Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 12, 2015 | |
Document And Entity Information Abstract | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | DOCUMENT SECURITY SYSTEMS INC | |
Entity Central Index Key | 771,999 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 46,302,404 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 1,014,857 | $ 2,343,675 |
Restricted cash | 306,215 | 355,793 |
Accounts receivable, net | 1,667,531 | 2,097,671 |
Inventory | 1,120,417 | 869,262 |
Prepaid expenses and other current assets | 426,081 | 425,671 |
Deferred tax asset, net | 2,499 | 2,499 |
Total current assets | 4,537,600 | 6,094,571 |
Property, plant and equipment, net | 5,295,495 | 5,016,539 |
Investments and other assets, net | 626,337 | 686,912 |
Goodwill | 12,046,197 | 12,046,197 |
Other intangible assets, net | 3,445,040 | 3,908,399 |
Total assets | 25,950,669 | 27,752,618 |
Current liabilities: | ||
Accounts payable | 1,624,519 | 1,037,359 |
Accrued expenses and other current liabilities | 1,452,965 | 1,997,241 |
Current portion of long-term debt, net | 1,555,222 | 754,745 |
Total current liabilities | 4,632,706 | 3,789,345 |
Long-term debt, net | 6,791,564 | 7,439,036 |
Other long-term liabilities | 517,621 | 520,180 |
Deferred tax liability, net | $ 157,732 | $ 148,258 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity | ||
Common stock, $.02 par value; 200,000,000 shares authorized, 46,302,404 shares issued and outstanding (46,172,404 on December 31, 2014) | $ 926,048 | $ 923,448 |
Additional paid-in capital | 101,692,748 | 101,012,659 |
Accumulated other comprehensive loss | (58,621) | (61,180) |
Accumulated deficit | (88,709,129) | (86,019,128) |
Total stockholders' equity | 13,851,046 | 15,855,799 |
Total liabilities and stockholders' equity | $ 25,950,669 | $ 27,752,618 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Common stock, par value | $ 0.02 | $ 0.02 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 46,302,404 | 46,172,404 |
Common stock, shares outstanding | 46,302,404 | 46,172,404 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue | ||||
Printed products | $ 3,683,311 | $ 4,407,261 | $ 6,703,197 | $ 7,570,761 |
Technology sales, services and licensing | 512,789 | 476,130 | 922,434 | 940,361 |
Total revenue | 4,196,100 | 4,883,391 | 7,625,631 | 8,511,122 |
Costs and expenses | ||||
Cost of goods sold, exclusive of depreciation and amortization | 2,663,378 | 3,196,633 | 4,649,679 | 5,394,895 |
Selling, general and administrative (including stock based compensation) | 2,236,713 | 2,613,781 | 4,844,828 | 5,687,979 |
Depreciation and amortization | 390,533 | 1,288,313 | 770,126 | 2,601,684 |
Total costs and expenses | 5,290,624 | 7,098,727 | 10,264,633 | 13,684,558 |
Operating loss | (1,094,524) | (2,215,336) | (2,639,002) | (5,173,436) |
Other income and (expense): | ||||
Interest expense | $ (90,330) | (88,905) | (168,712) | (163,855) |
Net loss on debt modification and extinguishment | $ (34,548) | (19,096) | $ (51,915) | |
Gains on sales of investment and equipment | $ 146,283 | 146,283 | ||
Loss before income taxes | (1,038,571) | $ (2,338,789) | (2,680,527) | $ (5,389,206) |
Income tax expense | 4,737 | 4,737 | 9,474 | 9,474 |
Net loss | (1,043,308) | (2,343,526) | (2,690,001) | (5,398,680) |
Other comprehensive loss: | ||||
Interest rate swap gain (loss) | 18,311 | (15,274) | 2,559 | (25,217) |
Comprehensive loss: | $ (1,024,997) | $ (2,358,800) | $ (2,687,442) | $ (5,423,897) |
Loss per share: | ||||
Basic and diluted | $ (0.02) | $ (0.06) | $ (0.06) | $ (0.13) |
Shares used in computing loss per share: | ||||
Basic and diluted | 46,302,404 | 42,040,907 | 46,271,078 | 41,982,770 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (2,690,001) | $ (5,398,680) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 770,126 | 2,601,684 |
Stock based compensation | 643,138 | $ 840,879 |
Paid in-kind interest | 44,000 | |
Gain on sale of equipment | (46,283) | |
Net loss on debt modification and extinguishment | 19,096 | $ 51,915 |
Change in deferred tax provision | 9,474 | 9,474 |
Foreign currency translation (gain) loss | (29,400) | 16,420 |
Decrease (increase) in assets: | ||
Accounts receivable | 430,140 | 359,137 |
Inventory | (251,155) | (84,680) |
Prepaid expenses and other assets | 60,165 | (174,616) |
Restricted cash | 49,578 | 254,521 |
Increase (decrease) in liabilities: | ||
Accounts payable | 587,160 | 33,081 |
Accrued expenses and other liabilities | (523,629) | 387,188 |
Net cash used by operating activities | (927,591) | (1,103,677) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (57,486) | $ (157,789) |
Proceeds from the sale of equipment | $ 46,283 | |
Purchase of investments | $ (750,000) | |
Purchase of intangible assets | $ (3,237) | (1,196,980) |
Net cash used by investing activities | $ (14,440) | (2,104,769) |
Cash flows from financing activities: | ||
Net payments on revolving lines of credit | (158,087) | |
Payments of long-term debt | $ (386,787) | (298,816) |
Borrowings of long-term debt | 2,691,000 | |
Issuances of common stock, net of issuance costs | 301,974 | |
Net cash (used) provided by financing activities | $ (386,787) | 2,536,071 |
Net decrease in cash | (1,328,818) | (672,375) |
Cash beginning of period | 2,343,675 | 1,977,031 |
