Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 24, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | DOCUMENT SECURITY SYSTEMS INC | ||
Entity Central Index Key | 771,999 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 11,923,377 | ||
Entity Common Stock, Shares Outstanding | 51,881,948 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 1,440,256 | $ 2,343,675 |
Restricted cash | 293,043 | 355,793 |
Accounts receivable, net | 2,097,433 | 2,097,671 |
Inventory | 937,830 | 869,262 |
Prepaid expenses and other current assets | 313,528 | 425,671 |
Total current assets | 5,082,090 | 6,092,072 |
Property, plant and equipment, net | 5,003,818 | 5,016,539 |
Investments and other assets, net | 100,632 | 686,912 |
Goodwill | 2,453,349 | 12,046,197 |
Other intangible assets, net | 3,017,544 | 3,908,399 |
Total assets | 15,657,433 | 27,750,119 |
Current liabilities: | ||
Accounts payable | 1,945,073 | 1,037,359 |
Accrued expenses and other current liabilities | 1,964,726 | $ 1,997,241 |
Short-term debt | 4,023,379 | |
Current portion of long-term debt, net | 1,553,061 | $ 754,745 |
Total current liabilities | 9,486,239 | 3,789,345 |
Long-term debt, net | 2,258,115 | 7,439,036 |
Other long-term liabilities | 63,697 | 520,180 |
Deferred tax liability, net | 162,107 | 145,759 |
Stockholders’ equity | ||
Common stock, $.02 par value; 200,000,000 shares authorized, 51,881,948 shares issued and outstanding (46,172,404 on December 31, 2014) | 1,037,639 | 923,448 |
Additional paid-in capital | 103,041,941 | 101,012,659 |
Accumulated other comprehensive loss | (63,697) | (61,180) |
Accumulated deficit | (100,328,608) | (86,019,128) |
Total stockholders’ equity | 3,687,275 | 15,855,799 |
Total liabilities and stockholders’ equity | $ 15,657,433 | $ 27,750,119 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ .02 | $ .02 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 51,881,948 | 46,172,404 |
Common stock, shares outstanding | 51,881,948 | 46,172,404 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue | ||
Printed products | $ 15,700,676 | $ 16,478,303 |
Technology sales, services and licensing | 1,804,433 | 1,809,193 |
Total revenue | 17,505,109 | 18,287,496 |
Costs and expenses | ||
Cost of revenue, exclusive of depreciation and amortization | 10,665,122 | 11,689,743 |
Selling, general and administrative (including stock based compensation) | 9,271,533 | 10,767,449 |
Depreciation and amortization | 1,558,899 | 5,274,323 |
Impairment of goodwill | 9,592,848 | 3,000,000 |
Impairment of assets | 500,000 | 34,034,862 |
Total costs and expenses | 31,588,402 | 64,766,377 |
Operating loss | (14,083,293) | (46,478,881) |
Other income and (expense): | ||
Interest expense | (334,738) | (317,191) |
Net loss on debt modification and extinguishment | (19,096) | $ (51,915) |
Gain on disposals of investment and equipment, net | 120,431 | |
Foreign currency transaction gain | 29,400 | $ 2,305 |
Loss before income taxes | (14,287,296) | (46,845,682) |
Income tax expense (benefit) | 22,184 | (988,630) |
Net loss | $ (14,309,480) | (45,857,052) |
Less: loss attributable to noncontrolling interest | 4,700,000 | |
Net loss to common shareholders | $ (14,309,480) | (41,157,052) |
Other comprehensive loss: | ||
Interest rate swap loss | (2,517) | (33,614) |
Comprehensive loss: | $ (14,311,997) | $ (41,190,666) |
Loss per common share: | ||
Basic and diluted | $ (0.30) | $ (0.98) |
Shares used in computing loss per common share: | ||
Basic and diluted | 47,759,877 | 42,105,619 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (14,309,480) | $ (45,857,052) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 1,558,899 | 5,274,323 |
Stock based compensation | 974,137 | 1,355,430 |
Paid in-kind interest | 84,379 | $ 48,000 |
Gain on disposals of equipment, net | $ (20,431) | |
Amortization of note discount | $ 22,707 | |
Impairment of goodwill | $ 9,592,848 | 3,000,000 |
Impairment of intangible assets and investments inclusive of noncontrolling interest | 500,000 | $ 34,034,862 |
Net loss on debt modification and extinguishment | 19,096 | |
Change in deferred tax provision | 22,184 | $ (988,630) |
Foreign currency transaction gain | (29,400) | (2,305) |
Decrease (increase) in assets: | ||
Accounts receivable | 238 | 51,452 |
Inventory | (68,568) | (34,283) |
Prepaid expenses and other assets | 198,423 | 30,081 |
Restricted cash | 62,750 | 144,207 |
Increase (decrease) in liabilities: | ||
Accounts payable | 907,714 | (384,406) |
Accrued expenses and other liabilities | (469,419) | 915,376 |
Net cash used by operating activities | (976,630) | (2,390,238) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (157,098) | $ (280,902) |
Sale of equipment | $ 46,283 | |
Purchase of investments | $ (750,000) | |
Purchase of intangible assets | $ (5,159) | (1,243,714) |
Net cash used by investing activities | $ (115,974) | (2,274,616) |
Cash flows from financing activities: | ||
Net payments on revolving lines of credit | (158,087) | |
Payments of long-term debt | $ (939,151) | (616,393) |
Borrowings of long-term debt | 4,041,000 | |
Issuances of common stock, net of issuance costs | $ 1,128,336 | 1,764,978 |
Net cash provided by financing activities | 189,185 | 5,031,498 |
Net (decrease) increase in cash | (903,419) | 366,644 |
Cash beginning of year | 2,343,675 | 1,977,031 |
Cash end of year | $ 1,440,256 | $ 2,343,675 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Noncontrolling Interest [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2013 | $ 988,230 | $ 97,790,426 | $ (27,566) | $ 4,500,000 | $ (44,862,076) | $ 58,389,014 |
Balance, shares at Dec. 31, 2013 | 49,411,486 | |||||
Issuance of common stock, net | $ 78,494 | 1,472,173 | 1,550,667 | |||
Issuance of common stock, net, shares | 3,924,700 | |||||
Stock based payments, net of tax effect | $ 6,556 | 1,500,060 | 1,506,616 | |||
Stock based payments, net of tax effect, shares | 327,775 | |||||
Retirement of shares held in escrow | $ (150,000) | 150,000 | ||||
Retirement of shares held in escrow, shares | (7,500,000) | |||||
Exchange of warrants for common stock | $ 168 | 168 | ||||
Exchange of warrants for common stock, shares | 8,443 | |||||
Change in noncontrolling interest in Virtual Agility Technology Investment, LLC | 100,000 | 200,000 | 300,000 | |||
Other comprehensive loss | (33,614) | (33,614) | ||||
Net Loss | $ (4,700,000) | (41,157,052) | (45,857,052) | |||
Balance at Dec. 31, 2014 | $ 923,448 | 101,012,659 | $ (61,180) | $ (86,019,128) | 15,855,799 | |
Balance, shares at Dec. 31, 2014 | 46,172,404 | |||||
Issuance of common stock, net | $ 109,091 | 1,019,245 | 1,128,336 | |||
Issuance of common stock, net, shares | 5,454,544 | |||||
Stock based payments, net of tax effect | $ 3,100 | 971,037 | 974,137 | |||
Stock based payments, net of tax effect, shares | 155,000 | |||||
Shares issued in debt modification | $ 2,000 | 39,000 | 41,000 | |||
Shares issued in debt modification, shares | 100,000 | |||||
Other comprehensive loss | $ (2,517) | (2,517) | ||||
Net Loss | $ (14,309,480) | (14,309,480) | ||||
Balance at Dec. 31, 2015 | $ 1,037,639 | $ 103,041,941 | $ (63,697) | $ (100,328,608) | $ 3,687,275 | |
Balance, shares at Dec. 31, 2015 | 51,881,948 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | NOTE 1 - DESCRIPTION OF BUSINESS 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 Companys 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 Companys subsidiary, DSS Technology Management, Inc., manages, licenses and acquires intellectual property (IP) assets 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation Use of Estimates Reclassifications Restricted Cash Accounts Receivable Inventory Property, Plant and Equipment Investments Goodwill - Other Intangible Assets and Patent Application Costs Impairment of Long Lived Assets Fair Value of Financial Instruments ● 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. At December 31, 2014, the Companys convertible note payable was recorded at its face amount, net of an unamortized premium for a beneficial conversion feature and had an estimated fair value of approximately $117,000 based on the underlying shares the note could be converted into at the trading price on December 31, 2014. Since the underlying shares were trading in an active, observable market, the fair value measurement qualified as a Level 1 input. As included in Note 7, the conversion feature associated with this note was removed during 2015. Derivative Instruments The Company has an interest rate swap with Citizens that changes the variable rate on a term loan to a fixed rate as follows: Notional Amount Variable Rate Fixed Cost Maturity Date $ 1,021,926 3.39 % 5.87 % August 30, 2021 Conventional Convertible Debt Share-Based Payments Revenue Recognition - For technology sales and services, revenue is recognized in accordance with 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 Companys 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 collectability 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 Companys 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 - Contingent Legal Expenses - Advertising Costs . Research and Development Income Taxes Earnings Per Common Share As of December 31, 2015 and 2014, there were 11,874,620 and 12,019,194, respectively, of common stock share equivalents potentially issuable under convertible debt agreements, employment agreements, options, warrants, and restricted stock agreements that could potentially dilute basic earnings per share in the future. Common stock equivalents were excluded from the calculation of diluted earnings per share for 2015 and 2014 in which the Company had a net loss, since their inclusion would have been anti-dilutive. Comprehensive Loss Concentration of Credit Risk During 2015, two customers accounted for 35% of the Companys consolidated revenue. As of December 31, 2015, these two customers accounted for 27% of the Companys trade accounts receivable balance. During 2014, these same two customers accounted for 40% of the Companys consolidated revenue. As of December 31, 2014, these two customers accounted for 25% of the Companys trade accounts receivable balance. Continuing Operations - Recent Accounting Pronouncements - In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys 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 entitys 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 consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company does not believe the adoption of this ASU will have a significant impact on its consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance requires that certain inventory, including inventory measured using the first-in-first-out method, be measured at the lower of cost or 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. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The guidance becomes effective for annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company applied this guidance to its current fiscal years ending December 31, 2015 and 2014. The adoption of this guidance had no material impact on the results of operations or financial position. Certain prior year deferred tax assets or liabilities have been reclassified to conform with the current year presentation. In February 2016, the FASB issued an accounting standard update ASU 2016-02, Leases, which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet evaluated nor has it determined the effect of the standard on its ongoing financial reporting. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 3 INVENTORY Inventory consisted of the following at December 31: 2015 2014 Finished Goods $ 718,601 $ 572,695 Work in process 167,779 123,611 Raw Materials 51,450 172,956 $ 937,830 $ 869,262 |
Property Plant and Equipment
Property Plant and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
