DEI Document
DEI Document - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 31, 2016 | |
DEI [Abstract] | ||
Entity Registrant Name | HOOPER HOLMES INC | |
Entity Central Index Key | 741,815 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 8,714,636 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 102 | $ 2,035 |
Accounts receivable, net of allowance for doubtful accounts of $169 and $112 at June 30, 2016 and December 31, 2015, respectively | 5,376 | 5,565 |
Inventories | 981 | 567 |
Other current assets | 319 | 331 |
Total current assets | 6,778 | 8,498 |
Property, plant and equipment | 8,549 | 8,427 |
Less: Accumulated depreciation and amortization | 6,415 | 5,656 |
Property, plant and equipment, net | 2,134 | 2,771 |
Intangible assets, net | 4,681 | 5,331 |
Goodwill | 633 | 633 |
Other assets | 402 | 450 |
Total assets | 14,628 | 17,683 |
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||
Accounts payable | 4,734 | 5,339 |
Accrued expenses | 4,685 | 5,186 |
Short-term debt | 5,142 | 5,330 |
Total current liabilities | 14,561 | 15,855 |
Other long-term liabilities | 544 | 1,611 |
Commitments and contingencies | ||
Stockholders' (deficit) equity: | ||
Common stock, par value $.04 per share; Authorized: 240,000,000 shares; Issued: 8,714,636 shares at June 30, 2016, and 5,201,733 shares at December 31, 2015; Outstanding: 8,714,636 shares at June 30, 2016, and 5,201,107 shares at December 31, 2015 | 349 | 3,121 |
Additional paid-in capital | 164,089 | 156,195 |
Accumulated deficit | (164,915) | (159,028) |
Stockholders' (deficit) equity | (477) | 288 |
Less: Treasury stock, at cost; 0 and 626 shares at June 30, 2016, and December 31, 2015 | 0 | (71) |
Total stockholders' (deficit) equity | (477) | 217 |
Total liabilities and stockholders' (deficit) equity | $ 14,628 | $ 17,683 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 169 | $ 112 |
Common stock, par value (in dollars per share) | $ 0.04 | $ 0.04 |
Common stock, shares authorized (in shares) | 240,000,000 | 240,000,000 |
Common stock, shares issued (in shares) | 8,714,636 | 5,201,733 |
Common stock, shares outstanding (in shares) | 8,714,636 | 5,201,107 |
Treasury stock (in shares) | 0 | 626 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 7,643 | $ 7,662 | $ 14,884 | $ 13,343 |
Cost of operations | 5,878 | 5,969 | 11,659 | 10,918 |
Gross profit | 1,765 | 1,693 | 3,225 | 2,425 |
Selling, general and administrative expenses | 3,724 | 3,811 | 7,551 | 6,471 |
Transaction costs | 221 | 593 | 329 | 679 |
Operating loss from continuing operations | (2,180) | (2,711) | (4,655) | (4,725) |
Interest expense, net | 1,011 | 626 | 1,800 | 709 |
Other income | (887) | 0 | (887) | 0 |
Loss from continuing operations before taxes | (2,304) | (3,337) | (5,568) | (5,434) |
Income tax expense | 5 | 5 | 10 | 10 |
Loss from continuing operations | (2,309) | (3,342) | (5,578) | (5,444) |
Discontinued operations: | ||||
Loss from discontinued operations | (150) | (21) | (309) | (25) |
Net loss | $ (2,459) | $ (3,363) | $ (5,887) | $ (5,469) |
Continuing operations | ||||
Basic (in dollars per share) | $ (0.27) | $ (0.65) | $ (0.67) | $ (1.10) |
Diluted (in dollars per share) | (0.27) | (0.65) | (0.67) | (1.10) |
Discontinued operations | ||||
Basic (in dollars per share) | (0.02) | 0 | (0.04) | (0.01) |
Diluted (in dollars per share) | (0.02) | 0 | (0.04) | (0.01) |
Net loss | ||||
Basic (in dollars per share) | (0.29) | (0.65) | (0.71) | (1.11) |
Diluted (in dollars per share) | $ (0.29) | $ (0.65) | $ (0.71) | $ (1.11) |
Weighted average number of shares - Basic (in shares) | 8,602,590 | 5,162,786 | 8,329,568 | 4,944,824 |
Weighted average number of shares - Diluted (in shares) | 8,602,590 | 5,162,786 | 8,329,568 | 4,944,824 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' (Deficit) Equity (unaudited) - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock |
Balance (in shares) at Dec. 31, 2015 | 5,201,733 | 626 | |||
Balance at Dec. 31, 2015 | $ 217 | $ 3,121 | $ 156,195 | $ (159,028) | $ (71) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (5,887) | ||||
Issuance of common stock, net of issuance costs (in shares) | 3,346,378 | ||||
Issuance of common stock, net of issuance costs | 4,723 | $ 2,008 | 2,715 | ||
Share-based compensation (in shares) | 166,665 | ||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 470 | $ 100 | 370 | ||
Reverse stock split re-allocation | 0 | $ (4,880) | 4,880 | ||
Other adjustments due to reverse stock split (in shares) | 486 | ||||
Retirement of treasury stock (in shares) | (626) | (626) | |||
Retirement of treasury stock | 0 | (71) | $ 71 | ||
Balance (in shares) at Jun. 30, 2016 | 8,714,636 | 0 | |||
Balance at Jun. 30, 2016 | $ (477) | $ 349 | $ 164,089 | $ (164,915) | $ 0 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (5,887) | $ (5,469) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,409 | 873 |
Amortization of debt discount | 807 | 244 |
Amortization of debt issuance costs | 123 | 280 |
Write-off of debt issuance costs | 282 | 0 |
Accretion of termination fees | 91 | 0 |
Mark to market of the Additional Warrant | 59 | 0 |
Termination fees included in payoff of 2013 Loan and Security Agreement | 277 | 0 |
Provision for bad debt expense | 117 | 26 |
Share-based compensation expense | 470 | 193 |
Issuance of common stock in connection with First Amendment to Credit Agreement | 50 | 0 |
Write-off of Additional Warrant | (887) | 0 |
Change in assets and liabilities: | ||
Accounts receivable | 72 | (1,667) |
Inventories | (414) | 247 |
Other assets | (52) | (340) |
Accounts payable, accrued expenses and other liabilities | (1,365) | 514 |
Net cash used in operating activities | (4,848) | (5,099) |
Cash flows from investing activities: | ||
Capital expenditures | (191) | (355) |
Acquisition of Accountable Health Solutions | 0 | (4,000) |
Net cash used in investing activities | (191) | (4,355) |
Cash flows from financing activities: | ||
Borrowings under credit facility | 16,566 | 1,000 |
Payments under credit facility | (17,044) | (151) |
Principal payments on term loan | (954) | 0 |
Proceeds from issuance of Term Loan | 0 | 5,000 |
Issuance of common stock, net of issuance costs | 4,574 | 0 |
Proceeds related to the exercise of stock options | 0 | 23 |
Debt issuance costs | (36) | (377) |
Net cash provided by financing activities | 3,106 | 5,495 |
Net decrease in cash and cash equivalents | (1,933) | (3,959) |
Cash and cash equivalents at beginning of period | 2,035 | 5,201 |
Cash and cash equivalents at end of period | 102 | 1,242 |
Supplemental disclosure of non-cash investing activities: | ||
Fixed assets vouchered but not paid | 28 | 76 |
Supplemental disclosure of non-cash financing activities: | ||
Issuance of common stock in connection with the Acquisition | 0 | 3,000 |
Issuance of common stock in connection with Second Amendment to Credit Agreement | 100 | 0 |
Debt issuance costs vouchered but not paid | 0 | 500 |
Payoff of 2013 Loan and Security Agreement by SCM | (2,552) | 0 |
Opening outstanding borrowings under 2016 Credit and Security Agreement | 3,028 | 0 |
Debt issuance costs incurred for 2016 Credit and Security Agreement | 236 | 0 |
Supplemental disclosure of cash paid during period for: | ||
Income taxes | 31 | 0 |
Interest | $ 466 | $ 0 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Hooper Holmes, Inc. and its subsidiaries (“Hooper Holmes” or the "Company”) provides on-site screenings, laboratory testing, risk assessment, and sample collection services to individuals as part of comprehensive health and wellness programs offered through corporate and government employers. The acquisition of Accountable Health Services, Inc. ("AHS") ("the Acquisition"), which is discussed further in Note 3 to the condensed consolidated financial statements, allows Hooper Holmes to also deliver telephonic health coaching, a wellness portal, data analytics, and reporting services. Hooper Holmes is engaged by the organizations sponsoring such programs, including health and care management companies, broker and wellness companies, disease management organizations, reward administrators, third party administrators, clinical research organizations, and health plans. Hooper Holmes provides these services through a national network of health professionals. The Company's screening business is subject to some seasonality, with the second quarter sales typically dropping below other quarters and the third and fourth quarter sales typically the strongest quarters due to increased demand for screenings from mid-August through November related to annual benefit renewal cycles. The Company's wellness services business is more constant, though there are some variations due to the timing of the health coaching programs, which are billed per participant and typically start soon after the conclusion of onsite screening events. In addition to its Screening and Health and Wellness Service operations, the Company generates ancillary revenue through the assembly of medical kits for sale to third parties. The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's 2015 Annual Report on Form 10-K, filed with the SEC on March 30, 2016. Financial statements prepared in accordance with U.S. GAAP require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and other disclosures. The financial information included herein is unaudited; however, such information reflects all adjustments that are, in the opinion of the Company's management, necessary for a fair statement of results for the interim periods presented. The results of operations for the three and six month periods ended June 30, 2016 and 2015 , are not necessarily indicative of the results to be expected for any other interim period or the full year. See “Management's Discussion and Analysis of Financial Condition and Results of Operations” for additional information. On September 30, 2013, the Company completed the sale of certain assets comprising its Portamedic service line. During 2014, the Company sold certain assets comprising the Heritage Labs and Hooper Holmes Services businesses. The operating results of these businesses have been segregated and reported as discontinued operations for all periods presented in this Quarterly Report on Form 10-Q. On June 15, 2016, the Company completed a one-for-fifteen reverse stock split. As a result, the share and per share information for all periods presented in these unaudited condensed consolidated financial statements have been adjusted to reflect the impact of the reverse stock split. The reverse stock split did not affect the total number of authorized shares of common stock of 240,000,000 shares or the par value of the Company’s common stock at $0.04 . Accordingly, an adjustment was made between additional paid-in-capital and common stock in the condensed consolidated balance sheet to reflect the new values after the reverse stock split. During the second quarter of 2016, it was determined that costs that had been expensed in the first quarter of 2016 related to the modification of the Credit Agreement (as defined in Note 9 to the condensed consolidated financial statements) and the equity issuances. Costs associated with the modification of the Credit Agreement should have been capitalized and amortized to interest expense over the remaining life of the Credit Agreement, while costs associated with the equity issuances should have been recorded as a reduction to equity. The Company recorded these correcting entries during the second quarter of 2016. The net impact of the correcting adjustments decreased reported pretax loss in the second quarter of 2016 by approximately $0.2 million . Management does not believe the impact of these out of period adjustments materially impacts the fair presentation of the Company’s operating results or financial condition for the periods impacted. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)", which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. This new guidance is effective for the Company in the first quarter of 2018, with early adoption permitted as of the original effective date or first quarter of 2017. The Company is currently evaluating the impact the adoption of ASU 2014-09 will have on the consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". This ASU requires management to assess and evaluate whether conditions or events exist, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the financial statements issue date. This standard will be effective for annual periods beginning after December 15, 2016, and for annual and interim periods thereafter; early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2014-15 will have on the disclosures in Note 2 of the condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs", which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. The Company adopted the provisions of ASU 2015-03 in the first quarter of 2016. The retrospective application of the new standard resulted in a $0.2 million reduction to both noncurrent assets and current liabilities as of December 31, 2015. The debt issuance costs associated with the revolving credit facilities remain classified in noncurrent assets in accordance with ASU 2015-15. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which is intended to improve financial reporting about leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial position, results of operations or cash flows. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting (Topic 718)", which is intended to simplify the accounting for share-based compensation. This standard simplifies the accounting for income taxes in relation to share-based compensation, modifies the accounting for forfeitures, and modifies the statutory tax withholding requirements. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2016-09 will have on its consolidated financial position, results of operations or cash flows. |
Liquidity
Liquidity | 6 Months Ended |
Jun. 30, 2016 | |
Liquidity [Abstract] | |
Liquidity | Liquidity The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The uncertainty regarding the Company's ability to generate sufficient cash flows and liquidity to fund operations raises substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company has taken the following actions toward alleviating the substantial doubt that exists with regard to the Company's ability to continue as a going concern: • On January 25, 2016, the Company received $3.4 million , net of issuance costs, in additional equity by issuing 2,601,789 shares of its common stock, $0.04 par value, through a rights offering to current shareholders which is being used to fund working capital; • On March 28, 2016, the Company received $1.2 million , net of issuance costs, in additional equity by issuing 666,667 shares of its common stock, $0.04 par value, to 200 NNH, LLC, which is being used to fund working capital; • On March 28, 2016, the Company renegotiated its financial covenants in the Credit Agreement (as defined below) to requirements based on its forecast models; and • On April 29, 2016, the Company entered into a new Credit and Security Agreement with SCM Specialty Finance Opportunities Fund, L.P. (as defined below) replacing the 2013 Loan and Security Agreement (as defined below). Refer to Note 9 to the condensed consolidated financial statements for additional discussion. The Company expects to continue to monitor its liquidity carefully, work to reduce this uncertainty, and address its cash needs through a combination of one or more of the following actions: • The Company will continue to aggressively seek new and return business from its existing customers and expand its presence in the Health and Wellness marketplace; • The Company will continue to implement further cost actions and efficiency improvements; • The Company expects to continue to carefully manage receipts and disbursements, including amounts and timing, focusing on reducing days receivables outstanding and managing days payables outstanding. The Company's primary sources of liquidity are cash and cash equivalents as well as availability under a Credit and Security Agreement (the "2016 Credit and Security Agreement") with SCM Specialty Finance Opportunities Fund, L.P. ("SCM"). At June 30, 2016 , the Company had $0.1 million in cash and cash equivalents and had $3.3 million outstanding under the 2016 Credit and Security Agreement, with available borrowing capacity of $0.3 million . As of August 9, 2016 , the Company had $2.4 million outstanding with estimated available borrowing capacity of $0.8 million . As of June 30, 2016 , the Company also owed approximately $4.0 million under an existing term loan ("the Term Loan"), which is governed by the terms of a credit agreement ("the Credit Agreement") with SWK Funding LLC ("SWK") and was used to fund the cash component of the Acquisition. Each of these agreements contain certain financial covenants, including various affirmative and negative covenants including minimum aggregate revenue, EBITDA, and consolidated unencumbered liquid assets requirements, which the Company did not comply with as of June 30, 2016 . For additional information regarding the 2016 Credit and Security Agreement, Credit Agreement, and the related covenants, see Note 9 to the condensed consolidated financial statements. The Company incurred a loss from continuing operations of $5.6 million during the six month period ended June 30, 2016 . The Company’s net cash used in operating activities for the six month period ended June 30, 2016 , was $4.8 million . The Company has managed its liquidity through availability under a revolving credit facility, raising additional equity, and a series of cost reduction initiatives. The Company has historically used availability under a revolving credit facility to fund operations. The Company experiences a timing difference between the operating expenses and cash collection of the associated revenue based on Health and Wellness customer payment terms. To conduct successful screenings, the Company must expend cash to deliver the equipment and supplies required for the screenings and pay its health professionals and site management, all of which is done in advance of the customer invoicing process and ultimate cash receipts for services performed. Given the seasonal nature of the Company's operations, which are largely dependent on second half volumes, management expects to continue using a revolving credit facility in 2016 and beyond. Other Considerations The Health and Wellness business sells services directly to end customers and also through wellness, disease management, benefit brokers, and insurance companies (referred to as channel partners) who ultimately have the relationship with the end customer. Sales to direct customers offer the full suite of our services while sales of our screenings through channel partners are often aggregated with other offerings from these channel partners to provide a total solution to the end-user. As such, the Company's success is largely dependent on that of its partners. Additionally, the Acquisition provides new offerings including the wellness portal and telephonic coaching, along with new staff, new systems, and new customers. During the six month period ended June 30, 2016 , the Company incurred under $0.1 million of costs associated with the ongoing integration of AHS, which are recorded in selling, general and administrative expenses. Transition costs incurred during the three month period ended June 30, 2016 , were immaterial. These costs relate primarily to transition services purchased from AHS and the ongoing transition of information technology infrastructure. The Company does not expect to continue to incur material transition costs going forward. In addition, the Company has contractual obligations related to operating leases and employment contracts which could adversely affect liquidity. The Company’s ability to satisfy its liquidity needs and meet future covenants is dependent on growing revenues, improving profitability, and raising additional equity. These profitability improvements primarily include expansion of the Company’s presence in the Health and Wellness marketplace through new sales to direct customers, retaining existing customers, and capitalizing on the opportunities presented by its channel partners. The Company must increase screening, telephonic health coaching, and wellness portal volumes in order to cover its fixed cost structure and improve gross profits. These improvements may be outside of management’s control. If the Company is unable to increase volumes or control operating costs, liquidity may be adversely affected. There can be no assurance that cash flows from operations, combined with any additional borrowings available to the Company, will be obtainable in an amount sufficient to enable the Company to repay its indebtedness, or to fund other liquidity needs. If the Company is unable to comply with financial covenants in 2016 and in the event that the Company were unable to modify the covenants, find new or additional lenders, or raise additional equity, the Company would be considered in default, which would then enable the lenders to accelerate the repayment of all amounts outstanding and exercise remedies with respect to collateral, which would have a material adverse impact on the Company's business. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition The Company entered into and consummated the Purchase Agreement on April 17, 2015, among the Company and certain of its subsidiaries, Accountable Health Solutions, Inc. (the "Seller" or "AHS") and Accountable Health, Inc. (the "Shareholder"). Pursuant to the Purchase Agreement, the Company acquired the assets and certain liabilities representing the health and wellness business of the Seller for approximately $7.0 million - $4.0 million in cash and up to 433,333 shares of the Company’s common stock, $0.04 par value, with a value of $3.0 million , which was subject to a working capital adjustment as described in the Purchase Agreement. At the closing of the Purchase Agreement, the Company issued and delivered 371,739 shares of Common Stock to the Shareholder at closing and issued and held back 21,739 shares of Common Stock for the working capital adjustment, which were subsequently released on October 9, 2015, and 39,855 shares of Common Stock for indemnification purposes. No additional shares will be issued under the terms of the Purchase Agreement. The shares were issued pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, which provides an exemption for private offerings of securities. In order to fund the Acquisition, the Company entered into and consummated the Credit Agreement with SWK on April 17, 2015. Refer to Note 9 of the condensed consolidated financial statements for discussion of the Credit Agreement and related warrants. The Acquisition was treated as a purchase in accordance with Accounting Standards Codification (ASC) 805, Business Combinations , which requires allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed in the transaction. The allocation of purchase price is based on management’s judgment after evaluating several factors, including a valuation assessment. The allocation of the purchase price was finalized in the first quarter of 2016 and is as follows: (in thousands) Accounts receivable, net of allowance of $2 $ 918 Inventory and other current assets 117 Fixed assets 123 Customer portal (existing technologies) 4,151 Customer relationships 2,097 Goodwill 633 Accounts payable and accrued expenses (743 ) Deferred revenue (296 ) Purchase Price $ 7,000 Intangible assets acquired include existing technology in the form of a customer-facing wellness portal and customer relationships. The fair value of the customer relationships acquired was determined using the excess earnings method under the income approach for customer relationships; and the fair value of the wellness portal software was determined using the replacement cost method. The estimated useful life for the wellness portal and customer relationships is 4 years and 8 years , respectively. Amortization is recorded on a straight-line basis over the estimated useful life of the asset. The Company recorded amortization expense as a component of cost of operations of $0.3 million and $0.5 million , respectively, and amortization expense as a component of selling, general and administrative expenses of $0.1 million and $0.1 million , respectively, during the three and six month periods ended June 30, 2016 . The Company recorded amortization expense of $0.2 million as a component of cost of operations and $0.1 million as a component of selling, general and administrative expenses for the three and six month periods ended June 30, 2015 . The goodwill of $0.6 million was recorded in one reporting unit, the Health and Wellness operations, and is deductible for tax purposes. The consolidated statement of operations for the three and six month periods ended June 30, 2016 , includes revenue of $2.7 million and $5.2 million , respectively, attributable to AHS. Disclosure of the earnings contribution from the AHS business is not practicable, as the Company has already integrated operations. The following table provides unaudited pro forma results of operations for the three and six month periods ended June 30, 2015 , as if AHS was part of operations on the first day of the 2014 fiscal year. (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2015 2015 Pro forma revenues $ 7,662 $ 15,750 Pro forma net loss from continuing operations $ (2,749 ) $ (5,856 ) These pro forma results are based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Company been a combined company during the periods presented, nor are they indicative of the consolidated results of operations in future periods. The pro forma results for the six month period ended June 30, 2015 , include pre-tax adjustments for amortization of intangible assets of $0.3 million . Pro forma results for the three and six month periods ended June 30, 2015 , include pre-tax adjustments for the elimination of acquisition costs of $0.6 million and $0.7 million , respectively. |
Loss Per Share
Loss Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic loss per share equals net loss divided by the weighted average common shares outstanding during the period. Diluted loss per share equals net loss divided by the sum of the weighted average common shares outstanding during the period plus dilutive common stock equivalents. The calculation of loss per common share on a basic and diluted basis was the same for the three and six month periods ended June 30, 2016 and 2015 , because the inclusion of dilutive common stock equivalents and the Warrant issued in connection with the Acquisition would have been anti-dilutive for all periods presented. The Company has granted options to purchase shares of the Company's common stock through employee stock plans with the weighted average options outstanding as of June 30, 2016 and 2015 , being 355,092 and 274,460 , respectively, and a warrant to purchase 543,478 shares issued to SWK was outstanding as of June 30, 2016 , but are anti-dilutive because the Company is in a net loss position. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Employee Share-Based Compensation Plans - On May 29, 2008, the Company's shareholders approved the 2008 Omnibus Employee Incentive Plan (the "2008 Plan") providing for the grant of stock options, stock appreciation rights, non-vested stock, and performance shares. During the three and six month periods ended June 30, 2016 , the Company granted 100,000 and 153,332 options, respectively, for the purchase of shares under the 2008 Plan. During the three and six month periods ended June 30, 2015 , the Company granted 667 and 40,000 options, respectively. As of June 30, 2016 , 31,659 shares remain available for grant under the 2008 Plan. On May 24, 2011, the Company's shareholders approved the 2011 Omnibus Employee Incentive Plan, as subsequently amended and restated, (the "2011 Plan") providing for the grant of stock options and non-vested stock awards. During the three and six month periods ended June 30, 2016 , there were no options for the purchase of shares granted under the 2011 Plan. During the three month period ended June 30, 2015 , there were 30,000 options for the purchase of shares granted under the 2011 Plan. During the six month periods ended June 30, 2016 and 2015 , the Company also granted a total of 166,665 and 2,778 stock awards, respectively, to non-employee members of the Board of Directors that immediately vested. As of June 30, 2016 , 243,693 shares remain available for grant under the 2011 Plan. The fair value of the stock options granted during the three and six month periods ended June 30, 2016 , was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Three Months Ended June 30, Six Months Ended June 30, 2016 2016 Expected life (years) 5.3 5.1 Expected volatility 80.0% 81.0% Expected dividend yield —% —% Risk-free interest rate 1.3% 1.4% Weighted average fair value of options granted during the period $1.27 $1.33 The following table summarizes stock option activity for the six month period ended June 30, 2016 : Number of Options Weighted Average Exercise Price Per Option Weighted Average remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding balance at December 31, 2015 286,568 $ 6.46 Granted 153,332 2.05 Exercised — — Forfeited and Expired (34,560 ) 3.23 Outstanding balance at June 30, 2016 405,340 5.07 8.45 $0 Options exercisable at June 30, 2016 147,113 $ 7.65 7.25 $0 There were no options exercised during the six month period ended June 30, 2016 . There were 50,000 options with a weighted average exercise price of $0.45 exercised during the six month period ended June 30, 2015 . Options for the purchase of an aggregate of 30,768 shares of common stock vested during the six month period ended June 30, 2016 , and the aggregate fair value at grant date of these options was $0.1 million . As of June 30, 2016 , there was approximately $0.4 million of total unrecognized compensation cost related to stock options. The cost is expected to be recognized over a weighted average period of 1.74 years. The Company recorded $0.4 million and $0.5 million , respectively, of share-based compensation expense in selling, general and administrative expenses for the three and six month periods ended June 30, 2016 . The Company recorded $0.1 million and $0.2 million , respectively, of share-based compensation expense in selling, general and administrative expenses for the three and six month periods ended June 30, 2015 . |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Included in inventories at June 30, 2016 , and December 31, 2015 , are $0.4 million and $0.3 million , respectively, of finished goods and $0.6 million and $0.3 million , respectively, of components. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company recorded Goodwill of $0.6 million as of June 30, 2016 , and December 31, 2015 . Intangible assets subject to amortization are amortized on a straight-line basis and are summarized in the table below. June 30, 2016 December 31, 2015 (in thousands) Gross Carrying Amount Accumulated Amortization Intangibles Assets, net Gross Carrying Amount Accumulated Amortization Intangibles Assets, net Portal $ 4,151 $ 1,251 $ 2,900 $ 4,151 $ 732 $ 3,419 Customer relationships 2,097 316 1,781 2,097 185 1,912 Total $ 6,248 $ 1,567 $ 4,681 $ 6,248 $ 917 $ 5,331 Amortization expense for the three and six month periods ended June 30, 2016 , was $0.3 million and $0.7 million , respectively. Amortization expense for each of the three and six month periods ended June 30, 2015 , was $0.3 million . Based on the Company's recent financial performance and negative equity, management determined a review of impairment of long-lived assets and goodwill was necessary as of June 30, 2016 . The analysis indicated no impairment charges for long-lived assets or goodwill was required at June 30, 2016 . |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | Restructuring Charges At June 30, 2016 , there was a $0.6 million liability related to Portamedic branch closure costs, which is recorded in accrued expenses and other long-term liabilities in the accompanying condensed consolidated balance sheet. Charges recorded during the three and six month periods ended June 30, 2016 , were recorded as a component of discontinued operations. The following table provides a summary of the activity in the restructure accrual for the six month period ended June 30, 2016 : (in thousands) December 31, 2015 Adjustments Payments June 30, 2016 Facility closure obligation $ 657 $ 134 $ (201 ) $ 590 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of June 30, 2016 , the Company maintained the 2016 Credit and Security Agreement and the Term Loan provided by the Credit Agreement. The following table summarizes the Company's outstanding borrowings: (in thousands) June 30, 2016 December 31, 2015 2016 Credit and Security