Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 25, 2014 | Jun. 30, 2013 | |
Document And Entity Information Abstract | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'dss | ' | ' |
Entity Registrant Name | 'DOCUMENT SECURITY SYSTEMS INC | ' | ' |
Entity Central Index Key | '0000771999 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well Known Seasoned Issuer | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 49,495,511 | ' |
Entity Public Float | ' | ' | $46,104,657 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash | $2,477,031 | $1,887,163 |
Accounts receivable, net of allowance of $60,000 ($60,000- 2012) | 2,149,123 | 2,123,019 |
Inventory | 834,979 | 817,685 |
Prepaid expenses and other current assets | 403,107 | 290,402 |
Deferred tax asset, net | 223,323 | ' |
Total current assets | 6,087,563 | 5,118,269 |
Property, plant and equipment, net | 5,157,852 | 3,723,908 |
Investments and other assets | 11,448,008 | 232,815 |
Goodwill | 15,046,197 | 3,322,799 |
Other intangible assets, net | 29,602,591 | 1,852,677 |
Total assets | 67,342,211 | 14,250,468 |
Current liabilities: | ' | ' |
Accounts payable | 1,421,765 | 1,417,460 |
Accrued expenses and other current liabilities | 1,455,629 | 1,218,534 |
Revolving lines of credit | 158,087 | 238,240 |
Short-term debt, net | 824,857 | ' |
Current portion of long-term debt, net | 613,488 | 913,454 |
Total current liabilities | 4,473,826 | 3,787,688 |
Long-term debt, net | 3,087,358 | 1,483,676 |
Interest rate swap hedging liabilities | 27,566 | 127,883 |
Deferred tax liability, net | 1,364,447 | 127,675 |
Commitments and contingencies (see Note 12) | ' | ' |
Stockholders' equity | ' | ' |
Common stock, $.02 par value; 200,000,000 shares authorized, 49,411,486 shares issued and outstanding (21,705,969 in 2012) | 988,230 | 434,118 |
Additional paid-in capital | 97,790,426 | 55,872,917 |
Accumulated other comprehensive loss | -27,566 | -127,883 |
Accumulated deficit | -44,862,076 | -47,455,606 |
Non-controlling interest in subsidiary | 4,500,000 | ' |
Total stockholders' equity | 58,389,014 | 8,723,546 |
Total liabilities and stockholders' equity | $67,342,211 | $14,250,468 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Balance Sheets [Abstract] | ' | ' |
Accounts receivable, allowance | $60,000 | $60,000 |
Common stock, par value | $0.02 | $0.02 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 49,411,486 | 21,705,969 |
Common stock, shares outstanding | 49,411,486 | 21,705,969 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Loss (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue | ' | ' |
Printed products | $15,425,514 | $15,289,688 |
Technology sales, services and licensing | 2,026,930 | 1,825,582 |
Total revenue | 17,452,444 | 17,115,270 |
Costs and expenses | ' | ' |
Costs of revenue, exclusive of depreciation and amortization | 10,458,110 | 10,977,535 |
Selling, general and administrative, (including stock based compensation of $1,894,719 and $846,705, respectively). | 11,665,667 | 9,066,523 |
Depreciation and amortization | 2,966,368 | 845,137 |
Impairment of intangible assets Modified | 516,726 | ' |
Total expenses | 25,606,871 | 20,889,195 |
Operating loss | -8,154,427 | -3,773,925 |
Other income (expense): | ' | ' |
Interest expense | -245,969 | -228,139 |
Gain on sale of fixed assets | 116,569 | ' |
Amortizaton of note discount and loss on debt extinguishment | -45,266 | -259,816 |
Loss before income taxes | -8,355,345 | -4,261,880 |
Income tax (benefit) expense, net | -10,948,875 | 18,948 |
Net income (loss) | 2,593,530 | -4,280,828 |
Other comprehensive income (loss): | ' | ' |
Interest rate swap gain (loss) | 100,317 | -17,195 |
Comprehensive income (loss) | $2,693,847 | ($4,298,023) |
Earnings per share: | ' | ' |
Basic | $0.08 | ($0.21) |
Diluted | $0.08 | ($0.21) |
Shares used in computing earnings per share: | ' | ' |
Basic | 31,838,593 | 20,828,149 |
Diluted | 31,884,957 | 20,828,149 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | ' | ' |
Net income (loss) | $2,593,530 | ($4,280,828) |
Adjustments to reconcile net income (loss) to net cash used by operating activities: | ' | ' |
Depreciation and amortization | 2,966,368 | 845,137 |
Stock based compensation | 1,894,719 | 846,705 |
Amortizaton of note discount | 45,266 | 259,816 |
Loss on extinquishment of debt | 26,252 | ' |
Gain on sale of fixed assets | -116,569 | ' |
Impairment of intangible assets | 516,726 | ' |
Change in deferred tax provision | -10,948,875 | 18,948 |
Increase in assets: | ' | ' |
Accounts receivable | -26,104 | -527,269 |
Inventory | -17,294 | -34,243 |
Prepaid expenses and other assets | -184,956 | -117,951 |
Increase (decrease) in liabilities: | ' | ' |
Accounts payable | 159,948 | -249,503 |
Accrued expenses and other liabilities | -58,250 | 75,905 |
Net cash used by operating activities | -3,149,239 | -3,163,283 |
Cash flows from investing activities: | ' | ' |
Purchase of equipment and building improvements | -378,587 | -245,112 |
Sale of equipment | 753,000 | ' |
Acquisition of business | 6,568,112 | ' |
Investment in VirtualAgility | -250,000 | ' |
Purchase of intangible assets | -2,593,495 | -113,569 |
Net cash provided by (used by) investing activities | 4,099,030 | -358,681 |
Cash flows from financing activities: | ' | ' |
Net payments on revolving lines of credit | -80,153 | -525,496 |
Payment of short-term loan from related party | ' | -150,000 |
Payments of long-term debt | -353,192 | -352,350 |
Payments of capital lease obligations | ' | -94,595 |
Issuance of common stock, net of issuance costs | 73,422 | 5,813,889 |
Net cash (used) provided by financing activities | -359,923 | 4,691,448 |
Net increase in cash | 589,868 | 1,169,484 |
Cash beginning of year | 1,887,163 | 717,679 |
Cash end of year | $2,477,031 | $1,887,163 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid- in Capital | Accumulated Other Comprehensive Income | Non-controlling Interest in Subsidiary [Member] | Accumulated Deficit |
Beginning Balance at Dec. 31, 2011 | $5,500,037 | $390,262 | $48,395,241 | ($110,688) | ' | ($43,174,778) |
Beginning Balance (in shares) at Dec. 31, 2011 | ' | 19,513,132 | ' | ' | ' | ' |
Issuance of common stock, net (in shares) | ' | 2,017,127 | ' | ' | ' | ' |
Issuance of common stock, net | 5,813,889 | 40,342 | 5,773,547 | ' | ' | ' |
Stock based payments, net of tax effect | 912,216 | ' | 912,216 | ' | ' | ' |
Beneficial conversion features of convertible debt | 215,584 | ' | 215,584 | ' | ' | ' |
Conversion of debt (in shares) | ' | 175,710 | ' | ' | ' | ' |
Conversion of debt | 579,843 | 3,514 | 576,329 | ' | ' | ' |
Other comprehensive income (loss) | -17,195 | ' | ' | -17,195 | ' | ' |
Net Income (Loss) | -4,280,828 | ' | ' | ' | ' | -4,280,828 |
Ending Balance at Dec. 31, 2012 | 8,723,546 | 434,118 | 55,872,917 | -127,883 | ' | -47,455,606 |
Ending Balance (in shares) at Dec. 31, 2012 | ' | 21,705,969 | ' | ' | ' | ' |
Issuance of common stock, net (in shares) | ' | 3,479,208 | ' | ' | ' | ' |
Issuance of common stock, net | 148,643 | 69,584 | 79,059 | ' | ' | ' |
Shares issued in consideration of acquisition of a subsidiary, shares | ' | 23,439,631 | ' | ' | ' | ' |
Issuance of common stock for acquisition of Lexington Technology Group, net | 44,820,582 | 468,794 | 40,051,788 | ' | 4,300,000 | ' |
Stock based payments, net of tax effect (in shares) | ' | 786,678 | ' | ' | ' | ' |
Stock based payments, net of tax effect | 1,810,379 | 15,734 | 1,794,645 | ' | ' | ' |
Beneficial conversion features of convertible debt | ' | ' | -7,983 | ' | ' | ' |
Other comprehensive income (loss) | 100,317 | ' | ' | 100,317 | ' | ' |
Sale of shares in Virtual Agility Technology Investment, LLC | 200,000 | ' | ' | ' | 200,000 | ' |
Net Income (Loss) | 2,593,530 | ' | ' | ' | ' | 2,593,530 |
Ending Balance at Dec. 31, 2013 | $58,389,014 | $988,230 | $97,790,426 | ($27,566) | $4,500,000 | ($44,862,076) |
Ending Balance (in shares) at Dec. 31, 2013 | ' | 49,411,486 | ' | ' | ' | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2013 | |
DESCRIPTION OF BUSINESS [Abstract] | ' |
DESCRIPTION OF BUSINESS | ' |
NOTE 1 - DESCRIPTION OF BUSINESS | |
Document Security Systems, Inc. (the "Company"), through three of its subsidiaries, Premier Packaging Corporation, Plastic Printing Professionals, Inc., which operates under the assumed name of DSS Plastics Group, and Secuprint Inc., which operates under the assumed name of DSS Printing Group, operates in the security and commercial printing, packaging and plastic ID markets. The Company develops, markets, manufactures and sells paper and plastic products designed to protect valuable information from unauthorized scanning, copying, and digital imaging. The Company's subsidiary, Extradev, Inc. which operates under the assumed name of DSS Digital Group, develops, markets and sells digital information services, including data hosting, disaster recovery and data back-up and security services. The Company's subsidiary as a result of a merger completed on July 1, 2013 (as described in greater detail below), DSS Technology Management, Inc., acquires intellectual property assets, interests in companies owning intellectual property assets, or assists others in managing their intellectual property monetization efforts, for the purpose of monetizing these assets through a variety of value-enhancing initiatives, including, but not limited to, investments in the development and commercialization of patented technologies, licensing, strategic partnerships and commercial litigation. | |
Completion of Merger with DSS Technology Management, Inc. | |
On July 1, 2013 (the "Closing Date"), DSSIP, Inc., a Delaware corporation ("Merger Sub") and a wholly-owned subsidiary of DSS merged with and into Lexington Technology Group, Inc. ("Lexington"), n/k/a DSS Technology Management, Inc., a Delaware corporation ("DSS Technology Management"), pursuant to the terms and conditions of an Agreement and Plan of Merger, dated as of October 1, 2012 (as amended, the "Merger Agreement"), by and among the Company, DSS Technology Management, Merger Sub and Hudson Bay Master Fund Ltd. ("Hudson Bay"), as representative of DSS Technology Management's stockholders (the "Merger"). Effective on July 1, 2013, as a result of the Merger, DSS Technology Management became a wholly-owned subsidiary of DSS. In connection with the Merger, the Company issued on the Closing Date, its securities to DSS Technology Management's stockholders in exchange for the capital stock owned by DSS Technology Management's stockholders, as follows (the "Merger Consideration"): (i) an aggregate of 16,558,387 shares of the Company's common stock, par value $0.02 per share (the "Common Stock") ; (ii) 7,100,000 shares of the Company's Common Stock to be held in escrow pursuant to an escrow agreement, dated July 1, 2013, entered into by and among the Company, Hudson Bay and American Stock Transfer & Trust Company, LLC, as escrow agent (the "Escrow Agreement"); (iii) warrants to purchase up to an aggregate of 4,859,894 shares of the Company's Common Stock, at an exercise price of $4.80 per share and expiring on July 1, 2018; and (iv) warrants to purchase up to an aggregate of 3,432,170 shares of the Company's Common Stock, at an exercise price of $0.02 per share and expiring on July 1, 2023 (the "$.02 Warrants"), to DSS Technology Management's preferred stockholders that would beneficially own more than 9.99% of the shares of the Company's Common Stock as a result of the Merger (the "Beneficial Ownership Condition"). In addition, the Company assumed options to purchase an aggregate of 2,000,000 shares of the Company's Common Stock at an exercise price of $3.00 per share, in exchange for 3,600,000 outstanding and unexercised stock options to purchase shares of DSS Technology Management's common stock. In addition, the Company issued an aggregate of 786,678 shares of Common Stock to Palladium Capital Advisors, LLC ("Palladium") as compensation for their services in connection with the transactions contemplated by the Merger Agreement. Of those shares issued to Palladium, 400,000 are currently being held in escrow pursuant to the same terms and conditions as those set forth in the Escrow Agreement. | |
As a result of the consummation of the Merger, as of the Closing Date, the former stockholders of DSS Technology Management owned approximately 51% of the outstanding common stock of the combined company and the stockholders of the Company prior to the completion of the Merger own approximately 49% of the outstanding common stock of the combined company. | |
Pursuant to the Escrow Agreement, the shares of the Company's Common Stock deposited in the escrow account will be released to the holders of the DSS Technology Management common stock (pro rata on a fully-diluted basis as of the effective time of the Merger) if and when the closing price per share of the Company's Common Stock exceeds $5.00 per share (as adjusted for stock splits, stock dividends and similar events) for 40 trading days within a continuous 90 trading day period following the closing of the Merger. If within one year following the closing of the Merger, such threshold is not achieved, the shares of the Company's Common Stock held in escrow shall be cancelled and returned to the treasury of the Company. DSS Technology Management stockholders will have voting rights with respect to the Company's shares owned by such stockholders and held in escrow for one year following the closing of the Merger even though such shares may be cancelled and returned to the treasury of the Company if the condition for release of the shares held in escrow is not met. | |
If after one year after the Closing Date, the shares held in escrow are cancelled because the conditions discussed above were not met, the former stockholders of DSS Technology Management are expected to own approximately 42% of the outstanding common stock of the combined company and the stockholders of the Company prior to the completion of the Merger are expected to own approximately 58% of the outstanding common stock of the combined company (without taking into account any shares of the Company's Common Stock held by DSS Technology Management's stockholders prior to the completion of the Merger, and excluding the exercise of any options and warrants). | |
The transaction was accounted for as a business combination in accordance with FASB ASC 805 Business Combinations. (See Footnote 9) | |
Effective on August 2, 2013, Lexington Technology Group, Inc. changed its name to DSS Technology Management, Inc. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
Principles of Consolidation - The consolidated financial statements include the accounts of Document Security System and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||
Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, fair values of intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company's common stock, deferred revenue and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The Company engages third-party valuation consultants to assist Management in the allocation of the purchase price of significant acquisitions, testing for impairment of intangible assets, and the determination of the fair value of derivative liabilities. | |||||||||||||
Reclassifications - Certain prior year amounts have been reclassified to conform to the current year presentation. | |||||||||||||
Accounts Receivable - The Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based upon management's estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. At December 31, 2013, the Company established a reserve for doubtful accounts of approximately $60,000 ($60,000 - 2012). The Company does not accrue interest on past due accounts receivable. | |||||||||||||
Inventory - Inventories consist primarily of paper, plastic materials and cards, pre-printed security paper, paperboard and fully-prepared packaging which and are stated at the lower of cost or market on the first-in, first-out ("FIFO") method.Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead. | |||||||||||||
Property, Plant and Equipment - Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives or lease period of the assets whichever is shorter. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Any gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. Depreciation expense in 2013 was approximately $560,000 ($541,000 - 2012). | |||||||||||||
Investments - The Company's investment consists of non-recourse promissory notes and common stock in VirtualAgility, Inc ("VirtualAgility"). The Company does not control nor exert significant influence over VirtualAgility and therefore carries the investment at cost. The VirtualAgility investment is held by the Company's subsidiary, VirtualAgility Technology Investment, LLC ("VATI"), of which the Company owned 60% on December 31, 2013. Management determined the Company has control over VATI, and has consolidated VATI in the accompanying consolidated Financial Statements. The portion of capital owned by the minority owner of VATI is shown as non-controlling interest on the balance sheet. | |||||||||||||
Business Combinations - Business combinations are recorded in accordance with FASB ASC 805. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed then a gain on acquisition is recorded. Under the guidance, all acquisition costs are expensed as incurred. The application of business combination and impairment accounting requires the use of significant estimates and assumptions. | |||||||||||||
Goodwill - Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an event occurs or circumst ances change that would indicated the carrying amount may be impaired. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If the two-step impairment test is necessary, a fair-value-based test is applied at the reporting unit level, which is generally one level below the operating segment level. The test compares the fair value of an entity's reporting units to the carrying value of those reporting units. This test requires various judgments and estimates. The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. An adjustment to goodwill will be recorded for any goodwill that is determined to be impaired. The Company tests goodwill for impairment at least annually in conjunction with preparation of its annual business plan, or more frequently if events or circumstances indicate it might be impaired. FASB ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. | |||||||||||||
Other Intangible Assets and Patent Application Costs- Other intangible assets consists of costs associated with the application for patents, acquisition of patents and contractual rights to patents and trade secrets associated with the Company's technologies.. The Company's patents and trade secrets are generally for document anti-counterfeiting and anti-scanning technologies and processes that form the basis of the Company's document security business. Patent application costs are capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life. In addition, intangible assets include customer lists and non-compete agreements obtained as a result of acquisitions. Intangible asset amortization expense is classified as an operating expense. The Company believes that the decision to incur patent costs is discretionary as the associated products or services can be sold prior to or during the application process. The Company accounts for other intangible amortization as an operating expense, unless the underlying asset is directly associated with the production or delivery of a product. Subsequent to acquisition of patents and trade secrets, legal and associated costs incurred in prosecuting alleged infringements of the patents will be recognized as expense when incurred. Costs incurred to renew or extend the term of recognized intangible assets, including patent annuities and fees, and patent defense costs are expensed as incurred. To date, the amount of related amortization expense for other intangible assets directly attributable to revenue recognized is not material. | |||||||||||||
Impairment of Long Lived Assets - The Company monitors the carrying value of long-lived assets for potential impairment and tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset or asset group to its carrying value. | |||||||||||||
Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the FASB ASC establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: | |||||||||||||
¨ | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | ||||||||||||
¨ | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | ||||||||||||
¨ | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | ||||||||||||
The carrying amounts reported in the balance sheet of cash, accounts receivable, prepaids, notes receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of revolving credit lines, notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions. Derivative instruments, as discussed below, are recorded as assets and liabilities at estimated fair value based on available market information. The Company's convertible note payable is recorded at its face amount, net of an unamortized premium for a beneficial conversion feature and has an estimated fair value of approximately $539,000 ($565,000 - December 31, 2012) based on the underlying shares the note can be converted into at the trading price on December 31, 2013. Since the underlying shares are trading in an active, observable market, the fair value measurement qualifies as a Level 1 input. See Note 5 for additional details regarding the fair value of the Company's investments in notes receivable. | |||||||||||||
Derivative Instruments - The Company maintains an overall interest rate risk management strategy that incorporates the use of interest rate swap contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility. The Company has two interest rate swaps that change variable rates into fixed rates on two term loans. These swaps qualify as Level 2 fair value financial instruments. These swap agreements are not held for trading purposes and the Company does not intend to sell the derivative swap financial instruments. The Company records the interest swap agreements on the balance sheet at fair value because the agreements qualify as a cash flow hedges under accounting principles generally accepted in the United States of America. Gains and losses on these instruments are recorded in other comprehensive income (loss) until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive income (loss) (AOCI) to the Consolidated Statement of Operations on the same line item as the underlying transaction. The valuations of the interest rate swaps have been derived from proprietary models of the bank based upon recognized financial principles and reasonable estimates about relevant future market conditions and may reflect certain other financial factors such as anticipated profit or hedging, transactional, and other costs. The notional amounts of the swaps decrease over the life of the agreements. The Company is exposed to a credit loss in the event of nonperformance by the counter parties to the interest rate swap agreements. However, the Company does not anticipate non-performance by the counter parties. The cumulative net loss attributable to this cash flow hedge recorded in accumulated other comprehensive loss and other liabilities at December 31, 2013 was approximately $28,000 ($128,000 - December 31, 2012). | |||||||||||||
The Company has notional amounts of approximately $1,506,000 as of December 31, 2013 on its interest rate swap agreements for its Citizens Bank debt. The Company has two interest rate swaps that change variable rates into fixed rates on two term loans and the terms of these instruments are as follows: | |||||||||||||
Notional | Variable | ||||||||||||
Amount | Rate | Fixed Cost | Maturity Date | ||||||||||
$ | 350,000 | 3.92 | % | 5.7 | % | 1-Feb-15 | |||||||
$ | 1,155,744 | 3.32 | % | 5.87 | % | 30-Aug-21 | |||||||
Conventional Convertible Debt - When the convertible feature of the conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature ("BCF"). Prior to the determination of the BCF, the proceeds from the debt instrument are first allocated between the convertible debt and any detachable free standing instruments that are included, such as common stock warrants. The Company records a BCF as a debt discount pursuant to FASB ASC Topic 470-20. In those circumstances, the convertible debt will be recorded net of the discount related to the BCF. The Company amortizes the discount to interest expense over the life of the debt using the effective interest method. | |||||||||||||
Share-Based Payments - Compensation cost for stock awards are measured at fair value and recognize compensation expense over the service period for which awards are expected to vest. The Company uses the Black-Scholes-Merton option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes-Merton model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option's expected term and the price volatility of the underlying stock. For equity instruments issued to consultants and vendors in exchange for goods and services the Company determines the measurement date for the fair value of the equity instruments issued at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||||||
Revenue Recognition - Sales of printed products including commercial and security printing, packaging, and plastic cards are recognized when a product or service is delivered, shipped or provided to the customer and all material conditions relating to the sale have been substantially performed. | |||||||||||||
For technology sales and services, revenue is recognized in accordance with the FASB ASC 985-605. Accordingly, revenue is recognized when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is reasonably assured. We recognize cloud computing revenue, including data backup, recovery and security services, on a monthly basis, beginning on the date the customer commences use of our services. Professional services are recognized in the period services are provided. | |||||||||||||
For printing technology licenses revenue is recognized once all the following criteria for revenue recognition have been met: (1) persuasive evidence of an agreement exists; (2) the right and ability to use the product or technology has been rendered; (3) the fee is fixed and determinable and not subject to refund or adjustment; and (4) collection of the amounts due is reasonably assured. | |||||||||||||