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: 2015 2014 Estimated Useful Life Machinery and equipment 5-10 years $ 5,615,562 $ 5,156,060 Building and improvements 39 years 1,923,027 1,913,727 Land 185,000 185,000 Leasehold improvements See (1) 722,984 818,846 Furniture and fixtures 7 years 68,272 163,300 Software and websites 3 years 402,225 439,373 Total cost 8,917,070 8,676,306 Less accumulated depreciation 3,913,252 3,659,767 Property, plant, and equipment, net $ 5,003,818 $ 5,016,539 (1) |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | NOTE 5 INVESTMENTS During 2014 and 2013 DSS Technology Management made 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. The non-recourse note is eligible for a preferred return of $1,250,000, plus a variable return of 1.875% based on gross proceeds, if any, derived from VirtualAgilitys patent portfolio. 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 Investment, LLC (VATI) and transferred its ownership of the VirtualAgility investment and future investment options to VATI. Also in May 2013, a third-party investor became a 40% member of VATI. In exchange, the investor contributed $250,000 into VATI which was used to exercise one of the investment options in VirtualAgility per the terms described above. As of July 1, 2013, DSS Technology Management owned 60% of VATI. In conjunction with its acquisition 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 of July 1, 2013. 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. On February 14, 2014, DSS Technology Management contributed $250,000 into VATI which used the funds to make an additional investment in VirtualAgility per the terms described above. In May 2014, 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 June 30, 2014, VATI owned 657,119 shares of common stock of VirtualAgility. As of June 30, 2014, investment in VATI was approximately $11,750,000 and DSS Technology Management owned 60% of VATI. VirtualAgility was the plaintiff in a patent infringement lawsuit against Salesforce.com, Inc. et al. In January and February 2014, DSS Technology Management made investments of $100,000 and $400,000, respectively, to purchase an aggregate of 594,530 shares of common stock of Express Mobile, Inc. (Express Mobile), which represented approximately 6% of the outstanding common stock of Express Mobile at the time of investment. Express Mobile is a developer of custom mobile applications and websites. The investments were recorded using the cost method. In accordance with paragraphs 16 through 19 of FASB ASC 825-10-50 the Company determined that it is not practicable to estimate the fair value of these investments since Express Mobile is a privately-held company that is not subject to the same disclosure regulations as U.S. public companies, and as such, the basis for an estimated fair value is subject to the completeness, quality, timing and accuracy of data received from Express Mobile. In December 2015, based on discussions with Express Mobile management and the Companys understanding of the status of Express Mobiles business, the Company determined that the investment was impaired and recognized an impairment loss of $500,000. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | NOTE 6 - INTANGIBLE ASSETS AND GOODWILL During 2015 and 2014, the Company spent approximately $5,000 and $94,000, respectively, on patent application costs. In 2014, the Company spent $1,150,000 on patent acquisitions. On July 8, 2013, the Companys 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, 2015, the Company had received an aggregate of $650,000 ($650,000 in 2014) from the investors pursuant to the agreement of which approximately $551,000 was in accrued expenses in the consolidated balance sheet ($603,000 as December 31, 2014). On May 23, 2014, the Companys subsidiary, DSS Technology Management, purchased 115 patents covering certain methods and processes in the semiconductor industry for $1,150,000. 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 Courts 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 that the assets had been 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. Intangible assets are comprised of the following: December 31, 2015 December 31, 2014 Useful Life Gross Carrying Amount Accumulated Amortizaton Net Carrying Amount Gross Carrying Amount Accumulated Amortizaton Net Carrying Amount Acquired intangibles- customer lists and non-compete agreements 5 -10 years 1,997,300 1,635,257 362,043 1,997,300 1,532,123 465,177 Acquired intangibles-patents and patent rights Varied (1) 3,650,000 1,562,526 2,087,474 3,650,000 852,343 2,797,657 Patent application costs Varied (2) 1,062,958 494,931 568,027 1,058,833 413,268 645,565 $ 6,710,258 $ 3,692,714 $ 3,017,544 $ 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 December 31, 2015, the weighted average remaining useful life of these assets in service was approximately 4.4 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, 2015, the weighted average remaining useful life of these assets in service was approximately 9.3 years. Amortization expense for the year ended December 31, 2015 amounted to approximately $896,000 ($4,653,000 2014). Approximate expected amortization for each of the five succeeding fiscal years is as follows: Year Amount 2016 $ 692,000 2017 $ 673,000 2018 $ 537,000 2019 $ 265,000 2020 $ 193,000 Goodwill The Company performed its annual goodwill impairment test as of December 31, 2015. The Company performed the first step of the goodwill impairment test by comparing the fair value of each of its reporting units with their carrying amounts including goodwill. In performing this step, the Company determined estimates of fair value using a discounted cash flow model for each of its reporting units. The Company determined that its Packaging and Plastic units each had to the fair values in excess of their carrying value of their assets including goodwill and therefore, did not have an indication of goodwill impairment. For the Companys Technology Management unit, the Company determined that the estimated fair value of the reporting unit was below its carrying value and therefore, required a second step goodwill impairment analysis. In performing the second step of the goodwill impairment test, the Company compared the carrying value of its Technology Management goodwill to its implied fair value. For the Companys technology reporting unit for which a significant amount of future value is based on the value of patents and patent rights, the Company uses a valuation methodology that assesses the potential value of claims against parties the Company believes have infringed on the patents and therefore, the Company has the rights to receive royalties for those infringers. The Company uses its best estimates to determine the amount and timing of royalties that would be due from each potential infringing party based on the estimated scope of usage of the patented technology by each potential infringing party. Furthermore, the Company uses discount factors to take into account the potential of settlements at various stages of a typical patent infringement court case depending on the stage of each of the Companys infringement proceedings. During the Companys annual assessment of goodwill in 2015, the Company considered the negative trends in patent litigation which have reduced the success of patent owners in protecting their patents in the federal court system, among other factors. In performing Step 1 analysis, the Company determined that its DSS TM reporting unit had a negative carrying value as a result of the identifiable liabilities exceeding the assets and as a result was required to perform Step 2. In performing Step 2, the Company determined the fair value of the identifiable assets exceeded the enterprise value of the reporting unit and accordingly the Company recorded an approximately $9,600,000 goodwill impairment charge to the goodwill assigned to its DSS Technology Management division. During the Companys annual assessment of goodwill in 2014, the Company assessed that the negative trends in patent litigation that have reduced the success of patent owners in protecting their patents in the federal court system had impairment the Companys goodwill assigned to its DSS Technology Management division and accordingly, the Company recorded a $3,000,000 goodwill impairment charge to the goodwill assigned to its DSS Technology Management division. There are inherent assumptions and estimates used in developing future cash flows requiring managements judgment in applying these assumptions and estimates to the analysis of identifiable intangibles and asset impairment including projecting revenues, timing and amount of claim or settlements related to patent infringement cases, royalty rates, interest rates, and the cost of capital. Many of the factors used in assessing fair value are outside the Companys control and it is reasonably likely that assumptions and estimates will change in future periods. These changes can result in future impairments. The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows: Packaging Plastics Technolgy Management Total Balance as of January 1, 2014 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 Goodwill acquired during the year - - - - Impairment losses - - (3,000,000 ) (3,000,000 ) Balance as of December 31, 2014 Goodwill 1,768,400 684,949 12,831,774 15,285,123 Accumulated impairment losses - - (3,238,926 ) (3,238,926 ) 1,768,400 684,949 9,592,848 12,046,197 Goodwill acquired during the year - - - - Impairment losses - - (9,592,848 ) (9,592,848 ) Balance as of December 31, 2015 Goodwill 1,768,400 684,949 12,831,774 15,285,123 Accumulated impairment losses - - (12,831,774 ) (12,831,774 ) $ 1,768,400 $ 684,949 $ - $ 2,453,349 |
Short Term and Long Term Debt
Short Term and Long Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Short Term and Long Term Debt | NOTE 7 SHORT TERM AND LONG TERM DEBT Revolving Credit Lines Long-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 Companys wholly-owned subsidiary, Secuprint Inc., and carries an interest rate of 9% per annum. Interest is payable quarterly, in arrears. The Company also issued the lender as additional consideration a five-year warrant to purchase up to 60,000 shares of the Companys 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 that was amortized over the original term of the note. The note was set to mature on May 24, 2014, but its maturity date was extended on May 2, 2014 to May 24, 2015 by the lender. In exchange for the extension, the Company also issued the lender as additional consideration a five-year warrant to purchase up to 40,000 shares of the Companys common stock at an exercise price of $1.50 per share. The warrant was valued at approximately $29,000 using the Black-Scholes-Merton option pricing model with a volatility of 70.0%, a risk free rate of return of 1.53% and zero dividend and forfeiture estimates. In conjunction with the issuance of the warrants, the Company recorded expense for modification of debt of approximately $29,000. On February 23, 2015, the Company entered into Promissory Note Amendment No. 2 to extend the maturity date to May 31, 2016 and to institute principal payments in the amount of $15,000 per month plus interest through the extended maturity date, and a balloon payment of $610,000 due on the extended maturity date. As of December 31, 2015, the balance of the term loan was $685,000 ($850,000 at December 31, 2014). Term Loan Debt 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 was to provide Premier Packaging with up to $450,000 towards the funding of eligible equipment purchases for up to one year. In October 2011, the Company had borrowed $42,594 under the facility which amount was converted into a term note payable in 60 monthly installments of $887 plus interest at 1 Month LIBOR plus 