Agreement (2013 Loan and Security Agreement as of December 31, 2015) $ 3,277 $ 3,278 Term Loan 4,046 5,000 Discount on Term Loan (1,977 ) (2,785 ) Unamortized debt issuance costs related to Term Loan (204 ) (163 ) Total debt 5,142 5,330 Short-term portion (5,142 ) (5,330 ) Total long-term debt, net $ — $ — The following table summarizes the components of interest expense for the three and six month periods ended June 30, 2016 and 2015 : (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Interest expense on Term Loan (interest at LIBOR, plus 14%) $ 161 $ 154 $ 341 154 Interest expense on 2013 Loan and Security Agreement 16 4 49 4 Interest expense on 2016 Credit and Security Agreement 48 — 48 — Accretion of termination fees (over term of Term Loan at rate of 8%) 45 27 91 27 Amortization of debt issuance costs 62 197 123 280 Write-off of debt issuance costs related to 2013 Loan and Security Agreement 282 — 282 — Amortization of debt discount associated with the warrants 397 244 807 244 Mark to market of the Additional Warrant — — 59 — Total $ 1,011 $ 626 $ 1,800 $ 709 2016 Credit and Security Agreement On April 29, 2016, the Company entered into the 2016 Credit and Security Agreement with SCM. The 2016 Credit and Security Agreement provides the Company with a revolving credit facility, the proceeds of which are to be used for general working capital purposes and capital expenditures. The 2016 Credit and Security Agreement replaced the 2013 Loan and Security Agreement, eliminating the requirement of the Company to issue the Additional Warrant for the purchase of common stock valued at $1.25 million to SWK, the holder of the Company’s Credit Agreement (see below for further information about the Additional Warrant). An early termination fee of $140,000 , approximately $30,000 of legal fees, and approximately $107,000 of other ordinary course fees were accelerated due to the termination of the 2013 Loan and Security Agreement and were rolled into the opening outstanding borrowings under the 2016 Credit and Security Agreement with SCM and are reflected in transaction costs in the condensed consolidated statement of operations during the three month period ended June 30, 2016 , and approximately $0.3 million of unamortized debt issuance costs related to the 2013 Loan and Security Agreement were written off and recorded in interest expense in the condensed consolidated statement of operations during the three month period ended June 30, 2016 Under the terms of the 2016 Credit and Security Agreement, SCM makes cash advances to the Company in an aggregate principal at any one time outstanding not to exceed $7 million , subject to certain loan balance limits based on the value of the Company’s eligible collateral (the “Revolving Loan Commitment Amount”). The 2016 Credit and Security Agreement has a term of three years , expiring on April 29, 2019. As of June 30, 2016 , the Company had $3.3 million outstanding under the 2016 Credit and Security Agreement with available borrowing capacity of $0.3 million . As of August 9, 2016 , the Company had $2.4 million outstanding, with estimated available borrowing capacity of $0.8 million . Borrowings will bear interest at a fluctuating rate that when annualized is equal to the Prime Rate plus 5.5% , subject to increase in the event of a default. The Company paid SCM a $140,000 facility fee, and monthly, SCM will receive an unused line fee equal to one-half of one percent ( 0.5% ) per annum of the difference derived by subtracting (i) the greater of (x) the average daily outstanding balance under the Revolving Facility during the preceding month and (y) the Minimum Balance, from (ii) the Revolving Loan Commitment Amount and also a collateral management fee equal to one-half of one percent ( 0.5% ) per annum of the Revolving Loan Commitment Amount. As of June 30, 2016 , the remaining balance in debt issuance costs recorded in Other Assets on the condensed consolidated balance sheet was $0.3 million . The 2016 Credit and Security Agreement contains customary representations and warranties and various affirmative and negative covenants including minimum aggregate revenue, EBITDA, and consolidated unencumbered liquid assets requirements. Minimum aggregate revenue must not be less than $34.0 million for the twelve months ending June 30, 2016, $37.0 million for the twelve months ending September 30, 2016, $40.0 million for the twelve months ending December 31, 2016, and $45.0 million for the twelve months ending each fiscal quarter thereafter. Adjusted EBITDA must not be less than negative $2.0 million for the six months ending June 30, 2016, negative $1.1 million for the nine months ending September 30, 2016, $0.8 million for the twelve months ending December 31, 2016, $0.5 million for the twelve months ending March 31, 2017, $0.9 million for the twelve months ending June 30, 2017, and $2.5 million for the twelve months ending September 30, 2017. In addition, consolidated unencumbered liquid assets must not be less than $0.75 million on the last day of any quarter. The Company was not in compliance with the covenants under the 2016 Credit and Security Agreement as of June 30, 2016 , and has entered into a First Amendment to Credit and Security Agreement and Limited Waiver and Forbearance (“First Amendment”), which provides a waiver related to the measurement period ended June 30, 2016. If certain conditions set forth in the First Amendment are satisfied as of September 30, 2016, the waiver and an amendment to the 2016 Credit and Security Agreement providing for revised financial covenants will become permanent. If the Company is unable to fulfill the conditions in the First Amendment by September 30, 2016, or fails to comply with, or obtain further waivers to, the financial covenants in the First Amendment in the future, then the lenders would have the option to accelerate the repayment of all amounts outstanding and exercise remedies with respect to collateral, which would have a material adverse impact on the Company's business. The foregoing description of the First Amendment is only a summary and is qualified in its entirety by the full text of the First Amendment, which is attached as an exhibit to this Quarterly Report on Form 10-Q. Borrowings under the Agreement are secured by a security interest in all existing and after-acquired property of the Company, including, but not limited to, its receivables (which are subject to a lockbox account arrangement), inventory and equipment. Credit Agreement In order to fund the Acquisition, the Company entered into the Credit Agreement with SWK on April 17, 2015, as amended on February 25, 2016, and March 28, 2016. The Credit Agreement provides the Company with a $5.0 million Term Loan. The proceeds of the Term Loan were used to pay certain fees and expenses related to the negotiation and consummation of the Purchase Agreement and the Acquisition described in Note 3 and general corporate purposes. The Company paid SWK an origination fee of $0.1 million . The Term Loan is due and payable on April 17, 2018. The Company is also required to make quarterly revenue-based payments in an amount equal to eight and one-half percent ( 8.5% ) of yearly aggregate revenue up to and including $20 million , seven percent ( 7% ) of yearly aggregate revenue greater than $20 million up to and including $30 million , and five percent ( 5% ) of yearly aggregate revenue greater than $30 million . The revenue-based payment will be applied to fees and interest, and any excess to the principal of the Term Loan. Revenue-based payments commenced in February 2016, and the maximum principal portion of the aggregate revenue-based payment is capped at $600,000 per quarter. During the six month period ended June 30, 2016 , the Company made principal payments to SWK of $1.0 million , in addition to $0.4 million of interest paid. The outstanding principal balance under the Credit Agreement bears interest at an adjustable rate per annum equal to the LIBOR Rate (subject to a minimum amount of one percent ( 1.0% )) plus fourteen percent ( 14.0% ) and is due and payable quarterly, in arrears, which commenced on August 14, 2015. Upon the earlier of (a) the maturity date on April 17, 2018, or (b) full repayment of the Term Loan, whether by acceleration or otherwise, the Company is required to pay an exit fee equal to eight percent ( 8% ) of the aggregate principal amount of all term loans advanced under the Credit Agreement. The Company is recognizing the exit fee over the term of the Term Loan through an accretion accrual to interest expense using the effective interest method. The Credit Agreement also contains certain financial covenants including minimum aggregate revenue, adjusted EBITDA, and consolidated unencumbered liquid assets requirements. On March 28, 2016, the Company obtained a Second Amendment to the Credit Agreement (the "Second Amendment") in which the lender modified the existing covenants and replaced them with minimum aggregate revenue covenants of $34.0 million for the twelve months ending June 30, 2016, $37.0 million for the twelve months ending September 30, 2016, $40.0 million for the twelve months ending December 31, 2016, and $45.0 million for the twelve months ending each fiscal quarter thereafter. The Second Amendment also modified the minimum adjusted EBITDA covenants for 2016 and replaced them with minimum adjusted EBITDA covenants of negative $2.0 million for the six months ending June 30, 2016, negative $1.1 million for the nine months ending September 30, 2016, $0.8 million for the twelve months ending December 31, 2016, $0.5 million for the twelve months ending March 31, 2017, $0.9 million for the twelve months ending June 30, 2017, and $2.5 million for the twelve months ending September 30, 2017, and each twelve consecutive calendar month period ending on the last day of each fiscal quarter thereafter. In addition, the Company was required to obtain new equity contributions in an aggregate amount of not less than $0.5 million between March 23, 2016 and June 30, 2016, which requirement the Company has satisfied through the private offering to 200 NNH, LLC, which is described further in Note 2 to the condensed consolidated financial statements. The Second Amendment also required the Company to issue shares of its common stock, $0.04 par value, with a value of $100,000 to SWK, which the Company issued during the first quarter of 2016 and recorded as debt issuance costs as a direct deduction to short-term debt on the condensed consolidated balance sheet as of June 30, 2016 . The Company was not in compliance with the covenants under the Credit Agreement, as amended, as of June 30, 2016 , and has entered into a Third Amendment to Credit Agreement and Limited Waiver and Forbearance (“Third Amendment”), which provides a waiver related to the measurement period ended June 30, 2016. If certain conditions set forth in the Third Amendment are satisfied as of September 30, 2016, the waiver and an amendment to the Credit Agreement