For other technology licenses, revenue arrangements generally provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. These rights typically include some combination of the following: (i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled the Company, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation. The intellectual property rights granted may be perpetual in nature, extending until the expiration of the related patents, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. Pursuant to the terms of these agreements, the Company has no further obligation with respect to the grant of the non-exclusive retroactive and future licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on the Company's part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the agreement, or upon receipt of the minimum upfront payment for term agreement renewals. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectibility is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all other revenue recognition criteria have been met. | |||||||||||||
Certain of the Company's revenue arrangements provide for future royalties or additional required payments based on future licensee activities. Additional royalties are recognized in revenue upon resolution of the related contingency provided that all revenue recognition criteria, as described above, have been met. Amounts of additional royalties due under these license agreements, if any, cannot be reasonably estimated by management. | |||||||||||||
Costs of Revenue - Costs of revenue includes all direct cost of the Company's packaging, commercial and security printing and plastic ID card sales, primarily, paper, plastic, inks, dies, and other consumables, and direct labor, transportation and manufacturing facility costs. In addition, this category includes all direct costs associated with the Company's technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Costs of revenue recorded in the DSS Technology Management group include contingent legal fees, inventor royalties, legal, consulting and other professional fees directly related to the Company's patent monetization, litigation and licensing activities. Amortization of patent costs and acquired technology are included in depreciation and amortization on the consolidated statement of operations. Costsof revenue sold does not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. | |||||||||||||
Contingent Legal Expenses - Contingent legal fees are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In instances where there are no recoveries from potential infringers, no contingent legal fees are paid; however, the Company may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement that will be paid out from the proceeds from settlements or licenses that arise pursuant to an enforcement action, which will be expensed as legal fees in the period in which the payment of such fees is probable. Any unamortized patent acquisition costs will be expensed in the period a conclusion is reached in an enforcement action that does not yield future royalties potential. | |||||||||||||
Advertising Costs - Generally consist of online, keyword advertising with Google with additional amounts spent on certain print media in targeted industry publications. Advertising costs were approximately $48,000 in 2013 ($83,000 - 2012). | |||||||||||||
Research and Development - Research and development costs are expensed as incurred. Research and development costs consist primarily of compensation costs for research personnel, third-party research costs, and consulting costs. The Company spent approximately $254,000 and $491,000 on research and development during 2013 and 2012, respectively. | |||||||||||||
Foreign Currency - Net gains and losses resulting from transactions denominated in foreign currency are recorded as other income or loss. | |||||||||||||
Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense. | |||||||||||||
Earnings Per Common Share - The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss year, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. | |||||||||||||
As of December 31, 2013 and 2012, there were 18,750,840 and 4,614,784, respectively, of common stock share equivalents potentially issuable under convertible debt agreements, employment agreements, options, warrants, and restricted stock agreements, including common shares being held in escrow pursuant to the Merger Agreement, and that could potentially dilute basic earnings per share in the future. For the year ended December 31, 2013, based on the average market price of the Company's common stock during that period of $1.98, 46,364 common stock equivalents were added to the basic shares outstanding to calculate dilutive earnings per share. Common stock equivalents were excluded from the calculation of diluted earnings per share for 2012 in which the Company had a net loss, since their inclusion would have been anti-dilutive. | |||||||||||||
Comprehensive Loss - Comprehensive loss is defined as the change in equity of the Company during a period from transactions and other events and circumstances from non-owner sources. It consists of net (loss) income and other gains and losses affecting stockholders' equity that, under GAAP, are excluded from net income (loss). The change in fair value of interest rate swaps was the only item impacting accumulated other comprehensive loss for the years ended December 31, 2013 and 2012. | |||||||||||||
Concentration of Credit Risk - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions. | |||||||||||||
During 2013, two customers accounted for 35% of the Company's consolidated revenue. As of December 31, 2013, these two customers accounted for 30% of the Company's trade accounts receivable balance. During 2012, one of these customers accounted for 29% of the Company's consolidated revenue. As of December 31, 2012, this same customer accounted for 21% of the Company's trade accounts receivable balance. | |||||||||||||
Recent Accounting Pronouncements - FASB ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). Per this ASU, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. |
INVENTORY
INVENTORY | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INVENTORY [Abstract] | ' | ||||||||
INVENTORY | ' | ||||||||
NOTE 3 - INVENTORY | |||||||||
Inventory consisted of the following at December 31: | |||||||||
2013 | 2012 | ||||||||
Finished Goods | $ | 395,767 | $ | 270,776 | |||||
Work in process | 129,627 | 101,694 | |||||||
Raw Materials | 309,585 | 445,215 | |||||||
$ | 834,979 | $ | 817,685 | ||||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY PLANT AND EQUIPMENT | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
PROPERTY PLANT AND EQUIPMENT [Abstract] | ' | ||||||||||||||
PROPERTY PLANT AND EQUIPMENT | ' | ||||||||||||||
NOTE 4 - PROPERTY PLANT AND EQUIPMENT | |||||||||||||||
Property, plant and equipment consisted of the following at December 31: | |||||||||||||||
2013 | 2012 | ||||||||||||||
Estimated | Purchased | Purchased | Under | ||||||||||||
Useful Life | Capital | ||||||||||||||
Leases | |||||||||||||||
Machinery and equipment | 5-10 years | $ | 5,109,121 | $ | 3,435,509 | $ | 63,000 | ||||||||
Building and improvements | 39 years | 1,655,613 | 1,345,523 | - | |||||||||||
Land | 185,000 | 185,000 | - | ||||||||||||
Leasehold improvements | See (1) | 774,912 | 765,425 | - | |||||||||||
Furniture and fixtures | 7 years | 138,135 | 135,854 | - | |||||||||||
Software and websites | 3 years | 359,308 | 359,308 | - | |||||||||||
Total cost | $ | 8,222,089 | $ | 6,226,619 | $ | 63,000 | |||||||||
Less accumulated depreciation | 3,064,237 | 2,516,711 | 49,000 | ||||||||||||
Property, plant, and equipment, net | $ | 5,157,852 | $ | 3,709,908 | $ | 14,000 | |||||||||
(1) Expected lease term between 3 and 10 years. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2013 | |
INVESTMENTS [Abstract] | ' |
INVESTMENTS | ' |
NOTE 5 - INVESTMENTS | |
In March 2013, DSS Technology Management made its first of a series of investments in VirtualAgility, Inc. ("VirtualAgility"), a developer of programming platforms that facilitate the creation of business applications without programming or coding. The initial investment consisted of a $200,000 non-recourse note plus an equity stake of 1/8 of 7% of the outstanding common stock of VirtualAgility, for a total cash investment of $250,000. Each non-recourse note, when purchased, is eligible for a preferred return of $1,250,000, plus a variable return of 1.875% based on gross proceeds derived from VirtualAgility's patent portfolio, if any. In addition, VirtualAgility granted DSS Technology Management a total of seven additional options to make additional quarterly investments of $250,000 apiece, under the same terms as the first investment. If all of such options are exercised, DSS Technology Management will have invested an aggregate of $2,000,000, consisting of $1,600,000 in non-recourse notes that would be eligible for an aggregate preferred return of $10,000,000 plus up to 15% of variable returns and, based on the current capitalization of VirtualAgility, DSS Technology Management would also own approximately 7% of the outstanding common stock of VirtualAgility. In May 2013, DSS Technology Management created a subsidiary called VirtualAgility Technology Investments, LLC ("VATI") and transferred its ownership of the VirtualAgility investment and future investment options to VATI. Also in May 2013, a third-party investor and became a 40% member of VATI. In exchange, the investor contributed $250,000 into VATI which was used to exercise one of the investments in VirtualAgility per the terms described above. As of July, 2013, DSS Technology Management owned 60% of VATI. In conjunction with its purchase accounting, the Company assessed the fair value of the VirtualAgility investment, including the expected exercise of future investment options as of the acquisition date, at approximately $10,750,000 which became the cost basis of the investment as July 1, 2013. A relief from royalty methodology was used to value the potential proceeds to be derived from the patent portfolio and the analysis included a discounted cash flow which estimated future net cash flows resulting from the licensing and enforcement of the VirtualAgility patent portfolio based on information as of the date of acquisition, considering assumptions and estimates related to potential infringers of the patents, applicable industries, usage of the underlying patented technologies, estimated license fee revenues, contingent legal fee arrangements, other estimated costs, tax implications and other factors. A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of estimated net cash flows. The measurement of the VirtualAgility investment constitutes a Level 3 input. In August 2013, the Company contributed $250,000 into VATI which used the funds to make an additional investment in VirtualAgility per the terms described above. In November 2013, the other member of VATI contributed $250,000 into VATI which used the funds to make an additional investment in VirtualAgility per the terms described above. As of December 31, 2013, VATI owned 438,401 shares of common stock of VirtualAgility. As of December 31, 2013, DSS Technology Management owned 60% of VATI. VATI did not record any income or loss during the year ended December 31, 2013. | |
On February 14, 2014, DSS Technology Management made an additional investment in VirtualAgility, consisting of a non-recourse note and equity totaling $250,000, and as a result, increased its ownership percentage in VATI to 68%. | |
In January and February 2014, the Company made investments of $100,000 and $400,000, respectively, for an aggregate of 594,530 shares of common stock in Express Mobile, Inc., a developer of custom mobile applications and websites. The investment will be recorded using the cost method. | |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||
INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||||||||||||||||
INTANGIBLE ASSETS | ' | ||||||||||||||||||||||||||
NOTE 6 - INTANGIBLE ASSETS | |||||||||||||||||||||||||||
Other intangible assets | |||||||||||||||||||||||||||
During 2013 and 2012, the Company spent approximately $78,000 and $114,000 on patent application costs, and $2,500,000 and $0 on patent and patent rights acquisition costs, respectively. In addition, the Company acquired patents as a result of its acquisition of DSS Technology Management which were valued in conjunction with the Company's purchase accounting at approximately $27,856,000 (see Note 9). The patents and patent rights acquired have estimated economic useful lives of approximately 2.5 to 7.5 years. | |||||||||||||||||||||||||||
The Company recorded goodwill of approximately $12.0 million in connection with its acquisition of DSS Technology Management in July 2013. The goodwill was recorded due to the establishment of a deferred tax liability which resulted from the increase in basis of the DSS Technology Management tangible and intangible assets, excluding goodwill, for book purposes but not for tax purposes. Under the acquisition method of accounting, the impact on the acquiring company's deferred tax assets is recorded outside of acquisition accounting. Accordingly, the valuation allowance on the Company's deferred tax assets was partially released to offset part of the increase in deferred tax liability and resulted in an estimated deferred tax benefit of approximately $11.0 million, which was recorded in the statement of operations in 2013. The goodwill is not deductible for income tax purposes. | |||||||||||||||||||||||||||
Refer to Note 9 to these consolidated financial statements for additions to patents and goodwill in connection with the Company's acquisition of DSS Technology Management and the related application of the acquisition method of accounting. | |||||||||||||||||||||||||||
On July 8, 2013, the Company's subsidiary, DSS Technology Management, purchased two patents for $500,000 covering certain methods and processes related to Bluetooth devices. In conjunction with the patent purchases, DSS Technology Management entered into a Proceed Right Agreement with certain investors pursuant to which DSS Technology Management initially received $250,000 of a total of $750,000 which it will ultimately receive thereunder, subject to certain payment milestones, in exchange for 40% of the proceeds which it receives, if any, from the use, sale or licensing of the two patents. As of December 31, 2013, the Company received $500,000 from the investors under the agreement which is recorded as a liability in the consolidated balance sheet. | |||||||||||||||||||||||||||
In September 2013, DSS Technology Management purchased 10 patents covering certain methods and processes in the semiconductor industry for $2,000,000. | |||||||||||||||||||||||||||
Intangible assets are comprised of the following: | |||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||
Useful Life | Gross Carrying | Accumulated | Net Carrying | Gross Carrying | Accumulated | Net Carrying | |||||||||||||||||||||
Amount | Amortizaton | Amount | Amount | Amortizaton | Amount | ||||||||||||||||||||||
Acquired intangibles- customer lists and non-compete agreements | 5 -10 years | 1,997,300 | 1,343,819 | 653,481 | 2,405,300 | 1,243,865 | 1,161,435 | ||||||||||||||||||||
Acquired intangibles-patents and patent rights | Varied (1) | 30,356,164 | 2,042,083 | 28,314,081 | - | - | - | ||||||||||||||||||||
Patent application costs | Varied (2) | 965,523 | 330,494 | 635,029 | 956,714 | 265,472 | 691,242 | ||||||||||||||||||||
$ | 33,318,987 | $ | 3,716,396 | $ | 29,602,591 | $ | 3,362,014 | $ | 1,509,337 | $ | 1,852,677 | ||||||||||||||||
(1) acquired patents and patent rights are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2013, the weighted average remaining useful life of these assets in service was approximately 6.3 years. | |||||||||||||||||||||||||||
(2) patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2013, the weighted average remaining useful life of these assets in service was approximately 9.1 years. | |||||||||||||||||||||||||||
Amortization expense for the year ended December 31, 2013 amounted to approximately $2,406,000 ($304,000 - 2012). | |||||||||||||||||||||||||||
Approximate expected amortization for each of the five succeeding fiscal years is as follows: | |||||||||||||||||||||||||||
2014 | $ | 4,585,000 | |||||||||||||||||||||||||
2015 | $ | 4,499,000 | |||||||||||||||||||||||||
2016 | $ | 4,297,000 | |||||||||||||||||||||||||
2017 | $ | 4,278,000 | |||||||||||||||||||||||||
2018 | $ | 4,134,000 | |||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013, are as follows: | |||||||||||||||||||||||||||
Packaging | Plastics | Technology | Total | ||||||||||||||||||||||||
Segment | Segment | Segment | |||||||||||||||||||||||||
Balance as of January 1, 2013 | |||||||||||||||||||||||||||
Goodwill | 1,768,400 | 684,949 | 869,450 | $ | 3,322,799 | ||||||||||||||||||||||
Accumulated impairment losses | - | - | - | - | |||||||||||||||||||||||
1,768,400 | 684,949 | 869,450 | 3,322,799 | ||||||||||||||||||||||||
Goodwill acquired during the year | - | - | 11,962,324 | 11,962,324 | |||||||||||||||||||||||
Impairment losses | - | - | (238,926 | ) | (238,926 | ) | |||||||||||||||||||||
Balance as of December 31, 2013 | |||||||||||||||||||||||||||
Goodwill | 1,768,400 | 684,949 | 12,831,774 | 15,285,123 | |||||||||||||||||||||||
Accumulated impairment losses | - | - | (238,926 | ) | (238,926 | ) | |||||||||||||||||||||
1,768,400 | 684,949 | 12,592,848 | $ | 15,046,197 | |||||||||||||||||||||||
During the year ended December 31, 2013, the Company determined that the intangible assets the Company recorded as a result of its acquisition of ExtraDev, Inc. in May 2011 were impaired as a result of a decline of customers for its historical IT hosting and custom programming and services businesses due to increased competition, including competition from Microsoft, and the digital group's focus on new products such as the Company's AuthentiGuard Suite, which has reduced resources directed to supporting its IT hosting and custom programming businesses. As a result of this decline, the Company performed a present value analysis of the expected future cash flows of the revenues and expenses associated with ExtraDev's historical business and determined that the intangible assets that the Company had recorded as a result of the acquisition of ExtraDev were impaired. As a result, the Company wrote-off approximately $239,000 of goodwill, customer lists with a gross value of $258,000 and a net book value $198,000, and non-compete agreements with a gross value of $150,000 and a net book value of $80,000 associated with ExtraDev, Inc. in the third quarter of 2013. |
SHORT_TERM_AND_LONG_TERM_DEBT
SHORT TERM AND LONG TERM DEBT | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
SHORT TERM AND LONG TERM DEBT [Abstract] | ' | ||||
SHORT TERM AND LONG TERM DEBT | ' | ||||
NOTE 7 - SHORT TERM AND LONG TERM DEBT | |||||
Revolving Credit Lines - The Company's subsidiary Premier Packaging Corporation has a revolving credit line with RBS Citizens, N.A. ("Citizens Bank") of up to $1,000,000 that bears interest at 1 Month LIBOR plus 3.75% (3.93% as of December 31, 2013) and matures on May 31, 2014. As of December 31, 2013, the revolving line had a balance of $158,087 ($194,680, net of sweep account of $349,976 as of December 31, 2012). The Company's subsidiary, ExtraDev, Inc. has a $100,000 revolving line of credit with a bank that bears interest at 4.75% that is secured by personal guarantees of the former ExtraDev owners. As of December 31, 2013, the balance of the ExtraDev credit line was $0 ($43,560 -December 31, 2012). | |||||
Short-Term Debt - On May 24, 2013, the Company entered into a promissory note in the principal sum of $850,000 to purchase three printing presses that were previously leased by the Company's wholly-owned subsidiary, Secuprint, Inc. The Note is secured by all of the assets of Secuprint, Inc., including the equipment. The note matures on May 24, 2014, and carries an interest rate of 9% per annum. Interest is payable quarterly, in arrears. On May 24, 2013, as additional consideration for the loan, the Company issued the lender a five-year warrant to purchase up to 60,000 shares of the Company's common stock at an exercise price of $3.00 per share. The warrant was valued at approximately $69,000 using the Black-Scholes-Merton option pricing model with a volatility of 60.0%, a risk free rate of return of 0.89% and zero dividend and forfeiture estimates. In conjunction with the issuance of the warrants, the Company recorded a discount on debt of approximately $69,000, which is being amortized over the term of the note. As of December 31, 2013, short-term debt had a carrying value of $824,857 with an outstanding balance of $850,000 net of unamortized discount of $25,143. | |||||
Long-Term Debt - On December 30, 2011, the Company issued a $575,000 convertible note that was due on December 29, 2013, and carries an interest rate of 10% per annum. Interest is payable quarterly, in arrears. The convertible note can be converted at any time during the term at lender's option into a total of 260,180 shares of the Company's common stock at a conversion price of $2.21 per share. In conjunction with the issuance of the convertible note, the Company determined a beneficial conversion feature existed amounting to approximately $88,000, which was recorded as a debt discount to be amortized over the term of the note. The note is secured by all of the assets (excluding assets leased) of Secuprint Inc., a subsidiary of the Company, is subject to various events of default. On May 24, 2013, the Company amended the convertible note to extend the maturity date of the note from December 29, 2013 to December 29, 2015. The change in the fair value of the embedded conversion option exceeded 10% of the carrying value of the original debt, therefore the Company accounted for this restructuring as an extinguishment in accordance with FASB ASC 470-50 "Debt Modifications and Extinguishments" and recognized a loss on extinguishment of $26,252. The note was written up to its fair value on the date of modification of approximately $650,000 and the premium recorded in excess of its face value will be amortized over the remaining life of the note. The carrying amount of the note on December 31, 2013 was approximately $633,000 ($575,000 - December 31, 2012). | |||||
Term Loan Debt - On February 12, 2010, in conjunction with the credit facility agreement with Citizens Bank, Premier Packaging entered into a term loan with Citizens Bank for $1,500,000. As amended on July 26, 2011, the term loan requires monthly principal payments of $25,000 plus interest through maturity of February 2015. Interest accrues at 1 Month LIBOR plus 3.75% (3.92% at December 31, 2013). The Company entered into an interest rate swap agreement to lock into a 5.7% effective interest rate over the remaining life of the amended term loan. As of December 31, 2013, the balance of the term loan was $350,000 ($650,000 - December 31, 2012). | |||||
On October 8, 2010, Premier Packaging amended its credit facility Agreement with Citizens Bank to add a standby term loan note pursuant to which Citizens Bank will provide Premier Packaging with up to $450,000 towards the funding of eligible equipment purchases. In October 2011, the standby term loan note was converted into a term note payable in monthly installments of $887 plus interest at LIBOR plus 3% (3.17% at December 31, 2013) over 5 years. As of December 31, 2013, the balance under this term note was $30,171 ($40,819 - December 31, 2012). | |||||
On July 19, 2013, Premier Packaging, entered into a Master Loan and Security Agreement (the "Master Agreement") with People's Capital and Leasing Corp. ("Peoples Capital") pursuant to which Premier Packaging purchased a 2006 Heidelberg Model XL105-6LX CP2000 printing press for use in its Victor, New York facility. Pursuant to the Master Agreement, People's Capital provided Premier Packaging with a loan in the principal amount of $1,303,900, repayable over a 60-month period in monthly payments will commence when the equipment is placed in service. The repayment of the loan is secured by a security interest in (i) the equipment; and (ii) all proceeds obtained from the sale of the equipment. The note bears interest at 4.84% and is payable in equal monthly installments of $24,511 commencing January 6, 2014 through December 6, 2018. As of December 31, 2013, the note had a balance of $1,303,900. | |||||
Promissory Notes - On August 30, 2011, Premier Packaging purchased the packaging plant it occupies in Victor, New York for $1,500,000, which was partially financed with a $1,200,000 promissory note obtained from Citizens Bank ("Promissory Note"). The promissory note calls for monthly payments of principal and interest in the amount of $7,658, with interest calculated as 1 month LIBOR plus 3.15% (3.32% at December 31, 2013). Concurrently with the transaction, the Company entered into an interest rate swap agreement to lock into a 5.865% effective interest rate for the life of the loan. The Promissory Note matures in August 2021 at which time a balloon payment of the remaining principal balance of $919,677 is due. As of December 31, 2013, the Promissory Note had a balance of $1,132,998 ($1,170,831 - December 31, 2012). | |||||
On December 6, 2013, Premier Packaging entered in to a Construction to Permanent Loan with Citizens Bank for up to $450,000 that will convert into a Promissory Note upon the completion and acceptance of building improvements to the Company's packaging plant in Victor, New York. The Promissory Note will be payable in monthly installments over a 15 year period at an interest to be determined at the date of conversion by the choice of the borrower on either a fixed rate of 3.89% or variable rate based on the then applicable LIBOR rate. As of December 31, 2013, Premier Packaging had borrowed $250,464 of the available $450,000 and expects the construction to be completed in the first half of 2014. | |||||