3% (3.24% at December 31, 2015). As of December 31, 2015, the balance under this term note was $8,874 ($19,522 at December 31, 2014). On July 19, 2013, Premier Packaging entered into an equipment loan with Peoples Capital and Leasing Corp. (Peoples Capital) for a printing press. The loan was for $1,303,900, repayable over a 60-month period which commenced when the equipment was placed in service in January 2014. The loan bears interest at 4.84% and is payable in equal monthly installments of $24,511. As of December 31, 2015, the loan had a balance of $819,681 ($1,067,586 at December 31, 2014). On April 28, 2015, Premier Packaging entered into a term note with Citizens for $525,000, repayable over a 60-month period. The loan bears interest at 3.61% and is payable in equal monthly installments of $9,591. Premier Packaging used the proceeds of the term note to acquire a HP Indigo 7800 Digital press. As of December 31, 2015, the loan had a balance of $460,448. Promissory Notes On December 6, 2013, Premier Packaging entered into a Construction to Permanent Loan with Citizens Bank for up to $450,000 that was converted into a promissory note upon the completion and acceptance of building improvements to the Companys packaging plant in Victor, New York. In May 2014, the Company converted the loan into a $450,000 note payable in monthly installments over a 5 year period of $2,500 plus interest calculated at a variable rate of 1 Month Libor plus 3.15% (3.39% at December 31, 2015), which payments commenced on July 1, 2014. The note matures in July 2019 at which time a balloon payment of the remaining principal balance of $300,000 is due. As of December 31, 2015, the note had a balance of $405,247 ($435,000 December 31, 2014). Under the Citizens Bank credit facilities, the Companys 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, June 30, 2015, September 30, 2015, and December 31, 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. A summary of scheduled principal payments of long-term debt, not including revolving lines of credit and other debt which can be settled with non-monetary assets, subsequent to December 31, 2015 are as follows: Year Amount 2016 $ 1,553,061 2017 467,727 2018 486,599 2019 491,618 2020 104,691 Thereafter 707,480 Total $ 3,811,176 Other Debt On March 27, 2014, the Company received an additional $1,000,000 under the Agreement comprised of a promissory note of $900,000 was promissory note and fixed return interests on $100,000. On September 5, 2014, the Company received the remaining $1,500,000 under the Agreement comprised of a promissory note of $900,000 was promissory note and fixed return interests on $100,000. In September 2015, the Company made a payment of $150,000 on the note. As of December 31, 2015, total Advances equaled $4,350,000, which consisted of $3,891,000 under the Agreement and an aggregate of $459,000 under the fixed return equity interest and contingent equity interests. Aggregate accrued interest totaled $132,000 as of December 31, 2015 ($48,000 as of December 31, 2014). The Agreement defines certain Events of Default, one of which is the failure by the Company, on or before the second anniversary of the Effective Date, which was February 13, 2016, to make payments to the Investors equal to the outstanding Advances. On February 13, 2016, the Company failed to make these payments. Under the Agreement, upon an Event of Default, the Collateral Agent and the Investors have a number of remedies, including rights related to foreclosure or direct monetization of the Patents. As a result of the Event of Default discussed above, the sole and exclusive recourse of the Investors and the Collateral Agent is to form a special purpose entity to take possession of the Patents, subject to a perpetual, non-transferable, non-exclusive worldwide royalty-free license back to the Company. The Agreement further provides that, in the case of this default, the Collateral Agent and Investors will not, individually or collectively, seek to enforce any monetary judgment with respect to or against any assets of the Company other than the Patents and any payments received in respect of the Patents, including settlement payments, license fees and royalties on the Patents. In the event that the Collateral Agent or Investors foreclose on, and take possession of the Patents, the Company will still be entitled to receive any payments received in respect of the Patents in the event of a recovery by any substituted plaintiff in any related litigation proceedings, subject to payment of amounts owed under the Agreement to the Investors and the Collateral Agent. In addition, as a result of the default, the interest rate on the unpaid amounts due increased to 2% per year effective February 13, 2016. As a result of the event of default, the Company has classified the remainder of the amounts due on the notes of approximately $4,023,000 as short-term debt as of December 31, 2015. The Company has been in discussions with the investors to amend the Agreement or otherwise to remedy the event of default; however, there can be no assurance as to the ultimate success of these discussions. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 8 - STOCKHOLDERS EQUITY Sales of Equity - The securities offered were made pursuant to prospectus supplements to the prospectus dated November 1, 2013, pursuant to the Companys shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission on October 11, 2013 and became effective on November 1, 2013. The offering closed on December 31, 2015. No placement agent or underwriter was involved in the offering. 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 shares of its common stock with a grant date fair value of $41,000. Stock Warrants The following is a summary with respect to warrants outstanding and exercisable at December 31, 2015 and 2014 and activity during the years then ended: 2015 2014 Weighted Weighted Average Average Exercise Exercise Warrants Price Warrants Price Outstanding January 1 6,566,385 $ 4.70 6,875,586 $ 4.64 Granted during the year 1,090,911 0.40 100,000 1.56 Exercised/transferred - - (80,645 ) 3.10 Lapsed/terminated (207,235 ) 3.52 (328,556 ) 2.91 Outstanding at December 31 7,450,061 $ 4.10 6,566,385 $ 4.70 Exercisable at December 31 6,359,150 $ 4.10 6,535,274 $ 4.71 Weighted average months remaining 34.3 40.0 Stock Options The following is a summary with respect to options outstanding at December 31, 2015 and 2014 and activity during the years then ended: 2015 2014 Number of Options Weighted Average Exercise Price Weighted Average Life Remaining Number of Options Weighted Average Exercise Price Weighted Average Life Remaining (in years) (in years) Outstanding at January 1: 4,928,291 2.92 4,073,898 3.25 Granted 53,550 0.60 1,172,197 1.96 Exercised - - - - Lapsed/terminated (557,282 ) 2.95 (317,804 ) 3.56 Outstanding at December 31: 4,424,559 2.89 4.0 4,928,291 2.92 4.0 Exercisable at December 31: 3,628,495 2.77 4.6 2,806,696 2.94 5.0 Expected to vest at December 31: 346,064 2.00 3.2 1,660,169 2.46 5.8 Aggregate intrinsic value of outstanding options at December 31: $ - $ - Aggregate intrinsic value of exercisable options at December 31: $ - $ - Aggregate intrinsic value of options expected to vest at December 31: $ - $ - 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 Companys 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, 2015, 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, 2015 was $0.12 ($0.71 -2014). The aggregate grant date fair value of options that vested during the year was approximately $988,000 ($1,145,000 -2014). There were no options exercised during 2015 or 2014. 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 Companys common stock at the grant date using the historical volatility of the Companys common stock over the most recent period equal to the expected stock option term. In January 2015, the Company issued an aggregate of 53,550 options to purchase shares of the Companys common stock with an exercise price of $0.60 per share to certain members of the Companys board in exchange for agreements by the board members to reduce their cash compensation for the fiscal year of 2015. The options vested on August 15, 2015 and had an aggregate grant date fair value of approximately $6,000. The aggregate fair value of these options was determined by utilizing the Black-Scholes-Merton option pricing model with a volatility of 72.6%, a risk free rate of return of 1.66% and zero dividend and forfeiture estimates. On March 5, 2014, the Company issued an aggregate of 1,138,697 options to purchase the Companys common stock at $2.00 per share with a term of 5 years to its employees covered under the 2013 Plan. The options 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. The options were valued at approximately $833,000 using the Black-Scholes-Merton option pricing model with a volatility of 67.0%, a risk free rate of return of 0.92% and zero dividend and forfeiture estimates. On March 13, 2014, the Company issued an aggregate of 84,025 shares of common stock to three of its directors to pay approximately $134,000 of accrued directors fees. In December 2014, the Company issued 33,500 options to purchase the Companys common stock at $0.60 per share with a term of 5 years to members of the Companys executive management in exchange for an agreement by each employee to reduce his cash compensation for the fiscal year of 2015. The options vested on August 15, 2015 and had a grant date fair value of $6,643. The options were valued using the Black-Scholes-Merton option pricing model with a volatility of 72.6%, a risk free rate of return of 1.66% and zero dividend and forfeiture estimates. 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, 2015 and 2014: 2015 2014 Volatility 72.6 % 67.1 % Expected option term 2.9 years 3.5 years Risk-free interest rate 1.7 % 0.9 % Expected forfeiture rate 0.0 % 0.0 % Expected dividend yield 0.0 % 0.0 % Restricted Stock In January 2015, the Company issued an aggregate of 30,000 shares of restricted common stock to certain members of the Companys board in exchange for agreements by the board members to reduce their cash compensation for the fiscal year of 2015. The restricted shares vested on August 15, 2015 and had an aggregate grant date fair value of approximately $11,000. In November 2015, the Company issued 125,000 restricted shares to a consultant in exchange for media advertising services agreement. The restricted shares vested over a 90 period and had a grant date fair value of $27,500. In December 2014, the Company issued an aggregate of 243,750 shares of restricted common stock to certain members of the Companys executive and senior management in exchange for agreements by the employees to reduce their cash compensation for the fiscal year of 2015. The restricted shares vested on August 15, 2015 and had an aggregate grant date fair value of $117,000. The following is a summary of activity of restricted stock during the years ended at December 31, 2015 and 2014: Shares Weighted- average Grant Date Fair Value Restricted shares outstanding, December 31, 2013 41,176 $ 3.33 Restricted shares granted 243,750 0.48 Restricted shares vested (20,588 ) 3.33 Restricted shares outstanding, December 31, 2014 264,338 $ 0.70 Restricted shares granted 155,000 0.25 Restricted shares vested (359,338 ) 0.59 Restricted shares outstanding, December 31, 2015 60,000 $ 0.22 Stock-Based Compensation |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9 - INCOME TAXES Following is a summary of the components giving rise to the income tax provision (benefit) for the years ended December 31: 2015 2014 Currently payable: Federal $ - $ - State 5,836 6,735 Total currently payable 5,836 6,735 Deferred: Federal (990,745 ) (13,939,671 ) State (147,674 ) 488,406 Total deferred (1,138,419 ) (13,451,265 ) Less: increase in allowance 1,154,767 12,455,900 Net deferred 16,348 (995,365 ) Total income tax provision (benefit) $ 22,184 $ (988,630 ) Individual components of deferred taxes are as follows: Deferred tax assets: 2015 2014 Net operating loss carry forwards $ 17,383,770 $ 16,104,083 Equity issued for services 855,139 1,050,348 Goodwill and other intangibles 692,470 773,019 Investment in pass-through entity 268,476 268,476 Other 681,889 591,259 Gross deferred tax assets 19,881,744 18,787,185 Deferred tax liabilities: Goodwill and other intangibles 291,706 312,277 Depreciation and amortization 289,534 312,823 Gross deferred tax liabilities 581,240 625,100 Less valuation allowance (19,462,611 ) (18,307,844 ) Net deferred tax liabilities $ (162,107 ) $ (145,759 ) During 2014, the Company recognized a $995,000 net deferred tax benefit primarily as a result of the expense recognized during the period related to the impairment of the investment in VATI and the Bascom patents. The Company has approximately $51,958,000 in federal net operating loss carryforwards (NOLs) available to reduce future taxable income, which will expire at various dates from 2022 through 2034. Due to the uncertainty as to the Companys 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 Companys NOLs could also be subject to annual limitation as a result of a change in its equity ownership as defined under the Internal Revenue Code Section 382. This limitation, as applicable, could further limit the use of the NOLs. 