providing for revised financial covenants and an extended period of time to make required principal payments will become permanent. If the Company is unable to fulfill the conditions in the Third Amendment by September 30, 2016, or fails to comply with, or obtain further waivers to, the financial covenants in the Third Amendment in the future, then the lenders would have the option to accelerate the repayment of all amounts outstanding and exercise remedies with respect to collateral, which would have a material adverse impact on the Company's business. The foregoing description of the Third Amendment is only a summary and is qualified in its entirety by the full text of the Third Amendment, which is attached as an exhibit to this Quarterly Report on Form 10-Q. The Credit Agreement contains a cross-default provision that can be triggered if the Company has more than $0.25 million in debt outstanding under the 2016 Credit and Security Agreement and the Company fails to make payments to SCM when due or if SCM is entitled to accelerate the maturity of debt in response to a default situation under the 2016 Credit and Security Agreement, which may include violation of any financial covenants. As of June 30, 2016, as security for payment and other obligations under the 2016 Credit and Security Agreement, SCM held a security interest in all of the Company's, and its subsidiary guarantors', existing and after-acquired property, including receivables (which are subject to a lockbox account arrangement), inventory and equipment. Additionally, SWK holds a security interest for final and indefeasible payment. The security interest held by SWK is in substantially all of the Company's assets and the Company's subsidiaries. In connection with the execution of the Credit Agreement, the Company issued SWK a warrant (the "Warrant") to purchase 543,478 shares of the Company’s common stock. The Warrant is exercisable after October 17, 2015, and up to and including April 17, 2022, at an exercise price of $6.90 per share. The Warrant is exercisable on a cashless basis. The exercise price of the Warrant is subject to customary adjustment provisions for stock splits, stock dividends, recapitalizations and the like. The Warrant grants the holder certain piggyback registration rights. The Warrant was considered equity classified, and as such, the Company allocated the proceeds from the Term Loan to the Warrant using the Relative Fair Value Method. Further, pursuant to the Credit Agreement, if the 2013 Loan and Security Agreement was not repaid in full and terminated, and all liens securing the 2013 Loan and Security Agreement were not released, on or prior to April 30, 2016, as amended in the First Amendment to the Credit Agreement dated February 25, 2016, the Company agreed to issue an additional warrant (the “Additional Warrant”) to SWK to purchase common stock valued at $1.25 million , with an exercise price of the closing price on April 30, 2016. In accordance with the relevant accounting guidance, the Additional Warrant was determined to be an embedded derivative. The fair value of these warrants at the inception of the Credit Agreement of approximately $3.6 million was recorded as a debt discount, and is being amortized through interest expense over the term of the Credit Agreement using the effective interest method. The Company valued both warrants using the Black-Scholes pricing model, which utilizes Level 3 Inputs. For the Warrant, the Company utilized volatility of 85.0% , a risk-free rate of 1.4% , dividend rate of zero , and term of 7 years, which is consistent with the exercise period of the Warrant. For the Additional Warrant, the Company utilized volatility of 80.0% , a risk-free rate of 2.1% , dividend rate of zero , and term of 7 years , which is consistent with the exercise period of the Additional Warrant. As noted above, on April 29, 2016, the Company entered into the 2016 Credit and Security Agreement with SCM, which eliminated the requirement of the Company to issue the Additional Warrant. Accordingly, during the three month period ended June 30, 2016 , the Company recorded $0.9 million in other income in the condensed consolidated statement of operations related to the write-off of the derivative liability associated with the Additional Warrant. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company leases its corporate headquarters in Olathe, Kansas, which includes the Health and Wellness operations center, under an operating lease which expires in 2018. The Company leases its AHS operations centers in Des Moines, Iowa and Indianapolis, IN, under operating leases which expire in 2018. The Company also leases copiers and other miscellaneous equipment. These leases expire at various times through 2017. The Company is obligated under a lease related to the discontinued Hooper Holmes Services operations center through 2018 and has ceased use of this facility. The Company is still the primary lessee under operating leases for two Portamedic branch offices and has recorded a facility closure obligation related to the above mentioned leases for future rent payments not utilized for continuing operations and such related costs are recorded in the reporting for discontinued operations. The Company has recorded a facility closure obligation of $0.6 million as of June 30, 2016 , related to the above mentioned leases. The Company has employment agreements with certain executive employees that provide for payment of base salary for up to a one year period in the event their employment with the Company is terminated in certain circumstances, including following a change in control, as further defined in the agreements. From time to time, the Company is subject to federal and state tax audits and related governmental inquiries into matters such as income tax returns, sales and use tax returns, employment classification of its workers, and wage and hour law compliance. The Company is currently under examination by the Internal Revenue Service (the “IRS”) for the calendar years 2013, 2014, and 2015 with respect to its classification of certain of its health professionals as independent contractors rather than employees. This examination could lead to proposed adjustments to its federal employment taxes for the periods in question, but the IRS has not yet issued an assessment. The Company believes that it has properly classified these workers as independent contractors, but there can be no assurances of a favorable outcome for the Company and given the ongoing status of the examination, we are unable at this time to provide an estimate of the range of loss, if any. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company, in the normal course of business, is a party to various claims and other legal proceedings. In the opinion of management, the Company has substantial legal defenses and/or insurance coverage (subject to deductibles) with respect to all of its pending legal actions. If management believes that a material loss not covered by insurance arising from these actions is probable and can reasonably be estimated, the Company may record the amount of the estimated loss or, if a loss cannot be estimated but the minimum liability may be estimated using a range and no point is more probable than another, the Company may record the minimum estimated liability. As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary. Management believes that the ultimate outcome of all pending legal actions, individually and in the aggregate, will not have a material adverse effect on the Company's financial position that is inconsistent with its loss reserves or on its overall trends in results of operations. However, litigation and claims are subject to inherent uncertainties and unfavorable outcomes can occur that exceed any amounts reserved for such losses. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the results of operations in the period in which the outcome occurs or in future periods. On May 24, 2012, a complaint was filed against the Company in the United States District Court for the District of New Jersey alleging, among other things, that the Company failed to pay overtime compensation to a purported class of certain independent contractor examiners who, the complaint alleges, should be treated as employees for purposes of federal law. The complaint seeks award of an unspecified amount of allegedly unpaid overtime wages to certain examiners. The Company filed an answer denying the substantive allegations therein. On August 1, 2014, the Magistrate Judge issued a Report and Recommendation to conditionally certify the class of all contract examiners from August 16, 2010, to the present. On August 29, 2014, the Company submitted its objections to the Report and Recommendation of the Magistrate Judge. The Magistrate has suspended ruling concerning those objections while the parties pursue the possibility of a settlement. On April 29, 2016, the Company reached a preliminary understanding with the plaintiffs with respect to a settlement of the lawsuit involving a release of all claims by the plaintiffs and the Company's establishment of a settlement fund of $0.45 million . Accordingly, as of June 30, 2016 , the Company had accrued $ 0.45 million related to this matter versus $0.3 million as of December 31, 2015. The litigation accrual for all periods was included in the Accrued expenses line item on the condensed consolidated balance sheet. The additional expense of $0.15 million recorded during the six month period ended June 30, 2016, is included in the discontinued operations line item on the condensed consolidated statements of operations. This preliminary understanding is subject to approval by the Magistrate and the parties' entry into a definitive settlement agreement. The claim is not covered by insurance, and the Company is incurring legal costs to defend the litigation which are recorded in discontinued operations. This matter relates to the former Portamedic service line for which the Company retained liability. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's income tax expense was not material for any period presented in the condensed consolidated statement of operations. No amounts were recorded for unrecognized tax benefits or for the payment of interest and penalties during the three and six month periods ended June 30, 2016 and 2015 . No federal or state tax benefits were recorded relating to the current year loss. The Company continues to believe that a full valuation allowance is required on its net deferred tax assets, with the exception of deferred income tax on the liabilities of certain indefinite-lived intangibles. The tax years 2012 through 2015 may be subject to federal examination and assessment. Tax years from 2007 through 2011 remain open solely for purposes of federal and certain state examination of net operating loss and credit carryforwards. State income tax returns may be subject to examination for tax years 2011 through 2015, depending on state tax statute of limitations. As of December 31, 2015 , the Company had U.S. federal and state net operating loss carryforwards of $167.2 million and $149.8 million , respectively. There has been no significant change in these balances as of June 30, 2016 . The net operating loss carryforwards, if not utilized, will expire in the years 2016 through 2035 . Since the Company had changes in ownership during 2015 and continuing into the first quarter of 2016, additional limitations under IRC Section 382 of the Internal Revenue Code of 1986 may apply to the future utilization of certain tax attributes including net operating loss (“NOL”) carryforwards, other tax carryforwards, and certain built-in losses. The Company has not yet completed its analysis of any impact of these ownership changes. No tax benefit has been reported since a full valuation allowance offsets these tax attributes. However, limitations could apply even if the valuation allowance was released. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company determines the fair value measurements used in our consolidated financial statements based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. • Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company estimated the fair value of the Term Loan and derivative liability using the Black-Scholes valuation model, which is a Level 3 valuation technique. June 30, 2016 December 31, 2015 (in thousands) Face Value Fair Value Carrying Amount Face Value Fair Value Carrying Amount Term Loan $ 5,000 $ 3,590 $ 1,953 $ 5,000 $ 3,837 $ 2,052 Derivative liability $ — $ — $ — $ 1,250 $ 828 $ 828 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with instructions for Form 10-Q and the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's 2015 Annual Report on Form 10-K, filed with the SEC on March 30, 2016. Financial statements prepared in accordance with U.S. GAAP require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and other disclosures. The financial information included herein is unaudited; however, such information reflects all adjustments that are, in the opinion of the Company's management, necessary for a fair statement of results for the interim periods presented. The results of operations for the three and six month periods ended June 30, 2016 and 2015 , are not necessarily indicative of the results to be expected for any other interim period or the full year. See “Management's Discussion and Analysis of Financial Condition and Results of Operations” for additional information. |
Discontinued Operations | On September 30, 2013, the Company completed the sale of certain assets comprising its Portamedic service line. During 2014, the Company sold certain assets comprising the Heritage Labs and Hooper Holmes Services businesses. The operating results of these businesses have been segregated and reported as discontinued operations for all periods presented in this Quarterly Report on Form 10-Q. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)", which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. This new guidance is effective for the Company in the first quarter of 2018, with early adoption permitted as of the original effective date or first quarter of 2017. The Company is currently evaluating the impact the adoption of ASU 2014-09 will have on the consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". This ASU requires management to assess and evaluate whether conditions or events exist, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the financial statements issue date. This standard will be effective for annual periods beginning after December 15, 2016, and for annual and interim periods thereafter; early adoption is permitted. The Company is currently evaluating the impact the adoption of ASU 2014-15 will have on the disclosures in Note 2 of the condensed consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs", which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying value of the debt liability. The Company adopted the provisions of ASU 2015-03 in the first quarter of 2016. The retrospective application of the new standard resulted in a $0.2 million reduction to both noncurrent assets and current liabilities as of December 31, 2015. The debt issuance costs associated with the revolving credit facilities remain classified in noncurrent assets in accordance with ASU 2015-15. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which is intended to improve financial reporting about leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2016-02 will have on its consolidated financial position, results of operations or cash flows. In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting (Topic 718)", which is intended to simplify the accounting for share-based compensation. This standard simplifies the accounting for income taxes in relation to share-based compensation, modifies the accounting for forfeitures, and modifies the statutory tax withholding requirements. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2016-09 will have on its consolidated financial position, results of operations or cash flows. |
Loss Per Share | Loss Per Share Basic loss per share equals net loss divided by the weighted average common shares outstanding during the period. Diluted loss per share equals net loss divided by the sum of the weighted average common shares outstanding during the period plus dilutive common stock equivalents. |
Fair Value Measurements | Fair Value Measurements The Company determines the fair value measurements used in our consolidated financial statements based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: • Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. • Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Allocation of Purchase Price | The allocation of the purchase price was finalized in the first quarter of 2016 and is as follows: (in thousands) Accounts receivable, net of allowance of $2 $ 918 Inventory and other current assets 117 Fixed assets 123 Customer portal (existing technologies) 4,151 Customer relationships 2,097 Goodwill 633 Accounts payable and accrued expenses (743 ) Deferred revenue (296 ) Purchase Price $ 7,000 |
Business Acquisition, Pro Forma Information | The following table provides unaudited pro forma results of operations for the three and six month periods ended June 30, 2015 , as if AHS was part of operations on the first day of the 2014 fiscal year. (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2015 2015 Pro forma revenues $ 7,662 $ 15,750 Pro forma net loss from continuing operations $ (2,749 ) $ (5,856 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Valuation Assumptions | The fair value of the stock options granted during the three and six month periods ended June 30, 2016 , was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Three Months Ended June 30, Six Months Ended June 30, 2016 2016 Expected life (years) 5.3 5.1 Expected volatility 80.0% 81.0% Expected dividend yield —% —% Risk-free interest rate 1.3% 1.4% Weighted average fair value of options granted during the period $1.27 $1.33 |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the six month period ended June 30, 2016 : Number of Options Weighted Average Exercise Price Per Option Weighted Average remaining Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding balance at December 31, 2015 286,568 $ 6.46 Granted 153,332 2.05 Exercised — — Forfeited and Expired (34,560 ) 3.23 Outstanding balance at June 30, 2016 405,340 5.07 8.45 $0 Options exercisable at June 30, 2016 147,113 $ 7.65 7.25 $0 |
Goodwill and Other Intangible23
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Subject to Amortization | Intangible assets subject to amortization are amortized on a straight-line basis and are summarized in the table below. June 30, 2016 December 31, 2015 (in thousands) Gross Carrying Amount Accumulated Amortization Intangibles Assets, net Gross Carrying Amount Accumulated Amortization Intangibles Assets, net Portal $ 4,151 $ 1,251 $ 2,900 $ 4,151 $ 732 $ 3,419 Customer relationships 2,097 316 1,781 2,097 185 1,912 Total $ 6,248 $ 1,567 $ 4,681 $ 6,248 $ 917 $ 5,331 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring Charges [Abstract] | |
Activity in the Restructure Accrual | The following table provides a summary of the activity in the restructure accrual for the six month period ended June 30, 2016 : (in thousands) December 31, 2015 Adjustments Payments June 30, 2016 Facility closure obligation $ 657 $ 134 $ (201 ) $ 590 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the Company's outstanding borrowings: (in thousands) June 30, 2016 December 31, 2015 2016 Credit and Security Agreement (2013 Loan and Security Agreement as of December 31, 2015) $ 3,277 $ 3,278 Term Loan 4,046 5,000 Discount on Term Loan (1,977 ) (2,785 ) Unamortized debt issuance costs related to Term Loan (204 ) (163 ) Total debt 5,142 5,330 Short-term portion (5,142 ) (5,330 ) Total long-term debt, net $ — $ — |
Summary of Components of Interest Expense | The following table summarizes the components of interest expense for the three and six month periods ended June 30, 2016 and 2015 : (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Interest expense on Term Loan (interest at LIBOR, plus 14%) $ 161 $ 154 $ 341 154 Interest expense on 2013 Loan and Security Agreement 16 4 49 4 Interest expense on 2016 Credit and Security Agreement 48 — 48 — Accretion of termination fees (over term of Term Loan at rate of 8%) 45 27 91 27 Amortization of debt issuance costs 62 197 123 280 Write-off of debt issuance costs related to 2013 Loan and Security Agreement 282 — 282 — Amortization of debt discount associated with the warrants 397 244 807 244 Mark to market of the Additional Warrant — — 59 — Total $ 1,011 $ 626 $ 1,800 $ 709 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Term Loan and Derivative Liability | The Company estimated the fair value of the Term Loan and derivative liability using the Black-Scholes valuation model, which is a Level 3 valuation technique. June 30, 2016 December 31, 2015 (in thousands) Face Value Fair Value Carrying Amount Face Value Fair Value Carrying Amount Term Loan $ 5,000 $ 3,590 $ 1,953 $ 5,000 $ 3,837 $ 2,052 Derivative liability $ — $ — $ — $ 1,250 $ 828 $ 828 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ / shares in Units, $ in Thousands | Jun. 15, 2016$ / sharesshares | Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2015USD ($) | Mar. 28, 2016$ / shares | Jan. 25, 2016$ / shares | Dec. 31, 2015USD ($)$ / sharesshares |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Stock split conversion ratio | 0.0667 | |||||||
Common stock, shares authorized (in shares) | shares | 240,000,000 | 240,000,000 | 240,000,000 | 240,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | ||
Loss from continuing operations before taxes | $ 2,304 | $ 3,337 | $ 5,568 | $ 5,434 | ||||
Adjustments for new accounting pronouncement | Noncurrent assets | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Deferred issuance costs, net | $ (200) | |||||||