Under the Citizens Bank credit facilities, the Company's subsidiary, Premier Packaging Corporation is subject to various covenants including fixed charge coverage ratio, tangible net worth and current ratio covenants. In March 2014, Premier Packaging was notified that it was not in compliance with the required fixed charge coverage ratio as of December 31, 2013. In March 2014, the Company received a waiver as of December 31, 2013 from Citizens Bank, relating to the above-mentioned financial covenant. The Citizens Bank obligations are secured by all of the assets of Premier Packaging and are also secured through cross guarantees by DSS and its other wholly-owned subsidiaries, P3 and Secuprint. | |||||
A summary of scheduled principal payments of long-term debt, not including revolving lines of credit, premiums or discounts subsequent to December 31, 2013 are as follows: | |||||
2014 | 1,434,281 | ||||
2015 | 952,181 | ||||
2016 | 310,587 | ||||
2017 | 316,820 | ||||
2018 | 332,690 | ||||
Thereafter | 1,146,145 | ||||
4,492,704 | |||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | ' | ||||||||||||||||||||||||
NOTE 8 - STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||
Stock Issued in Private Placements - On February 13, 2012, the Company completed the sale of $3,000,000 of investment units (the "Units") in a private placement. A total of 30 Units were sold, at a price of $100,000 per Unit. Each Unit consisted of (i) 32,258 shares of the Company's common stock, and (ii) a five-year warrant to purchase up to 16,129 shares of the Company's common stock at an exercise price of $3.10 per share. The private placement resulted in aggregate cash proceeds to the Company of $3,000,000. In connection with the private placement, the Company paid a placement agent fee of $210,000 and issued to the placement agent a five-year warrant to purchase up to an aggregate of 58,064 shares of Common Stock at an exercise price of $3.10. The placement agent warrant had a fair value of $177,000. | |||||||||||||||||||||||||
Concurrently with the execution of the Merger Agreement, on October 1, 2012, DSS entered into subscription agreements with certain accredited investors, pursuant to which DSS agreed to issue and sell to such investors in a private placement an aggregate of 833,651 shares of its common stock, at a purchase price of $3.30 per share, for an aggregate purchase price of $2,751,048 (the "Private Placement"). The Private Placement was completed on October 1, 2012. Lexington participated in the private placement and purchased an aggregate of 218,675 shares of DSS common stock, at a purchase price of $3.30 per share, for an aggregate purchase price of $721,628. Dawson James Securities, Inc. acted as the sole placement agent in connection with the Private Placement and received $250,095 in fees. | |||||||||||||||||||||||||
Stock Warrants - From time to time, the Company issues warrants in conjunction with the sale of its common stock in private placements, and to certain consultants for services. On February 20, 2012, the Company and ipCapital Group, Inc. ("ipCapital") entered into an engagement letter (the "ipCapital Engagement Letter") for the provision of certain IP strategic consulting services by ipCapital for the 2012 calendar year (the "Services"). At the time, the managing director and 42% owner of ipCapital, John Cronin, was also a director of the Company. Fees for services were approximately $320,000 in 2012. In addition the Company issued ipCapital a five-year warrant (the "Warrant") to purchase up to 100,000 shares of the Company's common stock at an exercise price of $4.62 per share (the "Warrant Stock"). The Warrant vests and becomes exercisable to the extent of 33 1/3 percent of the Warrant Stock upon each of the first, second and third anniversary dates, respectively, of the Issuance Date. The warrant is valued using the Black-Scholes-Merton option pricing model at each reporting period through the earlier of the completion of services or the expiration of the service term. The warrant was valued at approximately $58,000 as of December 31, 2013. In addition, on February 20, 2012, the Company entered into a second consulting arrangement with ipCapital (the "ipCapital Consulting Agreement") for which ipCapital will provide strategic advice to the Company's senior management team on the development of the Company's Digital Group infrastructure and cloud computing business strategy. The ipCapital Consulting Agreement has a three year term. As ipCapital's sole source of compensation under the ipCapital Consulting Agreement, the Company issued ipCapital a five-year warrant (the "Consulting Warrant") to purchase up to 200,000 shares of the Company's common stock at an exercise price of $4.50 per share (the "Consulting Warrant Stock"). The Consulting Warrant vests and becomes exercisable to the extent of 33 1/3 percent of the Consulting Warrant Stock upon each of the first, second and third anniversary dates, respectively, of the Consulting Warrant Issuance Date. The warrant is valued using the Black Scholes-Merton option pricing model at each reporting period through the requisite service period, in this case the vesting period. The warrant was valued at approximately $113,000 as of December 31, 2013. | |||||||||||||||||||||||||
Also, on February 20, 2012, the Company entered into consulting arrangement with Century Media Group for the provision of investor relations services. As compensation Century Media Group will receive a fee of $10,000 per month for the one year term, plus the Company issued Century Media Group a 14-month warrant (the "Century Media Warrant") to purchase up to 250,000 shares of the Company's common stock at exercise prices of $4.50, $4.75, $5.00, $5.25 and $6.00 for each 50,000 shares subject to the Century Media Warrant. The Century Media Warrant vested in full on the date of issuance. The Company calculated the fair value of the warrant at approximately $248,000, using the Black-Scholes-Merton option pricing model. Expense for consulting services was being recorded over the 12-month service term. On January 21, 2013 the Company cancelled the February 2012 warrant and issued Century Media Group a two year warrant to purchase up to 50,000 shares of the Company's common stock at an exercise price of $3.00 per share. The warrant immediately vested and carries a term of two years. The February 2012 Warrant was issued as partial consideration for a one-year investor relations consulting agreement previously entered into between the Company and Century Media on February 20, 2012 (the "Century Media Consulting Agreement"). On January 21, 2013, the February 2012 Warrant was cancelled and the Company issued Century Media Group Inc. ("Century Media") a two year warrant to purchase up to 50,000 shares of the Company's common stock at an exercise price of $3.00 per share ("Warrant"). The Warrant vested on the date of grant ("Grant Date"), and carries a term of two years commencing from the Grant Date. As a result of the new Warrant, approximately $33,000 of stock based compensation expense was recorded during the year ended December 31, 2013. The Century Media Consulting agreement automatically expired on its stated termination date of February 20, 2013. | |||||||||||||||||||||||||
On July 1, 2013 in conjunction with its Merger with DSS Technology Management, the Company issued warrants to purchase up to an aggregate of 4,859,894 shares of the Company's Common Stock, at an exercise price of $4.80 per share and expiring on July 1, 2018; and warrants to purchase up to an aggregate of 3,432,170 shares of the Company's Common Stock, at an exercise price of $0.02 per share and expiring on July 1, 2023 to DSS Technology Management's preferred stockholders that would beneficially own more than 9.99% of the shares of the Company's Common Stock as a result of the Merger (the "Beneficial Ownership Condition"). | |||||||||||||||||||||||||
During 2013, a total of 3,472,170 shares of common stock were issued by the Company upon the exercise of warrants in exchange for aggregate proceeds of approximately $148,000. During 2012, a total of 215,734 shares of common stock were issued by the Company upon the exercise of warrants in exchange for aggregate proceeds of approximately $609,000. | |||||||||||||||||||||||||
The following is a summary with respect to warrants outstanding and exercisable at December 31, 2013 and 2012 and activity during the years then ended: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||
Exercise | Exercise | ||||||||||||||||||||||||
Warrants | Price | Warrants | Price | ||||||||||||||||||||||
Outstanding January 1 | 2,255,692 | $ | 4.34 | 1,533,892 | $ | 5.19 | |||||||||||||||||||
Granted during the year | 8,342,064 | 2.82 | 1,091,934 | 4 | |||||||||||||||||||||
Exercised | (3,472,170 | ) | 0.04 | (215,734 | ) | 2.82 | |||||||||||||||||||
Lapsed/terminated | (250,000 | ) | 5.1 | (154,400 | ) | 12.53 | |||||||||||||||||||
Outstanding at December 31 | 6,875,586 | $ | 4.64 | 2,255,692 | $ | 4.34 | |||||||||||||||||||
Exercisable at December 31 | 6,742,253 | $ | 4.64 | 2,055,692 | $ | 4.32 | |||||||||||||||||||
Weighted average months remaining | 49.8 | 46.5 | |||||||||||||||||||||||
Stock Options - On June 20, 2013 the Company's shareholders adopted The 2013 Employee, Director and Consultant Equity Incentive Plan ( the "2013 Plan"), which replaced both the Company's Amended and Restated 2004 Employee Stock Option Plan and Amended and Restated 2004 Non-Executive Director Stock Option Plan. The 2013 Plan provides for the issuance of up to a total of 6,000,000 shares of common stock authorized to be issued for grants of options, restricted stock and other forms of equity to employees, directors and consultants. Under the terms of the 2013 Plan, options granted thereunder may be designated as options which qualify for incentive stock option treatment ("ISOs") under Section 422A of the Internal Revenue Code, or options which do not qualify ("NQSOs"). | |||||||||||||||||||||||||
During 2013, the Company issued options to purchase up to an aggregate of 178,750 shares of its common stock to its non-executive board members at exercise prices between $1.40 and $2.51 per share. The fair value of these options amounted to approximately $123,000 determined by utilizing the Black-Scholes-Merton option pricing model. | |||||||||||||||||||||||||
On January 10, 2013, the Company modified 80,000 fully vested options held by former non-executive board members that were set to expire on January 14, 2013 by extending the expiration dates to between January 2, 2014 and January 14, 2014. These options had been granted between 2009 and 2012. The incremental compensation costs associated with this modification of approximately $34,000 was recognized during the year ended December 31, 2013 and is included in selling, general and administrative expenses. | |||||||||||||||||||||||||
On July 1, 2013 in conjunction with its Merger with DSS Technology Management, the Company assumed options to purchase an aggregate of 2,000,000 shares of the Company's Common Stock at an exercise price of $3.00 per share, in exchange for 3,600,000 outstanding and unexercised stock options to purchase shares of DSS Technology Management's common stock (See Note 9). | |||||||||||||||||||||||||
On July 30, 2012, the Company issued as compensation to a consultant a five-year option to purchase 45,000 shares of the Company's common stock at an exercise price of $4.00. One-third of the option vested on July 30, 2012, one-third of the option will vest on July 30, 2013, and the remaining one-third will vest on July 30, 2014. The warrant was valued at approximately $92,000 using the Black Scholes Merton option pricing model with a volatility of 60.6%, a risk free rate of return of 0.62% and zero dividend and forfeiture estimates. The Company valued the option at approximately $92,000 using the Black-Scholes-Merton option pricing model and will expense it in accordance with the service period. The initial one-third of the options vested were valued at approximately $31,000, the second third of the options vested were valued at approximately $8,000 and the remaining third of the options were valued as of December 31, 2013 at approximately $9,000. | |||||||||||||||||||||||||
Stock-Based Compensation - The Company records stock-based payment expense related to these options based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During 2013, the Company had stock compensation expense of approximately $1,895,000 or $0.06 basic earnings per share ($847,000; $0.04 basic earnings per share - 2012). This amount includes approximately $774,000 of stock based compensation expense for fair value of 386,678 shares issued to Palladium upon the closing of the Merger on July 1, 2013 and the expense associated with 400,000 shares issued to Palladium upon the closing of the Merger on July 1, 2013 that are being held in escrow. As of December 31, 2013, there was approximately $1,998,000 of total unrecognized compensation costs related to options and restricted stock granted under the Company's stock option plans, which the Company expects to recognize over the weighted average period of approximately three years. This amount excludes $536,000 of potential stock based compensation for stock options that vest upon the occurrence of certain events which the Company does not believe are likely. | |||||||||||||||||||||||||
The following is a summary with respect to options outstanding at December 31, 2013 and 2012 and activity during the years then ended: | |||||||||||||||||||||||||
2004 Employee Plan | Non-Executive Director Plan | ||||||||||||||||||||||||
Number of | Weighted | Weighted | Number of | Weighted | Weighted | ||||||||||||||||||||
Options | Average | Average Life | Options | Average | Average Life | ||||||||||||||||||||
Exercise Price | Remaining | Exercise Price | Remaining | ||||||||||||||||||||||
(in years) | (in years) | ||||||||||||||||||||||||
Outstanding at December 31, 2011: | 1,168,648 | 4.18 | 177,000 | $ | 4.79 | ||||||||||||||||||||
Granted | 885,000 | 3.46 | 155,000 | 2.98 | |||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||
Lapsed/terminated | (328,500 | ) | 4.44 | (20,000 | ) | 11.1 | |||||||||||||||||||
Outstanding at December 31, 2012: | 1,725,148 | 3.8 | 312,000 | 3.49 | |||||||||||||||||||||
Granted | - | - | 28,750 | 2.75 | |||||||||||||||||||||
Exercised | - | - | (20,000 | ) | 1.86 | ||||||||||||||||||||
Lapsed/terminated | (85,000 | ) | 4.99 | (37,000 | ) | 6.31 | |||||||||||||||||||
Transferred | (1,640,148 | ) | 3.73 | (283,750 | ) | 3.14 | |||||||||||||||||||
Outstanding at December 31, 2013: | - | - | - | - | - | - | |||||||||||||||||||
2013 Employee, Director and Consultant | |||||||||||||||||||||||||
Equity Incenive Plan | |||||||||||||||||||||||||
Number of | Weighted | Weighted | |||||||||||||||||||||||
Options | Average | Average Life | |||||||||||||||||||||||
Exercise Price | Remaining | ||||||||||||||||||||||||
(in years) | |||||||||||||||||||||||||
Outstanding at December 31, 2012: | |||||||||||||||||||||||||
Transferred | 1,923,898 | 3.65 | |||||||||||||||||||||||
Granted | 2,150,000 | 2.89 | |||||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||||
Lapsed/terminated | - | - | |||||||||||||||||||||||
Outstanding at December 31, 2013: | 4,073,898 | 3.25 | 5.7 | ||||||||||||||||||||||
Exercisable at December 31, 2013 | 1,718,024 | 3.25 | 4.3 | ||||||||||||||||||||||
Expected to vest at December 31, 2103 | 1,905,874 | 2.95 | 7.79 | ||||||||||||||||||||||
Aggregate intrinsic value of outstanding options at December 31, 2013 | $ | 104,700 | |||||||||||||||||||||||
Aggregate intrinsic value of exercisable options at December 31, 2013 | $ | 37,365 | |||||||||||||||||||||||
Aggregate intrinsic value of options expected to vest at December 31, 2013 | $ | 67,335 | |||||||||||||||||||||||
Included in these amounts are earn-out options issued to the previous owners of ExtraDev with a contractual term of 5 years, to purchase an aggregate of 450,000 shares of common stock at an exercise price of $4.50 per share that will be vested if the Company's Digital division achieves certain annual revenue targets by the end of fiscal year 2016. The fair value of the earn-out options amounted to $594,000. If the annual revenue targets are met or are deemed probable to occur, then the Company will record stock based compensation expense. As of December 31, 2013 vesting is considered remote. All options granted to the owners of ExtraDev were classified as compensation for post combination services since the vesting of each grant is based on length of employment, with all unvested options forfeiting upon termination of employment, therefore, the fair value of these equity instruments was not considered a component of the purchase price of the ExtraDev acquisition. | |||||||||||||||||||||||||
The weighted-average grant date fair value of options granted during the year ended December 31, 2013 was $0.82 ($1.32 -2012). The aggregate grant date fair value of options that vested during the year was approximately $1,009,000 ($368,000 -2012). There were 20,000 options exercised on a cashless basis during 2013. There were no options exercised during 2012. The intrinsic value of options exercised during 2013 was approximately$20,000. | |||||||||||||||||||||||||
The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes-Merton Option Pricing Model. The Company estimated the expected volatility of the Company's common stock at the grant date using the historical volatility of the Company's common stock over the most recent period equal to the expected stock option term. The expected volatility utilized ranged between 59.61% and 61.04% during 2013. The risk-free interest rate assumptions were determined using the equivalent U.S. Treasury bonds yield and ranged between 0.76% and 1.65% in 2013. The Company estimates pre-vesting option forfeitures at the time of grant. The Company has had minimal pre-vesting forfeitures in the past. The Company has never paid any cash dividends and does not anticipate paying any cash dividends in the foreseeable future. Therefore, the Company assumed an expected dividend yield of zero. | |||||||||||||||||||||||||
The following table shows our weighted average assumptions used to compute the share-based compensation expense for stock options and warrants granted during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Volatility | 60.9 | % | 61.2 | % | |||||||||||||||||||||
Expected option term | 5.7 years | 3.0 years | |||||||||||||||||||||||
Risk-free interest rate | 1.6 | % | 0.6 | % | |||||||||||||||||||||
Expected forfeiture rate | 0 | % | 0 | % | |||||||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||||||||||
Restricted Stock Issued to Employees - Restricted common stock may be issued under the Company's 2013 Employee, Director and Consultant Equity Incentive Plan for services to be rendered and may not be sold, transferred or pledged for such period as determined by our Compensation and Management Resources Committee. Restricted stock compensation cost is measured as the stock's fair value based on the quoted market price at the date of grant. The restricted shares issued reduce the amount available under the employee stock option plans. Compensation cost is recognized only on restricted shares that will ultimately vest. The Company estimates the number of shares that will ultimately vest at each grant date based on historical experience and adjust compensation cost and the carrying amount of unearned compensation based on changes in those estimates over time. Restricted stock compensation cost is recognized ratably over the requisite service period which approximates the vesting period. An employee may not sell or otherwise transfer unvested shares and, in the event that employment is terminated prior to the end of the vesting period, any unvested shares are surrendered to us. The Company has no obligation to repurchase any restricted stock. During 2012, 25,000 restricted shares issued to an employee expired unvested. In addition, during 2012, the Company granted two restricted stock awards to an employee. The first award granted the employee 30,000 shares of common stock that vest ratably over four years and had a grant date fair value of $101,400. Expense related to the first grant was being recorded on a straight-line basis as shares were to vest. The second award granted the employee 100,000 shares of common stock that would vest in four tranches upon reaching net sales goals. The grant date fair value of the second award amounted to $338,000. In October 2012 the employee resigned and the restricted shares were forfeited unvested. The Company reversed expense recorded for the unvested restricted shares in the fourth quarter of 2012. There were no restricted stock grants made by the Company in 2013. | |||||||||||||||||||||||||
The following is a summary of activity of restricted stock during the years ended at December 31, 2013 and 2012: | |||||||||||||||||||||||||
Shares | Weighted- average | ||||||||||||||||||||||||
Grant Date Fair | |||||||||||||||||||||||||
Value | |||||||||||||||||||||||||
Restricted shares outstanding, December 31, 2011 | 107,352 | $ | 5.46 | ||||||||||||||||||||||
Restricted shares granted | 130,000 | 3.38 | |||||||||||||||||||||||
Restricted shares vested | (20,588 | ) | 3.33 | ||||||||||||||||||||||
Restricted shares forfeited | (155,000 | ) | 4.85 | ||||||||||||||||||||||
Restricted shares outstanding, December 31, 2012 | 61,764 | $ | 3.33 | ||||||||||||||||||||||
Restricted shares granted | - | - | |||||||||||||||||||||||
Restricted shares vested | (20,588 | ) | 3.33 | ||||||||||||||||||||||
Restricted shares forfeited | - | - | |||||||||||||||||||||||
Restricted shares outstanding, December 31, 2013 | 41,176 | $ | 3.33 | ||||||||||||||||||||||
On March 5, 2014, the Company issued an aggregate of 1,168,000 options to purchase the Company's common stock at $2.00 per share with a term of 5 years to its employees covered under the Company's 2013 Employee, Director and Consultant Equity Incentive Plan. The options will vest pro-ratably as follows: 1/3 on the grant date, 1/3 on the first anniversary of the grant date and 1/3 on the second anniversary of the grant date as long as the employee is employed on such dates. On March 13, 2014 the Company issued an aggregate of 84,025 shares of common stock to three of its directors to pay approximately $133,000 of accrued director's fees. |
BUSINESS_COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
BUSINESS COMBINATIONS [Abstract] | ' | ||||||||
BUSINESS COMBINATIONS | ' | ||||||||
NOTE 9 - BUSINESS COMBINATIONS | |||||||||
On July 1, 2013 (the "Closing Date"), DSSIP, Inc., a Delaware corporation ("Merger Sub") and a wholly-owned subsidiary of DSS merged with and into Lexington Technology Group, Inc, pursuant to the terms and conditions of an Agreement and Plan of Merger, dated as of October 1, 2012 (as amended, the "Merger Agreement"). Effective on July 1, 2013, as a result of the Merger, Lexington Technology Group, Inc ("Lexington"), which changed its name to DSS Technology Management, Inc. on August 2, 2013, became a wholly-owned subsidiary of the Company. The Company believes the merger with Lexington was an opportunity to significantly increase its intellectual property assets and expand its intellectual property development, acquisition and monetization business. In connection with the Merger, the Company issued on the Closing Date, its securities in exchange for the capital stock owned by Lexington stockholders, as follows (the "Merger Consideration"): (i) an aggregate of 16,558,387 shares of the Company's common stock, par value $0.02 per share (the "Common Stock"), which includes 240,559 shares of the Company's common stock owned by DSS Technology Management prior to the merger that were exchanged for shares issuable to Lexington stockholders pursuant to the merger (the "Exchange Shares"); (ii) 7,100,000 shares of the Company's Common Stock to be held in escrow pursuant to an escrow agreement, dated July 1, 2013. Pursuant to the escrow agreement, the shares of the Company's Common Stock deposited in the escrow account will be released to the holders if and when the closing price per share of the Company's Common Stock exceeds $5.00 per share (as adjusted for stock splits, stock dividends and similar events) for 40 trading days within a continuous 90 trading day period following the closing of the Merger. If within one year following the closing of the Merger, such threshold is not achieved, the shares of the Company's Common Stock held in escrow shall be cancelled and returned to the treasury of the Company. The holders of the escrow shares will have voting rights with respect to the shares until such shares are released or retired after one year (the "Escrow Agreement"); (iii) warrants to purchase up to an aggregate of 4,859,894 shares of the Company's Common Stock, at an exercise price of $4.80 per share and expiring on July 1, 2018; and (iv) warrants to purchase up to an aggregate of 3,432,170 shares of the Company's Common Stock, at an exercise price of $0.02 per share and expiring on July 1, 2023 (the "$.02 Warrants"), to Lexington's preferred stockholders that would beneficially own more than 9.99% of the shares of the Company's Common Stock as a result of the Merger (the "Beneficial Ownership Condition"). In addition, the Company assumed options to purchase an aggregate of 2,000,000 shares of the Company's Common Stock at an exercise price of $3.00 per share, in exchange for 3,600,000 outstanding and unexercised stock options to purchase shares of DSS Technology Management's common stock. In addition, the Company issued an aggregate of 786,678 shares of Common Stock to Palladium as compensation for their services in connection with the transactions contemplated by the Merger Agreement. Of those shares issued to Palladium, 400,000 are currently being held in escrow pursuant to the same terms and conditions as those set forth in the Escrow Agreement. Lexington changed its name to DSS Technology Management, Inc. on August 2, 2013, The Company spent approximately $1,445,000 in legal, accounting, consulting and filing fees related to the Merger. | |||||||||
