — — 4,428 5,579 29 — 10,036 Loss from continuing operations (2,140 ) (29 ) — (6,597 ) Revaluation of asset contribution related financial instruments, net 2,948 Interest and other financing expense, net — — — (103 ) Loss from continuing operations before income taxes ($ 2,140 ) ($ 29 ) $ — ($ 3,752 ) Nine Months Ended September 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 25,724 $ 3,302 $ 708 $ 29,734 Costs of revenues 5,412 1,853 330 7,595 Gross profit 20,312 1,449 378 22,139 Gross profit % 79.0 % 43.9 % 53.4 % 74.5 % Allocated operating expenses: Engineering and product development 779 204 — 983 Selling and marketing expenses 16,677 2,045 35 18,757 Impairment 3,518 3,518 Loss on sale of assets 1,731 843 2,574 Unallocated operating expenses — — — 9,791 20,974 3,980 878 35,623 Loss from continuing operations (662 ) (2,531 ) (500 ) (13,484 ) Interest and other financing expense, net — — — (537 ) Loss from continuing operations before income taxes ($ 662 ) ($ 2,531 ) ($ 500 ) ($ 14,021 ) For the three and nine months ended September 30, 2017 and 2016 (unaudited), net revenues by geographic area were as follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 North America 1 $ — $ 4,257 $ 2,475 $ 18,376 Asia Pacific 2 — 744 — 2,180 Europe (including Israel) — 2,246 1,064 9,147 South America — 11 — 31 $ — $ 7,258 $ 3,539 $ 29,734 1 United States $ 3,528 $ 2,475 $ 15,405 1 Canada $ 277 $ — $ 1,506 As of September 30, 2017 and December 31, 2016, long-lived assets by geographic area were as follows: September 30, 2017 December 31, 2016 (unaudited) North America $ — $ 71 Asia Pacific — 6 Europe (including Israel) — — $ — $ 77 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 | 9 Months Ended |
Sep. 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 nine months ended September 30, 2017 or 2016. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 Subsequent Events: Amendment No. 2 to the Interest Contribution Agreement On October 11, 2017, the Company and its subsidiary FC Global Realty Operating Partnership, LLC entered into an Amendment No. 2 (the “Amendment No. 2”) to the Interest Contribution Agreement with First Capital Real Estate Operating Partnership, L.P. and First Capital Real Estate Trust Incorporated. Under Amendment No. 2 the parties agreed to amend the proposed terms of the Payout notes as described below. Prior to issuance of the Payout Notes, Messrs. Rafaeli, McGrath and Ben-Dror requested certain changes to the forms of Payout Note and Security Agreement, including the removal of certain subordination provisions and the addition of a provision regarding acceleration of payment, which required the parties to enter into the Amendment No. 2. The form of the Payout Note attached as Exhibit H to the Contribution Agreement and the form of the Security Agreement attached as Exhibit I to the Contribution Agreement were amended by the Amendment No. 2 and were replaced in their entirety as exhibits to the Contribution Agreement. The foregoing summary of the terms and conditions of the Amendment No. 2 does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment No. 2 filed as an exhibit to the Company’s form 8-K filed with the SEC on October 18, 2017. Issuance of Payout Notes On October 12, 2017, the Company issued the Payout Notes to Dolev Rafaeli, Dennis M. McGrath and Yoav Ben-Dror in the principal amounts of $3,133,934, $977,666 and $1,515,000, respectively. The Payout Notes are due on October 12, 2018 and carry a ten percent (10%) interest rate, payable monthly in arrears commencing on December 1, 2017 (each such payment, a “Monthly Interest Payment” and each date of such payment, an “Interest Payment Date”). As of September 30, 2017 the Company has accrued for the Payout Notes to Dolev Rafaeli, Dennis M. McGrath and Yoav Ben-Dror in the amounts of $1,262, $168 and $1,292, respectively. The Payout Notes may not be prepaid by the Company without the written consent of the holder. Notwithstanding the foregoing, if the Company sells any of its securities, whether equity, equity-linked or debt securities (a “Capital Raising Transaction”), prior to the maturity date, then forty percent (40%) of the funds raised in such Capital Raising Transaction shall be used to pay down the Payout Notes on a pro rata basis based upon the relative principal amounts; provided, however, that if the investors in such Capital Raising Transaction stipulate that the proceeds cannot be used to pay down indebtedness, then none of the proceeds of such Capital Raising Transaction shall be used to pay down the Payout Notes on an accelerated basis; provided further, however, that a committee consisting of board members Michael R. Stewart and Dennis M. McGrath unanimously consent to the use of proceeds from such Capital Raising Transaction. The principal will convert to shares of the Company’s common stock at maturity at the lower of (i) $2.5183 or (ii) the volume-weighted average price (“VWAP”) with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) 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. In addition, each holder of a Payout Note may elect to have a Monthly Interest Payment paid in shares of common stock, at the VWAP with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) during the thirty (30) trading days ending five (5) trading