Cash end of period | $ 1,014,857 | $ 1,304,656 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 1. Basis of Presentation and Significant Accounting Policies Document Security Systems, Inc. (the Company), through two of its subsidiaries, Premier Packaging Corporation, which operates under the assumed name of DSS Packaging Group, and Plastic Printing Professionals, Inc., which operates under the assumed name of DSS Plastics 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, DSS Technology Management, Inc., acquires intellectual property (IP) 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. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X for smaller reporting companies. Accordingly, these statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying balance sheets and related interim statements of operations and comprehensive loss and cash flows include all adjustments, considered necessary for their fair presentation in accordance with U.S. GAAP. All significant intercompany transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results expected for the full year. For further information regarding the Company's accounting policies, refer to the audited consolidated financial statements and footnotes thereto included in the Company's Form 10-K for the fiscal year ended December 31, 2014. Use of Estimates - Restricted Cash As of June 30, 2015, cash of $306,215 ($355,793 December 31, 2014) is restricted for payments of costs and expenses associated with one of the Company's IP monetization programs. Derivative Instruments - . 59,000 61,000 The Company has a notional amount of approximately $ 1,050,000 Notional Variable Amount Rate Fixed Cost Maturity Date $ 1,050,203 3.33 % 5.87 % August 30, 2021 Impairment of Long Lived Assets and Goodwill -Long-lived and intangible assets and goodwill are assessed for potential impairment whenever events or changes in circumstances indicate that full recoverability of net asset balances through future cash flows is in question. Goodwill and indefinite-lived intangible assets are assessed at least annually, but also whenever events or changes in circumstances indicate the carrying values may not be recoverable. Factors that could trigger an impairment review, include (a) significant underperformance relative to historical or projected future operating results; (b) significant changes in the manner of or use of the acquired assets or the strategy for our overall business; (c) significant negative industry or economic trends; (d) significant decline in our stock price for a sustained period; and (e) a decline in our market capitalization below net book value. 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 circumstances change that would indicate the carrying amount may be impaired. Financial Accounting Standards Board (FASB) Accounting Standard Classification (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. During the Company's annual assessment of goodwill in 2014, the Company assessed that the negative trends in patent litigation that have recently reduced the success of patent owners in protecting their patents in the federal court system had caused an impairment of the Company's goodwill assigned to its DSS Technology Management division and accordingly, the Company recorded a $ 3,000,000 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 in which a conclusion is reached in an enforcement action that does not yield future royalties potential. Earnings Per Common Share As of June 30, 2015 and 2014, there were 11,448,047 16,239,947 Concentration of Credit Risk - During the six months ended June 30, 2015 and 2014, one customer accounted for 22 30 14 20 Reclassifications Continuing Operations - The Company has incurred significant net losses in previous years and through the six months of 2015. The Company's ability to fund its current and future commitments out of its available cash and cash generated from its operations depends on a number of factors. Some of these factors include the Company's ability to (i) increase sales of the Company's digital products; (ii) decrease legal and professional expenses for the Company's intellectual property monetization business; and (iii) continue to generate operating profits from the Company's packaging and plastic printing operations. 1,015,000 306,000 800,000 New Accounting Pronouncements Not Yet Adopted In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company does not believe the adoption of this ASU will have a significant impact on its financial statements. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory (ASU 2015-11). ASU 2015-11 requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out (LIFO) or the retail inventory method. It is effective for annual reporting periods beginning after December 15, 2016. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-11 on its consolidated balance sheets. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2015 | |
Inventory [Abstract] | |
Inventory | 2. Inventory Inventory consisted of the following: June 30, 2015 December 31, Finished Goods $ 749,922 $ 572,695 Work in process 168,596 123,611 Raw Materials 201,899 172,956 $ 1,120,417 $ 869,262 |
Investments
Investments | 6 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Investments | 3. Investments In January and February 2014, DSS Technology Management made investments of $ 100,000 400,000 594,530 6 500,000 500,000 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets [Abstract] | |
Intangible Assets | 4. Intangible Assets Intangible assets are comprised of the following: June 30, 2015 December 31, 2014 Useful Life Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Acquired intangibles- customer lists and non-compete agreements 5 10 $ 1,997,300 $ 1,592,207 $ 405,093 $ 1,997,300 $ 1,532,123 $ 465,177 Acquired intangibles-patents and patent rights Varied (1) 3,650,000 1,207,435 2,442,565 3,650,000 852,343 2,797,657 Patent application costs Varied (2) 1,062,070 464,688 597,382 1,058,833 413,268 645,565 $ 6,709,370 $ 3,264,330 $ 3,445,040 $ 6,706,133 $ 2,797,734 $ 3,908,399 (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 June 30, 2015, the weighted average remaining useful life of these assets in service was approximately 4.9 (2) Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of June 30, 2015, the weighted average remaining useful life of these assets in service was approximately 9.5 Intangible asset amortization expense for the six months ended June 30, 2015 amounted to $ 466,596 2,312,737 On January 5, 2015, the United States District Court for the Northern District of California issued a decision granting summary judgment to defendant Facebook, Inc. in connection with a lawsuit filed on October 3, 2012 by Plaintiff Bascom Research, LLC (a