Accounting Treatment of the Merger | |||||||||
U.S. Generally Accepted Accounting Principles (hereafter - GAAP), require that for each business combination, one of the combining entities shall be identified as the acquirer, and the existence of a controlling financial interest shall be used to identify the acquirer in a business combination. In a business combination effected primarily by exchanging equity interests, the acquirer usually is the entity that issues its equity interests. However, it is sometimes not clear which party is the accounting acquirer. | |||||||||
In accordance with FASB Topic ASC 805 "Business Combinations", if a business combination has occurred, but it is not clear which of the combining entities is the acquirer, GAAP requires considering additional factors in making that determination. These factors include the relative voting rights of the combined entity after the business combination, the existence of a large minority voting interest in the combined entity, the composition of the governing body of the combined entity, the composition of senior management in the combined entity and the relative size of the combining entities. | |||||||||
Based on the aforementioned, and after taking in consideration all relevant facts and circumstances, management came to the conclusion that the Company, as the legal acquirer was also the accounting acquirer in the transaction. The conclusion was based on the determination that although, the former stockholders of DSS Technology Management had 51% of the voting interest in the combined company as of the closing date of the merger, the former stockholders of DSS Technology Management did not have clear indications of control when analyzed in the context of the other factors listed by FASB Topic ASC 805, such as the existence of a large minority voting interest, the composition of the governing body of the combined entity, the composition of senior management in the combined entity and the relative size of the combining entities. In addition, the ownership of the combined company by the former stockholders of DSS Technology Management could reduce to approximately 42% of the outstanding common stock of the combined company if, after one year, the shares held in escrow are cancelled because the conditions of the Escrow Agreement were not met. At the time of the Merger, management determined the likelihood of meeting the conditions in the Escrow Agreement to be remote. As a result, the merger will be accounted for as a business combination in accordance with the Business Combination Topic of the FASB ASC 805. | |||||||||
Purchase Price Allocation | |||||||||
The Merger was accounted for in accordance with the acquisition method of accounting under FASB ASC Topic 805, "Business Combinations" ("Topic 805"). Under the guidance, the assets and liabilities of the acquired business, DSS Technology Management, are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair values is recorded as goodwill, if any. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed then a gain on acquisition is recorded. The purchase price is based on the fair value of the DSS common stock, DSS common stock to be held in escrow and issued if certain contingencies are met, warrants to purchase DSS common stock issued by DSS to DSS Technology Management stockholders, and replacement options awards related to pre-combination services granted to certain DSS Technology Management employees pursuant to the Merger Agreement. The Company measured the identifiable assets acquired and liabilities assumed based on the acquisition date fair value. The fair value of the equity instruments issued to former stockholders of DSS Technology Management is based on a $1.87 share price of DSS common stock which was the closing share price of DSS's stock on July 1, 2013 on the closing date of the Merger. For warrants and employee options to purchase DSS common stock issued or assumed as consideration in the Merger, the Company used the Black Scholes Merton option pricing model to determine fair values, with terms set at the remaining life of the option or warrant, a volatility of approximately 59%, and a risk free rate of return of approximately 0.9% with zero forfeitures expected. For the DSS common stock to be held in escrow, the Company used a Monte Carlo simulation model to determine an average expected fair value. While DSS uses its best estimates and assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed, the purchase price allocation is preliminary and could change during the measurement period (not to exceed one year) if new information is obtained about the facts and circumstances that existed as of the Merger date that, if known, would have resulted in the recognition of additional or changes to the value of the assets and liabilities presented in this purchase price allocation. | |||||||||
($ -in | |||||||||
thousands) | |||||||||
Current assets, net of current liabilities | $ | 6,252 | |||||||
Deposits and non-current assets | 9 | ||||||||
Investments at fair value | 10,750 | ||||||||
Other intangible assets- patent and patent rights | 27,856 | ||||||||
Goodwill | 11,962 | ||||||||
56,829 | |||||||||
Deferred tax liability, net | 11,962 | ||||||||
44,867 | |||||||||
Non-controlling interest in subsidiary | (4,300 | ) | |||||||
Total estimated purchase price | $ | 40,567 | |||||||
Consideration issued: | |||||||||
Fair value of 16,317,828 shares of DSS common stock issued to DSS Technology Management shareholders | $ | 30,514 | |||||||
Fair value of 7,100,000 shares of DSS common stock issued to DSS Technology Management shareholders to be held in escrow for up to one year | 901 | ||||||||
Fair value of options to purchase 2,000,000 shares DSS common stock for $3.00 per share exchanged for options to purchase DSS Technology Management's common stock that were granted to DSS Technology Management's employees which relate to pre-combination services | 141 | ||||||||
Fair value of warrants to purchase up to 4,859,894 shares of DSS common stock for $4.80 per share issued to DSS Technology Management shareholders | 2,661 | ||||||||
Fair value of warrants to purchase 3,432,170 shares of DSS common stock for $0.02 per share issued to certain DSS Technology Management shareholders | 6,350 | ||||||||
Total estimated purchase price | $ | 40,567 | |||||||
Management is responsible for determining the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as of the Acquisition Date. Management considered a number of factors, including reference to an analysis under FASB ASC 805 solely for the purpose of allocating the purchase price to the assets acquired and liabilities assumed. The Company's estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. These valuations require the use of management's assumptions, which would not reflect unanticipated events and circumstances that occur. A relief from royalty methodology was used to value the patent portfolio and the analysis included a discounted cash flow which estimated future net cash flows resulting from the licensing and enforcement of the patent portfolio based on information as of the date of acquisition, considering assumptions and estimates related to potential infringers of the patents, applicable industries, usage of the underlying patented technologies, estimated license fee revenues, contingent legal fee arrangements, other estimated costs, tax implications and other factors. A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of estimated net cash flows. | |||||||||
In March 2013, DSS Technology Management, made its first of a series of investments in VirtualAgility, Inc. ("VirtualAgility"), a developer of programming platforms that facilitate the creation of business applications without programming or coding. The initial investment consisted of a $200,000 non-recourse note plus an equity stake of 1/8 of 7% of the outstanding common stock of VirtualAgility, for a total cash investment of $250,000. Each non-recourse note, when purchased, is eligible for a preferred return of $1,250,000, plus a variable return of 1.875% based on gross proceeds derived from VirtualAgility's patent portfolio, if any. In addition, VirtualAgility granted DSS Technology Management a total of seven additional options to make additional quarterly investments of $250,000 apiece, under the same terms as the first investment. If all of such options are exercised, DSS Technology Management will have invested an aggregate of $2,000,000, consisting of $1,600,000 in non-recourse notes that would be eligible for an aggregate preferred return of $10,000,000 plus up to 15% of variable returns and, based on the current capitalization of VirtualAgility, DSS Technology Management would also own approximately 7% of the outstanding common stock of VirtualAgility. In May 2013, DSS Technology Management created a subsidiary called VirtualAgility Technology Investments, LLC ("VATI") and transferred its ownership of the VirtualAgility investment and future investment options to VATI. Also in May 2013, a third-party investor and became a 40% member of VATI. In exchange, the investor contributed $250,000 into VATI which was used to exercise one of the investments in Virtual Agility per the terms described above. As of July 1, 2013, DSS Technology Management owned 60% of VATI. In conjunction with its purchase accounting, the Company assessed the fair value of the VirtualAgility investment, including the expected exercise of future investment options as of the acquisition date, at approximately $10,750,000, which became the cost basis of the investment as July 1, 2013. A relief from royalty methodology was used to value the potential proceeds to be derived from the patent portfolio and the analysis included a discounted cash flow which estimated future net cash flows resulting from the licensing and enforcement of the VirtualAgility patent portfolio based on information as of the date of acquisition, considering assumptions and estimates related to potential infringers of the patents, applicable industries, usage of the underlying patented technologies, estimated license fee revenues, contingent legal fee arrangements, other estimated costs, tax implications and other factors. A discount rate consistent with the risks associated with achieving the estimated net cash flows was used to estimate the present value of estimated net cash flows. The measurement of the VirtualAgility investment constitutes a Level 3 input. | |||||||||
Set forth below is the unaudited pro-forma revenue, operating loss, net loss and loss per share of the Company as if DSS Technology Management had been acquired by the Company as of January 1, 2012. | |||||||||
Year Ended December 31 | |||||||||
(unaudited) | |||||||||
2013 | 2012 | ||||||||
Revenue | $ | 18,046,000 | $ | 17,115,000 | |||||
Operating loss | (11,527,000 | ) | (3,179,000 | ) | |||||
Net loss | (12,489,000 | ) | (3,725,000 | ) | |||||
Earnings per share: | |||||||||
Basic | $ | (0.24 | ) | $ | (0.09 | ) | |||
Diluted | $ | (0.24 | ) | $ | (0.09 | ) | |||
The pro-forma amounts for the year ended December 31, 2013 and 2012 were adjusted to exclude merger related costs of $1,400,000 and $768,000, respectively, and exclude a non-recurring income tax benefit of $10,962,000 related to the merger. Since the acquisition, DSS Technology Management had revenue of approximately $566,000 and a loss of approximately $2,747,000. | |||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INCOME TAXES [Abstract] | ' | ||||||||
INCOME TAXES | ' | ||||||||
NOTE 10 - INCOME TAXES | |||||||||
Following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31: | |||||||||
2013 | 2012 | ||||||||
Currently payable: | |||||||||
Federal | $ | - | $ | - | |||||
State | - | - | |||||||
Total currently payable | - | - | |||||||
Deferred: | |||||||||
Federal | (2,217,527 | ) | (1,351,316 | ) | |||||
State | (528,872 | ) | (322,185 | ) | |||||
Total deferred | (2,746,399 | ) | (1,673,501 | ) | |||||
Less: (decrease) increase in allowance | (8,202,476 | ) | 1,692,449 | ||||||
Net deferred | (10,948,875 | ) | 18,948 | ||||||
Total income tax provision (benefit) | $ | (10,948,875 | ) | $ | 18,948 | ||||
Individual components of deferred taxes are as follows: | |||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | $ | 15,960,340 | $ | 14,079,414 | |||||
Equity issued for services | 721,934 | 603,785 | |||||||
Goodwill and other intangibles | 218,896 | 0 | |||||||
Other | 338,087 | 422,998 | |||||||
Gross deferred tax assets | 17,239,257 | 15,106,197 | |||||||
Deferred tax liabilities: | |||||||||
Goodwill and other intangibles | $ | 9,827,201 | $ | 234,822 | |||||
Depreciation and amortization | 286,520 | 922,706 | |||||||
Investment in pass-through entity | 2,414,716 | - | |||||||
Gross deferred tax liabilities | $ | 12,528,437 | $ | 1,157,528 | |||||
Less valuation allowance | (5,851,944 | ) | (14,076,344 | ) | |||||
Net deferred tax liabilities | $ | (1,141,124 | ) | $ | (127,675 | ) | |||
The Company recognized a $10,962,000 deferred tax benefit in 2013 as a result of the acquisition of DSS Technology Management, Inc. on July 1, 2013. Due to the acquisition, a temporary difference between the book fair value and the tax basis of the other intangible assets acquired created an approximately $11,962,000 deferred tax liability and additional goodwill. With the increase in the deferred tax liability, the Company reduced the deferred tax asset valuation allowance by the amount of net operating loss that could offset the amortization of the deferred tax liability associated with the value of the patents acquired and recognized a deferred tax benefit of approximately $10,962,000. | |||||||||
The Company has approximately $42,516,000 in net operating loss carryforwards ("NOLs") available to reduce future taxable income, which will expire at various dates from 2022 through 2033. Due to the uncertainty as to the Company's ability to generate sufficient taxable income in the future and utilize the NOLs before they expire, the Company has recorded a valuation allowance accordingly. | |||||||||
The excess tax benefits associated with stock option exercises are recorded directly to stockholders' equity only when realized. As a result, the excess tax benefits available in net operating loss carryforwards but not reflected in deferred tax assets was approximately $1,019,000. These carryforwards expire at various dates from 2022 through 2030. The excess tax benefits associated with stock option exercises are recorded directly to stockholders' equity only when realized. In addition, a portion of the valuation allowance amounting to approximately $407,000 will be recorded as a reduction to additional paid in capital in the event that it is determined that a valuation allowance is no longer considered necessary. | |||||||||
The differences between the United States statutory federal income tax rate and the effective income tax rate in the accompanying consolidated statements of operations are as follows: | |||||||||
2013 | 2012 | ||||||||
Statutory United States federal rate | 34 | % | 34 | % | |||||
State income taxes net of federal benefit | 4.2 | 5 | |||||||
Permanent differences | (4.5 | ) | (0.8 | ) | |||||
Other | (0.8 | ) | 1 | ||||||
Change in valuation reserves | 98.1 | (39.6 | ) | ||||||
Effective tax rate | 131 | % | (0.4 | )% | |||||
At December 31, 2013 and 2012, the total unrecognized tax benefits of $446,000 have been netted against the related deferred tax assets. | |||||||||
The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2013 and 2012 the Company recognized no interest and penalties. | |||||||||
The Company files income tax returns in the U.S. federal jurisdiction and various states. The tax years 2010-2013 generally remain open to examination by major taxing jurisdictions to which the Company is subject. |
DEFINED_CONTRIBUTION_PENSION_P
DEFINED CONTRIBUTION PENSION PLAN | 12 Months Ended |
Dec. 31, 2013 | |
DEFINED CONTRIBUTION PENSION PLAN [Abstract] | ' |
DEFINED CONTRIBUTION PENSION PLAN | ' |
NOTE 11 - DEFINED CONTRIBUTION PENSION PLAN | |
The Company maintains qualified Employee savings plans (the "401(k) Plans") which qualify as deferred salary arrangements under Section 401(k) of the Internal Revenue Code which covers all employees. Employees generally become eligible to participate in the Plan immediately following the employee's hire date. Employees may contribute a percentage of their earnings, subject to the limitations of the Internal Revenue Code. Commencing July 1, 2011, the Company matched up to 1% of the employee's earnings. On December 17, 2013, the Company increased its matching percentage to 50% of the employee's contribution up to a maximum match of 3% of the employee's contribution. The total matching contributions for 2013 were approximately $41,000 ($35,000 -2012). |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ' | ||||||||||||
NOTE 12 - COMMITMENTS AND CONTINGENCIES | |||||||||||||
Facilities - The Company's corporate offices and Digital division together occupy approximately 11,000 square feet of commercial office space at 28 East Main Street, Rochester, New York 14614 under a lease that expires in September 30, 2015, at a rental rate of approximately $13,000, $14,000 and $11,000 per month in 2013, 2014 and 2015, respectively. The Company's digital division also leases space at a data center in Rochester, New York for $5,567 per month that expires in July, 2014. In addition, as a result of it merger, the Company leases office space in New York, New York under a lease that expires in December 2014 for $3,000 per month. From May 2007 to December 2013, our Plastics division leased approximately 25,000 square feet of commercial production and warehouse space for an average of $23,000 per month in Brisbane, California under a lease that was set to expire in July 2014. Commencing January 1, 2014, the Plastics division amended its lease agreement to reduce the lease space to approximately 15,000 square feet for approximately $13,000 per month and extend the term to December 31, 2018. From December 2008 to December 2013, our Printing division leased approximately 20,000 square foot of commercial production and warehouse space in Rochester, New York, for $7,100 per month, under a lease that expired in January 2014. Commencing in January 2014, the Company moved its printing operations to a 40,000 square foot packaging plant in Victor, New York, a suburb of Rochester, New York, which the Company owns. The Company's DSS Technology Management division leases executive office space in Tysons Corner, Virginia under a 12 month lease that expires in July 2014 for approximately $3,780 per month, and also leases a sales and research and development facility in Tyler, Texas under a 12 month lease that expires in December 2014 for approximately $1,190 per month. The Company's subsidiary Bascom Research LLC leases shared office space in Mclean Virginia on a month to month basis at $1,370 per month. | |||||||||||||
Equipment Leases - From time to time, the Company leases certain production and office equipment, digital and offset presses, laminating and finishing equipment for its various printing operations. The leases may be capital leases or operating leases and are generally for a term of 36 to 60 months. The leases expire at various dates February 2017. As of December 31, 2013, the Company did not have any capital leases. | |||||||||||||
The following table summarizes the Company's lease commitments. | |||||||||||||
Operating Leases | |||||||||||||
Equipment | Facilities | Total | |||||||||||
Payments made in 2013 | $ | 130,686 | $ | 633,072 | $ | 763,758 | |||||||
Future minimum lease commitments: | |||||||||||||
2014 | 30,540 | 457,851 | 488,391 | ||||||||||
2015 | 16,907 | 292,450 | 309,357 | ||||||||||
2016 | 5,241 | 164,183 | 169,424 | ||||||||||
2017 | 874 | 169,109 | 169,983 | ||||||||||
2018 | - | 174,182 | 174,182 | ||||||||||
Total future minimum lease commitments | $ | 53,562 | $ | 1,257,775 | $ | 1,311,337 | |||||||
Employment Agreements - The Company has employment agreements with nine members of its management team with terms ranging from one to 5 years through November 2015. The agreements provide for severance payments in the event of termination for certain causes. As of December 31, 2013, the minimum annual severance payments under these employment agreements are, in aggregate, approximately $1,382,000. | |||||||||||||
Related Party Consulting Payments - During 2013 and 2012, the Company paid consulting fees of approximately $188,000 and $54,000, respectively, to Patrick White, its former CEO, under a consulting agreement and expects to pay an aggregate amount of approximately $175,000 in future monthly payments through the expiration of the agreement in March 2015. | |||||||||||||
Contingent Litigation Payments - The Company retains the services of professional service providers, including law firms that specialize in intellectual property licensing, enforcement and patent law. These service providers are often retained on an hourly, monthly, project, contingent or a blended fee basis. In contingency fee arrangements, a portion of the legal fee is based on predetermined milestones or the Company's actual collection of funds. The Company accrues contingent fees when it is probable that the milestones will be achieved and the fees can be reasonably estimated. As of December 31, 2013, the Company has not accrued any contingent legal fees pursuant to these arrangements. | |||||||||||||
Legal Proceedings - From August 2005 until May 2013, the Company was involved in lawsuits in various foreign jurisdictions against the European Central Bank ("ECB") alleging patent infringement by the ECB and claimed unspecified damages (the "ECB Litigation"). The Company brought the suit in the European Court of First Instance in Luxembourg. The Company alleged that all Euro banknotes in circulation infringed the Company's European Patent 0 455 750B1 (the "Patent") which covered a method of incorporating an anti-counterfeiting feature into banknotes or similar security documents to protect against forgeries by digital scanning and copying devices. The ECB then filed claims against the Company in eight European countries seeking to invalidate the patents. During the course of the ECB Litigation, the losing party, in certain jurisdictions, was responsible for the prevailing party's legal fees and disbursements. As of December 31, 2013, pursuant to foreign judgments for costs and fees, the Company has recorded as accrued liabilities approximately €175,000 ($241,000) for such fees. In addition, the ECB formally requested the Company to pay attorneys and court fees for the Court of First Instance case in Luxembourg which amounts to €93,752 ($127,000) as of December 31, 2013, which, unless the amount is settled, will be subject to an assessment procedure that has not been initiated. The Company will accrue the assessed amount, if any, as soon as it is reasonably estimable. | |||||||||||||
On August 20, 2008, the Company entered into an agreement (the "Trebuchet Agreement") with Trebuchet Capital Partners, LLC ("Trebuchet") under which Trebuchet agreed to pay substantially all of the litigation costs associated with validity proceedings in eight European countries relating to the ECB Litigation, and the Company provided Trebuchet with the sole and exclusive right to manage infringement litigation relating to the Patent in Europe, including the right to initiate litigation in the name of the Company, Trebuchet or both, and to choose whom and where to sue, subject to certain limitations set forth in the Trebuchet Agreement. On February 18, 2010, Trebuchet, on behalf of the Company, filed an infringement suit in The Netherlands against the ECB and two security printing entities with manufacturing operations in The Netherlands. The Netherlands Court determined in December 2010 that the patent was invalid in The Netherlands, and the infringement case was terminated by Trebuchet. Trebuchet was responsible for cost and fee reimbursements associated with the case which Trebuchet paid in February 2012. On July 7, 2011, Trebuchet and the Company entered into a series of related agreements and general releases wherein Trebuchet effectively ended its ongoing participation in the ECB Litigation. | |||||||||||||
On October 24, 2011 the Company initiated a law suit against Coupons.com Incorporated ("Coupons.com"). The suit was filed in the United States District Court, Western District of New York, located in Rochester, New York. Coupons.com is a Delaware corporation having its principal place of business located in Mountain View, California. In the Coupons.com suit, the Company alleged breach of contract, misappropriation of trade secrets, unfair competition and unjust enrichment, and is seeking in excess of $10 million in money damages from Coupons.com for those claims. The Company's breach of contract claim remains intact as of the date of this report. | |||||||||||||
On October 3, 2012, DSS Technology Management's subsidiary, Bascom Research, LLC, commenced legal proceedings against five companies, including Facebook, Inc. and LinkedIn Corporation, pursuant to which Bascom Research, LLC alleges that such companies infringe on one or more of its patents. The Company anticipates that these legal proceedings may continue for several years and may require significant expenditures for legal fees and other expenses. Disputes regarding the assertion of patents and other intellectual property rights are highly complex and technical. Once initiated, the Company may be forced to litigate against others to enforce or defend Bascom Research's intellectual property rights or to determine the validity and scope of other parties' proprietary rights. The defendants or other third parties involved in the lawsuits in which the Company is involved may allege defenses and/or file counterclaims in an effort to avoid or limit liability and damages for patent infringement. If such defenses or counterclaims are successful, they may have a material adverse effect on the value of the patents and preclude the Company's ability to derive licensing revenue from the patents, or any revenue. | |||||||||||||