days prior to the applicable Interest Payment Date, as reported by Bloomberg L.P. The holders of the Payout Notes have demand registration rights which require the filing of a re-sale 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. The Payout Notes contain standard events of default, including: (i) if the Company shall default in the payment of the principal amount or any interest as and when the same shall become due and payable; or (ii) if the Company shall violate or breach to a material extent any of the representations, warranties and covenants contained in the Payout Notes or the Security Agreement and such violation or breach shall continue for thirty (30) days after written notice of such breach shall been received by the Company from the holder; or (iii) in the event of any voluntary or involuntary bankruptcy, liquidation or winding up of the Company, as more particularly described in the Payout Notes. The foregoing summary of the terms and conditions of the Payout Notes does not purport to be complete and is qualified in its entirety by reference to the full text of those documents filed as exhibits to the Company’s Form 8-K filed with the SEC on October 18, 2017. Security Agreement On October 12, 2017, the Company entered into the Security Agreement with Dolev Rafaeli, Dennis M. McGrath and Yoav Ben-Dror to secure the prompt payment of the principal and all accrued interest due under the Payout Notes. Pursuant to the Security Agreement, the Company granted a security interest in all of the properties, assets and personal property of the Company, whether now owned or hereafter acquired, to Messrs. Rafaeli, McGrath and Ben-Dror, which shall terminate following payment in full of the Payout Notes. The foregoing summary of the terms and conditions of the Security Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Security Amendment filed as an exhibit to the Company’s Form 8-K filed with the SEC on October 18, 2017. Singal Employment Agreement Also on October 11, 2017, the Company entered into an amended and restated employment agreement (the “Restated Employment Agreement,”) with Suneet Singal, its Chief Executive Officer, to reflect his base salary, as previously approved by the Board of Directors and reported by the Company on a Form 8-K filed on August 3, 2017, and set forth the accrual of his salary. Under the Restated Employment Agreement, Mr. Singal shall be entitled to a base salary of $250,000 per annum (the “Base Salary”), payable in accordance with the Company’s normal payroll practices, provided however, that the Base Salary will accrue, and not be paid, until (i) the 20% Unsecured Convertible Promissory Note issued by First Capital Real Estate Operating Partnership, L.P. to the Company on July 25, 2017 has been repaid in full and (ii) Mr. Singal begins working for the Company on a full time basis. Increases in the Base Salary will be determined from time to time in the sole discretion of the Board. Mr. Singal will also be entitled to a bonus 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. Singal and Mr. Stephen Johnson, the Company’s Chief Financial Officer. In addition, Mr. Singal 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. Singal 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. Singal 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. Singal 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. Singal would be required to pay for that reimbursement. Additionally, Mr. Singal 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. The Restated Employment Agreement is for a term of three years, commencing on May 17, 2017, and will be renewed automatically for additional one year periods unless terminated by either the Company or Mr. Singal ninety (90) days prior to the expiration of the then applicable term. Mr. Singal’s employment may be terminated by the Company for Cause, as defined in the Restated Employment Agreement. His employment will terminate automatically upon his resignation (other than for Good Reason (as defined in the Restated Employment Agreement) or due to his death or disability). If Mr. Singal’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. Singal’s employment is terminated by the Company other than for Cause or if it terminates automatically and immediately upon his resignation for Good Reason, then Mr. Singal 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 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. Singal 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 of the Internal Revenue Code of 1986, as amended, 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. Singal’s employment ceased, 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. Singal 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. Singal resigns for Good Reason due to a Change of Control (as defined in the Restated Employment Agreement), then he will be entitled to payment of an additional eighteen (18) months of 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. Singal’s employment terminates upon his death and may be terminated by the Company in the event of his disability. In such instances, Mr. Singal will receive the same payments and other items as he would be entitled to receive if his employment was terminated for Cause, or if he resigned for Good