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. 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: 2015 2014 Statutory United States federal rate 34.0 % 34.0 % State income taxes net of federal benefit 0.7 (0.7 ) Noncontrolling interest in pass-through entity - (3.4 ) Permanent differences (23.3 ) (2.3 ) Other (3.5 ) 1.1 Change in valuation reserves (8.1 ) (26.6 ) Effective tax rate (0.2 )% 2.1 % At December 31, 2015 and 2014, 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, 2015 and 2014, 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 2012-2015 generally remain open to examination by major taxing jurisdictions to which the Company is subject. |
Defined Contribution Pension Pl
Defined Contribution Pension Plan | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Pension Plan | NOTE 10 - 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 401(k) Plan immediately following the employees hire date. Employees may contribute a percentage of their earnings, subject to the limitations of the Internal Revenue Code. The Company matches up to 50% of the employees contribution up to a maximum match of 3%. The total matching contributions for 2015 were approximately $109,000 ($107,000 -2014). |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11 COMMITMENTS AND CONTINGENCIES Facilities - Equipment Leases The following table summarizes the Companys lease commitments. Operating Leases Equipment Facilities Total Payments made in 2015 $ 45,745 $ 337,738 $ 383,483 Future minimum lease commitments: 2016 $ 48,499 $ 233,937 $ 282,436 2017 44,131 237,929 282,060 2018 43,258 243,002 286,260 2019 14,419 68,820 83,239 2020 - 68,820 68,820 Total future minimum lease commitments $ 150,307 $ 852,508 $ 1,002,815 Employment Agreements Related Party Payments - Contingent Litigation Payments Legal Proceedings On October 3, 2012, Lexington Technology Groups (now DSS Technology Management) subsidiary, Bascom Research, LLC, commenced legal proceedings against five companies, including Facebook, Inc. and LinkedIn Corporation, pursuant to which Bascom Research, LLC alleged that such companies infringed on one or more of its patents. On January 5, 2015, the U.S. District Court for the Northern District of California granted summary judgment to defendants Facebook, Inc., and LinkedIn Corp. effectively ending the case at the trial court level. On January 22, 2015, Bascom Research, LLC and Facebook, Inc. entered in to a Stipulation filed with the District Court whereby Bascom Research, LLC agreed not to appeal the District Courts judgment, and Facebook, Inc. agreed to request the dismissal of a pending CBM review it had previously filed with the USPTOs Patent Trial and Appeal Board (PTAB). The CBM proceeding was terminated on February 24, 2015. 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 complaint alleges infringement by Apple of DSS Technology Managements patents that relate to systems and methods of using low power wireless peripheral devices. DSS Technology Management is seeking a judgement 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 Apples motion to transfer the case to the Northern District of California. On November 7, 2014, the case was transferred to the Northern District of California. In December 2014, Apple filed two IPR petitions with PTAB for review of the patents at issue in the case. The PTAB instituted the IPRs on June 25, 2015. Oral arguments of the IPRs took place on March 15, 2016, with a decision expected from PTAB by the end of June 2016. 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 sought a judgment for infringement, injunctive relief, and money damages from each of the named defendants. In June, 2014, TSMC filed an IPR petition with PTAB for review of the patents at issue. Samsung then filed an IPR petition relating to the same patents in September 2014, and filed a corrected IPR petition in October 2014. On December 31, 2014, the PTAB instituted review of several of the patent claims at issue in the case. Samsung then filed a motion with PTAB to join TSMCs IPR proceeding. The request was granted by PTAB. On November 30, 2015, the PTAB issued a decision invalidating the patent claims at issue in the case. DSS Technology Management then filed a notice of appeal of the IPR decision with the Federal Circuit on February 1, 2016, which is pending as of the date of this Report. On March 3, 2015, a Markman hearing was held in the Eastern District of Texas. Based on the District Courts 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 Managements right to appeal the courts claim construction order to the Federal Circuit, thus preserving the status quo in the event an appeal results in a remand for further proceedings in the District Court. On March 22, 2016, the Federal Circuit ruled in favor of TSMC in the appeal. On April 28, 2015, DSS Technology Management reached a confidential settlement with NEC, ending the litigation with NEC. 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 DSSTMs patents that relates to systems and methods of using low power wireless peripheral devices. DSS Technology Management sought judgment for infringement and money damages from Lenovo in connection with the case. 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., Conns 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 DSSTMs patents, injunctive relief and money damages. On December 9, 2015, Intel filed IPR petitions with PTAB for review of the patents at issue in the case. PTAB has not yet made a determination whether the IPRs will be instituted. On March 18, 2016, the District Court issued an Order granting Intels motion to stay the case until completion of the IPR proceedings. 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 certain of its semiconductor patents. The defendants are SK Hynix et al., et al., On January 29, 2016, the Company received notice of the dismissal of a shareholder derivative suit filed in New York State Court in April 2015 by Benjamin Lapin, derivatively and on behalf of 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 the Company, as Nominal Defendant. In addition to the foregoing, the Company is 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 its results of operations, cash flows or our financial condition. The Company accrues for potential litigation losses when a loss is probable and reasonably estimable. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION Supplemental cash flow information for the years ended December 31: 2015 2014 Cash paid for interest $ 251,000 $ 298,000 Non-cash investing and financing activities: Accrued liabilities with related parties settled with equity $ - $ 134,000 Financing of building improvements $ - $ 200,000 Financing of equipment purchases $ 525,000 $ - Change in non-controlling interest $ - $ (4,700,000 ) Loss from change in fair value of interest rate swap derivative $ (2,500 ) $ (34,000 ) Escrow shares retired $ - $ 150,000 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 13 - SEGMENT INFORMATION As of January 1, 2015, the Companys 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 Companys 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 Companys operations by reportable segment for the years ended December 31, 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: Year Ended December 31, 2015 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 11,797,000 3,904,000 1,804,000 - $ 17,505,000 Depreciation and amortization 584,000 120,000 847,000 8,000 1,559,000 Interest expense 137,000 - 84,000 114,000 335,000 Stock based compensation 69,000 39,000 112,000 754,000 974,000 Impairment of goodwill - - 9,593,000 - 9,593,000 Impairment of intangible assets and investments - - 500,000 - 500,000 Income tax expense - - - 22,000 22,000 Net income (loss) to common stockholders 1,070,000 166,000 (12,944,000 ) (2,601,000 ) (14,309,000 ) Capital expenditures 621,000 52,000 9,000 - 682,000 Identifiable assets 9,571,000 2,131,000 3,299,000 656,000 15,657,000 Year Ended December 31, 2014 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 12,926,000 3,552,000 1,809,000 - $ 18,287,000 Depreciation and amortization 567,000 171,000 4,532,000 4,000 5,274,000 Interest expense 156,000 7,000 54,000 100,000 317,000 Stock based compensation 121,000 69,000 155,000 1,010,000 1,355,000 Impairment of goodwill - - 3,000,000 - 3,000,000 Impairment of intangible assets and investments - - 34,035,000 - 34,035,000 Loss attributable to noncontrolling interest - - (4,700,000 ) - (4,700,000 ) Income tax benefit - - - (989,000 ) (989,000 ) Net income (loss) to common stockholders 842,000 (106,000 ) (38,843,000 ) (3,050,000 ) (41,157,000 ) Capital expenditures 717,000 131,000 1,244,000 - 2,092,000 Identifiable assets 8,873,000 1,872,000 14,872,000 2,133,000 27,750,000 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 2015 (2%- 2014). 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. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation |
Use of Estimates | Use of Estimates |
Reclassifications | Reclassifications |
Restricted Cash | Restricted Cash |
Accounts Receivable | Accounts Receivable |
Inventory | Inventory |
Property, Plant and Equipment | Property, Plant and Equipment |
Investments | Investments |
Goodwill | Goodwill - |
Other Intangible Assets and Patent Application Costs | Other Intangible Assets and Patent Application Costs |
Impairment of Long Lived Assets | Impairment of Long Lived Assets |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ● 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. At December 31, 2014, the Companys convertible note payable was recorded at its face amount, net of an unamortized premium for a beneficial conversion feature and had an estimated fair value of approximately $117,000 based on the underlying shares the note could be converted into at the trading price on December 31, 2014. Since the underlying shares were trading in an active, observable market, the fair value measurement qualified as a Level 1 input. As included in Note 7, the conversion feature associated with this note was removed during 2015. |
Derivative Instruments | Derivative Instruments The Company has an interest rate swap with Citizens that changes the variable rate on a term loan to a fixed rate as follows: Notional Amount Variable Rate Fixed Cost Maturity Date $ 1,021,926 3.39 % 5.87 % August 30, 2021 |