The Company estimates that its legal fees and expenses to pursue the Bascom case to trial will be approximately $2,000,000. This estimate depends on several variables, including the cost of retaining experts, actions taken by defendants in the litigation, and any potential proceedings with the USPTO. Expenses thereafter are dependent on the outcome of the litigation; in the event the case is appealed, legal fees and expenses through appeal over the course of the subsequent twelve months could range from $250,000 to over $750,000. The Company expects it will receive between 45% to 60% of the total consideration (including cash payments, equity, assets, or any other form of consideration) received from any license, settlement, judgment or other award relating to the Bascom Research patents, depending on the total amount of consideration earned and the stage of the case in which consideration is earned. | |||||||||||||
On November 26, 2013, DSS Technology Management filed suit against Apple, Inc., in the United States District Court for the Eastern District of Texas, for patent infringement (the "Apple Litigation"). The Apple Litigation relates to certain patents owned by DSS Technology Management in the Bluetooth technology space. Counsel retained by DSS Technology Management in connection with the Apple Litigation has agreed to handle the litigation on a contingent fee basis. The fee agreement with counsel calls for counsel to receive 25% of any licensing proceeds, and 33% - 38% of any litigation proceeds recovered, depending on size of recovery. DSS Technology Management is responsible to pay for up to $1,000,000 of expenses incurred in connection with the Apple Litigation. Expenses incurred over $1,000,000 will be advanced by counsel, and recoverable from proceeds obtained from the Apple Litigation. | |||||||||||||
In addition to the foregoing, we are subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although there can be no assurance in this regard, in the opinion of management, none of the legal proceedings to which we are a party, whether discussed herein or otherwise, will have a material adverse effect on our results of operations, cash flows or our financial condition. |
SUPPLEMENTAL_CASH_FLOW_INFORMA
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | ' | ||||||||
SUPPLEMENTAL CASH FLOW INFORMATION | ' | ||||||||
NOTE 13 - SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||
Supplemental cash flow information for the years ended December 31: | |||||||||
2013 | 2012 | ||||||||
Cash paid for interest | $ | 246,000 | $ | 230,000 | |||||
Non-cash investing and financing activities: | |||||||||
Conversion of debt and accrued interest to equity | $ | - | $ | 580,000 | |||||
Warrant issued for prepaid consulting services | $ | - | $ | 279,000 | |||||
Beneficial conversion features of convertible debt | $ | - | $ | 216,000 | |||||
Equity issued for acquisition | $ | 40,567,000 | $ | - | |||||
Gain (loss) from change in fair value of interest rate swap derivative | $ | 100,000 | $ | (17,000 | ) | ||||
Warrants issued with debt | $ | 69,000 | $ | - | |||||
Accounts payable converted to debt | $ | 153,000 | $ | - | |||||
Financing of equipment purchase and building improvements | $ | 2,404,000 | $ | - | |||||
Intrinsic value of beneficial conversion feature at reaquisition | $ | 75,000 | $ | - | |||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | ' | ||||||||||||||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||||||||||||||
NOTE 14 - SEGMENT INFORMATION | |||||||||||||||||||||||||
The Company's businesses are organized, managed and internally reported as five operating segments. Three of these operating segments, Premier Packaging Corporation, dba DSS Packaging Group, Plastic Printing Professionals, Inc., dba DSS Plastics Group, and Secuprint Inc., dba DSS Printing Group are engaged in the printing and production of paper, cardboard and plastic documents with a wide range of features, including the Company's patented technologies and trade secrets designed for the protection of documents against unauthorized duplication and altering. The two other operating segments, ExtraDev, Inc., dba DSS Digital Group, and DSS Technology Management, Inc., (f/k/a Lexington Technology Group, Inc.) are engaged in various aspects of developing, acquiring, selling and licensing technology assets and are grouped into one reportable segment called Technology. DSS Technology Management acquires or internally develops patented technology or intellectual property assets (or interests therein), with the purpose of monetizing these assets through a variety of value-enhancing initiatives, including, but not limited to, investments in the development and commercialization of patented technologies, licensing, strategic partnerships and commercial litigation. DSS Digital Group researches and develops intellectual property, products and services for purposes of creating commercial sales of products that are based on internally developed intellectual property and intellectual property assets and rights acquired by DSS Technology Management. DSS Digital Group also provides IT sales and services including remote server and application hosting, cloud computing, secure document systems, back-up and disaster recovery services and custom program development services. These two operating segments are combined into one reportable segment. | |||||||||||||||||||||||||
Approximate information concerning the Company's operations by reportable segment for years ended December 31, 2013 and 2012 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein: | |||||||||||||||||||||||||
Year Ended December 31, 2013 | Packaging | Printing Segment | Plastics Segment | Technology | Corporate | Total | |||||||||||||||||||
Segment | Segment | Segment | |||||||||||||||||||||||
Revenues from external customers | $ | 8,969,000 | $ | 3,273,000 | $ | 3,639,000 | $ | 1,571,000 | $ | - | $ | 17,452,000 | |||||||||||||
Revenues from other operating segments | 154,000 | 543,000 | - | - | - | 697,000 | |||||||||||||||||||
Interest expense | 120,000 | 45,000 | - | 5,000 | 76,000 | 246,000 | |||||||||||||||||||
Stock based compensation | - | - | - | - | 1,895,000 | 1,895,000 | |||||||||||||||||||
Depreciation and amortization | 409,000 | 161,000 | 170,000 | 2,225,000 | 1,000 | 2,966,000 | |||||||||||||||||||
Income tax (benefit) | - | - | - | - | (10,949,000 | ) | (10,949,000 | ) | |||||||||||||||||
Net income (loss) | 443,000 | 233,000 | 89,000 | (3,968,000 | ) | 5,797,000 | 2,594,000 | ||||||||||||||||||
Capital Expenditures | 1,889,000 | - | 15,000 | 2,864,000 | 12,000 | 4,780,000 | |||||||||||||||||||
Identifiable assets | 8,681,000 | 489,000 | 2,125,000 | 55,193,000 | 854,000 | 67,342,000 | |||||||||||||||||||
Year Ended December 31, 2012 | Packaging | Printing Segment | Plastics Segment | Technology | Corporate | Total | |||||||||||||||||||
Segment | Segment | Segment | |||||||||||||||||||||||
Revenues from external customers | $ | 9,428,000 | $ | 3,640,000 | $ | 2,966,000 | $ | 1,081,000 | $ | - | $ | 17,115,000 | |||||||||||||
Revenue from other operating segments | 91,000 | 625,000 | - | - | - | 716,000 | |||||||||||||||||||
Interest expense | 151,000 | - | - | 8,000 | 69,000 | 228,000 | |||||||||||||||||||
Stock based compensation | - | - | - | - | 847,000 | 847,000 | |||||||||||||||||||
Depreciation and amortization | 415,000 | 95,000 | 187,000 | 86,000 | 62,000 | 845,000 | |||||||||||||||||||
Income tax (benefit) | - | - | - | - | 19,000 | 19,000 | |||||||||||||||||||
Net income (loss) | 431,000 | (207,000 | ) | (60,000 | ) | (354,000 | ) | (4,091,000 | ) | (4,281,000 | ) | ||||||||||||||
Capital Expenditures | 28,000 | - | 68,000 | 129,000 | 20,000 | 245,000 | |||||||||||||||||||
Identifiable assets | 7,189,000 | 2,146,000 | 1,951,000 | 1,036,000 | 1,928,000 | 14,250,000 | |||||||||||||||||||
International revenue, which consists of sales to customers with operations in Canada, Western Europe, Latin America, Africa, the Middle East and Asia comprised 2% of total revenue for 2013, (2%- 2012). Revenue is allocated to individual countries by customer based on where the product is shipped to, location of services performed or the location of equipment that is under an annual maintenance agreement. The Company had no long-lived assets in any country other than the United States for any period presented. | |||||||||||||||||||||||||
Major Customers - During 2013, two customers accounted for 35% of the Company's consolidated revenue. As of December 31, 2013, these two customers accounted for 30% of the Company's trade accounts receivable balance. During 2012, one customer accounted for 29% of the Company's consolidated revenue. As of December 31, 2012, this customer accounted for 21% of the Company's trade accounts receivable balance. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
SUBSEQUENT EVENTS [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
NOTE 15 - SUBSEQUENT EVENTS | |
On February 13, 2014, the Company's subsidiary, DSS Technology Management, entered into an a series of agreements with certain investors pursuant to which the Company contracted to receive a series of advances up to $4,500,000 from the investors in exchange for promissory notes, fixed return interests and contingent interests collateralized by certain of the Company's intellectual property. On February 13, 2014, the Company received the first advance of $2,000,000 in exchange for a promissory note in the amount of $1,791,000, fixed return equity interests in the amount of $199,000, and contingent equity interests in the amount of $10,000. | |
Upon the Company achieving the First Milestone as defined in the Agreement, the Company will issue and sell to the Investors a promissory note in the amount of $900,000 (the "First Milestone Note") and fixed return equity interests in the amount of $100,000 (the "First Milestone Fixed Return Interests"), and in turn will receive $1,000,000 (collectively, the "First Milestone Advance"). Upon the Company achieving the Second Milestone as defined in the Agreement, the Company will issue and sell to the Investors a promissory note in the amount of $1,350,000 (the "Second Milestone Note") and fixed return equity interests in the amount of $150,000 (the "Second Milestone Fixed Return Interests"), and in turn will receive $1,500,000 (collectively, the "Second Milestone Advance"). | |
The Initial Advance Note, the First Milestone Note, and the Second Milestone Note (collectively, the "Notes") shall bear interest at a rate per annum equal to the Applicable Federal Rate on the unpaid principal amount thereof. The Notes will also be subject to a Make Whole Amount calculation (as defined in the Agreement), which will result in an effective annual interest rate of approximately 4.23% for the term thereof, assuming no prepayments. At the Company's option, it may pay accrued interest when due on the Notes, or elect to capitalize the accrued interest, adding it to the principal thereof. The maturity date of all the Notes shall be the date four years after issuance of the Initial Advance Notes. | |
The Company will apply any proceeds it receives in connection with the monetization of certain Patents (as defined in the Agreement) to the payment of the Notes, the Fixed Return Interests, and the Contingent Interests, in the following order (the "Payment Waterfall"): (i) 100% of the first $5,000,000 of Gross Receipts (as defined in the Agreement) shall be paid to the purchasers of the Notes, until they have received payment in full thereunder (including any Make Whole Amount), then to the Fixed Return Interest purchasers until they have received their Fixed Return (as defined in the Agreement), and then to the Contingent Interest purchasers until they have received their 2(x) Return (as defined in the Agreement); then (ii) 100% of the next $3,300,000 of Gross Receipts may be retained by the Company or paid to the Company's counsel; then (iii) the Applicable Percentage (as defined in the Agreement) of any Gross Receipts following the application of the first $8,300,000 shall be paid to the Notes purchasers until they have received payment in full thereunder, then to the Fixed Return Interests purchasers until they have received their Fixed Return, and then to the Contingent Interests purchasers until they have received their 2(x) Return; then (iv) after full payment of the Notes and Fixed Interests have been made, the Company shall pay the Contingent Interest purchasers 12% of the Gross Receipts and the Company shall be entitled to 88% of the Gross Receipts. | |
Pursuant to the Agreement, the Company granted, to the Collateral Agent for the benefit of the investors, a non-exclusive, royalty-free, license (including the right to grant sublicenses subject to certain restrictions as further described in the Agreement and Patent License) with respect to the Patents (as defined in the Agreement), which shall be governed by the Patent License. The Agreement contains certain Events of Default which include: (i) the Company failing to make payments pursuant to the Agreement when due; (ii) on or before the second anniversary of the Effective Date, Investors fail to have received payments from the Company equal to the aggregate amount of Advances made (1x Return); (iii) on or before the fourth anniversary of the Effective Date, Investors fail to have received payments from the Company equal to two times the aggregate amount of Advances made (2x Return); (iv) the Company violates a material covenant or covenants contained in the Agreement, and thereafter fails to cure such breach for a period of 30 days following the earlier of the Company learning of such failure or its receipt of notice of such failure; (v) the Company makes a representation or warranty that is materially false when made; (vi) any default or event of default with respect to any indebtedness in excess of $500,000 of Company shall occur and be continuing; (vii) a Change of Control of Company occurs (as defined in the Agreement); (viii) any material provision of the Agreement, or any related ancillary agreements, ceases to be valid and binding on or enforceable against the Company in accordance with its terms; (ix) any judgment against the Company which exceeds $500,000, or that grants injunctive relief resulting in a Material Adverse Effect (as defined in the Agreement), that remains unsatisfied for a period of 30 days from entry thereof; (x) the Company files a voluntary petition for bankruptcy, or has an involuntary bankruptcy proceeding filed against it that is not responded to or dismissed within 60 days, or seeks other debtor relief under applicable law other than bankruptcy law, or is declared bankrupt, or makes an assignment for the benefit of its creditors, or consents to the appointment of a receiver or other custodian for all or a substantial portion of its property. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||
Principles of Consolidation | ' | ||||||||||||
Principles of Consolidation - The consolidated financial statements include the accounts of Document Security System and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |||||||||||||
Use of Estimates | ' | ||||||||||||
Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable, fair values of intangible assets and goodwill, useful lives of intangible assets and property and equipment, fair values of options and warrants to purchase the Company's common stock, deferred revenue and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The Company engages third-party valuation consultants to assist Management in the allocation of the purchase price of significant acquisitions, testing for impairment of intangible assets, and the determination of the fair value of derivative liabilities. | |||||||||||||
Reclassifications | ' | ||||||||||||
Reclassifications - Certain prior year amounts have been reclassified to conform to the current year presentation. | |||||||||||||
Accounts Receivable | ' | ||||||||||||
Accounts Receivable - The Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based upon management's estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions. At December 31, 2013, the Company established a reserve for doubtful accounts of approximately $60,000 ($60,000 - 2012). The Company does not accrue interest on past due accounts receivable. | |||||||||||||
Inventory | ' | ||||||||||||
Inventory - Inventories consist primarily of paper, plastic materials and cards, pre-printed security paper, paperboard and fully-prepared packaging which and are stated at the lower of cost or market on the first-in, first-out ("FIFO") method.Packaging work-in-process and finished goods included the cost of materials, direct labor and overhead. | |||||||||||||
Property, Plant and Equipment | ' | ||||||||||||
Property, Plant and Equipment - Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives or lease period of the assets whichever is shorter. Expenditures for renewals and betterments are capitalized. Expenditures for minor items, repairs and maintenance are charged to operations as incurred. Any gain or loss upon sale or retirement due to obsolescence is reflected in the operating results in the period the event takes place. Depreciation expense in 2013 was approximately $560,000 ($541,000 - 2012). | |||||||||||||
Investments | ' | ||||||||||||
Investments - The Company's investment consists of non-recourse promissory notes and common stock in Virtual Agility, Inc ("Virtual Agility"). The Company does not control nor exert significant influence over Virtual Agility and therefore carries the investment at cost. The Virtual Agility investment is held by the Company's subsidiary, Virtual Agility Technology Investment, LLC, of which the Company owned 60% on December 31, 2013. | |||||||||||||
Business Combinations | ' | ||||||||||||
Business Combinations - Business combinations are recorded in accordance with FASB ASC 805. Under the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities assumed then a gain on acquisition is recorded. Under the guidance, all acquisition costs are expensed as incurred. The application of business combination and impairment accounting requires the use of significant estimates and assumptions. | |||||||||||||
Goodwill | ' | ||||||||||||
Goodwill - Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between annual tests if an event occurs or circumst ances change that would indicated the carrying amount may be impaired. FASB ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If the two-step impairment test is necessary, a fair-value-based test is applied at the reporting unit level, which is generally one level below the operating segment level. The test compares the fair value of an entity's reporting units to the carrying value of those reporting units. This test requires various judgments and estimates. The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting unit. An adjustment to goodwill will be recorded for any goodwill that is determined to be impaired. The Company tests goodwill for impairment at least annually in conjunction with preparation of its annual business plan, or more frequently if events or circumstances indicate it might be impaired. FASB ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. | |||||||||||||
Other Intangible Assets and Patent Application Costs | ' | ||||||||||||
Other Intangible Assets and Patent Application Costs- Other intangible assets consists of costs associated with the application for patents, acquisition of patents and contractual rights to patents and trade secrets associated with the Company's technologies.. The Company's patents and trade secrets are generally for document anti-counterfeiting and anti-scanning technologies and processes that form the basis of the Company's document security business. Patent application costs are capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life. In addition, intangible assets include customer lists and non-compete agreements obtained as a result of acquisitions. Intangible asset amortization expense is classified as an operating expense. The Company believes that the decision to incur patent costs is discretionary as the associated products or services can be sold prior to or during the application process. The Company accounts for other intangible amortization as an operating expense, unless the underlying asset is directly associated with the production or delivery of a product. Subsequent to acquisition of patents and trade secrets, legal and associated costs incurred in prosecuting alleged infringements of the patents will be recognized as expense when incurred. Costs incurred to renew or extend the term of recognized intangible assets, including patent annuities and fees, and patent defense costs are expensed as incurred. To date, the amount of related amortization expense for other intangible assets directly attributable to revenue recognized is not material. | |||||||||||||
Impairment of Long Lived Assets | ' | ||||||||||||
Impairment of Long Lived Assets - The Company monitors the carrying value of long-lived assets for potential impairment and tests the recoverability of such assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If a change in circumstance occurs, the Company performs a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, the Company will determine whether impairment has occurred for the group of assets for which the Company can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, the Company measures any impairment by comparing the fair value of the asset or asset group to its carrying value. | |||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||
Fair Value of Financial Instruments - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Fair Value Measurement Topic of the FASB ASC establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: | |||||||||||||
¨ | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | ||||||||||||
¨ | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | ||||||||||||
¨ | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | ||||||||||||
The carrying amounts reported in the balance sheet of cash, accounts receivable, prepaids, notes receivable, accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments. The fair value of revolving credit lines, notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions. Derivative instruments, as discussed below, are recorded as assets and liabilities at estimated fair value based on available market information. The Company's convertible note payable is recorded at its face amount, net of an unamortized premium for a beneficial conversion feature and has an estimated fair value of approximately $539,000 ($565,000 - December 31, 2012) based on the underlying shares the note can be converted into at the trading price on December 31, 2013. Since the underlying shares are trading in an active, observable market, the fair value measurement qualifies as a Level 1 input. See Note 5 for additional details regarding the fair value of the Company's investments in notes receivable. | |||||||||||||
Derivative Instruments | ' | ||||||||||||
Derivative Instruments - The Company maintains an overall interest rate risk management strategy that incorporates the use of interest rate swap contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility. The Company has two interest rate swaps that change variable rates into fixed rates on two term loans. These swaps qualify as Level 2 fair value financial instruments. These swap agreements are not held for trading purposes and the Company does not intend to sell the derivative swap financial instruments. The Company records the interest swap agreements on the balance sheet at fair value because the agreements qualify as a cash flow hedges under accounting principles generally accepted in the United States of America. Gains and losses on these instruments are recorded in other comprehensive income (loss) until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive income (loss) (AOCI) to the Consolidated Statement of Operations on the same line item as the underlying transaction. The valuations of the interest rate swaps have been derived from proprietary models of the bank based upon recognized financial principles and reasonable estimates about relevant future market conditions and may reflect certain other financial factors such as anticipated profit or hedging, transactional, and other costs. The notional amounts of the swaps decrease over the life of the agreements. The Company is exposed to a credit loss in the event of nonperformance by the counter parties to the interest rate swap agreements. However, the Company does not anticipate non-performance by the counter parties. The cumulative net loss attributable to this cash flow hedge recorded in accumulated other comprehensive loss and other liabilities at December 31, 2013 was approximately $28,000 ($128,000 - December 31, 2012). | |||||||||||||
The Company has notional amounts of approximately $1,506,000 as of December 31, 2013 on its interest rate swap agreements for its Citizens Bank debt. The Company has two interest rate swaps that change variable rates into fixed rates on two term loans and the terms of these instruments are as follows: | |||||||||||||
Notional | Variable | ||||||||||||
Amount | Rate | Fixed Cost | Maturity Date | ||||||||||
$ | 350,000 | 3.92 | % | 5.7 | % | 1-Feb-15 | |||||||
$ | 1,155,744 | 3.32 | % | 5.87 | % | 30-Aug-21 | |||||||
Conventional Convertible Debt | ' | ||||||||||||
Conventional Convertible Debt - When the convertible feature of the conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature ("BCF"). Prior to the determination of the BCF, the proceeds from the debt instrument are first allocated between the convertible debt and any detachable free standing instruments that are included, such as common stock warrants. The Company records a BCF as a debt discount pursuant to FASB ASC Topic 470-20. In those circumstances, the convertible debt will be recorded net of the discount related to the BCF. The Company amortizes the discount to interest expense over the life of the debt using the effective interest method. | |||||||||||||
Share-Based Payments | ' | ||||||||||||