Reason, 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. Johnson 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 $300,000 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 nonqualified 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. Annual Meeting of Shareholders The Annual Meeting of Shareholders was convened on September 14, 2017, then adjourned and reconvened on October 12, 2017, at which meeting all of the proposals specified in the Company’s Definitive Proxy and further described in that Proxy and in this filing were approved by the shareholders. Amendment and Restatement of Company’s Articles of Incorporation On October 19, 2017, the Company filed Amended and Restated Articles of Incorporation with the Nevada Secretary of State to, among other things, change the name of the Company from PhotoMedex, Inc. to FC Global Realty Incorporated, increase the number of authorized shares of the Company’s common stock from fifty million (50,000,000) shares to five hundred million (500,000,000) shares, and increase the number of authorized shares of the Company’s preferred stock from five million (5,000,000) shares to fifty million (50,000,000) shares. The Amended and Restated Articles of Incorporation also include the following amendments: ● the addition of a provision regarding the Company’s election not to be governed by certain provisions of the Nevada Revised Statutes regulating business combinations with interested stockholders; ● the addition of a provision regarding the Company’s election not to be governed by certain provisions of the Nevada Revised Statutes regulating control share acquisitions; ● the removal of a provision regarding the number of directors of the Company, which is included in the Company’s Amended and Restated Bylaws; ● the removal of a provision regarding vacancies in the Company’s Board of Directors, which is included in the Company’s Amended and Restated Bylaws; and ● the removal of a provision regarding the location of stockholder meetings and the location of the Company’s books and records, which is included in the Company’s Amended and Restated Bylaws. The Amended and Restated Articles of Incorporation were approved by the Company’s Board of Directors on May 17, 2017 and by the Company’s stockholders at the special meeting held on October 12, 2017. For more information regarding the Amended and Restated Articles of Incorporation, please see the Company’s proxy statement filed with the SEC on August 8, 2017. The Company’s common stock will be traded under a new symbol, FCRE, on the Nasdaq Capital Market, effective November 1, 2017. The Company filed Form 8-K regarding the change of ticker symbol on October 31, 2017. |
The Company (Policies)
The Company (Policies) | 9 Months Ended |
Sep. 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 and should be read in conjunction with the audited consolidated financial Statements and related notes included in our Form 10-K for fiscal 2016. The accompanying condensed consolidated balance sheet as of December 31, 2016 has been derived from those audited 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 nine months ended September 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 Israel (NIS). 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 were 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 carried out transactions involving foreign exchange derivative financial instruments (mainly forward exchange contracts) which were 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 September 30, 2017, the balance of such derivative instruments amounted to $0 in assets and $0 was recognized as financing income in the Statement of Comprehensive (Loss) Income during the three and nine month periods ended that date. There are no foreign currency derivatives as of September 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 provided for the estimated cost of the future warranty claims on the date the product was sold. Total accrued warranty was included in Other Accrued Liabilities September 30, 2017 2016 (unaudited) (unaudited) Accrual at beginning of year $ 241 $ 331 Additions charged to warranty expense — 78 Expiring warranties — (130 ) Claims satisfied — (131 ) Sale of consumer segment (241 ) — Total $ — $ 148 |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per common share were calculated using the following weighted-average shares outstanding: For the Three Months Ended September 30, For the Nine Months Ended 2017 2016 2017 2016 Weighted-average number of common and common equivalent shares outstanding: Basic and Diluted number of common shares outstanding 8,299,528 4,157,917 6,296,604 4,173,146 Diluted number of common and common stock equivalent shares outstanding 8,299,528 4,157,917 6,296,604 4,173,146 Diluted loss per share for the three and nine months ended September 30, 2017, exclude the impact of common stock options and warrants, totaling 64,939,538 and 32,469,769 shares respectively, as the effect of their inclusion would be anti-dilutive, due to the loss from continuing operations for the periods. Diluted loss per share for the three and nine months ended September 30, 2016, exclude the impact of common stock options and warrants, totaling 209,398 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 originally 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, if any. 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, if any. 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 2016-09 on its financial statements. ASU 2017-01 “Business Combinations (Topic 805): 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 2 (which its first installment was closed on May 17, 2017) were evaluated in accordance with the updated guidance ASU 2017-01. See Note 2. |