subsidiary of the Company) alleging patent infringement. As a result of the Court's decision, the Company evaluated the valuation of the patents that were the basis of the case for impairment as of December 31, 2014. The Company determined that since the patents had been invalidated the probability of future cash flows derived from the patents that would support the value of the assets had decreased so the assets were impaired. As a result, the Company recorded an impairment charge for the underlying patent assets of the net book value of the patents as of December 31, 2014 of approximately $ 22,285,000 On March 3, 2015, a Markman hearing was held in the Eastern District of Texas in connection with the pending DSS Technology Management v.Taiwan Semiconductor Manufacturing Company, Limited, et. al (TSMC) case. Based on the District Court's claim construction order issued on April 9, 2015, the Company's subsidiary, DSS Technology Management and TSMC entered in to a Joint Stipulation and Proposed Final Judgment of Non-Infringement dated May 4, 2015, subject to DSS Technology Management's right to appeal the court's claim construction decision to the Federal Circuit, thus preserving the status quo in the event an appeal results in remand for further proceedings in the District Court. During its review for the quarter ended March 31, 2015, the Company determined that this court action was a triggering event requiring that goodwill and certain of the Company's intangible assets be tested for impairment. Furthermore, during the quarters ended March 31, 2015 and June 30, 2015, the Company's market capitalization significantly declined and was considered an impairment indicator of goodwill in accordance with ASC 350-20. As such, the Company performed impairment tests for goodwill and certain of its intangible assets as described below for the quarters ended March 31, 2015 and June 30, 2015, respectively. In performing the impairment analysis related to the Company's subsidiary DSS Technology Management's intangible assets, the Company determined that the patent portfolio containing the patents being litigated in DSS Technology Management's suits against TSMC, Samsung, and Intel, among others, had a net carrying value of approximately $ 1.4 As a result of the aforementioned triggering events, during the quarters ended March 31, 2015 and June 30, 2015, the Company performed the first step of the goodwill impairment test on the goodwill allocated to DSS Technology Management in order to identify potential impairment by comparing the fair value of the reporting unit with its carrying amount, including goodwill. The carrying amount of the Company's goodwill as of March 31, 2015 and June 30, 2015 was approximately $ 12 9.6 |
Short-Term and Long-Term Debt
Short-Term and Long-Term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Short-Term and Long-Term Debt [Abstract] | |
Short-Term and Long-Term Debt | 5. Short-Term and Long-Term Debt Revolving Credit Lines 800,000 3.75 3.93 May 31, 2016 0 0 Long-Term Debt 575,000 10 260,180 2.21 15,000 230,000 500,000 604,000 On May 24, 2013, the Company entered into a promissory note in the principal sum of $ 850,000 9 May 31, 2016 15,000 610,000 775,000 850,000 Term Loan Debt 450,000 42,594 60 887 3 3.18 14,197 19,522 On July 19, 2013, Premier Packaging entered into an equipment loan with People's Capital and Leasing Corp. (Peoples Capital) for a printing press. The loan was for $ 1,303,900 60 4.84 24,511 945,130 1,067,586 On April 28, 2015, Premier Packaging entered into a term note with Citizens for $ 525,000 60 3.61 9,591 509,009 Promissory Notes 1,500,000 1,200,000 7,658 3.15 3.33 5.87 1,050,203 1,078,220 On December 6, 2013, Premier Packaging entered into a Construction to Permanent Loan with Citizens Bank for up to $ 450,000 450,000 5 2,500 3.15 3.33 300,000 420,247 435,000 Under the Citizens Bank credit facilities, the Company's subsidiary, Premier Packaging, is subject to various covenants including fixed charge coverage ratio, tangible net worth and current ratio covenants. For the quarters ended March 31, 2015 and June 30, 2015, Premier Packaging was in compliance with the covenants. The Citizens Bank obligations are secured by all of the assets of Premier Packaging and are also secured through cross guarantees by the Company and its other wholly-owned subsidiaries, Plastic Printing Professionals and Secuprint. Promissory Notes and other long-term liabilities 4,500,000 1.95 4.23 February 13, 2018 4,133,000 4,089,000 92,000 459,000 459,000 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | 6. Stockholders' Equity On February 23, 2015, the Company amended two of its debt obligations that, among other things, extended the maturity dates of the notes, instituted principal payments for the notes, and eliminated a conversion feature on one of the notes. In conjunction with these agreements, the Company issued an aggregate of 100,000 41,000 Restricted Shares 30,000 11,000 Stock Options 53,550 0.60 6,000 72.6 1.66 zero Stock-Based Payments and Compensation - 643,000 0.01 841,000 0.02 As of June 30, 2015, there was approximately $ 685,000 536,000 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies On October 24, 2011 the Company initiated a lawsuit 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 sought in excess of $ 10 On November 26, 2013, DSS Technology Management filed suit against Apple, Inc. (Apple) 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. DSS Technology Management is seeking a judgment for infringement, injunctive relief, and compensatory damages from Apple. On October 28, 2014, the case was stayed by the District Court pending a determination of Apple's motion to transfer the case to the Northern District of California. On November 7, 2014, Apple's motion to transfer the case to the Northern District of California was granted. On December 30, 2014, Apple filed two petitions for Inter Partes Review (IPRs) of the patents at issue in the case with the PTAB. DSS Technology Management filed its