Share-Based Payments - Compensation cost for stock awards are measured at fair value and recognize compensation expense over the service period for which awards are expected to vest. The Company uses the Black-Scholes-Merton option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes-Merton model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option's expected term and the price volatility of the underlying stock. For equity instruments issued to consultants and vendors in exchange for goods and services the Company determines the measurement date for the fair value of the equity instruments issued at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. | |||||||||||||
Revenue Recognition | ' | ||||||||||||
Revenue Recognition - Sales of printed products including commercial and security printing, packaging, and plastic cards are recognized when a product or service is delivered, shipped or provided to the customer and all material conditions relating to the sale have been substantially performed. | |||||||||||||
For technology sales and services, revenue is recognized in accordance with the FASB ASC 985-605. Accordingly, revenue is recognized when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is reasonably assured. We recognize cloud computing revenue, including data backup, recovery and security services, on a monthly basis, beginning on the date the customer commences use of our services. Professional services are recognized in the period services are provided. | |||||||||||||
For printing technology licenses revenue is recognized once all the following criteria for revenue recognition have been met: (1) persuasive evidence of an agreement exists; (2) the right and ability to use the product or technology has been rendered; (3) the fee is fixed and determinable and not subject to refund or adjustment; and (4) collection of the amounts due is reasonably assured. | |||||||||||||
For other technology licenses, revenue arrangements generally provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. These rights typically include some combination of the following: (i) the grant of a non-exclusive, retroactive and future license to manufacture and/or sell products covered by patented technologies owned or controlled the Company, (ii) a covenant-not-to-sue, (iii) the release of the licensee from certain claims, and (iv) the dismissal of any pending litigation. The intellectual property rights granted may be perpetual in nature, extending until the expiration of the related patents, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. Pursuant to the terms of these agreements, the Company has no further obligation with respect to the grant of the non-exclusive retroactive and future licenses, covenants-not-to-sue, releases, and other deliverables, including no express or implied obligation on the Company's part to maintain or upgrade the technology, or provide future support or services. Generally, the agreements provide for the grant of the licenses, covenants-not-to-sue, releases, and other significant deliverables upon execution of the agreement, or upon receipt of the minimum upfront payment for term agreement renewals. As such, the earnings process is complete and revenue is recognized upon the execution of the agreement, when collectibility is reasonably assured, or upon receipt of the minimum upfront fee for term agreement renewals, and when all other revenue recognition criteria have been met. | |||||||||||||
Certain of the Company's revenue arrangements provide for future royalties or additional required payments based on future licensee activities. Additional royalties are recognized in revenue upon resolution of the related contingency provided that all revenue recognition criteria, as described above, have been met. Amounts of additional royalties due under these license agreements, if any, cannot be reasonably estimated by management. | |||||||||||||
Costs of Revenue | ' | ||||||||||||
Costs of Revenue - Costs of revenue includes all direct cost of the Company's packaging, commercial and security printing and plastic ID card sales, primarily, paper, plastic, inks, dies, and other consumables, and direct labor, transportation and manufacturing facility costs. In addition, this category includes all direct costs associated with the Company's technology sales, services and licensing including hardware and software that is resold, third-party fees, and fees paid to inventors or others as a result of technology licenses or settlements, if any. Costs of revenue recorded in the DSS Technology Management group include contingent legal fees, inventor royalties, legal, consulting and other professional fees directly related to the Company's patent monetization, litigation and licensing activities. Amortization of patent costs and acquired technology are included in depreciation and amortization on the consolidated statement of operations. Costsof revenue sold does not include expenses related to product development, integration, and support. These costs are included in research and development, which is a component of selling, general and administrative expenses on the consolidated statement of operations. | |||||||||||||
Contingent Legal Expenses | ' | ||||||||||||
Contingent Legal Expenses - Contingent legal fees are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In instances where there are no recoveries from potential infringers, no contingent legal fees are paid; however, the Company may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement that will be paid out from the proceeds from settlements or licenses that arise pursuant to an enforcement action, which will be expensed as legal fees in the period in which the payment of such fees is probable. Any unamortized patent acquisition costs will be expensed in the period a conclusion is reached in an enforcement action that does not yield future royalties potential. | |||||||||||||
Advertising Costs | ' | ||||||||||||
Advertising Costs - Generally consist of online, keyword advertising with Google with additional amounts spent on certain print media in targeted industry publications. Advertising costs were approximately $48,000 in 2013 ($83,000 - 2012). | |||||||||||||
Research and Development | ' | ||||||||||||
Research and Development - Research and development costs are expensed as incurred. Research and development costs consist primarily of compensation costs for research personnel, third-party research costs, and consulting costs. The Company spent approximately $254,000 and $491,000 on research and development during 2013 and 2012, respectively. | |||||||||||||
Foreign Currency | ' | ||||||||||||
Foreign Currency - Net gains and losses resulting from transactions denominated in foreign currency are recorded as other income or loss. | |||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense. | |||||||||||||
Earnings Per Common Share | ' | ||||||||||||
Earnings Per Common Share - The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued. In a loss year, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive. | |||||||||||||
As of December 31, 2013 and 2012, there were 18,750,840 and 4,614,784, respectively, of common stock share equivalents potentially issuable under convertible debt agreements, employment agreements, options, warrants, and restricted stock agreements, including common shares being held in escrow pursuant to the Merger Agreement, and that could potentially dilute basic earnings per share in the future. For the year ended December 31, 2013, based on the average market price of the Company's common stock during that period of $1.98, 46,364 common stock equivalents were added to the basic shares outstanding to calculate dilutive earnings per share. Common stock equivalents were excluded from the calculation of diluted earnings per share for 2012 in which the Company had a net loss, since their inclusion would have been anti-dilutive. | |||||||||||||
Comprehensive Loss | ' | ||||||||||||
Comprehensive Loss - Comprehensive loss is defined as the change in equity of the Company during a period from transactions and other events and circumstances from non-owner sources. It consists of net (loss) income and other gains and losses affecting stockholders' equity that, under GAAP, are excluded from net income (loss). The change in fair value of interest rate swaps was the only item impacting accumulated other comprehensive loss for the years ended December 31, 2013 and 2012. | |||||||||||||
Concentration of Credit Risk | ' | ||||||||||||
Concentration of Credit Risk - The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions. | |||||||||||||
During 2013, two customers accounted for 35% of the Company's consolidated revenue. As of December 31, 2013, these two customers accounted for 30% of the Company's trade accounts receivable balance. During 2012, one of these customers accounted for 29% of the Company's consolidated revenue. As of December 31, 2012, this same customer accounted for 21% of the Company's trade accounts receivable balance. | |||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||
Recent Accounting Pronouncements - FASB ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). Per this ASU, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. | |||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ||||||||||||
Schedule of Derivative Instruments | ' | ||||||||||||
The Company has two interest rate swaps that change variable rates into fixed rates on two term loans and the terms of these instruments are as follows: | |||||||||||||
Notional | Variable | ||||||||||||
Amount | Rate | Fixed Cost | Maturity Date | ||||||||||
$ | 350,000 | 3.92 | % | 5.7 | % | 1-Feb-15 | |||||||
$ | 1,155,744 | 3.32 | % | 5.87 | % | 30-Aug-21 | |||||||
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INVENTORY [Abstract] | ' | ||||||||
Schedule of Inventory | ' | ||||||||
Inventory consisted of the following at December 31: | |||||||||
2013 | 2012 | ||||||||
Finished Goods | $ | 395,767 | $ | 270,776 | |||||
Work in process | 129,627 | 101,694 | |||||||
Raw Materials | 309,585 | 445,215 | |||||||
$ | 834,979 | $ | 817,685 | ||||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY PLANT AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | |||||||||||||||
PROPERTY PLANT AND EQUIPMENT [Abstract] | ' | ||||||||||||||
Schedule of Property, Plant and Equipment | ' | ||||||||||||||
Property, plant and equipment consisted of the following at December 31: | |||||||||||||||
2013 | 2012 | ||||||||||||||
Estimated | Purchased | Purchased | Under | ||||||||||||
Useful Life | Capital | ||||||||||||||
Leases | |||||||||||||||
Machinery and equipment | 5-10 years | $ | 5,109,121 | $ | 3,435,509 | $ | 63,000 | ||||||||
Building and improvements | 39 years | 1,655,613 | 1,345,523 | - | |||||||||||
Land | 185,000 | 185,000 | - | ||||||||||||
Leasehold improvements | See (1) | 774,912 | 765,425 | - | |||||||||||
Furniture and fixtures | 7 years | 138,135 | 135,854 | - | |||||||||||
Software and websites | 3 years | 359,308 | 359,308 | - | |||||||||||
Total cost | $ | 8,222,089 | $ | 6,226,619 | $ | 63,000 | |||||||||
Less accumulated depreciation | 3,064,237 | 2,516,711 | 49,000 | ||||||||||||
Property, plant, and equipment, net | $ | 5,157,852 | $ | 3,709,908 | $ | 14,000 | |||||||||
(1) Expected lease term between 3 and 10 years. | |||||||||||||||
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||
INTANGIBLE ASSETS [Abstract] | ' | ||||||||||||||||||||||||||
Schedule of Other Intangible Assets | ' | ||||||||||||||||||||||||||
Intangible assets are comprised of the following: | |||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||||||
Useful Life | Gross Carrying | Accumulated | Net Carrying | Gross Carrying | Accumulated | Net Carrying | |||||||||||||||||||||
Amount | Amortizaton | Amount | Amount | Amortizaton | Amount | ||||||||||||||||||||||
Acquired intangibles- customer lists and non-compete agreements | 5 -10 years | 1,997,300 | 1,343,819 | 653,481 | 2,405,300 | 1,243,865 | 1,161,435 | ||||||||||||||||||||
Acquired intangibles-patents and patent rights | Varied (1) | 30,356,164 | 2,042,083 | 28,314,081 | - | - | - | ||||||||||||||||||||
Patent application costs | Varied (2) | 965,523 | 330,494 | 635,029 | 956,714 | 265,472 | 691,242 | ||||||||||||||||||||
$ | 33,318,987 | $ | 3,716,396 | $ | 29,602,591 | $ | 3,362,014 | $ | 1,509,337 | $ | 1,852,677 | ||||||||||||||||
(1) acquired patents and patent rights are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2013, the weighted average remaining useful life of these assets in service was approximately 6.3 years. | |||||||||||||||||||||||||||
(2) patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2013, the weighted average remaining useful life of these assets in service was approximately 9.1 years. | |||||||||||||||||||||||||||
Schedule of Estimated Future Amortization of Intangible Assets | ' | ||||||||||||||||||||||||||
Approximate expected amortization for each of the five succeeding fiscal years is as follows: | |||||||||||||||||||||||||||
2014 | $ | 4,585,000 | |||||||||||||||||||||||||
2015 | $ | 4,499,000 | |||||||||||||||||||||||||
2016 | $ | 4,297,000 | |||||||||||||||||||||||||
2017 | $ | 4,278,000 | |||||||||||||||||||||||||
2018 | $ | 4,134,000 | |||||||||||||||||||||||||
Schedule of Goodwill | ' | ||||||||||||||||||||||||||
The changes in the carrying amount of goodwill for the year ended December 31, 2013, are as follows: | |||||||||||||||||||||||||||
Packaging | Plastics | Technology | Total | ||||||||||||||||||||||||
Segment | Segment | Segment | |||||||||||||||||||||||||
Balance as of January 1, 2013 | |||||||||||||||||||||||||||
Goodwill | 1,768,400 | 684,949 | 869,450 | $ | 3,322,799 | ||||||||||||||||||||||
Accumulated impairment losses | - | - | - | - | |||||||||||||||||||||||
1,768,400 | 684,949 | 869,450 | 3,322,799 | ||||||||||||||||||||||||
Goodwill acquired during the year | - | - | 11,962,324 | 11,962,324 | |||||||||||||||||||||||
Impairment losses | - | - | (238,926 | ) | (238,926 | ) | |||||||||||||||||||||
Balance as of December 31, 2013 | |||||||||||||||||||||||||||
Goodwill | 1,768,400 | 684,949 | 12,831,774 | 15,285,123 | |||||||||||||||||||||||
Accumulated impairment losses | - | - | (238,926 | ) | (238,926 | ) | |||||||||||||||||||||
1,768,400 | 684,949 | 12,592,848 | $ | 15,046,197 |
SHORT_TERM_AND_LONG_TERM_DEBT_
SHORT TERM AND LONG TERM DEBT (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
SHORT TERM AND LONG TERM DEBT [Abstract] | ' | ||||
Schedule of Notes Payable and Long-Term Debt | ' | ||||
A summary of scheduled principal payments of long-term debt, not including revolving lines of credit, premiums or discounts subsequent to December 31, 2013 are as follows: | |||||
2014 | 1,434,281 | ||||
2015 | 952,181 | ||||
2016 | 310,587 | ||||
2017 | 316,820 | ||||
2018 | 332,690 | ||||
Thereafter | 1,146,145 | ||||
4,492,704 |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
STOCKHOLDERS' EQUITY [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Warrant Activity | ' | ||||||||||||||||||||||||
The following is a summary with respect to warrants outstanding and exercisable at December 31, 2013 and 2012 and activity during the years then ended: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Weighted | Weighted | ||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||
Exercise | Exercise | ||||||||||||||||||||||||
Warrants | Price | Warrants | Price | ||||||||||||||||||||||
Outstanding January 1 | 2,255,692 | $ | 4.34 | 1,533,892 | $ | 5.19 | |||||||||||||||||||
Granted during the year | 8,342,064 | 2.82 | 1,091,934 | 4 | |||||||||||||||||||||
Exercised | (3,472,170 | ) | 0.04 | (215,734 | ) | 2.82 | |||||||||||||||||||
Lapsed/terminated | (250,000 | ) | 5.1 | (154,400 | ) | 12.53 | |||||||||||||||||||
Outstanding at December 31 | 6,875,586 | $ | 4.64 | 2,255,692 | $ | 4.34 | |||||||||||||||||||
Exercisable at December 31 | 6,742,253 | $ | 4.64 | 2,055,692 | $ | 4.32 | |||||||||||||||||||
Weighted average months remaining | 49.8 | 46.5 | |||||||||||||||||||||||
Summary of Stock Option Activity Under Stock Option and Incentive Plans | ' | ||||||||||||||||||||||||
The following is a summary with respect to options outstanding at December 31, 2013 and 2012 and activity during the years then ended: | |||||||||||||||||||||||||
2004 Employee Plan | Non-Executive Director Plan | ||||||||||||||||||||||||
Number of | Weighted | Weighted | Number of | Weighted | Weighted | ||||||||||||||||||||
Options | Average | Average Life | Options | Average | Average Life | ||||||||||||||||||||
Exercise Price | Remaining | Exercise Price | Remaining | ||||||||||||||||||||||
(in years) | (in years) | ||||||||||||||||||||||||
Outstanding at December 31, 2011: | 1,168,648 | 4.18 | 177,000 | $ | 4.79 | ||||||||||||||||||||
Granted | 885,000 | 3.46 | 155,000 | 2.98 | |||||||||||||||||||||
Exercised | - | - | - | - | |||||||||||||||||||||
Lapsed/terminated | (328,500 | ) | 4.44 | (20,000 | ) | 11.1 | |||||||||||||||||||
Outstanding at December 31, 2012: | 1,725,148 | 3.8 | 312,000 | 3.49 | |||||||||||||||||||||
Granted | - | - | 28,750 | 2.75 | |||||||||||||||||||||
Exercised | - | - | (20,000 | ) | 1.86 | ||||||||||||||||||||
Lapsed/terminated | (85,000 | ) | 4.99 | (37,000 | ) | 6.31 | |||||||||||||||||||
Transferred | (1,640,148 | ) | 3.73 | (283,750 | ) | 3.14 | |||||||||||||||||||
Outstanding at December 31, 2013: | - | - | - | - | - | - | |||||||||||||||||||
2013 Employee, Director and Consultant | |||||||||||||||||||||||||
Equity Incenive Plan | |||||||||||||||||||||||||
Number of | Weighted | Weighted | |||||||||||||||||||||||
Options | Average | Average Life | |||||||||||||||||||||||
Exercise Price | Remaining | ||||||||||||||||||||||||
(in years) | |||||||||||||||||||||||||
Outstanding at December 31, 2012: | |||||||||||||||||||||||||
Transferred | 1,923,898 | 3.65 | |||||||||||||||||||||||
Granted | 2,150,000 | 2.89 | |||||||||||||||||||||||
Exercised | - | - | |||||||||||||||||||||||
Lapsed/terminated | - | - | |||||||||||||||||||||||
Outstanding at December 31, 2013: | 4,073,898 | 3.25 | 5.7 | ||||||||||||||||||||||
Exercisable at December 31, 2013 | 1,718,024 | 3.25 | 4.3 | ||||||||||||||||||||||
Expected to vest at December 31, 2103 | 1,905,874 | 2.95 | 7.79 | ||||||||||||||||||||||
Aggregate intrinsic value of outstanding options at December 31, 2013 | $ | 104,700 | |||||||||||||||||||||||
Aggregate intrinsic value of exercisable options at December 31, 2013 | $ | 37,365 | |||||||||||||||||||||||
Aggregate intrinsic value of options expected to vest at December 31, 2013 | $ | 67,335 | |||||||||||||||||||||||
Schedule of Assumptions Used to Compute the Share-based Compensation Expense for Stock Options and Warrants | ' | ||||||||||||||||||||||||
The following table shows our weighted average assumptions used to compute the share-based compensation expense for stock options and warrants granted during the years ended December 31, 2013 and 2012: | |||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||
Volatility | 60.9 | % | 61.2 | % | |||||||||||||||||||||
Expected option term | 5.7 years | 3.0 years | |||||||||||||||||||||||
Risk-free interest rate | 1.6 | % | 0.6 | % | |||||||||||||||||||||
Expected forfeiture rate | 0 | % | 0 | % | |||||||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||||||||||
Summary of Restricted Stock | ' | ||||||||||||||||||||||||
The following is a summary of activity of restricted stock during the years ended at December 31, 2013 and 2012: | |||||||||||||||||||||||||
Shares | Weighted- average | ||||||||||||||||||||||||
Grant Date Fair | |||||||||||||||||||||||||
Value | |||||||||||||||||||||||||
Restricted shares outstanding, December 31, 2011 | 107,352 | $ | 5.46 | ||||||||||||||||||||||
Restricted shares granted | 130,000 | 3.38 | |||||||||||||||||||||||
Restricted shares vested | (20,588 | ) | 3.33 | ||||||||||||||||||||||
Restricted shares forfeited | (155,000 | ) | 4.85 | ||||||||||||||||||||||
Restricted shares outstanding, December 31, 2012 | 61,764 | $ | 3.33 | ||||||||||||||||||||||
Restricted shares granted | - | - | |||||||||||||||||||||||
Restricted shares vested | (20,588 | ) | 3.33 | ||||||||||||||||||||||
Restricted shares forfeited | - | - | |||||||||||||||||||||||
Restricted shares outstanding, December 31, 2013 | 41,176 | $ | 3.33 | ||||||||||||||||||||||
BUSINESS_COMBINATIONS_Tables
BUSINESS COMBINATIONS (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
BUSINESS COMBINATIONS [Abstract] | ' | ||||||||
Schedule of Business Combination | ' | ||||||||
($ -in | |||||||||
thousands) | |||||||||
Current assets, net of current liabilities | $ | 6,252 | |||||||
Deposits and non-current assets | 9 | ||||||||
Investments at fair value | 10,750 | ||||||||
Other intangible assets- patent and patent rights | 27,856 | ||||||||
Goodwill | 11,962 | ||||||||
56,829 | |||||||||
Deferred tax liability, net | 11,962 | ||||||||
44,867 | |||||||||
Non-controlling interest in subsidiary | (4,300 | ) | |||||||
Total estimated purchase price | $ | 40,567 | |||||||
Consideration issued: | |||||||||
Fair value of 16,317,828 shares of DSS common stock issued to DSS Technology Management shareholders | $ | 30,514 | |||||||
Fair value of 7,100,000 shares of DSS common stock issued to DSS Technology Management shareholders to be held in escrow for up to one year | 901 | ||||||||
Fair value of options to purchase 2,000,000 shares DSS common stock for $3.00 per share exchanged for options to purchase DSS Technology Management's common stock that were granted to DSS Technology Management's employees which relate to pre-combination services | 141 | ||||||||
Fair value of warrants to purchase up to 4,859,894 shares of DSS common stock for $4.80 per share issued to DSS Technology Management shareholders | 2,661 | ||||||||
Fair value of warrants to purchase 3,432,170 shares of DSS common stock for $0.02 per share issued to certain DSS Technology Management shareholders | 6,350 | ||||||||
Total estimated purchase price | $ | 40,567 | |||||||
Summary of Unaudited Pro Forma Financial Information | ' | ||||||||
Year Ended December 31 | |||||||||
(unaudited) | |||||||||
2013 | 2012 | ||||||||
Revenue | $ | 18,046,000 | $ | 17,115,000 | |||||
Operating loss | (11,527,000 | ) | (3,179,000 | ) | |||||
Net loss | (12,489,000 | ) | (3,725,000 | ) | |||||
Earnings per share: | |||||||||
Basic | $ | (0.24 | ) | $ | (0.09 | ) | |||
Diluted | $ | (0.24 | ) | $ | (0.09 | ) | |||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
INCOME TAXES [Abstract] | ' | ||||||||
Schedule of Income Tax Provision | ' | ||||||||
Following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31: | |||||||||
2013 | 2012 | ||||||||
Currently payable: | |||||||||
Federal | $ | - | $ | - | |||||
State | - | - | |||||||
Total currently payable | - | - | |||||||
Deferred: | |||||||||
Federal | (2,217,527 | ) | (1,351,316 | ) | |||||
State | (528,872 | ) | (322,185 | ) | |||||
Total deferred | (2,746,399 | ) | (1,673,501 | ) | |||||
Less: (decrease) increase in allowance | (8,202,476 | ) | 1,692,449 | ||||||
Net deferred | (10,948,875 | ) | 18,948 | ||||||
Total income tax provision (benefit) | $ | (10,948,875 | ) | $ | 18,948 | ||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||
Individual components of deferred taxes are as follows: | |||||||||
2013 | 2012 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | $ | 15,960,340 | $ | 14,079,414 | |||||
Equity issued for services | 721,934 | 603,785 | |||||||
Goodwill and other intangibles | 218,896 | 0 | |||||||
Other | 338,087 | 422,998 | |||||||
Gross deferred tax assets | 17,239,257 | 15,106,197 | |||||||
Deferred tax liabilities: | |||||||||
Goodwill and other intangibles | $ | 9,827,201 | $ | 234,822 | |||||
Depreciation and amortization | 286,520 | 922,706 | |||||||
Investment in pass-through entity | 2,414,716 | - | |||||||
Gross deferred tax liabilities | $ | 12,528,437 | $ | 1,157,528 | |||||
Less valuation allowance | (5,851,944 | ) | (14,076,344 | ) | |||||
Net deferred tax liabilities | $ | (1,141,124 | ) | $ | (127,675 | ) | |||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||||||
The differences between the United States statutory federal income tax rate and the effective income tax rate in the accompanying consolidated statements of operations are as follows: | |||||||||
2013 | 2012 | ||||||||
Statutory United States federal rate | 34 | % | 34 | % | |||||
State income taxes net of federal benefit | 4.2 | 5 | |||||||
Permanent differences | (4.5 | ) | (0.8 | ) | |||||
Other | (0.8 | ) | 1 | ||||||
Change in valuation reserves | 98.1 | (39.6 | ) | ||||||
Effective tax rate | 131 | % | (0.4 | )% | |||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | ||||||||||||
Schedule of Future Minimum Payments Under Operating Leases | ' | ||||||||||||
The following table summarizes the Company's lease commitments. | |||||||||||||
Operating Leases | |||||||||||||
Equipment | Facilities | Total | |||||||||||
Payments made in 2013 | $ | 130,686 | $ | 633,072 | $ | 763,758 | |||||||
Future minimum lease commitments: | |||||||||||||
2014 | 30,540 | 457,851 | 488,391 | ||||||||||
2015 | 16,907 | 292,450 | 309,357 | ||||||||||
2016 | 5,241 | 164,183 | 169,424 | ||||||||||
2017 | 874 | 169,109 | 169,983 | ||||||||||
2018 | - | 174,182 | 174,182 | ||||||||||
Total future minimum lease commitments | $ | 53,562 | $ | 1,257,775 | $ | 1,311,337 | |||||||
SUPPLEMENTAL_CASH_FLOW_INFORMA1
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | ' | ||||||||
Schedule of Supplemental Cash Flow Information | ' | ||||||||
Supplemental cash flow information for the years ended December 31: | |||||||||
2013 | 2012 | ||||||||
Cash paid for interest | $ | 246,000 | $ | 230,000 | |||||
Non-cash investing and financing activities: | |||||||||
Conversion of debt and accrued interest to equity | $ | - | $ | 580,000 | |||||
Warrant issued for prepaid consulting services | $ | - | $ | 279,000 | |||||
Beneficial conversion features of convertible debt | $ | - | $ | 216,000 | |||||
Equity issued for acquisition | $ | 40,567,000 | $ | - | |||||
Gain (loss) from change in fair value of interest rate swap derivative | $ | 100,000 | $ | (17,000 | ) | ||||
Warrants issued with debt | $ | 69,000 | $ | - | |||||
Accounts payable converted to debt | $ | 153,000 | $ | - | |||||
Financing of equipment purchase and building improvements | $ | 2,404,000 | $ | - | |||||
Intrinsic value of beneficial conversion feature at reaquisition | $ | 75,000 | $ | - | |||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||