The Company (Tables)
The Company (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2017 and 2016 is summarized as follows: September 30, 2017 2016 (unaudited) (unaudited) Accrual at beginning of year $ 241 $ 331 Additions charged to warranty expense — 78 Expiring warranties — (130 ) Claims satisfied — (131 ) Sale of consumer segment (241 ) — Total $ — $ 148 |
Schedule of basic and diluted earnings per common share using weighted-average shares outstanding | Basic and diluted net loss per common share were calculated using the following weighted-average shares outstanding: For the Three Months Ended September 30, For the Nine Months Ended 2017 2016 2017 2016 Weighted-average number of common and common equivalent shares outstanding: Basic and Diluted number of common shares outstanding 8,299,528 4,157,917 6,296,604 4,173,146 Diluted number of common and common stock equivalent shares outstanding 8,299,528 4,157,917 6,296,604 4,173,146 |
Acquisition of Real Estate As23
Acquisition of Real Estate Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Acquisition Of Real Estate Assets | |
Schedule of purchase price of the real estate assets, paid in stock | The consideration of the asset acquisition as of May 17, 2017 consists of the following: Fair value of FC Global common stock $ 1,275 Fair value of FC Global 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 assumed 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 | The allocation of total consideration: Investment properties 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 September 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 1.15 Probability (%) 50 50 Expected term of options (years) 0.62 0.25 Warrants Value: May 17, 2017 September 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 1.15 Probability (%) 50 50 Expected term of options (years) 5 4.63 Asset related to future mandatory asset contribution: May 17, 2017 September 30, 2017 Dividend yield (%) 0 0 Stock price (US dollars) 1.45 1.15 Probability (%) 70 70 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | September 30, 2017 December 31, 2016 (unaudited) Raw materials and work in progress $ — $ 1,968 Finished goods — 5,368 Total Inventories — $ 7,336 Less assets held for sale (see Note 1) — (7,336 ) Total inventories $ — $ — |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, 2017 December 31, 2016 (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) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of patents and licensed technologies | September 30, 2017 December 31, 2016 (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) | 9 Months Ended |
Sep. 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) | 9 Months Ended |
Sep. 30, 2017 | |
Compensation Related Costs [Abstract] | |
Schedule of accrued compensation and related expenses | September 30, 2017 December 31, 2016 (unaudited) Accrued payroll and related taxes $ 41 $ 262 Accrued vacation 20 66 Accrued commissions and bonuses 1,430 3,701 Total accrued compensation and related expense $ 1,491 $ 4,029 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other accrued liabilities | September 30, 2017 December 31, 2016 (unaudited) Accrued warranty, current, see Note 1 $ — $ 93 Accrued taxes, net 1,662 1,606 Accrued sales returns (1) — 1,975 Other accrued liabilities 3,123 4,417 Total other accrued liabilities $ 4,785 $ 8,091 |
Schedule of sales returns liability account | The activity in the accrued sales returns liability account was as follows: Nine Months Ended September 30, 2017 2016 (unaudited) (unaudited) Balance at beginning of year $ 1,975 $ 4,179 Additions that reduce net sales — 7,124 Deductions from reserves (1,975 ) (9,615 ) Balance at end of period $ — $ 1,688 |
Employee Stock Benefit Plans (T
Employee Stock Benefit Plans (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2017 was as follows: Number of Weighted Outstanding, January 1, 2017 134,150 $ 85.22 Granted — — Exercised — — Cancelled (42,085 ) 71.50 Outstanding, September 30, 2017 92,065 $ 91.43 Options exercisable at September 30, 2017 88,185 $ 91.22 |
Business Segments and Geograp31