responses to the petitions on March 30, 2015. On May 1, 2015, the District Court issued an order granting Apple's motion to stay the case until the IPRs are decided. On June 25, 2015, the PTAB instituted the IPR On March 10, 2014, DSS Technology Management filed suit in the United States District Court for the Eastern District of Texas against Taiwan Semiconductor Manufacturing Company, TSMC North America, TSMC Development, Inc. (referred to collectively as TSMC), Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Telecommunications America L.L.C., Samsung Semiconductor, Inc., Samsung Austin Semiconductor LLC (referred to collectively as Samsung), and NEC Corporation of America (referred to as NEC), for patent infringement involving certain of its semiconductor patents. DSS Technology Management is seeking a judgment for infringement, injunctive relief, and money damages from each of the named defendants. In June 2014, TSMC filed a petition for Inter Partes Review of the patents at issue with the PTAB. DSSTM filed its preliminary response to the petition in October 2014. Samsung also filed an IPR relating to the same patents in September 2014. DSSTM filed its preliminary response to that petition in December, 2014. On December 31, 2014, the PTAB instituted review of several of the patent claims at issue in the case. Samsung filed a motion with PTAB to join TSMC's IPR proceeding. The request was granted by the PTAB. On March 3, 2015, a Markman hearing was held in the Eastern District of Texas. Based on the District Court's claim construction order issued on April 9, 2015, DSS Technology Management and TSMC entered in to a Joint Stipulation and Proposed Final Judgment of Non-Infringement dated May 4, 2015, subject to DSS Technology Management's right to appeal the court's claim construction decision to the Federal Circuit, thus preserving the status quo in the event an appeal results in remand for further proceedings in the District Court. On April 28, 2015, DSS Technology Management reached a confidential settlement with NEC. A PTAB hearing was scheduled for August 12, 2015 in connection with the pending TSMC/Samsung IPR proceeding. On May 30, 2014, DSS Technology Management filed suit against Lenovo (United States), Inc. (Lenovo) in the United States District Court for the Eastern District of Texas, for patent infringement. The complaint alleged infringement by Lenovo of one of DSS Technology Management's patents that relates to systems and methods of using low power wireless peripheral devices. DSS Technology Management is seeking judgment for infringement and money damages from Lenovo in connection with the case. On April 27, 2015, Lenovo moved for summary judgment in the District Court on the grounds that the patent at issue is invalid for indefiniteness. On June 17, 2015, the parties entered in to a confidential non-suit agreement which ended the litigation with Lenovo. On February 16, 2015, DSS Technology Management filed suit in the United States District Court, Eastern District of Texas, against defendants Intel Corporation, Dell, Inc., GameStop Corp., Conn's Inc., Conn Appliances, Inc., NEC Corporation of America, Wal-Mart Stores, Inc., Wal-Mart Stores Texas, LLC, and AT&T, Inc. The complaint alleges patent infringement and seeks judgment for infringement of two of DSSTM's patents, injunctive relief and money damages. The case is currently in the initial pleadings stage. On April 28, 2015, a confidential settlement was reached with NEC. On June 29, 2015, Intel filed its Answer to the complaint and also filed a motion to have the case transferred to the Northern District of California, which motion is currently pending as of the date of this report. On April 28, 2015, the Company was served with a shareholder derivative lawsuit that was filed in the Supreme Court of the State of New York, County of Kings: Benjamin Lapin, Derivatively on Behalf of Himself and All Others Similarly Situated, Plaintiff v. Robert Fagenson, Jeffrey Ronaldi, Peter Hardigan, Robert Bzdick, Jonathon Perrelli, Warren Hurwitz, Ira Greenstein, David Klein and Philip Jones, Defendants, and Document Security Systems, Inc., Nominal Defendant. The complaint alleges, among other things, breach of fiduciary duty, gross mismanagement, abuse of control, and waste of corporate assets since October 2, 2012, and alleges that demand on the Board of Directors to take action would be futile. The complaint seeks unspecified damages, attorneys' fees, and other costs and expenses. The Company believes that all of the claims in this lawsuit are without merit and intends to vigorously defend against these claims, but is unable to predict the outcome or reasonably estimate a range of possible loss. On June 29, 2015, the Company filed a motion to dismiss the suit, which motion is currently pending as of the date of this report. On July 16, 2015, DSS Technology Management filed three separate lawsuits in the United States District Court for the Eastern District of Texas alleging infringement of one of its semiconductor patents. The defendants are SK Hynix et al., et al., 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. The Company accrues for potential litigation losses when a loss is probable and estimable. 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 June 30, 2015, the Company has not accrued any contingent legal fees pursuant to these arrangements. Contingent Payments The Company is party to certain agreements with funding partners who have rights to portions of intellectual property monetization proceeds that the Company receives. Related Party Consulting Payments 35,000 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 8. Supplemental Cash Flow Information Supplemental cash flow information for the six months ended June 30, 2015 and 2014 is approximately as follows: 2015 2014 Cash paid for interest $ 125,000 $ 151,000 Non-cash investing and financing activities: Loss from change in fair value of interest rate swap derivatives $ 3,000 $ (25,000 ) Accrued liabilities with related parties settled with equity $ - $ 134,000 Financing of equipment purchases $ 525,000 $ - Financing of building improvements $ - $ 200,000 Change in non-controlling interest $ - $ 200,000 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2015 | |