SEGMENT INFORMATION [Abstract] | ' | ||||||||||||||||||||||||
Schedule of Operations by Reportable Segment | ' | ||||||||||||||||||||||||
The Company relies on intersegment cooperation and management does not represent that these segments, if operated independently, would report the results contained herein: | |||||||||||||||||||||||||
Year Ended December 31, 2013 | Packaging | Printing Segment | Plastics Segment | Technology | Corporate | Total | |||||||||||||||||||
Segment | Segment | Segment | |||||||||||||||||||||||
Revenues from external customers | $ | 8,969,000 | $ | 3,273,000 | $ | 3,639,000 | $ | 1,571,000 | $ | - | $ | 17,452,000 | |||||||||||||
Revenues from other operating segments | 154,000 | 543,000 | - | - | - | 697,000 | |||||||||||||||||||
Interest expense | 120,000 | 45,000 | - | 5,000 | 76,000 | 246,000 | |||||||||||||||||||
Stock based compensation | - | - | - | - | 1,895,000 | 1,895,000 | |||||||||||||||||||
Depreciation and amortization | 409,000 | 161,000 | 170,000 | 2,225,000 | 1,000 | 2,966,000 | |||||||||||||||||||
Income tax (benefit) | - | - | - | - | (10,949,000 | ) | (10,949,000 | ) | |||||||||||||||||
Net income (loss) | 443,000 | 233,000 | 89,000 | (3,968,000 | ) | 5,797,000 | 2,594,000 | ||||||||||||||||||
Capital Expenditures | 1,889,000 | - | 15,000 | 2,864,000 | 12,000 | 4,780,000 | |||||||||||||||||||
Identifiable assets | 8,681,000 | 489,000 | 2,125,000 | 55,193,000 | 854,000 | 67,342,000 | |||||||||||||||||||
Year Ended December 31, 2012 | Packaging | Printing Segment | Plastics Segment | Technology | Corporate | Total | |||||||||||||||||||
Segment | Segment | Segment | |||||||||||||||||||||||
Revenues from external customers | $ | 9,428,000 | $ | 3,640,000 | $ | 2,966,000 | $ | 1,081,000 | $ | - | $ | 17,115,000 | |||||||||||||
Revenue from other operating segments | 91,000 | 625,000 | - | - | - | 716,000 | |||||||||||||||||||
Interest expense | 151,000 | - | - | 8,000 | 69,000 | 228,000 | |||||||||||||||||||
Stock based compensation | - | - | - | - | 847,000 | 847,000 | |||||||||||||||||||
Depreciation and amortization | 415,000 | 95,000 | 187,000 | 86,000 | 62,000 | 845,000 | |||||||||||||||||||
Income tax (benefit) | - | - | - | - | 19,000 | 19,000 | |||||||||||||||||||
Net income (loss) | 431,000 | (207,000 | ) | (60,000 | ) | (354,000 | ) | (4,091,000 | ) | (4,281,000 | ) | ||||||||||||||
Capital Expenditures | 28,000 | - | 68,000 | 129,000 | 20,000 | 245,000 | |||||||||||||||||||
Identifiable assets | 7,189,000 | 2,146,000 | 1,951,000 | 1,036,000 | 1,928,000 | 14,250,000 | |||||||||||||||||||
DESCRIPTION_OF_BUSINESS_Detail
DESCRIPTION OF BUSINESS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jul. 02, 2013 | Dec. 31, 2012 | |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Warrants issued in acquisition | 3,432,170 | ' | ' |
Common stock, par value | $0.02 | ' | $0.02 |
Common stock, shares issued | 49,411,486 | ' | 21,705,969 |
Equity ownership percentage | ' | 9.99% | ' |
Exercise price | $3 | ' | ' |
Palladium Capital Advisors [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Shares issued in consideration of acquisition of a subsidiary, shares | 786,678 | ' | ' |
Stock Held in Escrow | $400,000 | ' | ' |
DSS [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Shares issued in consideration of acquisition of a subsidiary, shares | 16,558,387 | ' | ' |
Common stock, par value | $0.02 | ' | ' |
Stock Held in Escrow | $7,100,000 | ' | ' |
Stock option, expiration date | 1-Jul-18 | ' | ' |
Common stock, shares issued | 4,859,894 | ' | ' |
Equity ownership percentage | 42.00% | 51.00% | ' |
Exercise price | $4.80 | ' | ' |
Options outstanding | 2,000,000 | ' | ' |
Lexington [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Options expired/forfeited | 3,600,000 | ' | ' |
Equity ownership percentage | 58.00% | 49.00% | ' |
Maximum [Member] | DSS [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Exercise price | $5 | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2013 | |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Accounts receivable, allowance | $60,000 | $60,000 | ' |
Depreciation expenses | 560,000 | 541,000 | ' |
Net gain (loss) attributable to cash flow hedge | 28,000 | 128,000 | ' |
Derivative notional amount | 1,506,000 | ' | ' |
Advertising costs | 48,000 | 83,000 | ' |
Research and development | 254,000 | 491,000 | ' |
Shares issuable, excluding from calculation of diluted earnings per share | 18,750,840 | 4,614,784 | ' |
Common stock issued, price per share | $1.98 | ' | ' |
Average market price common stock | 46,364 | ' | ' |
Debt instrument, fair value | $539,000 | $565,000 | ' |
Equity ownership percentage | ' | ' | 9.99% |
VATI [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Equity ownership percentage | 60.00% | ' | ' |
Revenues [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Concentration of credit risk, percentage | 35.00% | 29.00% | ' |
Accounts Receivable [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Concentration of credit risk, percentage | 30.00% | 21.00% | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Derivative Instrument) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Derivative [Line Items] | ' |
Notional Amount | $1,506,000 |
Matures February 1, 2015 [Member] | ' |
Derivative [Line Items] | ' |
Notional Amount | 350,000 |
Variable Rate | 3.92% |
Fixed Cost | 5.70% |
Maturity Date | 1-Feb-15 |
Matures August 30, 2021 [Member] | ' |
Derivative [Line Items] | ' |
Notional Amount | $1,132,998 |
Variable Rate | 3.32% |
Fixed Cost | 5.87% |
Maturity Date | 30-Aug-21 |
INVENTORY_Details
INVENTORY (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
INVENTORY [Abstract] | ' | ' |
Finished goods | $395,767 | $270,776 |
Work in process | 129,627 | 101,694 |
Raw materials | 309,585 | 445,215 |
Inventory | $834,979 | $817,685 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY PLANT AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | $8,222,089 | $6,226,619 | ||
Less accumulated depreciation, Purchased | 3,064,237 | 2,516,711 | ||
Property, plant, and equipment, net, Purchased | 5,157,852 | 3,709,908 | ||
Total cost, Under Capital Leases | ' | 63,000 | ||
Less accumulated depreciation, Under Capital Leases | ' | 49,000 | ||
Property, plant, and equipment, net, Under Capital Leases | ' | 14,000 | ||
Machinery and equipment [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | 5,109,121 | 3,435,509 | ||
Total cost, Under Capital Leases | ' | 63,000 | ||
Machinery and equipment [Member] | Minimum [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property and equipment, estimated useful life | '5 years | ' | ||
Machinery and equipment [Member] | Maximum [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property and equipment, estimated useful life | '10 years | ' | ||
Building and improvements [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | 1,655,613 | 1,345,523 | ||
Total cost, Under Capital Leases | ' | ' | ||
Property and equipment, estimated useful life | '39 years | ' | ||
Land [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | 185,000 | 185,000 | ||
Total cost, Under Capital Leases | ' | ' | ||
Leasehold improvements [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | 774,912 | [1] | 765,425 | [1] |
Total cost, Under Capital Leases | ' | ' | [1] | |
Leasehold improvements [Member] | Minimum [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property and equipment, estimated useful life | '3 years | ' | ||
Leasehold improvements [Member] | Maximum [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Property and equipment, estimated useful life | '10 years | ' | ||
Furniture and Fixtures [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | 138,135 | 135,854 | ||
Total cost, Under Capital Leases | ' | ' | ||
Property and equipment, estimated useful life | '7 years | ' | ||
Software and websites [Member] | ' | ' | ||
Property, Plant and Equipment [Line Items] | ' | ' | ||
Total cost, Purchased | 359,308 | 359,308 | ||
Total cost, Under Capital Leases | ' | ' | ||
Property and equipment, estimated useful life | '3 years | ' | ||
[1] | Expected lease term between 3 and 10 years. |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | Jul. 02, 2013 | Jul. 08, 2013 | Mar. 31, 2013 | Feb. 28, 2014 | Jul. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
DSS Technology Management [Member] | DSS Technology Management [Member] | VATI [Member] | VATI [Member] | VATI [Member] | VATI [Member] | VATI [Member] | ||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Initial investment, non-recourse note | ' | ' | ' | ' | ' | $200,000 | ' | ' |
Percent of outstanding common stock | ' | ' | ' | ' | ' | 7.00% | ' | ' |
Total cash investment | ' | 500,000 | ' | ' | ' | 250,000 | ' | ' |
Preferred return on each non-recourse note | ' | 750,000 | ' | ' | ' | 1,250,000 | ' | ' |
Aggregate investment | ' | ' | ' | 400,000 | ' | 2,000,000 | ' | ' |
Additional quarterly investments | ' | ' | ' | 100,000 | ' | 250,000 | ' | ' |
Cost of investment | ' | ' | ' | ' | ' | 6,450,000 | ' | ' |
Investment owned shares | ' | ' | ' | 594,530 | ' | ' | 438,401 | ' |
Aggregate preferred return | ' | ' | 10,000,000 | ' | 10,750,000 | ' | ' | ' |
Non-recourse notes | ' | ' | $1,600,000 | $250,000 | ' | $1,600,000 | ' | ' |
Equity ownership percentage | 9.99% | 40.00% | ' | 68.00% | ' | ' | ' | 60.00% |
INTANGIBLE_ASSETS_Narrative_De
INTANGIBLE ASSETS (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2013 | Jul. 08, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
DSS Technology Management [Member] | Customer list [Member] | Non-compete agreement [Member] | Bluetooth device patent [Member] | Patent purchases [Member] | Minimum [Member] | Maximum [Member] | ||||||
Patents and Patent Rights [Member] | Patents and Patent Rights [Member] | |||||||||||
Goodwill [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Patent application costs | ' | ' | $78,000 | $114,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Patent and patent acquisition costs | 2,000,000 | 750,000 | 2,500,000 | 0 | ' | ' | ' | ' | 500,000 | 500,000 | ' | ' |
Acquired patents and patent rights | ' | ' | 27,856,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Useful Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years 6 months | '7 years 6 months |
Goodwill | ' | ' | 11,962,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimate income tax benefit | ' | ' | 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write-off of goodwill amount | ' | ' | 239,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Write-off amount, gross | ' | ' | ' | ' | ' | ' | 258,000 | 150,000 | ' | ' | ' | ' |
Write-off amount | ' | ' | ' | ' | ' | ' | 198,000 | 80,000 | ' | ' | ' | ' |
Total cash investment | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' |
Return of investment in unconsolidated business | ' | ' | ' | ' | ' | $750,000 | ' | ' | ' | ' | ' | ' |
Equity ownership percentage | ' | ' | ' | ' | 9.99% | 40.00% | ' | ' | ' | ' | ' | ' |
INTANGIBLE_ASSETS_Schedule_of_
INTANGIBLE ASSETS (Schedule of Other Intangible Assets) (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Other Intangible Assets | ' | ' | ||
Gross Carrying Amount | $33,318,987 | $3,362,014 | ||
Accumulated Amortization | 3,716,396 | 1,509,337 | ||
Net Carrying Amount | 29,602,591 | 1,852,677 | ||
Acquired intangibles - customer lists and non-compete agreements [Member] | ' | ' | ||
Other Intangible Assets | ' | ' | ||
Gross Carrying Amount | 1,997,300 | 2,405,300 | ||
Accumulated Amortization | 1,343,819 | 1,243,865 | ||
Net Carrying Amount | 653,481 | 1,161,435 | ||
Acquired intangibles - customer lists and non-compete agreements [Member] | Minimum [Member] | ' | ' | ||
Other Intangible Assets | ' | ' | ||
Useful Life | '5 years | ' | ||
Acquired intangibles - customer lists and non-compete agreements [Member] | Maximum [Member] | ' | ' | ||
Other Intangible Assets | ' | ' | ||
Useful Life | '10 years | ' | ||
Acquired intangibles-patents and patent rights [Member] | ' | ' | ||
Other Intangible Assets | ' | ' | ||
Gross Carrying Amount | 30,356,164 | [1] | ' | [1] |
Accumulated Amortization | 2,042,083 | [1] | ' | [1] |
Net Carrying Amount | 28,314,081 | [1] | ' | [1] |
Useful Life | '6 years 3 months 18 days | ' | ||
Useful Life | 'Varied | ' | ||
Patent Application Costs [Member] | ' | ' | ||
Other Intangible Assets | ' | ' | ||
Gross Carrying Amount | 965,523 | [2] | 956,714 | [2] |
Accumulated Amortization | 330,494 | [2] | 265,472 | [2] |
Net Carrying Amount | $3,716,396 | [2] | $691,242 | [2] |
Useful Life | '9 years 1 month 6 days | ' | ||
Useful Life | 'Varied | ' | ||
[1] | acquired patents and patent rights are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2013, the weighted average remaining useful life of these assets in service was approximately 6.3 years. | |||
[2] | patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of December 31, 2013, the weighted average remaining useful life of these assets in service was approximately 9.1 years. |
INTANGIBLE_ASSETS_Schedule_of_1
INTANGIBLE ASSETS (Schedule of Future Amortization Expense) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
INTANGIBLE ASSETS [Abstract] | ' | ' |
2014 | $4,585,000 | ' |
2015 | 4,499,000 | ' |
2016 | 4,297,000 | ' |
2017 | 4,278,000 | ' |
2018 | 4,134,000 | ' |
Amortization of intangibles | $2,406,000 | $304,000 |
INTANGIBLE_ASSETS_Schedule_of_2
INTANGIBLE ASSETS (Schedule of Changes on Carrying Amount of Goodwill) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Goodwill [Line Items] | ' |
Goodwill, Beginning balance | $3,322,799 |
Accumulated impairment losses, Beginning balance | ' |
Goodwill, net, Beginning balance | 3,322,799 |
Goodwill acquired during the year | 11,962,324 |
Impairment losses | -238,926 |
Goodwill, Ending balance | 15,285,123 |
Accumulated impairment losses, Ending balance | 238,926 |
Goodwill, net, Ending balance | 15,046,197 |
Packaging Segment [Member] | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning balance | 1,768,400 |
Accumulated impairment losses, Beginning balance | ' |
Goodwill, net, Beginning balance | 1,768,400 |
Goodwill acquired during the year | ' |
Impairment losses | ' |
Goodwill, Ending balance | 1,768,400 |
Accumulated impairment losses, Ending balance | ' |
Goodwill, net, Ending balance | 1,768,400 |
Plastics Segment [Member] | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning balance | 684,949 |
Accumulated impairment losses, Beginning balance | ' |
Goodwill, net, Beginning balance | 684,949 |
Goodwill acquired during the year | ' |
Impairment losses | ' |
Goodwill, Ending balance | 684,949 |
Accumulated impairment losses, Ending balance | ' |
Goodwill, net, Ending balance | 684,949 |
Technology Segment [Member] | ' |
Goodwill [Line Items] | ' |
Goodwill, Beginning balance | 869,450 |
Accumulated impairment losses, Beginning balance | ' |
Goodwill, net, Beginning balance | 869,450 |
Goodwill acquired during the year | 11,962,324 |
Impairment losses | -238,926 |
Goodwill, Ending balance | 12,831,774 |
Accumulated impairment losses, Ending balance | 238,926 |
Goodwill, net, Ending balance | $12,592,848 |
SHORT_TERM_AND_LONG_TERM_DEBT_1
SHORT TERM AND LONG TERM DEBT (Revolving Credit Facility) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 26, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 19, 2013 | Dec. 31, 2013 | Feb. 12, 2010 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 08, 2010 | 24-May-13 | Dec. 06, 2013 | Aug. 31, 2011 | Dec. 31, 2013 |
RBS Citizens [Member] | RBS Citizens [Member] | ExtraDev, Inc. [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | |||
RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | |||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of credit, maximum borrowing amount | $158,087 | $349,976 | $1,000,000 | ' | $100,000 | ' | ' | ' | ' | ' | ' | $450,000 | ' | $450,000 | ' | ' |
Interest rate additional rate above LIBOR | ' | ' | 3.75% | 3.93% | ' | ' | ' | 3.75% | 3.00% | ' | ' | ' | ' | ' | 3.15% | 3.32% |
Credit facility, amount outstanding | ' | $194,680 | ' | $0 | $43,560 | ' | $1,303,900 | ' | ' | $30,171 | $40,819 | ' | ' | $250,464 | ' | ' |
Debt interest rate | ' | ' | ' | ' | 4.75% | ' | ' | 5.70% | ' | ' | ' | ' | 9.00% | ' | ' | ' |
Debt instrument, term | ' | ' | ' | ' | ' | '60 months | ' | ' | '5 years | ' | ' | ' | ' | '15 years | ' | ' |
SHORT_TERM_AND_LONG_TERM_DEBT_2
SHORT TERM AND LONG TERM DEBT (Short-Term and Long-Term Debt) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||
Jul. 02, 2013 | Jul. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 26, 2011 | Dec. 31, 2013 | Dec. 30, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 19, 2013 | Dec. 31, 2013 | Feb. 12, 2010 | Oct. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 08, 2010 | 24-May-13 | Dec. 06, 2013 | Aug. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
RBS Citizens [Member] | RBS Citizens [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | |||||
RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | |||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | $575,000 | ' | ' | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | ' | $850,000 | ' | ' | ' | ' |
Debt instrument, maturity date | ' | ' | ' | ' | ' | ' | 29-Dec-13 | ' | ' | ' | ' | ' | ' | 1-Mar-13 | ' | ' | ' | ' | 24-May-14 | ' | ' | ' | ' |
Debt interest rate | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | 5.70% | ' | ' | ' | ' | 9.00% | ' | ' | ' | ' |
Shares to be issued upon conversion of convertible note, shares | ' | ' | ' | ' | ' | ' | 260,180 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' |
Debt conversion, price per share | ' | ' | ' | ' | ' | ' | $2.21 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beneficial conversion feature recorded as a debt discount | ' | ' | ' | ' | ' | ' | 88,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt, unamortized discount | ' | ' | ' | 44,000 | ' | ' | ' | ' | 44,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 69,000 | ' | ' | ' | ' |
Debt instrument, carrying amount | ' | ' | ' | ' | ' | ' | 650,000 | 633,000 | 575,000 | 350,000 | 650,000 | 1,303,900 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,132,998 | 1,170,831 |
Line of credit, maximum borrowing amount | ' | ' | 158,087 | 349,976 | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 450,000 | ' | 450,000 | ' | ' | ' |
Credit facility agreement, monthly principal payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24,511 | ' | 25,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate additional rate above LIBOR | ' | ' | ' | ' | 3.75% | 3.93% | ' | ' | ' | ' | ' | ' | ' | 3.75% | 3.00% | ' | ' | ' | ' | ' | 3.15% | 3.32% | ' |
Interest rate on outstanding term loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.84% | ' | ' | ' | 3.17% | ' | ' | ' | 3.89% | 5.87% | ' | ' |
Credit facility, amount outstanding | ' | ' | ' | 194,680 | ' | 0 | ' | ' | ' | ' | ' | ' | 1,303,900 | ' | ' | 30,171 | 40,819 | ' | ' | 250,464 | ' | ' | ' |
Periodic installments amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 887 | ' | ' | ' | ' | ' | 7,658 | ' | ' |
Amortizaton of note discount | ' | ' | 45,266 | 259,816 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 months | ' | ' | '5 years | ' | ' | ' | ' | '15 years | ' | ' | ' |
Stock options issued, exercise price per share | $3 | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3 | ' | ' | ' | ' |
Loss on settlement of debt with related party | ' | ' | -26,252 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term debt, net | ' | ' | 824,857 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term debt, unamortized discount | ' | ' | 25,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding | ' | ' | $850,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SHORT_TERM_AND_LONG_TERM_DEBT_3
SHORT TERM AND LONG TERM DEBT (Promissory Note) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Jul. 26, 2011 | Dec. 31, 2013 | Aug. 31, 2011 | Aug. 31, 2011 | Dec. 31, 2013 | Dec. 06, 2013 | Dec. 31, 2012 | |
RBS Citizens [Member] | RBS Citizens [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | |||
Bzdick Properties Limited Liability Company [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | RBS Citizens [Member] | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price for Real Estate acquired | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | ' |
Cash payment for real estate | 378,587 | 245,112 | ' | ' | 150,000 | ' | ' | ' | ' |
Purchase price for Real Estate acquired, loan obtained | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' |
Periodic installments amount | ' | ' | ' | ' | ' | 7,658 | ' | ' | ' |
Interest rate additional rate above LIBOR | ' | ' | 3.75% | 3.93% | ' | 3.15% | 3.32% | ' | ' |
Interest rate on outstanding term loan | ' | ' | ' | ' | ' | 5.87% | ' | 3.89% | ' |
Debt instrument, final balloon payment | ' | ' | ' | ' | ' | 919,677 | ' | ' | ' |
Debt instrument, carrying amount | ' | ' | ' | ' | ' | ' | $1,132,998 | ' | $1,170,831 |
SHORT_TERM_AND_LONG_TERM_DEBT_4
SHORT TERM AND LONG TERM DEBT (Schedule of Principal Payments of Notes Payable and Long-Term Debt) (Details) (USD $) | Dec. 31, 2013 |
SHORT TERM AND LONG TERM DEBT [Abstract] | ' |
2014 | $1,434,281 |
2015 | 952,181 |
2016 | 310,587 |
2017 | 316,820 |
2018 | 332,690 |
Thereafter | 1,146,145 |
Total future principal payment | $4,492,704 |
STOCKHOLDERS_EQUITY_Stock_Issu
STOCKHOLDERS' EQUITY (Stock Issued in Private Placements) (Details) (USD $) | 12 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Feb. 13, 2012 | Feb. 13, 2012 | Oct. 01, 2012 | Dec. 31, 2012 | Oct. 01, 2012 | |
Investment Units sold in a Private Placement, Investors' Units [Member] | Investment Units sold in a Private Placement, Investors' Units [Member] | Investment Units sold in a Private Placement, Placement Agent [Member] | Private Placement In Connection With Merger Agreement [Member] | Private Placement In Connection With Merger Agreement [Member] | Private Placement In Connection With Merger Agreement [Member] | |||
Lexington Technology Group Inc. [Member] | Lexington Technology Group Inc. [Member] | |||||||
Capital Unit [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of investment units, aggregate offering price | ' | ' | ' | $3,000,000 | ' | $2,751,048 | ' | $721,628 |
Aggregate number of shares offered | ' | ' | ' | ' | ' | 833,651 | ' | 218,675 |
Sale of investment units, number of units | ' | ' | ' | 30 | ' | ' | ' | ' |
Sale of investment units, price per unit | $1.98 | ' | ' | $100,000 | ' | $3.30 | ' | $3.30 |
Sale of investment units, number shares issued per unit | ' | ' | ' | 32,258 | ' | ' | ' | ' |
Sale of investment units, shares issuable per warrant | ' | ' | ' | 16,129 | 58,064 | ' | ' | ' |
Sale of investment units, warrant exercise price per share | ' | ' | ' | 3.1 | 3.1 | ' | ' | ' |
Sale of investment units, placement agent fee paid | -73,422 | -5,813,889 | 210,000 | ' | ' | ' | 250,095 | ' |
Sale of investment units, value of issued warrant | ' | ' | ' | ' | $177,000 | ' | ' | ' |
STOCKHOLDERS_EQUITY_Stock_Warr
STOCKHOLDERS' EQUITY (Stock Warrants) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2013 | Feb. 29, 2012 | Feb. 29, 2012 | Feb. 29, 2012 | Feb. 29, 2012 | Feb. 29, 2012 | Dec. 31, 2013 | Feb. 29, 2012 | Jan. 31, 2013 | Feb. 29, 2012 | Dec. 31, 2013 | Jan. 21, 2013 | Feb. 29, 2012 | Feb. 29, 2012 | Feb. 29, 2012 | Feb. 29, 2012 | Feb. 29, 2012 | Jul. 31, 2013 | Jul. 02, 2013 | |
ipCapital Group Incorporated [Member] | ipCapital Engagement Letter [Member] | ipCapital Engagement Letter [Member] | ipCapital Engagement Letter [Member] | ipCapital Engagement Letter [Member] | ipCapital Engagement Letter [Member] | ipCapital Consulting Agreement [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | Century Media Warrant [Member] | DSS [Member] | DSS [Member] | ||||
Minimum [Member] | Maximum [Member] | ipCapital Group Incorporated [Member] | ipCapital Group Incorporated [Member] | ipCapital Group Incorporated [Member] | Exercise Price 1 [Member] | Exercise Price 2 [Member] | Exercise Price 3 [Member] | Exercise Price 4 [Member] | Exercise Price 5 [Member] | ||||||||||||
Stockholders' Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Professional fees - accounting and legal | ' | ' | ' | ' | ' | $240,000 | $365,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant term | ' | ' | ' | ' | ' | '3 years | '5 years | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants to purchase common stock, shares | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | 50,000 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of investment units, warrant exercise price per share | ' | ' | ' | ' | 4.62 | ' | ' | ' | ' | 4.5 | ' | ' | ' | 3 | 4.5 | 4.75 | 5 | 5.25 | 6 | ' | ' |
Percentage of consulting warrant stock vests and becomes exercisable | ' | ' | ' | ' | 33.33% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Value of warrant | 1,009,000 | 368,000 | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consulting fee per month | ' | 320,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants to purchase common stock, warrants exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | 113,000 | ' | ' | ' | ' | ' | ' | ' | 58,000 | ' | ' | 248,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock, net (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 215,734 | ' | ' | ' | ' | ' | ' | ' | 3,432,170 | ' |
Issuance of common stock, net | 148,643 | 5,813,889 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 609,000 | 148,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Stock based compensation | $1,894,719 | $846,705 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $33,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price | $3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4.80 |
Common stock, shares issued | 49,411,486 | 21,705,969 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,859,894 |
Common stock, par value | $0.02 | $0.02 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.02 |
Equity ownership percentage | ' | ' | 9.99% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.99% |
STOCKHOLDERS_EQUITY_Stock_Opti
STOCKHOLDERS' EQUITY (Stock Options) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jul. 02, 2013 | Jun. 20, 2013 | Jul. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 30, 2013 | Jan. 10, 2013 | |