Conventional Convertible Debt | Conventional Convertible Debt |
Share-Based Payments | Share-Based Payments |
Revenue Recognition | Revenue Recognition - For technology sales and services, revenue is recognized in accordance with 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 Companys 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 collectability 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 Companys 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 - |
Contingent Legal Expenses | Contingent Legal Expenses - |
Advertising Costs | Advertising Costs . |
Research and Development | Research and Development |
Income Taxes | Income Taxes |
Earnings Per Common Share | Earnings Per Common Share As of December 31, 2015 and 2014, there were 11,874,620 and 12,019,194, respectively, of common stock share equivalents potentially issuable under convertible debt agreements, employment agreements, options, warrants, and restricted stock agreements that could potentially dilute basic earnings per share in the future. Common stock equivalents were excluded from the calculation of diluted earnings per share for 2015 and 2014 in which the Company had a net loss, since their inclusion would have been anti-dilutive. |
Comprehensive Loss | Comprehensive Loss |
Concentration of Credit Risk | Concentration of Credit Risk During 2015, two customers accounted for 35% of the Companys consolidated revenue. As of December 31, 2015, these two customers accounted for 27% of the Companys trade accounts receivable balance. During 2014, these same two customers accounted for 40% of the Companys consolidated revenue. As of December 31, 2014, these two customers accounted for 25% of the Companys trade accounts receivable balance. |
Continuing Operations | Continuing Operations - |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys 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 entitys 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 consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company does not believe the adoption of this ASU will have a significant impact on its consolidated financial statements and related disclosures. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. The guidance requires that certain inventory, including inventory measured using the first-in-first-out method, be measured at the lower of cost or 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. The guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The guidance becomes effective for annual reporting periods beginning after December 15, 2016, with early adoption permitted. The Company applied this guidance to its current fiscal years ending December 31, 2015 and 2014. The adoption of this guidance had no material impact on the results of operations or financial position. Certain prior year deferred tax assets or liabilities have been reclassified to conform with the current year presentation. In February 2016, the FASB issued an accounting standard update ASU 2016-02, Leases, which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet evaluated nor has it determined the effect of the standard on its ongoing financial reporting. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Derivative Instruments | The Company has an interest rate swap with Citizens that changes the variable rate on a term loan to a fixed rate as follows: Notional Amount Variable Rate Fixed Cost Maturity Date $ 1,021,926 3.39 % 5.87 % August 30, 2021 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following at December 31: 2015 2014 Finished Goods $ 718,601 $ 572,695 Work in process 167,779 123,611 Raw Materials 51,450 172,956 $ 937,830 $ 869,262 |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following at December 31: 2015 2014 Estimated Useful Life Machinery and equipment 5-10 years $ 5,615,562 $ 5,156,060 Building and improvements 39 years 1,923,027 1,913,727 Land 185,000 185,000 Leasehold improvements See (1) 722,984 818,846 Furniture and fixtures 7 years 68,272 163,300 Software and websites 3 years 402,225 439,373 Total cost 8,917,070 8,676,306 Less accumulated depreciation 3,913,252 3,659,767 Property, plant, and equipment, net $ 5,003,818 $ 5,016,539 (1) |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | Intangible assets are comprised of the following: December 31, 2015 December 31, 2014 Useful Life Gross Carrying Amount Accumulated Amortizaton Net Carrying Amount Gross Carrying Amount Accumulated Amortizaton Net Carrying Amount Acquired intangibles- customer lists and non-compete agreements 5 -10 years 1,997,300 1,635,257 362,043 1,997,300 1,532,123 465,177 Acquired intangibles-patents and patent rights Varied (1) 3,650,000 1,562,526 2,087,474 3,650,000 852,343 2,797,657 Patent application costs Varied (2) 1,062,958 494,931 568,027 1,058,833 413,268 645,565 $ 6,710,258 $ 3,692,714 $ 3,017,544 $ 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 December 31, 2015, the weighted average remaining useful life of these assets in service was approximately 4.4 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, 2015, the weighted average remaining useful life of these assets in service was approximately 9.3 years. |
Schedule of Estimated Future Amortization of Intangible Assets | Approximate expected amortization for each of the five succeeding fiscal years is as follows: Year Amount 2016 $ 692,000 2017 $ 673,000 2018 $ 537,000 2019 $ 265,000 2020 $ 193,000 |
Schedule of Changes on Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2015 and 2014 are as follows: Packaging Plastics Technolgy Management Total Balance as of January 1, 2014 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 Goodwill acquired during the year - - - - Impairment losses - - (3,000,000 ) (3,000,000 ) Balance as of December 31, 2014 Goodwill 1,768,400 684,949 12,831,774 15,285,123 Accumulated impairment losses - - (3,238,926 ) (3,238,926 ) 1,768,400 684,949 9,592,848 12,046,197 Goodwill acquired during the year - - - - Impairment losses - - (9,592,848 ) (9,592,848 ) Balance as of December 31, 2015 Goodwill 1,768,400 684,949 12,831,774 15,285,123 Accumulated impairment losses - - (12,831,774 ) (12,831,774 ) $ 1,768,400 $ 684,949 $ - $ 2,453,349 |
Short Term and Long Term Debt (
Short Term and Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [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 and other debt which can be settled with non-monetary assets, subsequent to December 31, 2015 are as follows: Year Amount 2016 $ 1,553,061 2017 467,727 2018 486,599 2019 491,618 2020 104,691 Thereafter 707,480 Total $ 3,811,176 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Warrant Activity | The following is a summary with respect to warrants outstanding and exercisable at December 31, 2015 and 2014 and activity during the years then ended: 2015 2014 Weighted Weighted Average Average Exercise Exercise Warrants Price Warrants Price Outstanding January 1 6,566,385 $ 4.70 6,875,586 $ 4.64 Granted during the year 1,090,911 0.40 100,000 1.56 Exercised/transferred - - (80,645 ) 3.10 Lapsed/terminated (207,235 ) 3.52 (328,556 ) 2.91 Outstanding at December 31 7,450,061 $ 4.10 6,566,385 $ 4.70 Exercisable at December 31 6,359,150 $ 4.10 6,535,274 $ 4.71 Weighted average months remaining 34.3 40.0 |
Summary of Stock Option Activity Under Stock Option and Incentive Plans | The following is a summary with respect to options outstanding at December 31, 2015 and 2014 and activity during the years then ended: 2015 2014 Number of Options Weighted Average Exercise Price Weighted Average Life Remaining Number of Options Weighted Average Exercise Price Weighted Average Life Remaining (in years) (in years) Outstanding at January 1: 4,928,291 2.92 4,073,898 3.25 Granted 53,550 0.60 1,172,197 1.96 Exercised - - - - Lapsed/terminated (557,282 ) 2.95 (317,804 ) 3.56 Outstanding at December 31: 4,424,559 2.89 4.0 4,928,291 2.92 4.0 Exercisable at December 31: 3,628,495 2.77 4.6 2,806,696 2.94 5.0 Expected to vest at December 31: 346,064 2.00 3.2 1,660,169 2.46 5.8 Aggregate intrinsic value of outstanding options at December 31: $ - $ - Aggregate intrinsic value of exercisable options at December 31: $ - $ - Aggregate intrinsic value of options expected to vest at December 31: $ - $ - |
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, 2015 and 2014: 2015 2014 Volatility 72.6 % 67.1 % Expected option term 2.9 years 3.5 years Risk-free interest rate 1.7 % 0.9 % Expected forfeiture rate 0.0 % 0.0 % Expected dividend yield 0.0 % 0.0 % |
Summary of Restricted Stock | The following is a summary of activity of restricted stock during the years ended at December 31, 2015 and 2014: Shares Weighted- average Grant Date Fair Value Restricted shares outstanding, December 31, 2013 41,176 $ 3.33 Restricted shares granted 243,750 0.48 Restricted shares vested (20,588 ) 3.33 Restricted shares outstanding, December 31, 2014 264,338 $ 0.70 Restricted shares granted 155,000 0.25 Restricted shares vested (359,338 ) 0.59 Restricted shares outstanding, December 31, 2015 60,000 $ 0.22 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [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: 2015 2014 Currently payable: Federal $ - $ - State 5,836 6,735 Total currently payable 5,836 6,735 Deferred: Federal (990,745 ) (13,939,671 ) State (147,674 ) 488,406 Total deferred (1,138,419 ) (13,451,265 ) Less: increase in allowance 1,154,767 12,455,900 Net deferred 16,348 (995,365 ) Total income tax provision (benefit) $ 22,184 $ (988,630 ) |
Schedule of Deferred Tax Assets and Liabilities | Individual components of deferred taxes are as follows: Deferred tax assets: 2015 2014 Net operating loss carry forwards $ 17,383,770 $ 16,104,083 Equity issued for services 855,139 1,050,348 Goodwill and other intangibles 692,470 773,019 Investment in pass-through entity 268,476 268,476 Other 681,889 591,259 Gross deferred tax assets 19,881,744 18,787,185 Deferred tax liabilities: Goodwill and other intangibles 291,706 312,277 Depreciation and amortization 289,534 312,823 Gross deferred tax liabilities 581,240 625,100 Less valuation allowance (19,462,611 ) (18,307,844 ) Net deferred tax liabilities $ (162,107 ) $ (145,759 ) |
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: 2015 2014 Statutory United States federal rate 34.0 % 34.0 % State income taxes net of federal benefit 0.7 (0.7 ) Noncontrolling interest in pass-through entity - (3.4 ) Permanent differences (23.3 ) (2.3 ) Other (3.5 ) 1.1 Change in valuation reserves (8.1 ) (26.6 ) Effective tax rate (0.2 )% 2.1 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments Under Operating Leases | The following table summarizes the Companys lease commitments. Operating Leases Equipment Facilities Total Payments made in 2015 $ 45,745 $ 337,738 $ 383,483 Future minimum lease commitments: 2016 $ 48,499 $ 233,937 $ 282,436 2017 44,131 237,929 282,060 2018 43,258 243,002 286,260 2019 14,419 68,820 83,239 2020 - 68,820 68,820 Total future minimum lease commitments $ 150,307 $ 852,508 $ 1,002,815 |
Supplemental Cash Flow Inform29