Business Segments and Geographic Data (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of results of operations from business segments | 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 September 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 594 594 Unallocated operating expenses — — — 2,888 594 — — 3,482 Loss from continuing operations (594 ) — — (3.482 ) Revaluation of asset contribution related financial instruments, net — — — 326 Interest and other financing income, net — — — 20 Loss from continuing operations before income taxes ($ 594 ) $ — $ — ($ 3,136 ) Three Months Ended September 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 6,142 $ 840 $ 276 $ 7,258 Costs of revenues 909 461 117 1,487 Gross profit 5,233 379 159 5,771 Gross profit % 85.2 % 45.1 % 57.6 % 79.5 % Allocated operating expenses: Engineering and product development 243 83 — 326 Selling and marketing expenses 3,921 591 17 4,529 Impairment 3,518 3,518 Loss on sale of assets 1,731 1,731 Unallocated operating expenses — — — 2,894 7,682 2,405 17 12,998 Income (loss) from continuing operations (2,449 ) (2,026 ) 142 (7,227 ) Interest and other financing income, net — — — 88 Income (loss) from continuing operations before income taxes ($ 2,449 ) ($ 2,026 ) $ 142 ($ 7,139 ) Nine Months Ended September 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 4,816 29 — 4,845 Unallocated operating expenses — — — 4,428 5,579 29 — 10,036 Loss from continuing operations (2,140 ) (29 ) — (6,597 ) Revaluation of asset contribution related financial instruments, net 2,948 Interest and other financing expense, net — — — (103 ) Loss from continuing operations before income taxes ($ 2,140 ) ($ 29 ) $ — ($ 3,752 ) Nine Months Ended September 30, 2016 (unaudited) CONSUMER PHYSICIAN RECURRING PROFESSIONAL TOTAL Revenues $ 25,724 $ 3,302 $ 708 $ 29,734 Costs of revenues 5,412 1,853 330 7,595 Gross profit 20,312 1,449 378 22,139 Gross profit % 79.0 % 43.9 % 53.4 % 74.5 % Allocated operating expenses: Engineering and product development 779 204 — 983 Selling and marketing expenses 16,677 2,045 35 18,757 Impairment 3,518 3,518 Loss on sale of assets 1,731 843 2,574 Unallocated operating expenses — — — 9,791 20,974 3,980 878 35,623 Loss from continuing operations (662 ) (2,531 ) (500 ) (13,484 ) Interest and other financing expense, net — — — (537 ) Loss from continuing operations before income taxes ($ 662 ) ($ 2,531 ) ($ 500 ) ($ 14,021 ) |
Schedule of net revenues by geographic area | For the three and nine months ended September 30, 2017 and 2016 (unaudited), net revenues by geographic area were as follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 North America 1 $ — $ 4,257 $ 2,475 $ 18,376 Asia Pacific 2 — 744 — 2,180 Europe (including Israel) — 2,246 1,064 9,147 South America — 11 — 31 $ — $ 7,258 $ 3,539 $ 29,734 1 United States $ 3,528 $ 2,475 $ 15,405 1 Canada $ 277 $ — $ 1,506 |
Schedule of long-lived assets by geographic area | As of September 30, 2017 and December 31, 2016, long-lived assets by geographic area were as follows: September 30, 2017 December 31, 2016 (unaudited) North America $ — $ 71 Asia Pacific — 6 Europe (including Israel) — — $ — $ 77 |
The Company (Details)
The Company (Details) - USD ($) $ in Thousands | Sep. 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 | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||
Accrual at beginning of year | $ 241 | $ 331 |
Additions charged to warranty expense | 78 | |
Expiring warranties | (130) | |
Claims satisfied | (131) | |
Sale of consumer segment | (241) | |
Total | $ 148 |
The Company (Details 2)
The Company (Details 2) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted-average number of common and common equivalent shares outstanding: | ||||
Basic and Diluted number of common shares outstanding | 8,299,528 | 4,157,917 | 6,296,604 | 4,173,146 |
Diluted number of common and common stock equivalent shares outstanding | 8,299,528 | 4,157,917 | 6,296,604 | 4,173,146 |
The Company (Details Narrative)
The Company (Details Narrative) - USD ($) | Jul. 03, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Oct. 19, 2017 | Oct. 12, 2017 | 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 | 64,939,538 | 209,398 | 32,469,769 | 209,398 | ||||
Subsequent Event [Member] | ||||||||
Preferred stock, authorized | 5,000,000 | |||||||
Common stock, authorized | 50,000,000 | |||||||
Revised preferred stock, authorized | 50,000,000 | |||||||
Revised common stock, authorized | 500,000,000 | |||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
10% Payout Notes Due on October 12, 2018 [Member] | ||||||||
Terms of conversion | The principal will convert to shares of the Company’s common stock at maturity at the lower of (i) $2.5183 or (ii) the volume-weighted average price (“VWAP”) with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) 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. In addition, each holder of a Payout Note may elect to have a Monthly Interest Payment paid in shares of common stock, at the VWAP with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) during the thirty (30) trading days ending five (5) trading days prior to the applicable Interest Payment Date, as reported by Bloomberg L.P. | |||||||
Dolev Rafaeli [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||||
Accrued amount of notes issued | $ 1,262,000 | $ 1,262,000 | ||||||
Dolev Rafaeli [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | Subsequent Event [Member] | ||||||||
Principal amount | $ 3,133,934 | |||||||
Dennis M. McGrath [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||||
Accrued amount of notes issued | 168,000 | 168,000 | ||||||
Dennis M. McGrath [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | Subsequent Event [Member] | ||||||||
Principal amount | 977,666 | |||||||
Yoav Ben-Dror [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||||
Accrued amount of notes issued | 1,292,000 | $ 1,292,000 | ||||||
Yoav Ben-Dror [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | Subsequent Event [Member] | ||||||||