Stockholders' Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued | 2,000,000 | 6,000,000 | 45,000 | ' | 178,750 | ' | ' | ' |
Stock options issued, exercise price per share | $3 | ' | $4 | ' | ' | ' | ' | ' |
Fair value of options issued | ' | ' | $92,000 | ' | $123,000 | ' | ' | ' |
Number of fully vested options held | ' | ' | 31,000 | ' | 9,000 | ' | 8,000 | 80,000 |
Expected incremental cost | ' | ' | ' | $34,000 | ' | ' | ' | ' |
Total number of shares authorized | 3,600,000 | ' | ' | ' | ' | ' | ' | ' |
Exercisable at December 31, Weighted Average Exercise Price | ' | ' | ' | ' | $3 | ' | ' | ' |
Volatility | ' | ' | 60.60% | ' | 60.90% | 61.20% | ' | ' |
Risk free interest rate | ' | ' | 0.62% | ' | 1.60% | 0.60% | ' | ' |
Expected dividend yield | ' | ' | 0.00% | ' | 0.00% | ' | ' | ' |
Minimum [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued, exercise price per share | ' | ' | ' | ' | $1.40 | ' | ' | ' |
Maximum [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders' Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options issued, exercise price per share | ' | ' | ' | ' | $2.51 | ' | ' | ' |
STOCKHOLDERS_EQUITY_StockBased
STOCKHOLDERS' EQUITY (Stock-Based Compensation) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Jul. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
STOCKHOLDERS' EQUITY [Abstract] | ' | ' | ' |
Stock based compensation | ' | $1,894,719 | $846,705 |
Stock based compensation expense, fair value of options | ' | 774,000 | 31,000 |
Stock compensation expense, per share | ' | $0.06 | $0.04 |
Unrecognized compensation costs | ' | 1,998,000 | ' |
Unrecognized compensation costs, amount excluded for awards that vest upon the occurrence of certain events | ' | 536,000 | ' |
Volatility, minimum | ' | 59.61% | ' |
Volatility, maximum | ' | 61.04% | ' |
Approximate risk-free rate, minimum | ' | 0.76% | ' |
Approximate risk-free rate, maximum | ' | 1.65% | ' |
Expected dividend yield | 0.00% | 0.00% | ' |
Vested | ' | $0.82 | $1.32 |
Value of warrant | ' | $1,009,000 | $368,000 |
STOCKHOLDERS_EQUITY_Restricted
STOCKHOLDERS' EQUITY (Restricted Stock Issued to Employees) (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Mar. 05, 2014 | Dec. 31, 2012 | Dec. 31, 2012 | |
Restricted shares [Member] | Restricted shares [Member] | Restricted Stock Award 2 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted shares granted, Shares | ' | 130,000 | 84,025 | 30,000 | 100,000 |
Restricted shares that expired unvested | ' | ' | ' | 25,000 | ' |
Restricted stock, award vesting period | ' | ' | '5 years | '4 years | ' |
Fair value of awards | ' | ' | ' | $104,000 | $338,000 |
Accrued compensation | ' | ' | $133,000 | ' | ' |
Aggregate number of shares offered | ' | ' | 1,168,000 | ' | ' |
Common stock issued, price per share | $1.98 | ' | $2 | ' | ' |
STOCKHOLDERS_EQUITY_Schedule_o
STOCKHOLDERS' EQUITY (Schedule of Warrants Outstanding and Exercisable) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||
Jul. 02, 2013 | Jul. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Warrant [Member] | Warrant [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Outstanding, Beginning balance | ' | ' | ' | 2,255,692 | 1,533,892 |
Options granted | ' | ' | ' | 8,342,064 | 1,091,934 |
Exercised | ' | ' | ' | -3,472,170 | -215,734 |
Lapsed, Warrants | ' | ' | ' | -250,000 | -154,400 |
Outstanding, Ending balance | ' | ' | ' | 6,875,586 | 2,255,692 |
Exercisable at December 31 | ' | ' | ' | 6,742,253 | 2,055,692 |
Outstanding Beginning balance, Weighted Average Exercise Price | ' | ' | ' | $4.34 | $5.19 |
Granted, Weighted Average Exercise Price | $3 | $4 | ' | $2.82 | $4 |
Exercised, Weighted Average Exercise Price | ' | ' | ' | $0.04 | $2.82 |
Lapsed, Weighted Average Exercise Price | ' | ' | ' | $5.10 | $12.53 |
Outstanding, Ending balance, Weighted Average Exercise Price | ' | ' | ' | $4.64 | $4.34 |
Exercisable at December 31, Weighted Average Exercise Price | ' | ' | $3 | $4.64 | $4.32 |
Weighted average months remaining | ' | ' | ' | '49 months 24 days | '46 months 15 days |
STOCKHOLDERS_EQUITY_Schedule_o1
STOCKHOLDERS' EQUITY (Schedule of Options Outstanding) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||||||
Jul. 02, 2013 | Jul. 30, 2012 | Dec. 31, 2013 | Jul. 30, 2013 | Jan. 10, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
2004 Employee Stock Option Plan [Member] | 2004 Employee Stock Option Plan [Member] | 2013 Employee, Director and Consultant Equity Incenive Plan [Member] | 2004 Non-Executive Director Stock Option Plan [Member] | 2004 Non-Executive Director Stock Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding, Beginning balance | ' | ' | ' | ' | ' | 1,725,148 | 1,168,648 | ' | 312,000 | 177,000 |
Options granted | ' | ' | ' | ' | ' | ' | 885,000 | 2,150,000 | 28,750 | 155,000 |
Exercised | ' | ' | ' | ' | ' | ' | ' | ' | -20,000 | ' |
Forfeited | ' | ' | ' | ' | ' | 85,000 | -328,500 | ' | -37,000 | -20,000 |
Transferred | ' | ' | ' | ' | ' | -1,640,148 | ' | 1,923,898 | -283,750 | ' |
Outstanding, Ending balance | ' | ' | ' | ' | ' | ' | 1,725,148 | 4,073,898 | ' | 312,000 |
Exercisable at December 31 | ' | ' | ' | ' | ' | ' | ' | 1,718,024 | ' | ' |
Expected to vest | ' | 31,000 | 9,000 | 8,000 | 80,000 | ' | ' | 1,905,874 | ' | ' |
Outstanding Beginning balance, Weighted Average Exercise Price | ' | ' | ' | ' | ' | $3.80 | $4.18 | ' | $3.49 | $4.79 |
Granted, Weighted Average Exercise Price | $3 | $4 | ' | ' | ' | ' | $3.46 | $2.89 | $2.75 | $2.98 |
Exercised, Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' | ' | ' | $1.86 | ' |
Forfeited, Weighted Average Exercise Price | ' | ' | ' | ' | ' | $4.99 | $4.44 | ' | $6.31 | $11.10 |
Transferred, Weighted Average Exercise Price | ' | ' | ' | ' | ' | $3.73 | ' | $3.65 | $3.14 | ' |
Expected to vest, Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' | ' | $3.09 | ' | ' |
Outstanding, Ending balance, Weighted Average Exercise Price | ' | ' | ' | ' | ' | ' | $3.80 | $2.95 | ' | $3.49 |
Exercisable at December 31, Weighted Average Exercise Price | ' | ' | $3 | ' | ' | ' | ' | $3.25 | ' | ' |
Oustanding, Weighted Average Life Remaining | ' | ' | ' | ' | ' | ' | ' | '5 years 6 months 24 days | ' | ' |
Exercisable, Weighted Average Life Remaining | ' | ' | ' | ' | ' | ' | ' | '4 years 3 months 18 days | ' | ' |
Aggregate Intrinsic Value of outstanding options at December 31, 2013 | ' | ' | ' | ' | ' | ' | ' | $104,700 | ' | ' |
Aggregate Intrinsic Value of exercisable options at December 31, 2013 | ' | ' | ' | ' | ' | ' | ' | 37,365 | ' | ' |
Aggregate intrinsic value of options expected to vest at December 31, 2013 | ' | ' | ' | ' | ' | ' | ' | $67,335 | ' | ' |
STOCKHOLDERS_EQUITY_Schedule_o2
STOCKHOLDERS' EQUITY (Schedule of Share-Based Compensation Assumptions) (Details) | 1 Months Ended | 12 Months Ended | |
Jul. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
STOCKHOLDERS' EQUITY [Abstract] | ' | ' | ' |
Volatility | 60.60% | 60.90% | 61.20% |
Expected option term | ' | '5 years 8 months 12 days | '3 years |
Risk-free interest rate | 0.62% | 1.60% | 0.60% |
Expected forfeiture rate | ' | 0.00% | 0.00% |
Expected dividend yield | 0.00% | 0.00% | ' |
STOCKHOLDERS_EQUITY_Schedule_o3
STOCKHOLDERS' EQUITY (Schedule of Restricted Stock Activity) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
STOCKHOLDERS' EQUITY [Abstract] | ' | ' |
Restricted shares outstanding, Beginning balance, Shares | 61,764 | 107,352 |
Restricted shares granted, Shares | ' | 130,000 |
Restricted shares vested, Shares | -20,588 | -20,588 |
Restricted shares forfeited, Shares | ' | -155,000 |
Restricted shares outstanding, Ending balance, Shares | 41,176 | 61,764 |
Restricted shares outstanding, Beginning balance, Weighted-average Grant Date Fair Value | $3.33 | $5.46 |
Restricted shares granted, Weighted-average Grant Date Fair Value | ' | $3.38 |
Restricted shares vested, Weighted-average Grant Date Fair Value | $3.33 | $3.33 |
Restricted shares forfeited, Weighted-average Grant Date Fair Value | ' | $4.85 |
Restricted shares outstanding, Ending balance, Weighted-average Grant Date Fair Value | $3.33 | $3.33 |
BUSINESS_COMBINATIONS_Narrativ
BUSINESS COMBINATIONS (Narrative) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Jul. 02, 2013 | Dec. 31, 2013 | Jul. 02, 2013 | Dec. 31, 2013 | Jul. 02, 2013 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Jul. 08, 2013 | Jul. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Jul. 30, 2013 | 31-May-13 | |
DSS [Member] | DSS [Member] | Lexington [Member] | Lexington [Member] | Palladium Capital Advisors [Member] | DSS Technology Management [Member] | DSS Technology Management [Member] | DSS Technology Management [Member] | VirtualAgility [Member] | VirtualAgility [Member] | VirtualAgility [Member] | VirtualAgility [Member] | VirtualAgility [Member] | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued in consideration of acquisition of a subsidiary, shares | ' | ' | ' | 16,558,387 | ' | ' | ' | 786,678 | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.02 | $0.02 | ' | $0.02 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Held in Escrow | ' | ' | ' | $7,100,000 | ' | ' | ' | $400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants issued in acquisition | 3,432,170 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 49,411,486 | 21,705,969 | ' | 4,859,894 | ' | ' | ' | ' | ' | 240,559 | ' | ' | ' | ' | ' | ' |
Options expired/forfeited | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable at December 31, Weighted Average Exercise Price | $3 | ' | ' | $4.80 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option, expiration date | ' | ' | ' | 1-Jul-18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity ownership percentage | ' | ' | 9.99% | 42.00% | 51.00% | 58.00% | 49.00% | ' | ' | ' | 40.00% | ' | 7.00% | ' | 60.00% | 40.00% |
Options outstanding | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sale of investment units, price per unit | $1.98 | ' | ' | ' | ' | ' | ' | ' | ' | $1.87 | ' | ' | ' | ' | ' | ' |
Revenues from external customers | 17,452,444 | 17,115,270 | ' | ' | ' | ' | ' | ' | ' | 566,000 | ' | ' | ' | ' | ' | ' |
Net income (loss) | 2,593,530 | -4,280,828 | ' | ' | ' | ' | ' | ' | ' | -2,747,000 | ' | ' | ' | ' | ' | ' |
Professional fees | 1,445,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash paid for acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | 2,000,000 | ' | ' |
Quarterly payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' |
Merger related costs | 1,400,000 | 768,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate preferred return | ' | ' | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | 10,750,000 | 1,250,000 | ' | ' | ' |
Non-recurring income tax benefit | 10,962,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-Recourse Debt | ' | ' | ' | ' | ' | ' | ' | ' | $1,600,000 | ' | ' | ' | $200,000 | ' | ' | ' |
BUSINESS_COMBINATIONS_Schedule
BUSINESS COMBINATIONS (Schedule of Purchase Price Allocation) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Business Acquisition [Line Items] | ' |
Current assets, net of current liabilities | $6,252,000 |
Deposits and non-current assets | 9,000 |
Investments at fair value | 10,750,000 |
Other intangible assets | 27,856,000 |
Goodwill | 11,962,000 |
Fair value of assets acquired | 56,829,000 |
Deferred tax liability, net | 11,962,000 |
Non-controlling interest in subsidiary | -4,300,000 |
Total Purchase Price | 40,567,000 |
Value of equity issued to acquiree | 40,567,000 |
Fair value of 16,317,828 shares of DSS common stock issued to DSS Technology Management shareholders [Member] | ' |
Business Acquisition [Line Items] | ' |
Value of equity issued to acquiree | 30,514,000 |
Fair value of 7,100,000 shares of DSS common stock issued to DSS Technology Management shareholders to be held in escrow for up to one year [Member] | ' |
Business Acquisition [Line Items] | ' |
Value of equity issued to acquiree | 901,000 |
Fair value of options to purchase 2,000,000 shares DSS common stock for $3.00 per share exchanged for options to purchase DSS Technology Management's common stock that were granted to DSS Technology Management's employees which relate to pre-combination services [Member] | ' |
Business Acquisition [Line Items] | ' |
Value of equity issued to acquiree | 141,000 |
Fair value of warrants to purchase up to 4,859,894 shares of DSS common stock for $4.80 per share issued to DSS Technology Management shareholders [Member] | ' |
Business Acquisition [Line Items] | ' |
Value of equity issued to acquiree | 2,661,000 |
Fair value of warrants to purchase 3,432,170 shares of DSS common stock for $0.02 per share issued to certain DSS Technology Management shareholders | ' |
Business Acquisition [Line Items] | ' |
Value of equity issued to acquiree | $6,350,000 |
BUSINESS_COMBINATIONS_Schedule1
BUSINESS COMBINATIONS (Schedule of Pro Forma Information) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
BUSINESS COMBINATIONS [Abstract] | ' | ' |
Revenue | $18,046,000 | $17,115,000 |
Operating Loss | -11,527,000 | -3,179,000 |
Net Loss | ($12,489,000) | ($3,725,000) |
Basic | ($0.24) | ($0.09) |
Diluted | ($0.24) | ($0.09) |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
INCOME TAXES [Abstract] | ' | ' |
Other intangible assets | $27,856,000 | ' |
Deferred tax liability, net | 11,962,000 | ' |
Net operating loss carryforwards | 42,516,000 | ' |
Excess tax benefits associated with stock option exercises included in net operating loss carryforwards but not reflected in deferred tax assets | 1,019,000 | ' |
Portion of valuation allowance that will be recorded as a reduction to additional paid in capital in the event that it is determined that a valuation allowance is no longer considered necessary | 407,000 | ' |
Unrecognized tax benefits netted against deferred tax assets | $446,000 | $446,000 |
INCOME_TAXES_Schedule_of_Incom
INCOME TAXES (Schedule of Income Tax Provision (Benefit) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Currently payable: | ' | ' |
Federal | ' | ' |
State | ' | ' |
Total currently payable | ' | ' |
Deferred: | ' | ' |
Federal | -2,217,527 | -1,351,316 |
State | -528,872 | -322,185 |
Total deferred | -2,746,399 | -1,673,501 |
Less: (decrease) increase in allowance | -8,202,476 | 1,692,449 |
Net deferred | -10,948,875 | 18,948 |
Total income tax provision (benefit) | ($10,948,875) | $18,948 |
INCOME_TAXES_Schedule_of_Defer
INCOME TAXES (Schedule of Deferred Tax Assets/Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Net operating loss carryforwards | $15,960,340 | $14,079,414 |
Equity issued for services | 721,934 | 603,785 |
Goodwill and other intangibles | 218,896 | 0 |
Other | 338,087 | 422,998 |
Gross deferred tax assets | 17,239,257 | 15,106,197 |
Deferred tax liabilities: | ' | ' |
Goodwill and other intangibles | 9,827,201 | 234,822 |
Depreciation and amortization | 286,520 | 922,706 |
Investment in pass-through entity | 2,414,716 | ' |
Gross deferred tax liabilities | 12,528,437 | 1,157,528 |
Less valuation allowance | -5,851,944 | -14,076,344 |
Net deferred tax liabilities | ($1,141,124) | ($127,675) |
INCOME_TAXES_Schedule_of_Effec
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Effective income rax rate reconciliation: | ' | ' |
Statutory United States federal rate | 34.00% | 34.00% |
State income taxes net of federal benefit | 4.20% | 5.00% |
Permanent difference | -4.50% | -0.80% |
Other | -0.80% | 1.00% |
Change in valuation reserves | 98.10% | -39.60% |
Effective tax rate | 131.00% | -0.40% |
DEFINED_CONTRIBUTION_PENSION_P1
DEFINED CONTRIBUTION PENSION PLAN (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
DEFINED CONTRIBUTION PENSION PLAN [Abstract] | ' | ' |
Employer match percentage | 3.00% | 1.00% |
Contributions by company | $41,000 | $25,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Facilities) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
sqft | |
Commitments and Contingencies [Line Items] | ' |
Facilities operating lease, monthly rent expense 2015 | $309,357 |
Corporate Offices, Rochester, New York [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Area of leased or owned space, square feet | 11,000 |
Facilities operating lease, monthly rent expense | 13,000 |
Facilities operating lease, monthly rent expense 2014 | 14,000 |
Facilities operating lease, monthly rent expense 2015 | 11,000 |
Facilities operating lease, expiration date | 30-Sep-15 |
Plastics Division, Brisbane, California [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Area of leased or owned space, square feet | 25,000 |
Facilities operating lease, monthly rent expense | 23,000 |
Facilities operating lease, expiration date | 1-Jul-14 |
Printing Division, Rochester, New York [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Area of leased or owned space, square feet | 20,000 |
Facilities operating lease, monthly rent expense | 7,100 |
Facilities operating lease, expiration date | 1-Jan-14 |
Digital Division, Rochester, New York [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Facilities operating lease, monthly rent expense | 5,567 |
Facilities operating lease, expiration date | 1-Jul-14 |
Packaging Division, Victor, New York [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Area of leased or owned space, square feet | 40,000 |
New York, NY [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Facilities operating lease, monthly rent expense | 3,000 |
Facilities operating lease, expiration date | 1-Dec-14 |
Tyler, TX [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Facilities operating lease, monthly rent expense | 1,190 |
Facilities operating lease, expiration date | 1-Dec-14 |
Tysons Corner, VA [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Facilities operating lease, monthly rent expense | 3,780 |
Facilities operating lease, expiration date | 1-Jul-14 |
Plastics Division [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Area of leased or owned space, square feet | 15,000 |
Facilities operating lease, monthly rent expense | 13,000 |
Mclean Virginia [Member] | ' |
Commitments and Contingencies [Line Items] | ' |
Facilities operating lease, monthly rent expense | $1,370 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Equipment Leases) (Details) (USD $) | Dec. 31, 2013 |
Operating Leases | ' |
Payments made in 2013 | $763,758 |
2014 | 488,391 |
2015 | 309,357 |
2016 | 169,424 |
2017 | 169,983 |
2018 | 174,182 |
Total future minimum lease commitments | 1,311,337 |
Equipment [Member] | ' |
Operating Leases | ' |
Payments made in 2013 | 130,686 |
2014 | 30,540 |
2015 | 16,907 |
2016 | 5,241 |
2017 | 874 |
2018 | ' |
Total future minimum lease commitments | 53,562 |
Facilities [Member] | ' |
Operating Leases | ' |
Payments made in 2013 | 633,072 |
2014 | 457,851 |
2015 | 292,450 |
2016 | 164,183 |
2017 | 169,109 |
2018 | 174,182 |
Total future minimum lease commitments | $1,257,775 |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Employment Agreements) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies [Line Items] | ' |
Severance payment amount | $1,382,000 |
COMMITMENTS_AND_CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Related Party Consulting Payments, Accrued Director Fees, and Contingent Litigation Payment) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |
Oct. 03, 2012 | Nov. 26, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Former CEO [Member] | Former CEO [Member] | |||
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' | ' |
Consulting fees paid to related party | ' | ' | $188,000 | $54,000 |
Expected future consulting fees | ' | ' | 175,000 | ' |
Litigation expense | $2,000,000 | $1,000,000 | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES (Legal Proceedings) (Details) | 0 Months Ended | 1 Months Ended | 0 Months Ended | 12 Months Ended | |||||
Oct. 03, 2012 | Nov. 26, 2013 | Oct. 24, 2011 | Oct. 03, 2012 | Oct. 03, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | Minimum [Member] | Maximum [Member] | European Central Bank [Member] | European Central Bank [Member] | European Central Bank [Member] | European Central Bank [Member] | |
USD ($) | USD ($) | Germany [Member] | Germany [Member] | Luxembourg [Member] | Luxembourg [Member] | ||||
USD ($) | EUR (€) | USD ($) | EUR (€) | ||||||
Commitments and Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Attorneys and court fees | $2,000,000 | $1,000,000 | ' | $250,000 | $750,000 | $241,000 | € 175,000 | $127,000 | € 93,752 |
Money damages sought | ' | ' | $10,000,000 | ' | ' | ' | ' | ' | ' |
SUPPLEMENTAL_CASH_FLOW_INFORMA2
SUPPLEMENTAL CASH FLOW INFORMATION (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
SUPPLEMENTAL CASH FLOW INFORMATION [Abstract] | ' | ' |
Cash paid for interest | $246,000 | $230,000 |
Non-cash investing and financing activities: | ' | ' |
Conversion of debt and accrued interest to equity | ' | 580,000 |
Warrant issued for prepaid consulting services | ' | 279,000 |
Beneficial conversion features of convertible debt | ' | 215,584 |
Equity issued for acquisition | 40,567,000 | ' |
Gain (loss) from change in fair value of interest rate swap derivative | 100,000 | -17,000 |
Warrants issued with debt | 69,000 | ' |
Accounts payable converted to debt | 153,000 | ' |
Financing of equipment purchase and building improvements | 2,404,000 | ' |
Intrinsic value of beneficial conversion feature at reaquisition | $75,000 | ' |
SEGMENT_INFORMATION_Narrative_
SEGMENT INFORMATION (Narrative) (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
International Revenue [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Concentration of credit risk, percentage | 2.00% | 2.00% |
Revenue [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Concentration of credit risk, percentage | 35.00% | 29.00% |
Trade Accounts Receivable [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Concentration of credit risk, percentage | 30.00% | 21.00% |
SEGMENT_INFORMATION_Schedule_o
SEGMENT INFORMATION (Schedule of Segment Information) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | ' | ' |
Revenues from external customers | $17,452,444 | $17,115,270 |
Reveneus from transactions with other operating segments of the Company | 697,000 | 716,000 |
Interest expense | 245,969 | 228,139 |
Stock based compensation | 1,894,719 | 846,705 |
Depreciation and amortization | 2,966,368 | 845,137 |
Income tax (benefit) | -10,948,875 | 18,948 |
Net income (loss) | 2,593,530 | -4,280,828 |
Capital Expenditures | 378,587 | 245,112 |
Identifiable assets | 67,342,211 | 14,250,468 |
Packaging Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues from external customers | 8,969,000 | 9,428,000 |
Reveneus from transactions with other operating segments of the Company | 154,000 | 91,000 |
Interest expense | 120,000 | 151,000 |
Stock based compensation | ' | ' |
Depreciation and amortization | 409,000 | 415,000 |
Income tax (benefit) | ' | ' |
Net income (loss) | 443,000 | 431,000 |
Capital Expenditures | 1,889,000 | 28,000 |
Identifiable assets | 8,681,000 | 7,189,000 |
Printing Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues from external customers | 3,273,000 | 3,640,000 |
Reveneus from transactions with other operating segments of the Company | 543,000 | 625,000 |
Interest expense | 45,000 | ' |
Stock based compensation | ' | ' |
Depreciation and amortization | 161,000 | 95,000 |
Income tax (benefit) | ' | ' |
Net income (loss) | 233,000 | -207,000 |
Capital Expenditures | ' | ' |
Identifiable assets | 489,000 | 2,146,000 |
Plastics Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues from external customers | 3,639,000 | 2,966,000 |
Reveneus from transactions with other operating segments of the Company | ' | ' |
Interest expense | ' | ' |
Stock based compensation | ' | ' |
Depreciation and amortization | 170,000 | 187,000 |
Income tax (benefit) | ' | ' |
Net income (loss) | 89,000 | -60,000 |
Capital Expenditures | 15,000 | 68,000 |
Identifiable assets | 2,125,000 | 1,951,000 |
Technology Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues from external customers | 1,571,000 | 1,081,000 |
Reveneus from transactions with other operating segments of the Company | ' | ' |
Interest expense | 5,000 | 8,000 |
Stock based compensation | ' | ' |
Depreciation and amortization | 2,225,000 | 86,000 |
Income tax (benefit) | ' | ' |
Net income (loss) | -3,968,000 | -354,000 |
Capital Expenditures | 2,864,000 | 129,000 |
Identifiable assets | 55,193,000 | 1,036,000 |
Corporate Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenues from external customers | ' | ' |
Reveneus from transactions with other operating segments of the Company | ' | ' |
Interest expense | 76,000 | 69,000 |
Stock based compensation | 1,895,000 | 847,000 |
Depreciation and amortization | 1,000 | 62,000 |
Income tax (benefit) | -10,949,000 | 19,000 |
Net income (loss) | 5,797,000 | -4,091,000 |
Capital Expenditures | 12,000 | 20,000 |
Identifiable assets | $854,000 | $1,928,000 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Feb. 13, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Subsequent Event [Line Items] | ' | ' | ' |
Promissory note | ' | ' | $580,000 |
First gross receipts | 5,000,000 | ' | ' |
Second gross receipts | 3,300,000 | ' | ' |
Gross receipts | 8,300,000 | ' | ' |
Default debt limit | 500,000 | ' | ' |
Subsequent Event [Member] | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
Advance received | 2,000,000 | ' | ' |
Promissory note | 1,791,000 | ' | ' |
Fixed return equity interests | 199,000 | ' | ' |
Contingent equity interests | 10,000 | ' | ' |
Subsequent Event [Member] | First Milestone [Member] | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
Advance received | 1,000,000 | ' | ' |
Promissory note | 900,000 | ' | ' |
Fixed return equity interests | 100,000 | ' | ' |
Effective annual interest rate | 4.23% | ' | ' |
Subsequent Event [Member] | Second Milestone [Member] | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
Advance received | 1,500,000 | ' | ' |
Promissory note | 1,350,000 | ' | ' |
Fixed return equity interests | 150,000 | ' | ' |
Effective annual interest rate | 4.23% | ' | ' |
Subsequent Event [Member] | Maximum [Member] | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' |
Advance received | $4,500,000 | ' | ' |