Segment Information [Abstract] | |
Segment Information | 9. Segment Information The Company's businesses are organized, managed and internally reported as four operating segments. Two of these operating segments, Packaging and Printing, and Plastics 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., are engaged in various aspects of developing, acquiring, selling and licensing technology assets and are grouped into one reportable segment called Technology. Approximate information concerning the Company's operations by reportable segment for the three and six months ended June 30, 2015 and 2014 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: Three Months Ended June 30, 2015 Packaging and Plastics Technology Corporate Total Revenues from external customers $ 2,710,000 974,000 512,000 - $ 4,196,000 Depreciation and amortization 144,000 28,000 217,000 2,000 391,000 Stock based compensation 18,000 10,000 34,000 256,000 318,000 Net income (loss) 94,000 11,000 (372,000 ) (776,000 ) (1,043,000 ) Six Months Ended June 30, 2015 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 4,792,000 1,912,000 922,000 - $ 7,626,000 Depreciation and amortization 272,000 61,000 433,000 4,000 770,000 Stock based compensation 35,000 20,000 67,000 521,000 643,000 Net income (loss) 135,000 98,000 (1,427,000 ) (1,496,000 ) (2,690,000 ) Identifiable assets 9,461,000 2,017,000 12,911,000 1,562,000 25,951,000 Three Months Ended June 30, 2014 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 3,503,000 899,000 481,000 - $ 4,883,000 Depreciation and amortization 106,000 44,000 1,127,000 11,000 1,288,000 Stock based compensation 18,000 10,000 24,000 241,000 293,000 Net income (loss) 263,000 (13,000 ) (1,557,000 ) (1,037,000 ) (2,344,000 ) Six Months Ended June 30, 2014 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 5,746,000 1,820,000 945,000 - $ 8,511,000 Depreciation and amortization 256,000 87,000 2,245,000 14,000 2,602,000 Stock based compensation 92,000 52,000 117,000 579,000 840,000 Net income (loss) 199,000 (22,000 ) (3,236,000 ) (2,340,000 ) (5,399,000 ) Identifiable assets 9,143,000 2,059,000 53,786,000 1,321,000 66,309,000 |
Basis of Presentation and Sig15
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates - |
Restricted Cash | Restricted Cash As of June 30, 2015, cash of $306,215 ($355,793 December 31, 2014) is restricted for payments of costs and expenses associated with one of the Company's IP monetization programs. |
Derivative Instruments | Derivative Instruments - . 59,000 61,000 The Company has a notional amount of approximately $ 1,050,000 Notional Variable Amount Rate Fixed Cost Maturity Date $ 1,050,203 3.33 % 5.87 % August 30, 2021 |
Impairment of Long Lived Assets and Goodwill | Impairment of Long Lived Assets and Goodwill -Long-lived and intangible assets and goodwill are assessed for potential impairment whenever events or changes in circumstances indicate that full recoverability of net asset balances through future cash flows is in question. Goodwill and indefinite-lived intangible assets are assessed at least annually, but also whenever events or changes in circumstances indicate the carrying values may not be recoverable. Factors that could trigger an impairment review, include (a) significant underperformance relative to historical or projected future operating results; (b) significant changes in the manner of or use of the acquired assets or the strategy for our overall business; (c) significant negative industry or economic trends; (d) significant decline in our stock price for a sustained period; and (e) a decline in our market capitalization below net book value. |
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 circumstances change that would indicate the carrying amount may be impaired. Financial Accounting Standards Board (FASB) Accounting Standard Classification (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. During the Company's annual assessment of goodwill in 2014, the Company assessed that the negative trends in patent litigation that have recently reduced the success of patent owners in protecting their patents in the federal court system had caused an impairment of the Company's goodwill assigned to its DSS Technology Management division and accordingly, the Company recorded a $ 3,000,000 |
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 in which a conclusion is reached in an enforcement action that does not yield future royalties potential. |
Earnings Per Common Share | Earnings Per Common Share As of June 30, 2015 and 2014, there were 11,448,047 16,239,947 |
Concentration of Credit Risk | Concentration of Credit Risk - During the six months ended June 30, 2015 and 2014, one customer accounted for 22 30 14 20 |
Reclassifications | Reclassifications |
Continuing Operations | Continuing Operations - The Company has incurred significant net losses in previous years and through the six months of 2015. The Company's ability to fund its current and future commitments out of its available cash and cash generated from its operations depends on a number of factors. Some of these factors include the Company's ability to (i) increase sales of the Company's digital products; (ii) decrease legal and professional expenses for the Company's intellectual property monetization business; and (iii) continue to generate operating profits from the Company's packaging and plastic printing operations. 1,015,000 306,000 800,000 |