Principal amount | $ 1,515,000 | |||||||
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 was 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 | 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 had 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 would receive shares of stock in the Company, such amount to be calculated as set forth in the Second Waiver and Agreement. The sale of the Amarillo Hotel was not completed and closed by August 31, 2017, therefor the waiver of the requirement for the contribution of the interest in the Amarillo Hotel lapsed. On September 22, 2017, the Company and Acquiror entered into a Second Agreement to Waive Closing Deliverables (the “Second Agreement”) with the Contributor Parties, amending the Contribution Agreement. Pursuant to the terms of the Second Agreement, the Company and the Acquiror agreed to extend the date for the closing of the sale of the Amarillo Hotel until October 18, 2017, with the contribution of the funds from the sale to be made not later than October 23, 2017. In exchange the Contributor Parties shall receive shares of stock in the Company, such amount to be calculated as set forth in the Contribution Agreement, as amended by the Agreement to Waive Closing Deliverables and the Second Agreement. If the sale of the Amarillo Hotel is not completed and closed by October 18, 2017, the waiver of the requirement for the contribution of the interest in the Amarillo Hotel will lapse. | 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] | 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 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Description of reverse stock split | one for five | ||||||||
Accumulated deficit | $ (119,501) | $ (119,501) | $ (115,635) | ||||||
Cash and cash equivalents | 1,256 | 1,256 | |||||||
Restricted cash | 250 | 250 | 342 | ||||||
Loss from sale of asset | (4,845) | $ (2,787) | |||||||
Current asset | 7,984 | 7,984 | 18,417 | ||||||
Net loss | (3,156) | $ (7,417) | (3,866) | $ (14,527) | |||||
Foreign subsidiary translation adjustment | 3,228 | ||||||||
Neova Asset Purchase Agreement [Member] | |||||||||
Loss from sale of asset | 2,000 | $ (1,731) | |||||||
Proceeds from acquisitions and dispositions | $ 1,500 | ||||||||
Royalty receivable | 4,500 | $ 4,500 | |||||||
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 Narrativ37
The Company (Details Narrative 2) - USD ($) $ / shares in Units, $ in Thousands | Jul. 13, 2017 | Jul. 12, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Nov. 18, 2016 | Dec. 31, 2015 |
Goodwill | $ 0 | $ 3,581 | |||||||
Liability for Optional asset acquisition | $ 1,013 | $ 1,013 | |||||||
Gain loss on derivative instruments | 0 | 0 | |||||||
Cumulative translation adjustment into comprehensive loss | $ (207) | $ (3,228) | |||||||
Options and warrants [Member] | |||||||||
Diluted loss per share | 64,939,538 | 209,398 | 32,469,769 | 209,398 | |||||
Series A Preferred Stock [Member] | |||||||||
Share price | $ 3 | $ 3 | |||||||
Minimum net capital required | $ 2,500 | ||||||||
ICTV Brands, Inc & ICTV Holdings, Inc [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 | $ 7,648 | $ 7,648 | |||||||
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 | $ 1,013 | $ 1,013 | |||||||
Neova Asset Purchase Agreement [Member] | Sigmatron International, Inc [Member] | Consumer Products [Member] | |||||||||
Proceeds from agreements | $ 2 | ||||||||
Bill of Sale And Assignment [Member] | Sigmatron International, Inc [Member] | |||||||||
Deposits | $ 210 |
Acquisition of Real Estate As38
Acquisition of Real Estate Assets (Details) $ in Thousands | May 17, 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 assumed note payable on acquired asset | 470 | |
Transaction costs | 283 | |
Total consideration | 5,118 | |
Common Stock [Member] | ||
Fair value of FC Global | 1,275 | |
Series A Preferred Stock [Member] | ||
Fair value of FC Global | $ 4,483 | |
[1] | See Note 1 "Second Contribution" | |
[2] | See Note 1 "Optional Contribution" |
Acquisition of Real Estate As39
Acquisition of Real Estate Assets (Details 1) - USD ($) $ in Thousands | Sep. 30, 2017 | May 17, 2017 | Dec. 31, 2016 |
Acquisition Of Real Estate Assets | |||
Investment properties | $ 2,450 | $ 2,450 | |
Investment in other company | $ 2,668 | 2,668 | |
Total assets acquired at fair value | $ 5,118 |
Acquisition of Real Estate As40
Acquisition of Real Estate Assets (Details 2) - $ / shares | May 17, 2017 | Sep. 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 |
Stock price (US dollars) | $ 1.45 | $ 1.15 |
Probability (%) | 50.00% | 50.00% |
Expected term of options (years) | 7 months 13 days | 3 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 |
Stock price (US dollars) | $ 1.45 | $ 1.15 |
Probability (%) | 50.00% | 50.00% |
Expected term of options (years) | 5 years | 4 years 7 months 17 days |
Asset Contribution [Member] | ||
Dividend yield (%) | 0.00% | 0.00% |
Stock price (US dollars) | $ 1.45 | $ 1.15 |
Probability (%) | 70.00% | 70.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 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 (see Note 1) | (7,336) | |
Total inventories |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Sep. 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 (43