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information for the years ended December 31: 2015 2014 Cash paid for interest $ 251,000 $ 298,000 Non-cash investing and financing activities: Accrued liabilities with related parties settled with equity $ - $ 134,000 Financing of building improvements $ - $ 200,000 Financing of equipment purchases $ 525,000 $ - Change in non-controlling interest $ - $ (4,700,000 ) Loss from change in fair value of interest rate swap derivative $ (2,500 ) $ (34,000 ) Escrow shares retired $ - $ 150,000 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Operations by Reportable Segment | Approximate information concerning the Companys operations by reportable segment for the years ended December 31, 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: Year Ended December 31, 2015 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 11,797,000 3,904,000 1,804,000 - $ 17,505,000 Depreciation and amortization 584,000 120,000 847,000 8,000 1,559,000 Interest expense 137,000 - 84,000 114,000 335,000 Stock based compensation 69,000 39,000 112,000 754,000 974,000 Impairment of goodwill - - 9,593,000 - 9,593,000 Impairment of intangible assets and investments - - 500,000 - 500,000 Income tax expense - - - 22,000 22,000 Net income (loss) to common stockholders 1,070,000 166,000 (12,944,000 ) (2,601,000 ) (14,309,000 ) Capital expenditures 621,000 52,000 9,000 - 682,000 Identifiable assets 9,571,000 2,131,000 3,299,000 656,000 15,657,000 Year Ended December 31, 2014 Packaging and Printing Plastics Technology Corporate Total Revenues from external customers $ 12,926,000 3,552,000 1,809,000 - $ 18,287,000 Depreciation and amortization 567,000 171,000 4,532,000 4,000 5,274,000 Interest expense 156,000 7,000 54,000 100,000 317,000 Stock based compensation 121,000 69,000 155,000 1,010,000 1,355,000 Impairment of goodwill - - 3,000,000 - 3,000,000 Impairment of intangible assets and investments - - 34,035,000 - 34,035,000 Loss attributable to noncontrolling interest - - (4,700,000 ) - (4,700,000 ) Income tax benefit - - - (989,000 ) (989,000 ) Net income (loss) to common stockholders 842,000 (106,000 ) (38,843,000 ) (3,050,000 ) (41,157,000 ) Capital expenditures 717,000 131,000 1,244,000 - 2,092,000 Identifiable assets 8,873,000 1,872,000 14,872,000 2,133,000 27,750,000 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2014 | Jan. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | ||||
Restricted cash | $ 293,000 | $ 355,793 | ||
Accounts receivable, allowance | 59,000 | 59,000 | ||
Depreciation expense | 663,000 | 622,000 | ||
Debt instrument, fair value | 117,000 | |||
Net gain (loss) attributable to cash flow hedge | 64,000 | 61,000 | ||
Advertising costs | 25,000 | 39,000 | ||
Research and development | $ 470,000 | $ 462,000 | ||
Antidilutive securities | 11,874,620 | 12,019,194 | ||
Proceeds from sale of equity | $ 1,100,000 | |||
Unrestricted cash | 1,440,000 | |||
Maximum borrowing capacity | $ 800,000 | |||
Sales Revenue, Goods, Net [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration of credit risk, percentage | 35.00% | 40.00% | ||
Accounts Receivable [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration of credit risk, percentage | 27.00% | 25.00% | ||
DSS Technology Management [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Total cash investment | $ 400,000 | $ 100,000 | ||
Investment owned shares | 594,530 | |||
Percent of outstanding common stock | 6.00% | |||
Cost of investment | $ 500,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Derivative Instruments (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Summary Of Significant Accounting Policies - Schedule Of Derivative Instruments Details | |
Notional Amount | $ 1,021,926 |
Variable Rate | 3.39% |
Fixed Cost | 5.87% |
Maturity Date | Aug. 30, 2021 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 718,601 | $ 572,695 |
Work in process | 167,779 | 123,611 |
Raw Materials | 51,450 | 172,956 |
Inventory | $ 937,830 | $ 869,262 |
Property Plant and Equipment -
Property Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 8,917,070 | $ 8,676,306 | |
Less accumulated depreciation | 3,913,252 | 3,659,767 | |
Property, plant, and equipment, net | 5,003,818 | 5,016,539 | |
Machinery and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 5,615,562 | 5,156,060 | |
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 | $ 1,923,027 | 1,913,727 | |
Property and equipment, estimated useful life | 39 years | ||
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | [1] | $ 722,984 | 818,846 |
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 | $ 68,272 | 163,300 | |
Property and equipment, estimated useful life | 7 years | ||
Software and Websites [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 402,225 | 439,373 | |
Property and equipment, estimated useful life | 3 years | ||
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 185,000 | $ 185,000 | |
[1] | (1) Expected lease term between 3 and 10 years. |
Investments (Details Narrative)
Investments (Details Narrative) - USD ($) | Jul. 02, 2013 | Jun. 30, 2015 | May. 31, 2014 | Feb. 28, 2014 | Feb. 14, 2014 | Jan. 31, 2014 | Nov. 30, 2013 | Aug. 31, 2013 | May. 31, 2013 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2015 | Jun. 30, 2014 |
Related Party Transaction [Line Items] | |||||||||||||
Proceeesds from sale of equity interest | $ 1,100,000 | ||||||||||||
Virtual Agility Technology Investments Llc [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Initial investment, non-recourse note | $ 200,000 | ||||||||||||
Percent of outstanding common stock | 7.00% | ||||||||||||
Total cash investment | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | ||||||||
Preferred return on each non-recourse note | 1,250,000 | ||||||||||||
Aggregate investment | 2,000,000 | ||||||||||||
Additional quarterly investments | $ 250,000 | ||||||||||||
Variable return percentage | 1.875% | ||||||||||||
Cost of investment | $ 11,750,000 | ||||||||||||
Investment owned shares | 594,530 | 657,119 | |||||||||||
Aggregate preferred return | $ 10,750,000 | ||||||||||||
Non-recourse notes | $ 1,600,000 | ||||||||||||
Impairment of investment | $ 7,050,000 | ||||||||||||
Proceeesds from sale of equity interest | $ 200,000 | ||||||||||||
Document Security Systems Technology Management [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Percent of outstanding common stock | 6.00% | 7.00% | |||||||||||
Total cash investment | $ 400,000 | $ 100,000 | |||||||||||
Variable return percentage | 15.00% | ||||||||||||
Cost of investment | $ 500,000 | ||||||||||||
Aggregate preferred return | $ 10,000,000 | ||||||||||||
Equity ownership percentage | 60.00% | 60.00% | |||||||||||
Third Party Investor [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Total cash investment | $ 250,000 | ||||||||||||
Equity ownership percentage | 40.00% | ||||||||||||
Parent [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Impairment of investment | $ 11,750,000 | ||||||||||||
Noncontrolling Interest [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Equity ownership percentage | 40.00% | ||||||||||||
Impairment of investment | $ 4,700,000 |
Intangible Assets and Goodwil36
Intangible Assets and Goodwill (Details Narrative) | Jan. 05, 2015USD ($) | May. 23, 2014USD ($)Patents | Jul. 08, 2013USD ($) | Jul. 08, 2013USD ($) | Feb. 28, 2014USD ($) | Jan. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jul. 08, 2014 |
Goodwill [Line Items] | |||||||||
Patent application costs | $ 5,000 | $ 94,000 | |||||||
Patent and patent acquisition costs | 1,150,000 | ||||||||
Impairment of assets | $ 22,285,000 | 500,000 | 34,034,862 | ||||||
Amortization of intangibles | 896,000 | 4,653,000 | |||||||
Amount received from investors | 650,000 | 650,000 | |||||||
Impairment of goodwill | 9,592,848 | 3,000,000 | |||||||
Accrued expenses from investors | 551,000 | $ 603,000 | |||||||
Impairment charge | $ 9,600,000 | ||||||||
Patented Technology [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Patent and patent acquisition costs | $ 500,000 | ||||||||
Document Security Systems Technology Management [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Total cash investment | $ 250,000 | ||||||||
Return of investment in unconsolidated business | $ 750,000 | ||||||||
Equity ownership percentage | 40.00% | ||||||||
DSS Technology Management [Member] | |||||||||
Goodwill [Line Items] | |||||||||
Patent and patent acquisition costs | $ 1,150,000 | ||||||||
Number of patents | Patents | 115 | ||||||||
Total cash investment | $ 400,000 | $ 100,000 |
Intangible Assets and Goodwil37
Intangible Assets and Goodwill - Schedule of Other Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 6,710,258 | $ 6,706,133 | |
Accumulated Amortization | 3,692,714 | 2,797,734 | |
Net Carrying Amount | 3,017,544 | 3,908,399 | |
Customer Llists and Non-compete Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 1,997,300 | 1,997,300 | |
Accumulated Amortization | 1,635,257 | 1,532,123 | |
Net Carrying Amount | $ 362,043 | 465,177 | |
Customer Llists and Non-compete Agreements [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 5 years | ||
Customer Llists and Non-compete Agreements [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 10 years | ||
Patents and Patent Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 3,650,000 | 3,650,000 | [1] |
Accumulated Amortization | 1,562,526 | 852,343 | [1] |
Net Carrying Amount | $ 2,087,474 | 2,797,657 | [1] |
Useful Life | 4 years 4 months 24 days | ||
Patent Application Costs [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,062,958 | 1,058,833 | [2] |
Accumulated Amortization | 494,931 | 413,268 | [2] |
Net Carrying Amount | $ 568,027 | $ 645,565 | [2] |
Useful Life | 9 years 3 months 18 days | ||
[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, 2015, the weighted average remaining useful life of these assets in service was approximately 4.4 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, 2015, the weighted average remaining useful life of these assets in service was approximately 9.3 years. |
Intangible Assets and Goodwil38
Intangible Assets and Goodwill - Schedule of Estimated Future Amortization of Intangible Assets (Details) | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 692,000 |
2,017 | 673,000 |
2,018 | 537,000 |
2,019 | 265,000 |
2,020 | $ 193,000 |
Intangible Assets and Goodwil39
Intangible Assets and Goodwill - Schedule of Changes on Carrying Amount of Goodwill (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Goodwill, net, Beginning balance | $ 12,046,197 | $ 15,285,123 |
Accumulated impairment losses, Beginning balance | (3,238,926) | (238,926) |
Goodwill, Beginning balance | 15,285,123 | $ 15,046,197 |
Goodwill acquired during the year | ||
Impairment losses | (9,592,848) | $ (3,000,000) |
Goodwill, net, Ending balance | 2,453,349 | 12,046,197 |
Accumulated impairment losses, Ending balance | (12,831,774) | (3,238,926) |
Goodwill, Ending balance | 15,285,123 | 15,285,123 |
Document Security Systems Packaging Group [Member] | ||
Goodwill [Line Items] | ||
Goodwill, net, Beginning balance | $ 1,768,400 | $ 1,768,400 |
Accumulated impairment losses, Beginning balance | ||
Goodwill, Beginning balance | $ 1,768,400 | $ 1,768,400 |
Goodwill acquired during the year | ||
Impairment losses | ||
Goodwill, net, Ending balance | $ 1,768,400 | $ 1,768,400 |
Accumulated impairment losses, Ending balance | ||
Goodwill, Ending balance | $ 1,768,400 | $ 1,768,400 |
Document Security Systems Plastics Group [Member] | ||
Goodwill [Line Items] | ||
Goodwill, net, Beginning balance | $ 684,949 | $ 684,949 |
Accumulated impairment losses, Beginning balance | ||
Goodwill, Beginning balance | $ 684,949 | $ 684,949 |
Goodwill acquired during the year | ||
Impairment losses | ||
Goodwill, net, Ending balance | $ 684,949 | $ 684,949 |
Accumulated impairment losses, Ending balance | ||
Goodwill, Ending balance | $ 684,949 | $ 684,949 |
Document Security Systems Technology Management [Member] | ||
Goodwill [Line Items] | ||
Goodwill, net, Beginning balance | 12,831,774 | 12,831,774 |
Accumulated impairment losses, Beginning balance | (3,238,926) | (238,926) |
Goodwill, Beginning balance | $ 9,592,848 | $ 12,592,848 |
Goodwill acquired during the year | ||
Impairment losses | $ (9,592,848) | $ (3,000,000) |
Goodwill, net, Ending balance | 12,831,774 | 12,831,774 |
Accumulated impairment losses, Ending balance | $ (12,831,774) | (3,238,926) |
Goodwill, Ending balance | $ 9,592,848 |
Short Term and Long Term Debt40