New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Not Yet Adopted In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." The guidance requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to provide related footnote disclosures in certain circumstances. The guidance is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company does not believe the adoption of this ASU will have a significant impact on its financial statements. In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Simplifying the Measurement of Inventory (ASU 2015-11). ASU 2015-11 requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out (LIFO) or the retail inventory method. It is effective for annual reporting periods beginning after December 15, 2016. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-11 on its consolidated balance sheets. |
Basis of Presentation and Sig16
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation and Significant Accounting Policies [Abstract] | |
Summary of Derivative Financial Instruments | Notional Variable Amount Rate Fixed Cost Maturity Date $ 1,050,203 3.33 % 5.87 % August 30, 2021 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory [Abstract] | |
Schedule of Inventory | June 30, 2015 December 31, Finished Goods $ 749,922 $ 572,695 Work in process 168,596 123,611 Raw Materials 201,899 172,956 $ 1,120,417 $ 869,262 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Intangible Assets [Abstract] | |
Schedule of Other Intangible Assets | June 30, 2015 December 31, 2014 Useful Life Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Acquired intangibles- customer lists and non-compete agreements 5 10 $ 1,997,300 $ 1,592,207 $ 405,093 $ 1,997,300 $ 1,532,123 $ 465,177 Acquired intangibles-patents and patent rights Varied (1) 3,650,000 1,207,435 2,442,565 3,650,000 852,343 2,797,657 Patent application costs Varied (2) 1,062,070 464,688 597,382 1,058,833 413,268 645,565 $ 6,709,370 $ 3,264,330 $ 3,445,040 $ 6,706,133 $ 2,797,734 $ 3,908,399 (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 June 30, 2015, the weighted average remaining useful life of these assets in service was approximately 4.9 (2) Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of June 30, 2015, the weighted average remaining useful life of these assets in service was approximately 9.5 |
Supplemental Cash Flow Inform19
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | 2015 2014 Cash paid for interest $ 125,000 $ 151,000 Non-cash investing and financing activities: Loss from change in fair value of interest rate swap derivatives $ 3,000 $ (25,000 ) Accrued liabilities with related parties settled with equity $ - $ 134,000 Financing of equipment purchases $ 525,000 $ - Financing of building improvements $ - $ 200,000 Change in non-controlling interest $ - $ 200,000 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Information [Abstract] | |
Schedule of Operations by Reportable Segment | Three Months Ended June 30, 2015 Packaging and Plastics Technology Corporate Total Revenues from external customers $ 2,710,000 974,000 512,000 - $ 4,196,000 Depreciation and amortization 144,000 28,000 217,000 2,000 391,000 Stock based compensation 18,000 10,000 34,000 256,000 318,000 Net income (loss) 94,000 11,000 (372,000 ) (776,000 ) (1,043,000 ) Six Months Ended June 30, 2015 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 4,792,000 1,912,000 922,000 - $ 7,626,000 Depreciation and amortization 272,000 61,000 433,000 4,000 770,000 Stock based compensation 35,000 20,000 67,000 521,000 643,000 Net income (loss) 135,000 98,000 (1,427,000 ) (1,496,000 ) (2,690,000 ) Identifiable assets 9,461,000 2,017,000 12,911,000 1,562,000 25,951,000 Three Months Ended June 30, 2014 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 3,503,000 899,000 481,000 - $ 4,883,000 Depreciation and amortization 106,000 44,000 1,127,000 11,000 1,288,000 Stock based compensation 18,000 10,000 24,000 241,000 293,000 Net income (loss) 263,000 (13,000 ) (1,557,000 ) (1,037,000 ) (2,344,000 ) Six Months Ended June 30, 2014 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 5,746,000 1,820,000 945,000 - $ 8,511,000 Depreciation and amortization 256,000 87,000 2,245,000 14,000 2,602,000 Stock based compensation 92,000 52,000 117,000 579,000 840,000 Net income (loss) 199,000 (22,000 ) (3,236,000 ) (2,340,000 ) (5,399,000 ) Identifiable assets 9,143,000 2,059,000 53,786,000 1,321,000 66,309,000 |
Basis of Presentation and Sig21
Basis of Presentation and Significant Accounting Policies (Narrative) (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Accounting Policies | ||||
Shares issuable, excluding from calculation of diluted earnings per share | 11,448,047 | 16,239,947 | ||
Net gain (loss) attributable to cash flow hedge | $ (59,000) | $ (61,000) | ||
Notional Amount | 1,050,000 | |||
Impairment of goodwill | 3,000,000 | |||
Unrestricted cash | 1,014,857 | $ 1,304,656 | $ 2,343,675 | $ 1,977,031 |
Restricted cash | 306,215 | $ 355,793 | ||
Available under a revolving credit line at packaging subsidiary | $ 800,000 | |||
Accounts Receivable [Member] | Major Customer 1 | ||||
Significant Accounting Policies | ||||
Concentration of credit risk, percentage | 14.00% | 20.00% | ||
Revenue [Member] | Major Customer 1 | ||||
Significant Accounting Policies | ||||
Concentration of credit risk, percentage | 22.00% | 30.00% |
Basis of Presentation and Sig22
Basis of Presentation and Significant Accounting Policies (Schedule of Derivative Instrument) (Details) - Jun. 30, 2015 - USD ($) | Total |
Derivative [Line Items] | |
Notional Amount | $ 1,050,000 |
Matures August 30, 2021 [Member] | |
Derivative [Line Items] | |
Notional Amount | $ 1,050,203 |
Variable Rate | 3.33% |
Fixed Cost | 5.87% |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory [Abstract] | ||
Finished Goods | $ 749,922 | $ 572,695 |
Work in process | 168,596 | 123,611 |
Raw Materials | 201,899 | 172,956 |
Inventory | $ 1,120,417 | $ 869,262 |
Investments (Details)
Investments (Details) - USD ($) | 1 Months Ended | |||
Feb. 28, 2014 | Jan. 31, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||||
Investment owned shares | 594,530 | |||
DSS Technology Management [Member] | ||||
Related Party Transaction [Line Items] | ||||
Percent of outstanding common stock | 6.00% | |||
Total cash investment | $ 400,000 | $ 100,000 | ||