Property and Equipment, net (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 177 | $ 218 |
Patents and Licensed Technolo44
Patents and Licensed Technologies, net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 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 Technolo45
Patents and Licensed Technologies, net (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Patents And Licensed Technologies [Member] | ||
Amortization expense | $ 0 | $ 230 |
Goodwill and Other Intangible46
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 Intangible47
Goodwill and Other Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | $ 0 | $ 3,581 | ||||
Impairment of goodwill and intangible assets | $ 3,518 | $ 3,518 | ||||
Impairment of goodwill | 2,257 | |||||
Impairment of intangibles for licensed technology | $ 1,261 | |||||
CONSUMER [Member] | ||||||
Impairment of goodwill and intangible assets | $ 3,518 | $ 3,518 | ||||
PHYSICIAN RECURRING [Member] | ||||||
Goodwill | 1,039 | 1,039 | ||||
Other Intangible Assets [Member] | ||||||
Goodwill | 24,005 | 24,005 | ||||
Definite-lived intangibles | $ 12,000 | $ 12,000 |
Accrued Compensation and rela48
Accrued Compensation and related expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Compensation Related Costs [Abstract] | ||
Accrued payroll and related taxes | $ 41 | $ 262 |
Accrued vacation | 20 | 66 |
Accrued commissions and bonuses | 1,430 | 3,701 |
Total accrued compensation and related expense | $ 1,491 | $ 4,029 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | ||
Other Liabilities Disclosure [Abstract] | ||||||
Accrued warranty, current, see Note 1 | $ 93 | |||||
Accrued taxes, net | 1,662 | 1,606 | ||||
Accrued sales returns | [1] | 1,975 | [1] | $ 1,688 | $ 4,179 | |
Other accrued liabilities | 3,123 | 4,417 | ||||
Total other accrued liabilities | $ 4,785 | $ 8,091 | ||||
[1] | The activity in the accrued sales returns liability account was as follows: |
Other Accrued Liabilities (De50
Other Accrued Liabilities (Details 1) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 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 | 7,124 | ||
Deductions from reserves | (1,975) | (9,615) | |
Balance at end of period | [1] | $ 1,688 | |
[1] | The activity in the accrued sales returns liability account was as follows: |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended |
Sep. 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 | Sep. 30, 2017 |
Loss Contingencies [Line Items] | |||
Name of plantiff | Radiancy, Inc., a wholly-owned subsidiary of PhotoMedex | ||
Name of defendent | Linda Andrew v. Radiancy, Inc.; the Company (under the name 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. | ||
Settlement agreement name | The Company and its subsidiaries, Radiancy, Inc. (“Radiancy”) and PhotoMedex Technology, Inc. (“P-Tech”), entered into a Confidential Settlement and Mutual Release Agreement (the “DS Settlement Agreement”) with DS Healthcare Group, Inc. (“DSKX”) and its subsidiaries, PHMD Consumer Acquisition Corp. and PHMD Professional Acquisition Corp. | Radiancy, Inc. (“Radiancy”), a subsidiary of the Company entered into a Settlement Agreement and Release (the “Mouzon Settlement Agreement”) with regard to Mouzon, et al. v. Radiancy, Inc., a civil | |
Settlement agreement court | United States District Court for the District of Columbia. | ||
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) | 9 Months Ended |
Sep. 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 54
Employee Stock Benefit Plans (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 26, 2015 | Sep. 30, 2017 | Sep. 30, 2016 |
Value of shares issued | $ 1,275 | ||
Unrecognized compensation cost | $ 69 | ||
Unrecognized compensation cost expected to recognized period | 4 months 28 days | ||
Number of shares cancelled | 251,250 | ||
Consultant [Member] | |||
Share-based compensation | $ 1,060 | $ 1,478 | |
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 | 71,865 | ||
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 | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | $ 7,258 | $ 3,539 | $ 29,734 | |
Costs of revenues | 1,487 | 100 | 7,595 | |
Gross profit | $ 5,771 | $ 3,439 | $ 22,139 | |
Gross profit % | 79.50% | 97.10% | 74.50% | |
Allocated operating expenses: | ||||
Engineering and product development | $ 326 | $ 143 | $ 983 | |
Selling and marketing expenses | 4,529 | 620 | 18,757 | |
Impairment | 3,518 | 3,518 | ||
Loss on sale of assets | 594 | 1,731 | 4,845 | 2,574 |
Unallocated operating expense | 2,888 | 2,894 | 4,428 | 9,791 |
Total | 3,482 | 12,998 | 10,036 | 35,623 |
Income (loss) from continuing operations | (3,482) | (7,227) | (6,597) | (13,484) |
Revaluation of asset contribution related financial instruments, net | 326 | 2,948 | ||
Interest and other financing income (expense), net | 20 | 88 | (103) | (537) |
Income (loss) from continuing operations before income taxes | (3,136) | (7,139) | (3,752) | (14,021) |
CONSUMER [Member] | ||||
Revenues | 6,142 | 3,539 | 25,724 | |
Costs of revenues | 909 | 100 | 5,412 | |
Gross profit | $ 5,233 | $ 3,439 | $ 20,312 | |
Gross profit % | 85.20% | 97.10% | 79.00% | |
Allocated operating expenses: | ||||
Engineering and product development | $ 243 | $ 143 | $ 779 | |
Selling and marketing expenses | 3,921 | 620 | 16,677 | |
Impairment | 3,518 | 3,518 | ||