Adjustments for new accounting pronouncement | Current liabilities | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Deferred issuance costs, net | $ 200 | |||||||
Adjustment of Capitalized Costs Related to Modification of Credit Agreement | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Loss from continuing operations before taxes | $ 200 |
Liquidity (Details)
Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 28, 2016 | Jan. 25, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Aug. 09, 2016 | Jun. 15, 2016 | Dec. 31, 2015 | Apr. 17, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||||||||
Stock issued (in shares) | 666,667 | 2,601,789 | |||||||||
Common stock, par value (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | |||||
Issuance of common stock, net of issuance costs | $ 1,200 | $ 3,400 | $ 4,574 | $ 0 | |||||||
Cash and cash equivalents | $ 102 | $ 1,242 | 102 | 1,242 | $ 2,035 | $ 5,201 | |||||
Loss from continuing operations | (2,309) | $ (3,342) | (5,578) | (5,444) | |||||||
Net cash used in operating activities of continuing operations | 4,848 | $ 5,099 | |||||||||
AHS acquisition | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Common stock, par value (in dollars per share) | $ 0.04 | ||||||||||
Selling, general and administrative expenses | AHS acquisition | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Integration costs | 100 | ||||||||||
Line of credit | 2016 Credit and Security Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings outstanding | 3,300 | 3,300 | |||||||||
Available borrowing availability | 300 | 300 | |||||||||
Line of credit | 2016 Credit and Security Agreement | Subsequent event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings outstanding | $ 2,400 | ||||||||||
Available borrowing availability | $ 800 | ||||||||||
Loans payable | Credit agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Common stock, par value (in dollars per share) | $ 0.04 | ||||||||||
Outstanding borrowings under term loan | $ 4,000 | $ 4,000 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 17, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 15, 2016 | Mar. 31, 2016 | Mar. 28, 2016 | Jan. 25, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||||||||
Acquisition, cash paid | $ 0 | $ 4,000 | ||||||||
Common stock, par value (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | ||||
Amortization of intangible assets | $ 300 | $ 300 | $ 700 | 300 | ||||||
Goodwill | 633 | $ 633 | $ 633 | |||||||
AHS acquisition | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition, purchase price | $ 7,000 | |||||||||
Acquisition, cash paid | $ 4,000 | |||||||||
Shared to be issued in acquisition (up to amount) (in shares) | 433,333 | |||||||||
Common stock, par value (in dollars per share) | $ 0.04 | |||||||||
Value of common stock issued in acquisition | $ 3,000 | |||||||||
Acquisition, shares delivered at closing (in shares) | 371,739 | |||||||||
Acquisition, shares held back for working capital adjustment (in shares) | 21,739 | |||||||||
Acquisition, shares held back for indemnification (in shares) | 39,855 | |||||||||
Number of additional shares to be issued (in shares) | 0 | |||||||||
Goodwill | $ 633 | |||||||||
Revenues attributable to AHS since the acquisition | 2,700 | $ 5,200 | ||||||||
AHS acquisition | Amortization of Intangible Assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Pro forma amortization of intangible assets | 300 | |||||||||
AHS acquisition | Acquisition-related costs | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Pro forma amortization of intangible assets | 600 | 700 | ||||||||
AHS acquisition | Cost of operations | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Amortization of intangible assets | 300 | 200 | 500 | 200 | ||||||
AHS acquisition | Selling, general and administrative expenses | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Amortization of intangible assets | $ 100 | $ 100 | $ 100 | $ 100 | ||||||
AHS acquisition | Customer portal (existing technologies) | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life | 4 years | |||||||||
AHS acquisition | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life | 8 years |
Acquisition - Purchase price al
Acquisition - Purchase price allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Intangible assets | $ 6,248 | $ 6,248 | |
Goodwill | 633 | 633 | |
Customer portal (existing technologies) | |||
Business Acquisition [Line Items] | |||
Intangible assets | 4,151 | 4,151 | |
Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | 2,097 | $ 2,097 | |
AHS acquisition | |||
Business Acquisition [Line Items] | |||
Accounts receivable, net of allowance of $2 | $ 918 | ||
Inventory and other current assets | 117 | ||
Fixed assets | 123 | ||
Goodwill | 633 | ||
Accounts payable and accrued expenses | (743) | ||
Deferred revenue | (296) | ||
Purchase Price | 7,000 | ||
Accounts receivable, allowance | $ 2 | ||
AHS acquisition | Customer portal (existing technologies) | |||
Business Acquisition [Line Items] | |||
Intangible assets | 4,151 | ||
AHS acquisition | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 2,097 |
Acquisition - Pro forma results
Acquisition - Pro forma results of operations (Details) - AHS acquisition - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
Business Acquisition [Line Items] | ||
Pro forma revenues | $ 7,662 | $ 15,750 |
Pro forma net loss from continuing operations | $ (2,749) | $ (5,856) |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||
Weighted average options outstanding (in shares) | 355,092 | 274,460 |
Number of shares to be purchased under warrant (in shares) | 543,478 |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Share-Based Compensation Plans (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Options granted (in shares) | 153,332 | |||
2008 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Options granted (in shares) | 100,000 | 667 | 153,332 | 40,000 |
Remaining shares available for grant under the plan (in shares) | 31,659 | 31,659 | ||
2011 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Options granted (in shares) | 0 | 30,000 | 0 | 30,000 |
Remaining shares available for grant under the plan (in shares) | 243,693 | 243,693 | ||
Non-employee Members Board of Directors | 2011 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Options granted (in shares) | 166,665 | 2,778 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Valuation Assumptions (Details) - $ / shares | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected life (years) | 5 years 3 months 18 days | 5 years 1 month 6 days |
Expected volatility (as percent) | 80.00% | 81.00% |
Expected dividend yield (as percent) | 0.00% | 0.00% |
Risk-free interest rate (as percent) | 1.30% | 1.40% |
Weighted average fair value of options granted during the period | $ 1.27 | $ 1.33 |
Share-Based Compensation - Opti
Share-Based Compensation - Option Roll-Forward (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2015$ / sharesshares | |
Stock Option Activity [Roll Forward] | ||
Outstanding balance at December 31, 2015 (in shares) | shares | 286,568 | |
Options granted (in shares) | shares | 153,332 | |
Options exercised (in shares) | shares | 0 | (50,000) |
Options forfeited and expired (in shares) | shares | (34,560) | |
Outstanding balance at June 30, 2016 (in shares) | shares | 405,340 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding balance (weighted average exercise price) at December 31, 2015 (in dollars per share) | $ / shares | $ 6.46 | |
Granted (weighted average exercise price) (in dollars per share) | $ / shares | 2.05 | |
Exercised (weighted averaged exercise price) (in dollars per share) | $ / shares | 0 | $ 0.45 |
Forfeited and Expired (weighted average exercise price) (in dollars per share) | $ / shares | 3.23 | |
Outstanding balance (weighted average exercise price) at June 30, 2016 (in dollars per share) | $ / shares | $ 5.07 | |
Weighted Average Remaining Contractual Life, options outstanding | 8 years 5 months 12 days | |
Aggregate Intrinsic Value of options | $ | $ 0 | |
Number of options exercisable at March 31, 2016 (in shares) | shares | 147,113 | |
Weighted average exercise price of options exercisable at March 31, 2016 (in dollars per share) | $ / shares | $ 7.65 | |
Weighted Average Remaining Contractual Life, options exercisable | 7 years 2 months 29 days | |
Aggregate Intrinsic Value of options | $ | $ 0 |
Share-Based Compensation - Awar
Share-Based Compensation - Award Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Options exercised (in shares) | 0 | 50,000 | ||
Exercised (weighted averaged exercise price) (in dollars per share) | $ 0 | $ 0.45 | ||
Options vested in period (in shares) | 30,768 | |||
Aggregate fair value of options vested in period | $ 0.1 | |||
Unrecognized compensation cost related to stock options | $ 0.4 | $ 0.4 | ||
Weighted average period for recognition of compensation cost | 1 year 8 months 27 days | |||
Share-based compensation expense | $ 0.4 | $ 0.1 | $ 0.5 | $ 0.2 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 0.4 | $ 0.3 |
Components | $ 0.6 | $ 0.3 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 633,000 | $ 633,000 | $ 633,000 | ||
Amortization expense | 300,000 | $ 300,000 | 700,000 | $ 300,000 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 6,248,000 | 6,248,000 | 6,248,000 | ||
Accumulated Amortization | 1,567,000 | 1,567,000 | 917,000 | ||
Intangibles Assets, net | 4,681,000 | 4,681,000 | 5,331,000 | ||
Long-lived assets and goodwill impairment charges | 0 | ||||
Portal | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 4,151,000 | 4,151,000 | 4,151,000 | ||
Accumulated Amortization | 1,251,000 | 1,251,000 | 732,000 | ||
Intangibles Assets, net | 2,900,000 | 2,900,000 | 3,419,000 | ||
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 2,097,000 | 2,097,000 | 2,097,000 | ||
Accumulated Amortization | 316,000 | 316,000 | 185,000 | ||
Intangibles Assets, net | $ 1,781,000 | $ 1,781,000 | $ 1,912,000 |
Restructuring Charges (Details)
Restructuring Charges (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Restructuring Charges [Abstract] | |
Branch closure obligation | $ 600 |
Facility closure obligation | |
Restructuring Reserve [Roll Forward] | |
Restructuring reserve, beginning balance | 657 |
Adjustments | 134 |
Payments | (201) |
Restructuring reserve, ending balance | $ 590 |
Debt - Summary of Outstanding B
Debt - Summary of Outstanding Borrowings (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Total debt | $ 5,142 | $ 5,330 |
Short-term portion | (5,142) | (5,330) |
Total long-term debt, net | 0 | 0 |
Line of credit | 2016 Credit and Security Agreement | ||
Debt Instrument [Line Items] | ||
Total debt | 3,277 | |
Line of credit | 2013 Loan and Security Agreement | ||
Debt Instrument [Line Items] | ||
Total debt | 3,278 | |
Loans payable | Credit agreement | ||
Debt Instrument [Line Items] | ||
Total debt | 4,046 | 5,000 |