Cost of investment | $ 500,000 | $ 500,000 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - Range [Domain] - USD ($) | Jan. 05, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | |||||
Amortization of intangibles | $ 466,596 | $ 2,312,737 | |||
Impairment of assets | $ 22,285,000 | ||||
Goodwill | 12,046,197 | $ 12,000,000 | $ 12,046,197 | ||
Impairment of goodwill | $ 3,000,000 | ||||
DSS Technology Management [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | 9,600,000 | ||||
Patents [Member] | |||||
Goodwill [Line Items] | |||||
Useful Life | 9 years 6 months | ||||
Patents [Member] | DSS Technology Management [Member] | |||||
Goodwill [Line Items] | |||||
Net carrying value of intangible assets | $ 1,400,000 |
Intangible Assets (Schedule of
Intangible Assets (Schedule of Other Intangible Assets) (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | ||
Other Intangible Assets | |||
Gross Carrying Amount | $ 6,709,370 | $ 6,706,133 | |
Accumulated Amortization | 3,264,330 | 2,797,734 | |
Net Carrying Amount | 3,445,040 | 3,908,399 | |
Acquired intangibles - customer lists and non-compete agreements [Member] | |||
Other Intangible Assets | |||
Gross Carrying Amount | 1,997,300 | 1,997,300 | |
Accumulated Amortization | 1,592,207 | 1,532,123 | |
Net Carrying Amount | $ 405,093 | 465,177 | |
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 | [1] | $ 3,650,000 | 3,650,000 |
Accumulated Amortization | [1] | 1,207,435 | 852,343 |
Net Carrying Amount | [1] | $ 2,442,565 | 2,797,657 |
Useful Life | 4 years 10 months 24 days | ||
Patent application costs [Member] | |||
Other Intangible Assets | |||
Gross Carrying Amount | [2] | $ 1,062,070 | 1,058,833 |
Accumulated Amortization | [2] | 464,688 | 413,268 |
Net Carrying Amount | [2] | $ 597,382 | $ 645,565 |
Useful Life | 9 years 6 months | ||
[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 June 30, 2015, the weighted average remaining useful life of these assets in service was approximately 4.9 years. | ||
[2] | Patent application costs are amortized over their expected useful life which is generally the remaining legal life of the patent. As of June 30, 2015, the weighted average remaining useful life of these assets in service was approximately 9.5 years. |
Short-Term and Long-Term Debt (
Short-Term and Long-Term Debt (Revolving Credit Lines) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Oct. 31, 2011 | Jun. 30, 2015 | Jun. 29, 2015 | Apr. 28, 2015 | Dec. 31, 2014 | Oct. 08, 2010 | |
Debt Instrument [Line Items] | ||||||
Credit facility, amount outstanding | $ 509,009 | |||||
RBS Citizens [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, maximum borrowing amount | $ 525,000 | $ 450,000 | ||||
Debt interest rate | 3.61% | |||||
Interest rate additional rate above LIBOR | 3.00% | 3.18% | ||||
Credit facility, amount outstanding | $ 14,197 | $ 19,522 | ||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility, expiration date | May 31, 2016 | |||||
Revolving Credit Facility [Member] | RBS Citizens [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit, maximum borrowing amount | $ 800,000 | |||||
Debt interest rate | 3.93% | |||||
Interest rate additional rate above LIBOR | 3.75% | |||||
Credit facility, amount outstanding | $ 0 | $ 0 |
Short-Term and Long-Term Debt28
Short-Term and Long-Term Debt (Short and Long-Term Debt) (Details) - USD ($) | 1 Months Ended | |||||||||
Feb. 23, 2015 | Jan. 31, 2015 | Feb. 13, 2014 | Aug. 30, 2011 | Jun. 30, 2015 | Apr. 28, 2015 | Dec. 31, 2014 | Dec. 06, 2013 | May. 24, 2013 | Dec. 31, 2011 | |
Debt Instrument [Line Items] | ||||||||||
Stock options issued, exercise price per share | $ 0.60 | |||||||||
RBS Citizens [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt interest rate | 3.61% | |||||||||
Convertible Notes Payable [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 575,000 | |||||||||
Debt interest rate | 10.00% | |||||||||
Shares to be issued upon conversion of convertible note, shares | 260,180 | |||||||||
Debt conversion, price per share | $ 2.21 | |||||||||
Debt instrument, carrying amount | $ 500,000 | $ 604,000 | ||||||||
Periodic installments amount | $ 15,000 | |||||||||
Debt instrument, final balloon payment | $ 230,000 | |||||||||
Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 850,000 | |||||||||
Debt instrument, maturity date | May 31, 2016 | Feb. 13, 2018 | ||||||||
Debt interest rate | 1.95% | 9.00% | ||||||||
Debt instrument, carrying amount | 775,000 | 850,000 | ||||||||
Periodic installments amount | $ 15,000 | |||||||||
Debt instrument, final balloon payment | $ 610,000 | |||||||||
Promissory Notes [Member] | RBS Citizens [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, face amount | $ 450,000 | |||||||||
Debt instrument, carrying amount | $ 1,050,203 | $ 1,078,220 | ||||||||
Periodic installments amount | $ 7,658 |
Short-Term and Long-Term Debt29
Short-Term and Long-Term Debt (Promissory Note) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||||||||
Apr. 28, 2015 | Feb. 23, 2015 | May. 31, 2014 | Feb. 13, 2014 | Oct. 31, 2011 | Aug. 30, 2011 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 06, 2013 | May. 24, 2013 | |
Debt Instrument [Line Items] | |||||||||||
Purchase of equipment and building improvements | $ 57,486 | $ 157,789 | |||||||||
Long-term debt, net | 6,791,564 | $ 7,439,036 | |||||||||
Other long-term liabilities | $ 517,621 | 520,180 | |||||||||
RBS Citizens [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate additional rate above LIBOR | 3.00% | 3.18% | |||||||||
Debt interest rate | 3.61% | ||||||||||
Monthly installments | $ 9,591 | $ 887 | |||||||||
Promissory Notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Periodic installments amount | $ 15,000 | ||||||||||
Debt interest rate | 1.95% | 9.00% | |||||||||
Interest rate on outstanding term loan | 4.23% | ||||||||||
Debt instrument, carrying amount | $ 775,000 | 850,000 | |||||||||
Debt instrument, face amount | $ 850,000 | ||||||||||
Advances | $ 4,500,000 | ||||||||||
Long-term debt, net | 4,133,000 | 4,089,000 | |||||||||