Loss on sale of assets | 594 | 4,816 | ||
Unallocated operating expense | ||||
Total | 594 | 7,682 | 5,579 | 20,974 |
Income (loss) from continuing operations | (594) | (2,449) | (2,140) | (662) |
Revaluation of asset contribution related financial instruments, net | ||||
Interest and other financing income (expense), net | ||||
Income (loss) from continuing operations before income taxes | (594) | (2,449) | (2,140) | (662) |
PHYSICIAN RECURRING [Member] | ||||
Revenues | 840 | 3,302 | ||
Costs of revenues | 461 | 1,853 | ||
Gross profit | $ 379 | $ 1,449 | ||
Gross profit % | 45.10% | 43.90% | ||
Allocated operating expenses: | ||||
Engineering and product development | $ 83 | $ 204 | ||
Selling and marketing expenses | 591 | 2,045 | ||
Loss on sale of assets | 1,731 | 29 | 1,731 | |
Unallocated operating expense | ||||
Total | 2,405 | 29 | 3,980 | |
Income (loss) from continuing operations | (2,026) | (29) | (2,531) | |
Revaluation of asset contribution related financial instruments, net | ||||
Interest and other financing income (expense), net | ||||
Income (loss) from continuing operations before income taxes | (2,026) | (29) | (2,531) | |
PROFESSIONAL [Member] | ||||
Revenues | 276 | 708 | ||
Costs of revenues | 117 | 330 | ||
Gross profit | $ 159 | $ 378 | ||
Gross profit % | 57.60% | 53.40% | ||
Allocated operating expenses: | ||||
Engineering and product development | ||||
Selling and marketing expenses | 17 | 35 | ||
Loss on sale of assets | 843 | |||
Unallocated operating expense | ||||
Total | 17 | 878 | ||
Income (loss) from continuing operations | 142 | (500) | ||
Revaluation of asset contribution related financial instruments, net | ||||
Interest and other financing income (expense), net | ||||
Income (loss) from continuing operations before income taxes | $ 142 | $ (500) |
Business Segment and Geograph56
Business Segment and Geographic Data (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net revenues | $ 7,258 | $ 3,539 | $ 29,734 | |
North America [Member] | ||||
Net revenues | 4,257 | 2,475 | 18,376 | |
Asia Pacific [Member] | ||||
Net revenues | 744 | 2,180 | ||
Europe (including Israel) [Member] | ||||
Net revenues | 2,246 | 1,064 | 9,147 | |
South America [Member] | ||||
Net revenues | 11 | 31 | ||
United States [Member] | ||||
Net revenues | 3,528 | 2,475 | 15,405 | |
Canada [Member] | ||||
Net revenues | $ 277 | $ 1,506 |
Business Segment and Geograph57
Business Segment and Geographic Data (Details 2) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Long-lived assets | $ 77 | |
North America [Member] | ||
Long-lived assets | 71 | |
Asia Pacific [Member] | ||
Long-lived assets | 6 | |
Europe (including Israel) [Member] | ||
Long-lived assets |
Business Segment and Geograph58
Business Segment and Geographic Data (Details Narrative) | 9 Months Ended |
Sep. 30, 2017Number | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 11, 2017 | Jul. 28, 2017 | Sep. 30, 2017 | Oct. 19, 2017 | Oct. 12, 2017 | Dec. 31, 2016 |
Preferred stock, authorized | 5,000,000 | 5,000,000 | ||||
Common stock, authorized | 50,000,000 | 50,000,000 | ||||
Revised preferred stock, authorized | 50,000,000 | |||||
Revised common stock, authorized | 500,000,000 | |||||
10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Terms of conversion | The principal will convert to shares of the Company’s common stock at maturity at the lower of (i) $2.5183 or (ii) the volume-weighted average price (“VWAP”) with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) 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. In addition, each holder of a Payout Note may elect to have a Monthly Interest Payment paid in shares of common stock, at the VWAP with respect to on-exchange transactions in the Company’s common stock executed on the Nasdaq Stock Market (or such other market as the Company’s stock may then trade on) during the thirty (30) trading days ending five (5) trading days prior to the applicable Interest Payment Date, as reported by Bloomberg L.P. | |||||
Subsequent Event [Member] | ||||||
Preferred stock, authorized | 5,000,000 | |||||
Common stock, authorized | 50,000,000 | |||||
Revised preferred stock, authorized | 50,000,000 | |||||
Revised common stock, authorized | 500,000,000 | |||||
Dolev Rafaeli [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Accrued amount of notes issued | $ 1,262,000 | |||||
Dolev Rafaeli [Member] | Subsequent Event [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Principal amount | $ 3,133,934 | |||||
Dennis M. McGrath [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Accrued amount of notes issued | 168,000 | |||||
Dennis M. McGrath [Member] | Subsequent Event [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Principal amount | 977,666 | |||||
Yoav Ben-Dror [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Accrued amount of notes issued | $ 1,292,000 | |||||
Yoav Ben-Dror [Member] | Subsequent Event [Member] | 10% Payout Notes Due on October 12, 2018 [Member] | ||||||
Principal amount | $ 1,515,000 | |||||
Johnson Employment Agreement [Member] | Mr. Johnson [Member] | ||||||
Annual base salary | $ 300,000 | |||||
Restated Employment Agreement [Member] | Mr. Suneet Singal [Member] | Subsequent Event [Member] | ||||||
Annual base salary | $ 250,000 | |||||
Term of agreement | 3 years |