Short Term and Long Term Debt (Details Narrative) - USD ($) | Sep. 24, 2015 | Apr. 28, 2015 | Sep. 05, 2014 | Feb. 13, 2014 | Jul. 19, 2013 | Feb. 12, 2010 | Oct. 21, 2015 | Sep. 30, 2015 | May. 02, 2015 | Feb. 23, 2015 | Jan. 31, 2015 | May. 31, 2014 | May. 24, 2013 | Dec. 30, 2011 | Oct. 31, 2011 | Aug. 31, 2011 | Jul. 26, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 27, 2014 | Dec. 06, 2013 | Oct. 08, 2010 |
Debt Instrument [Line Items] | ||||||||||||||||||||||
Amortization of note discount and premium | $ 22,707 | |||||||||||||||||||||
Stock options issued, exercise price per share | $ 0.22 | $ 0.22 | $ 0.60 | $ 0.60 | $ 1.96 | |||||||||||||||||
Sale of investment units, shares issuable per warrant | 863,638 | 227,273 | ||||||||||||||||||||
Sale of investment units, warrant exercise price per share | $ 0.40 | $ 0.40 | ||||||||||||||||||||
Cash payment for real estate | $ 157,098 | $ 280,902 | ||||||||||||||||||||
Long-term debt, net | 2,258,115 | 7,439,036 | ||||||||||||||||||||
Payments of long-term debt | 939,151 | $ 616,393 | ||||||||||||||||||||
Short-term debt | $ 4,023,379 | |||||||||||||||||||||
Collateral Agent [Member] | February 13, 2016 [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Maximum unpaid interest rate | 2.00% | |||||||||||||||||||||
Convertible Notes Payable [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, face amount | $ 575,000 | |||||||||||||||||||||
Debt instrument, maturity date | Dec. 30, 2016 | |||||||||||||||||||||
Debt interest rate | 10.00% | |||||||||||||||||||||
Shares to be issued upon conversion of convertible note, shares | 260,180 | |||||||||||||||||||||
Beneficial conversion feature recorded as a debt discount | $ 88,000 | |||||||||||||||||||||
Debt instrument, carrying amount | $ 650,000 | $ 410,000 | $ 604,000 | |||||||||||||||||||
Periodic installments amount | 15,000 | |||||||||||||||||||||
Debt instrument, final balloon payment | 230,000 | |||||||||||||||||||||
Promissory Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Credit facility, amount outstanding | $ 4,089,000 | |||||||||||||||||||||
Debt instrument, face amount | $ 850,000 | |||||||||||||||||||||
Debt instrument, maturity date | May 31, 2016 | |||||||||||||||||||||
Debt interest rate | 9.00% | |||||||||||||||||||||
Shares to be issued upon conversion of convertible note, shares | 60,000 | |||||||||||||||||||||
Long-term debt, unamortized discount | $ 29,000 | $ 69,000 | ||||||||||||||||||||
Debt instrument, carrying amount | $ 685,000 | 850,000 | ||||||||||||||||||||
Periodic installments amount | $ 15,000 | |||||||||||||||||||||
Debt instrument, final balloon payment | $ 610,000 | |||||||||||||||||||||
Fair value of notes payable | $ 29,000 | $ 69,000 | ||||||||||||||||||||
Interest accrued in the period | $ 15,000 | |||||||||||||||||||||
Stock options issued, exercise price per share | $ 3 | |||||||||||||||||||||
Expected volatility | 70.00% | 60.00% | ||||||||||||||||||||
Risk-free interest rate per annum | 1.53% | 0.89% | ||||||||||||||||||||
Expected dividend yield | 0.00% | 0.00% | ||||||||||||||||||||
Sale of investment units, shares issuable per warrant | 40,000 | |||||||||||||||||||||
Sale of investment units, warrant exercise price per share | $ 1.50 | |||||||||||||||||||||
Term Loan [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate additional rate above LIBOR | 3.24% | |||||||||||||||||||||
Debt instrument, carrying amount | $ 1,303,900 | $ 8,874 | 19,522 | |||||||||||||||||||
Credit facility agreement, monthly principal payment | $ 24,511 | |||||||||||||||||||||
Interest rate on outstanding term loan | 4.84% | |||||||||||||||||||||
Debt instrument, term | 60 months | |||||||||||||||||||||
Rbs Citizens [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit, maximum borrowing amount | $ 800,000 | |||||||||||||||||||||
Interest rate additional rate above LIBOR | 3.99% | |||||||||||||||||||||
Credit facility, amount outstanding | $ 0 | 0 | ||||||||||||||||||||
Credit facility agreement, monthly principal payment | $ 25,000 | |||||||||||||||||||||
Rbs Citizens [Member] | Promissory Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate additional rate above LIBOR | 3.15% | 3.39% | ||||||||||||||||||||
Debt interest rate | 5.87% | |||||||||||||||||||||
Debt instrument, carrying amount | $ 1,021,926 | $ 1,078,220 | ||||||||||||||||||||
Periodic installments amount | $ 7,658 | |||||||||||||||||||||
Rbs Citizens [Member] | Term Loan [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Line of credit, maximum borrowing amount | $ 450,000 | |||||||||||||||||||||
Interest rate additional rate above LIBOR | 3.75% | 3.00% | 3.99% | |||||||||||||||||||
Debt instrument, face amount | $ 1,500,000 | |||||||||||||||||||||
Debt interest rate | 5.70% | |||||||||||||||||||||
Debt instrument, carrying amount | $ 42,594 | $ 0 | $ 50,000 | |||||||||||||||||||
Periodic installments amount | $ 887 | |||||||||||||||||||||
Debt instrument, term | 60 months | |||||||||||||||||||||
Rbs Citizens [Member] | Permanent Loan [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate additional rate above LIBOR | 3.15% | 3.39% | ||||||||||||||||||||
Debt instrument, maturity date | Jul. 31, 2019 | |||||||||||||||||||||
Debt instrument, carrying amount | $ 405,247 | 435,000 | $ 450,000 | |||||||||||||||||||
Periodic installments amount | $ 450,000 | |||||||||||||||||||||
Debt instrument, term | 5 years | |||||||||||||||||||||
Interest accrued in the period | $ 2,500 | |||||||||||||||||||||
Debt instrument, final balloon payment | $ 300,000 | |||||||||||||||||||||
Rbs Citizens [Member] | LIBOR [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Interest rate additional rate above LIBOR | 3.75% | |||||||||||||||||||||
Peoples Capital [Member] | Term Loan [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, carrying amount | $ 819,681 | 1,067,586 | ||||||||||||||||||||
Citizens [Member] | Term Loan [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, carrying amount | $ 525,000 | 460,448 | ||||||||||||||||||||
Credit facility agreement, monthly principal payment | $ 9,591 | |||||||||||||||||||||
Interest rate on outstanding term loan | 3.61% | |||||||||||||||||||||
Debt instrument, term | 60 months | |||||||||||||||||||||
Bzdick Properties Limited Liability Company [Member] | Promissory Notes [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, maturity date | Aug. 31, 2021 | |||||||||||||||||||||
Purchase price for Real Estate acquired | $ 1,500,000 | |||||||||||||||||||||
Purchase price for Real Estate acquired, loan obtained | $ 1,200,000 | |||||||||||||||||||||
DSS Technology Management [Member] | Investment Agreement [Member] | ||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||
Debt instrument, carrying amount | $ 1,000,000 | |||||||||||||||||||||
Interest accrued in the period | 132,000 | $ 48,000 | ||||||||||||||||||||
Advances | $ 4,500,000 | 4,350,000 | ||||||||||||||||||||
Fixed return equity interests | $ 100,000 | 199,000 | 459,000 | 100,000 | ||||||||||||||||||
Long-term debt, net | 900,000 | 1,791,000 | $ 3,891,000 | $ 900,000 | ||||||||||||||||||
Fair value of contingent consideration | 10,000 | |||||||||||||||||||||
Proceeds from return received | $ 1,500,000 | $ 2,000,000 | ||||||||||||||||||||
Payments of long-term debt | $ 150,000 |
Short Term and Long Term Debt -
Short Term and Long Term Debt - Schedule of Notes Payable and Long-Term Debt (Details) | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | |
2,016 | $ 1,553,061 |
2,017 | 467,727 |
2,018 | 486,599 |
2,019 | 491,618 |
2,020 | 104,691 |
Thereafter | 707,480 |
Total future principal payment | $ 3,811,176 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Sep. 24, 2015 | Aug. 15, 2015 | Mar. 13, 2014 | Mar. 05, 2014 | Nov. 30, 2015 | Oct. 21, 2015 | Feb. 23, 2015 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2013 |
Number of shares of common stock sold | 4,318,181 | 100,000 | |||||||||
Value of common stock sold | $ 950,000 | $ 250,000 | $ 41,000 | $ 1,128,336 | $ 1,550,667 | ||||||
Sale of stock price per share | $ 0.22 | ||||||||||
Stock options issued | 1,136,363 | 53,550 | |||||||||
Stock options issued, exercise price per share | $ 0.22 | $ 0.22 | $ 0.60 | $ 0.60 | $ 1.96 | ||||||
Fair value of options issued | $ 105,000 | $ 28,000 | $ 6,000 | ||||||||
Volatility | 81.40% | 81.40% | 72.60% | 72.60% | 67.10% | ||||||
Risk free return | 1.66% | 1.70% | 0.90% | ||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||||||
Number of common stock shares authorized | 450,000 | ||||||||||
Stock based compensation | $ 974,137 | $ 1,355,430 | |||||||||
Share-based compensation, earnings per share | $ 4.50 | ||||||||||
Unrecognized compensation costs | $ 147,000 | ||||||||||
Stock based compensation expense, employee stock options | $ 536,000 | ||||||||||
Restricted stock, shares | 125,000 | 30,000 | 243,750 | ||||||||
Restricted stock, value | $ 11,000 | $ 27,500 | $ 117,000 | ||||||||
Number of shares exchanged for warrants exercised | 863,638 | 227,273 | |||||||||
Exercise price | $ 0.40 | $ 0.40 | |||||||||
Term | 4 years | 4 years | 2 years 10 months 24 days | 3 years 6 months | |||||||
Fair value of earn-out options | $ 594,000 | ||||||||||
Weighted-average grant date fair value of options granted | $ 0.12 | $ .71 | |||||||||
Aggregate grant date fair value of options that vested | $ 6,000 | ||||||||||
Fair value of options vested during the year | $ 988,000 | $ 1,145,000 | |||||||||
Stock compensation expense | $ 974,000 | $ 1,355,000 | |||||||||
Stock compensation expense, description | the Company had stock compensation expense of approximately $974,000 or $0.02 basic earnings per share ($1,355,000; $0.03 basic earnings per share - 2014). | ||||||||||
2013 Plan [Member] | |||||||||||
Number of common stock shares authorized | 6,000,000 | ||||||||||
Accredited Investors [Member] | |||||||||||
Number of shares exchanged for warrants exercised | 1,090,911 | ||||||||||
Exercise price | $ 0.40 | ||||||||||
Employee [Member] | |||||||||||
Number of shares of common stock sold | 84,025 | ||||||||||
Value of common stock sold | $ 134,000 | ||||||||||
Fair value of options issued | $ 6,643 | $ 833,000 | |||||||||
Volatility | 72.60% | 67.00% | |||||||||
Risk free return | 1.66% | 0.92% | |||||||||
Dividend yield | 0.00% | ||||||||||
Number of shares exchanged for warrants exercised | 1,138,697 | 33,500 | |||||||||
Exercise price | $ 2 | $ 0.60 | |||||||||
Term | 5 years | ||||||||||
Minimum [Member] | |||||||||||
Risk free return | 1.45% | 1.35% | |||||||||
Maximum [Member] | |||||||||||
Risk free return | 1.60% | 1.36% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrant Activity (Details) - $ / shares | Sep. 24, 2015 | Oct. 21, 2015 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Outstanding, Beginning balance | 4,928,291 | 4,928,291 | 4,073,898 | ||
Granted during the year | 53,550 | 1,172,197 | |||
Exercised/transferred | |||||
Outstanding, Ending balance | 4,424,559 | 4,928,291 | |||
Exercisable | 3,628,495 | 2,806,696 | |||
Outstanding Beginning balance, Weighted Average Exercise Price | $ 2.92 | $ 2.92 | $ 3.25 | ||
Granted, Weighted Average Exercise Price | $ 0.22 | $ 0.22 | $ 0.60 | $ 0.60 | $ 1.96 |
Exercised, Weighted Average Exercise Price | |||||
Outstanding, Ending balance, Weighted Average Exercise Price | $ 2.89 | $ 2.92 | |||
Exercisable Weighted Average Exercise Price | $ 2.77 | $ 2.94 | |||
Warrant [Member] | |||||
Outstanding, Beginning balance | 6,566,385 | 6,566,385 | 6,875,586 | ||
Granted during the year | 1,090,911 | 100,000 | |||
Exercised/transferred | (80,645) | ||||
Lapsed/terminated | (207,235) | (328,556) | |||
Outstanding, Ending balance | 7,450,061 | 6,566,385 | |||
Exercisable | 6,359,150 | 6,535,274 | |||
Outstanding Beginning balance, Weighted Average Exercise Price | $ 4.70 | $ 4.70 | $ 4.64 | ||
Granted, Weighted Average Exercise Price | $ 0.40 | 1.56 | |||
Exercised, Weighted Average Exercise Price | 3.10 | ||||
Lapsed, Weighted Average Exercise Price | $ 3.52 | 2.91 | |||