Accrued interest, noncurrent | 92,000 | ||||||||||
Other long-term liabilities | $ 459,000 | 459,000 | |||||||||
Debt instrument, maturity date | May 31, 2016 | Feb. 13, 2018 | |||||||||
Promissory Notes [Member] | RBS Citizens [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Purchase price for Real Estate acquired | $ 1,500,000 | ||||||||||
Purchase of equipment and building improvements | 1,200,000 | ||||||||||
Periodic installments amount | $ 7,658 | ||||||||||
Interest rate additional rate above LIBOR | 3.15% | 3.15% | 3.33% | ||||||||
Interest rate on outstanding term loan | 5.87% | ||||||||||
Debt instrument, carrying amount | $ 1,050,203 | 1,078,220 | |||||||||
Debt instrument, face amount | $ 450,000 | ||||||||||
Carrying amount of loan convertible into note payable | $ 450,000 | ||||||||||
Monthly installments | $ 2,500 | ||||||||||
Maturity term | 5 years | ||||||||||
Promissory Notes Matured in July 2019 [Member] | RBS Citizens [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate additional rate above LIBOR | 3.33% | ||||||||||
Debt instrument, final balloon payment | $ 300,000 | ||||||||||
Debt instrument, carrying amount | $ 420,247 | $ 435,000 |
Short-Term and Long-Term Debt30
Short-Term and Long-Term Debt (Standby Term Note) (Details) - Credit Facility [Domain] | 1 Months Ended | 6 Months Ended | |||||
Apr. 28, 2015USD ($) | Jul. 19, 2013USD ($) | Oct. 31, 2011USD ($) | Jun. 30, 2015USD ($) | Jun. 29, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 08, 2010USD ($) | |
Debt Instrument [Line Items] | |||||||
Credit facility, amount outstanding | $ 509,009 | ||||||
Rbs Citizens [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | $ 525,000 | $ 450,000 | |||||
Debt instrument, monthly principal payment | $ 9,591 | $ 887 | |||||
Credit facility, amount outstanding | $ 14,197 | $ 19,522 | |||||
Interest rate additional rate above LIBOR | 3.00% | 3.18% | |||||
Debt interest rate | 3.61% | ||||||
Number of monthly installments | 60 | 60 | |||||
Amount borrowed | $ 42,594 | ||||||
Peoples Capital [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit, maximum borrowing amount | $ 1,303,900 | ||||||
Debt instrument, monthly principal payment | $ 24,511 | ||||||
Credit facility, amount outstanding | $ 945,130 | $ 1,067,586 | |||||
Debt interest rate | 4.84% | ||||||
Number of monthly installments | 60 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Feb. 23, 2015 | Jan. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stockholders' Equity [Abstract] | ||||||
Value of common stock sold | $ 41,000 | |||||
Number of shares of common stock sold | 100,000 | |||||
Stock options issued | 53,550 | |||||
Stock options issued, exercise price per share | $ 0.60 | |||||
Fair value of options issued | $ 6,000 | |||||
Volatility | 72.60% | |||||
Risk free interest rate | 1.66% | |||||
Dividend yield | 0.00% | |||||
Stock based compensation | $ 318,000 | $ 293,000 | $ 643,138 | $ 840,879 | ||
Share-based compensation, earnings per share | $ 0.01 | $ 0.02 | ||||
Unrecognized compensation costs | 685,000 | $ 685,000 | ||||
Stock based compensation expense, employee stock options | $ 536,000 | $ 536,000 | ||||
Restricted stock, shares | 30,000 | |||||
Restricted stock, value | $ 11,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 6 Months Ended |
Oct. 24, 2011 | Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Line Items] | ||
Damages sought | 10 | |
Former CEO [Member] | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Consulting fees paid to related party | $ 35,000 |
Supplemental Cash Flow Inform33
Supplemental Cash Flow Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 125,000 | $ 151,000 |
Non-cash investing and financing activities: | ||
Loss from change in fair value of interest rate swap derivatives | $ 3,000 | (25,000) |
Accrued liabilities with related parties settled with equity | $ 134,000 | |
Financing of equipment purchases | $ 525,000 | |
Financing of building improvements | $ 200,000 | |
Change in non-controlling interest | $ 200,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | $ 4,196,100 | $ 4,883,391 | $ 7,625,631 | $ 8,511,122 | |
Depreciation and amortization | 391,000 | 1,288,000 | 770,126 | 2,601,684 | |
Stock based compensation | 318,000 | 293,000 | 643,138 | 840,879 | |
Net income (loss) | (1,043,308) | (2,343,526) | (2,690,001) | (5,398,680) | |
Identifiable assets | 25,950,669 | 66,309,000 | 25,950,669 | 66,309,000 | $ 27,752,618 |
Packaging and Printing Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 2,710,000 | 3,503,000 | 4,792,000 | 5,746,000 | |
Depreciation and amortization | 144,000 | 106,000 | 272,000 | 256,000 | |
Stock based compensation | 18,000 | 18,000 | 35,000 | 92,000 | |
Net income (loss) | 94,000 | 263,000 | 135,000 | 199,000 | |
Identifiable assets | 9,461,000 | 9,143,000 | 9,461,000 | 9,143,000 | |
Plastics Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 974,000 | 899,000 | 1,912,000 | 1,820,000 | |
Depreciation and amortization | 28,000 | 44,000 | 61,000 | 87,000 | |
Stock based compensation | 10,000 | 10,000 | 20,000 | 52,000 | |
Net income (loss) | 11,000 | (13,000) | 98,000 | (22,000) | |
Identifiable assets | 2,017,000 | 2,059,000 | 2,017,000 | 2,059,000 | |
Technology Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | 512,000 | 481,000 | 922,000 | 945,000 | |
Depreciation and amortization | 217,000 | 1,127,000 | 433,000 | 2,245,000 | |
Stock based compensation | 34,000 | 24,000 | 67,000 | 117,000 | |
Net income (loss) | (372,000) | (1,557,000) | (1,427,000) | (3,236,000) | |
Identifiable assets | $ 12,911,000 | $ 53,786,000 | $ 12,911,000 | $ 53,786,000 | |
Corporate Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues from external customers | |||||
Depreciation and amortization | $ 2,000 | $ 11,000 | $ 4,000 | $ 14,000 | |
Stock based compensation | 256,000 | 241,000 | 521,000 | 579,000 | |
Net income (loss) | (776,000) | (1,037,000) | (1,496,000) | (2,340,000) | |
Identifiable assets | $ 1,562,000 | $ 1,321,000 | $ 1,562,000 | $ 1,321,000 |