Discount on Term Loan | (1,977) | (2,785) |
Unamortized debt issuance costs related to Term Loan | $ (204) | $ (163) |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Apr. 17, 2015 | |
Debt Instrument [Line Items] | |||||
Amortization of deferred financing costs | $ 62 | $ 197 | $ 123 | $ 280 | |
Write-off of debt issuance costs | 282 | 0 | |||
Amortization of debt discount associated with the warrants | 397 | 244 | 807 | 244 | |
Mark to market of the Additional Warrant | 0 | 0 | 59 | 0 | |
Total | 1,011 | 626 | 1,800 | 709 | |
2013 Loan and Security Agreement | |||||
Debt Instrument [Line Items] | |||||
Write-off of debt issuance costs | 282 | 0 | 282 | 0 | |
Loans payable | Credit agreement | |||||
Debt Instrument [Line Items] | |||||
Interest expense | 161 | 154 | 341 | 154 | |
Accretion of termination fees (over term of Term Loan at rate of 8%) | $ 45 | 27 | $ 91 | 27 | |
Exit fee as a percent of aggregate principal | 8.00% | 8.00% | 8.00% | ||
Line of credit | 2013 Loan and Security Agreement | |||||
Debt Instrument [Line Items] | |||||
Interest expense | $ 16 | 4 | $ 49 | 4 | |
Line of credit | 2016 Credit and Security Agreement | |||||
Debt Instrument [Line Items] | |||||
Interest expense | $ 48 | $ 0 | $ 48 | $ 0 |
Debt (Details)
Debt (Details) - USD ($) | Apr. 29, 2016 | Mar. 28, 2016 | Apr. 17, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Aug. 09, 2016 | Jun. 15, 2016 | Mar. 31, 2016 | Jan. 25, 2016 | Dec. 31, 2015 |
Loan and Security Agreements [Line Items] | ||||||||||||
Write-off of debt issuance costs | $ 282,000 | $ 0 | ||||||||||
Common stock, par value (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | ||||||
Stock issued | $ 4,723,000 | |||||||||||
Number of shares to be purchased under warrant (in shares) | 543,478 | 543,478 | ||||||||||
Other Operating Income | $ 887,000 | $ 0 | $ 887,000 | 0 | ||||||||
2013 Loan and Security Agreement | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Write-off of debt issuance costs | 282,000 | $ 0 | 282,000 | $ 0 | ||||||||
2013 Loan and Security Agreement | Interest Expense | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Write-off of debt issuance costs | 300,000 | |||||||||||
Loans payable | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Amount of term loan | 5,000,000 | 5,000,000 | $ 5,000,000 | |||||||||
Loans payable | 2013 Loan and Security Agreement | Contingently Issuable Warrant | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Value of warrant to be issued is debt instrument is not paid | $ 1,250,000 | |||||||||||
Loans payable | 2013 Loan and Security Agreement | Transaction Cost | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Debt extinguishment costs, early termination fees | $ 140,000 | |||||||||||
Loans payable | Credit agreement | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Facility fee amount | $ 100,000 | |||||||||||
Expected term | 7 years | |||||||||||
Deferred issuance costs, net | $ 204,000 | 204,000 | 163,000 | |||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending June 30, 2016 | $ 34,000,000 | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending September 30, 2016 | 37,000,000 | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending December 31, 2016 | 40,000,000 | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending each fiscal quarter thereafter | 45,000,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the three month period ending June 30, 2016 | 2,000,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the six month period ending September 30, 2016 | 1,100,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the nine month period ending December 31, 2016 | 800,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the twelve month period ending March 31, 2017 | 500,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the twelve month period ending June 30, 2017 | 900,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the twelve month period ending September 30, 2017 | 2,500,000 | |||||||||||
Amount of term loan | $ 5,000,000 | |||||||||||
Maximum aggregate revenue-based payment | $ 600,000 | |||||||||||
First principal payment | 1,000,000 | |||||||||||
Interest paid | $ 400,000 | |||||||||||
Variable rate floor, percent | 1.00% | |||||||||||
Exit fee as a percent of aggregate principal | 8.00% | 8.00% | 8.00% | |||||||||
Debt covenant, additional equity required (not less than) | $ 500,000 | |||||||||||
Common stock, par value (in dollars per share) | $ 0.04 | |||||||||||
Stock issued | $ 100,000 | |||||||||||
Debt covenant, maximum debt outstanding | $ 250,000 | |||||||||||
Number of shares to be purchased under warrant (in shares) | 543,478 | |||||||||||
Exercise price of warrant (in dollars per share) | $ 6.90 | |||||||||||
Term loan, fair value | $ 1,977,000 | $ 1,977,000 | $ 2,785,000 | |||||||||
Expected volatility rate (as percent) | 85.00% | |||||||||||
Risk free interest rate (as percent) | 1.40% | |||||||||||
Dividend rate (as percent) | 0.00% | |||||||||||
Loans payable | Credit agreement | Annual Aggregate Revenue Up To And Including $20 million | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Percent of aggregate revenue for quarterly payments | 8.50% | |||||||||||
Annual aggregate revenue limit | $ 20,000,000 | |||||||||||
Loans payable | Credit agreement | Annual Aggregate Revenue Greater Than $20 Million Up To And Including $30 Million | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Percent of aggregate revenue for quarterly payments | 7.00% | |||||||||||
Loans payable | Credit agreement | Annual Aggregate Revenue Greater Than $20 Million Up To And Including $30 Million | Minimum | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Annual aggregate revenue limit | $ 20,000,000 | |||||||||||
Loans payable | Credit agreement | Annual Aggregate Revenue Greater Than $20 Million Up To And Including $30 Million | Maximum | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Annual aggregate revenue limit | $ 30,000,000 | |||||||||||
Loans payable | Credit agreement | Annual Aggregate Revenue Greater Than $30 million | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Percent of aggregate revenue for quarterly payments | 5.00% | |||||||||||
Annual aggregate revenue limit | $ 30,000,000 | |||||||||||
Loans payable | Credit agreement | LIBOR | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Spread on variable rate (as percent) | 14.00% | 14.00% | ||||||||||
Loans payable | Credit agreement | Contingently Issuable Warrant | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Value of warrant to be issued is debt instrument is not paid | $ 1,250,000 | |||||||||||
Expected term | 7 years | |||||||||||
Term loan, fair value | $ 3,600,000 | |||||||||||
Expected volatility rate (as percent) | 80.00% | |||||||||||
Risk free interest rate (as percent) | 2.10% | |||||||||||
Dividend rate (as percent) | 0.00% | |||||||||||
Line of credit | 2013 Loan and Security Agreement | Transaction Cost | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Debt extinguishment cost, legal fees | 30,000 | |||||||||||
Facility fee amount | 107,000 | |||||||||||
Line of credit | 2016 Credit and Security Agreement | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Facility fee amount | 140,000 | |||||||||||
Maximum borrowing capacity | $ 7,000,000 | |||||||||||
Expected term | 3 years | |||||||||||
Borrowings outstanding | 3,300,000 | $ 3,300,000 | ||||||||||
Available borrowing availability | 300,000 | 300,000 | ||||||||||
Commitment fee, percentage (as percent) | 0.50% | |||||||||||
Collateral fee (as percent) | 0.50% | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending June 30, 2016 | $ 34,000,000 | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending September 30, 2016 | 37,000,000 | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending December 31, 2016 | 40,000,000 | |||||||||||
Debt covenant, minimum aggregate revenue for twelve month period ending each fiscal quarter thereafter | 45,000,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the three month period ending June 30, 2016 | (2,000,000) | |||||||||||
Debt covenant, minimum EBITDA amount for the six month period ending September 30, 2016 | (1,100,000) | |||||||||||
Debt covenant, minimum EBITDA amount for the nine month period ending December 31, 2016 | 800,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the twelve month period ending March 31, 2017 | 500,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the twelve month period ending June 30, 2017 | 900,000 | |||||||||||
Debt covenant, minimum EBITDA amount for the twelve month period ending September 30, 2017 | 2,500,000 | |||||||||||
Amount of consolidated unencumbered liquid assets required (not less than) | $ 750,000 | |||||||||||
Other Operating Income | 900,000 | |||||||||||
Line of credit | 2016 Credit and Security Agreement | Other Assets | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Deferred issuance costs, net | $ 300,000 | $ 300,000 | ||||||||||
Line of credit | 2016 Credit and Security Agreement | Prime rate | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Spread on variable rate (as percent) | 5.50% | |||||||||||
Line of credit | 2016 Credit and Security Agreement | Subsequent event | ||||||||||||
Loan and Security Agreements [Line Items] | ||||||||||||
Borrowings outstanding | $ 2,400,000 | |||||||||||
Available borrowing availability | $ 800,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($)branch_office | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Branch closure obligation | $ | $ 0.6 |
Employment agreements, contract term | 1 year |
Portamedic branch | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Number of offices | branch_office | 2 |
Litigation (Details)
Litigation (Details) - USD ($) $ in Thousands | Apr. 29, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | |||
Settlement fund amount | $ 450 | ||
Loss from operations | Discontinued operations | |||
Loss Contingencies [Line Items] | |||
Loss recognized in period | $ 150 | ||
Accrued expenses | |||
Loss Contingencies [Line Items] | |||
Accrual of loss | $ 450 | $ 300 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | $ 0 | |
Interest and penalty payments | $ 0 | 0 | 0 | $ 0 | |
Current federal tax benefit | 0 | 0 | |||
Current state tax benefit | $ 0 | $ 0 | |||
U.S. Federal | |||||
Operating loss carryforwards, subject to expiration | $ 167,200,000 | ||||
State | |||||
Operating loss carryforwards, subject to expiration | $ 149,800,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability - Face Value | $ 0 | $ 1,250 |
Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term Loan - Face Value | 5,000 | 5,000 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | 0 | 828 |
Carrying Amount | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term Loan, Carrying Amount | 1,953 | 2,052 |
Level 3 | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | 0 | 828 |
Level 3 | Fair Value | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Term Loan, Fair Value | $ 3,590 | $ 3,837 |