Outstanding, Ending balance, Weighted Average Exercise Price | 4.10 | 4.70 | |||
Exercisable Weighted Average Exercise Price | 4.10 | 4.71 | |||
Weighted average months remaining | $ 34.3 | $ 40 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Activity Under Stock Option and Incentive Plans (Details) - USD ($) | Sep. 24, 2015 | Oct. 21, 2015 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Stockholders Equity - Summary Of Stock Option Activity Under Stock Option And Incentive Plans Details | |||||
Outstanding, Beginning balance | 4,928,291 | 4,928,291 | 4,073,898 | ||
Granted | 53,550 | 1,172,197 | |||
Exercised | |||||
Lapsed/terminated | (557,282) | (317,804) | |||
Outstanding, Ending balance | 4,424,559 | 4,928,291 | |||
Exercisable | 3,628,495 | 2,806,696 | |||
Expected to vest at December 31 | 346,064 | 1,660,169 | |||
Outstanding Beginning balance, Weighted Average Exercise Price | $ 2.92 | $ 2.92 | $ 3.25 | ||
Granted, Weighted Average Exercise Price | $ 0.22 | $ 0.22 | $ 0.60 | $ 0.60 | $ 1.96 |
Exercised, Weighted Average Exercise Price | |||||
Lapsed/terminated, Weighted Average Exercise Price | $ 2.95 | $ 3.56 | |||
Outstanding, Ending balance, Weighted Average Exercise Price | 2.89 | 2.92 | |||
Exercisable Weighted Average Exercise Price | 2.77 | 2.94 | |||
Expected to vest at December 31, Weighted Average Exercise Price | $ 2 | $ 2.46 | |||
Oustanding, Weighted Average Life Remaining | 4 years | 4 years | |||
Exercisable, Weighted Average Life Remaining | 4 years 7 months 6 days | 5 years | |||
Expected to vest, Weighted Average Life Remaining | 3 years 2 months 12 days | 5 years 9 months 18 days | |||
Aggregate intrinsic value of outstanding options at December 31 | |||||
Aggregate intrinsic value of exercisable options at December 31 | |||||
Aggregate intrinsic value of options expected to vest at December 31 |
Stockholders' Equity - Schedu45
Stockholders' Equity - Schedule of Assumptions Used to Compute the Share-based Compensation Expense for Stock Options and Warrants (Details) | Sep. 24, 2015 | Oct. 21, 2015 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Stockholders Equity - Summary Of Stock Option Activity Under Stock Option And Incentive Plans Details | |||||
Volatility | 81.40% | 81.40% | 72.60% | 72.60% | 67.10% |
Expected option term | 4 years | 4 years | 2 years 10 months 24 days | 3 years 6 months | |
Risk-free interest rate | 1.66% | 1.70% | 0.90% | ||
Expected forfeiture rate | 0.00% | 0.00% | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Stockholders' Equity - Summar46
Stockholders' Equity - Summary of Restricted Stock (Details) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted shares outstanding, Beginning balance, Shares | 264,338 | 41,176 |
Restricted shares granted, Shares | 155,000 | 243,750 |
Restricted shares vested, Shares | (359,338) | (20,588) |
Restricted shares outstanding, Ending balance, Shares | 60,000 | 264,338 |
Restricted shares outstanding, Beginning balance, Weighted-average Grant Date Fair Value | $ 0.70 | $ 3.33 |
Restricted shares granted, Weighted-average Grant Date Fair Value | 0.25 | 0.48 |
Restricted shares vested, Weighted-average Grant Date Fair Value | 0.59 | 3.33 |
Restricted shares outstanding, Ending balance, Weighted-average Grant Date Fair Value | $ 0.22 | $ 0.70 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income tax benefit | $ (16,348) | $ 995,365 |
Net operating loss carryforwards | 51,958,000 | |
Excess tax benefits associated with stock option exercises included in net operating loss carryforwards but not reflected in deferred tax assets | $ 1,019,000 | $ 1,019,000 |
Minimum [Member] | ||
Net operating loss carryforwards, expiration date | Dec. 31, 2022 | |
Minimum [Member] | Excess Tax Benefits [Member] | ||
Net operating loss carryforwards, expiration date | Dec. 31, 2022 | |
Maximum [Member] | ||
Net operating loss carryforwards, expiration date | Dec. 31, 2034 | |
Maximum [Member] | Excess Tax Benefits [Member] | ||
Net operating loss carryforwards, expiration date | Dec. 31, 2030 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
State | $ 5,836 | $ 6,735 |
Total currently payable | 5,836 | 6,735 |
Federal | (990,745) | (13,939,671) |
State | (147,674) | 488,406 |
Total deferred | (1,138,419) | (13,451,265) |
Less: (decrease) increase in allowance | 1,154,767 | 12,455,900 |
Net deferred | 16,348 | (995,365) |
Total income tax provision (benefit) | $ 22,184 | $ (988,630) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets: Net operating loss carryforwards | $ 17,383,770 | $ 16,104,083 |
Deferred tax assets: Equity issued for services | 855,139 | 1,050,348 |
Deferred tax assets: Goodwill and other intangibles | 692,470 | 773,019 |
Deferred tax assets: Investment in pass-through entity | 268,476 | 268,476 |
Deferred tax assets: Other | 681,889 | 591,259 |
Deferred tax assets: Gross deferred tax assets | 19,881,744 | 18,787,185 |
Deferred tax liabilities: Goodwill and other intangibles | 291,706 | 312,277 |
Deferred tax liabilities: Depreciation and amortization | 289,534 | 312,823 |
Deferred tax liabilities: Gross deferred tax liabilities | 581,240 | 625,100 |
Deferred tax liabilities: Less valuation allowance | (19,462,611) | (18,307,844) |
Deferred tax liabilities: Net deferred tax liabilities | $ (162,107) | $ (145,759) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Statutory United States federal rate | 34.00% | 34.00% |
State income taxes net of federal benefit | 0.70% | (0.70%) |
Noncontrolling interest in pass-through entity | 0.00% | (3.40%) |
Permanent difference | (23.30%) | (2.30%) |
Other | (3.50%) | 1.10% |
Change in valuation reserves | (8.10%) | (26.60%) |
Effective tax rate | (0.20%) | 2.10% |
Defined Contribution Pension 51
Defined Contribution Pension Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ||
Employee's contribution maximum percentage | 50.00% | |
Employer match percentage | 3.00% | |
Contributions by company | $ 109,000 | $ 107,000 |
Commitments and Contingencies52
Commitments and Contingencies (Details Narrative) | 12 Months Ended | |
Dec. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) | |
Severance payment amount | $ 1,011,000 | |
Minimum [Member] | ||
Lease equipment term | 36 months | |
Maximum [Member] | ||
Lease equipment term | 60 months | |
Patrick White [Member] | ||
Consulting fees paid to related party | $ 35,000 | $ 145,000 |
Document Security Systems Corporate Offices And Digital Division [Member] | ||
Area of square feet | ft² | 5,700 | |
Rent expense | $ 6,100 | |
Paid of rent | $ 133,000 | |
Lease expiration date | Dec. 31, 2020 | |
Document Security Systems Plastics Group [Member] | ||
Area of square feet | ft² | 15,000 | |
Rent expense | $ 13,000 | |
Lease expiration date | Dec. 31, 2018 | |
Document Security Systems Packaging Group [Member] | ||
Area of square feet | ft² | 40,000 | |
DSS Technology Management [Member] | ||
Rent expense | $ 600 | |
Paid of rent | $ 1,100 | |
Lease expiration date | Dec. 31, 2016 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments Under Operating Leases (Details) | Dec. 31, 2015USD ($) |
Property Subject to or Available for Operating Lease [Line Items] | |
Aggregate payments made 2015 | $ 383,483 |
2,016 | 282,436 |
2,017 | 282,060 |
2,018 | 286,260 |
2,019 | 83,239 |
2,020 | 68,820 |
Total future minimum lease commitments | 1,002,815 |
Building and Improvements [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Aggregate payments made 2015 | 45,745 |
2,016 | 48,499 |
2,017 | 44,131 |
2,018 | 43,258 |
2,019 | $ 14,419 |
2,020 | |
Total future minimum lease commitments | $ 150,307 |
Equipment [Member] | |
Property Subject to or Available for Operating Lease [Line Items] | |
Aggregate payments made 2015 | 337,738 |
2,016 | 233,937 |
2,017 | 237,929 |
2,018 | 243,002 |
2,019 | 68,820 |
2,020 | 68,820 |
Total future minimum lease commitments | $ 852,508 |
Supplemental Cash Flow Inform54
Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | $ 251,000 | $ 298,000 |
Accrued liabilities with related parties settled with equity | 134,000 | |
Financing of building improvements | $ 200,000 | |
Financing of equipment purchases | $ 525,000 | |
Change in non-controlling interest | $ (4,700,000) | |
Loss from change in fair value of interest rate swap derivative | $ (2,500) | (34,000) |
Escrow shares retired | $ 150,000 |
Segment Information (Details Na
Segment Information (Details Narrative) - Segment | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Number of operating segment | 4 | |
International Revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration of credit risk, percentage | 2.00% | 2.00% |
Segment Information - Schedule
Segment Information - Schedule of Operations by Reportable Segment (Details) - USD ($) | Jan. 05, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | |||
Revenues from external customers | $ 17,505,109 | $ 18,287,496 | |
Depreciation and amortization | 1,558,899 | 5,274,323 | |
Interest expense | 334,738 | 317,191 | |
Stock based compensation | 974,137 | 1,355,430 | |
Impairment of goodwill | 9,592,848 | 3,000,000 | |
Impairment of intangible assets and investments | $ 22,285,000 | $ 500,000 | 34,034,862 |
Loss attributable to noncontrolling interest | (4,700,000) | ||
Income tax benefit (Expense) | $ 22,184 | (988,630) | |
Net income (loss) to common stockholders | (14,309,480) | (41,157,052) | |
Capital expenditures | (157,098) | 2,092,000 | |
Identifiable assets | 15,657,433 | 27,750,119 | |
Document Security Systems Packaging Group [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 11,797,000 | 12,926,000 | |
Depreciation and amortization | 584,000 | 567,000 | |
Interest expense | 137,000 | 156,000 | |
Stock based compensation | $ 69,000 | $ 121,000 | |
Impairment of goodwill | |||
Impairment of intangible assets and investments | |||
Loss attributable to noncontrolling interest | |||
Income tax benefit (Expense) | |||
Net income (loss) to common stockholders | $ 1,070,000 | $ 842,000 | |
Capital expenditures | 621,000 | 717,000 | |
Identifiable assets | 9,571,000 | 8,873,000 | |
Document Security Systems Plastics Group [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 3,904,000 | 3,552,000 | |
Depreciation and amortization | $ 120,000 | 171,000 | |
Interest expense | 7,000 | ||
Stock based compensation | $ 39,000 | $ 69,000 | |
Impairment of goodwill | |||
Impairment of intangible assets and investments | |||
Loss attributable to noncontrolling interest | |||
Income tax benefit (Expense) | |||
Net income (loss) to common stockholders | $ 166,000 | $ (106,000) | |
Capital expenditures | 52,000 | 131,000 | |
Identifiable assets | 2,131,000 | 1,872,000 | |
Document Security Systems Technology Management [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 1,804,000 | 1,809,000 | |
Depreciation and amortization | 847,000 | 4,532,000 | |
Interest expense | 84,000 | 54,000 | |
Stock based compensation | 112,000 | 155,000 | |
Impairment of goodwill | 9,593,000 | 3,000,000 | |
Impairment of intangible assets and investments | $ 500,000 | 34,035,000 | |
Loss attributable to noncontrolling interest | $ (4,700,000) | ||
Income tax benefit (Expense) | |||
Net income (loss) to common stockholders | $ (12,944,000) | $ (38,843,000) | |
Capital expenditures | 9,000 | 1,244,000 | |
Identifiable assets | $ 3,299,000 | $ 14,872,000 | |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | |||
Depreciation and amortization | $ 8,000 | $ 4,000 | |
Interest expense | 114,000 | 100,000 | |
Stock based compensation | $ 754,000 | $ 1,010,000 | |
Impairment of goodwill | |||
Impairment of intangible assets and investments | |||
Loss attributable to noncontrolling interest | |||
Income tax benefit (Expense) | $ 22,000 | $ (989,000) | |
Net income (loss) to common stockholders | $ (2,601,000) | $ (3,050,000) | |
Capital expenditures | |||
Identifiable assets | $ 656,000 | $ 2,133,000 |