Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 09, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VASO Corp | |
Entity Central Index Key | 839,087 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 164,949,467 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,517 | $ 7,087 |
Accounts and other receivables, net of an allowance for doubtful accounts and commission adjustments of $4,370 at June 30, 2017 and $4,159 at December 31, 2016 | 8,816 | 12,741 |
Receivables due from related parties | 19 | 18 |
Inventories, net | 2,807 | 2,395 |
Deferred commission expense | 2,546 | 1,917 |
Prepaid expenses and other current assets | 962 | 925 |
Total current assets | 21,667 | 25,083 |
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $4,418 at June 30, 2017 and $3,835 at December 31, 2016 | 4,491 | 4,021 |
GOODWILL | 17,351 | 17,280 |
INTANGIBLES, net | 5,685 | 5,996 |
OTHER ASSETS, net | 4,155 | 5,001 |
Total Assets | 53,349 | 57,381 |
CURRENT LIABILITIES | ||
Accounts payable | 4,636 | 5,219 |
Accrued commissions | 1,340 | 2,139 |
Accrued expenses and other liabilities | 4,782 | 5,275 |
Sales tax payable | 714 | 718 |
Income taxes payable | 44 | 30 |
Deferred revenue - current portion | 11,062 | 7,628 |
Notes payable and capital lease obligations - current portion | 3,689 | 4,245 |
Notes payable - related parties - current portion | 166 | 0 |
Due to related party | 287 | 396 |
Total current liabilities | 26,720 | 25,650 |
LONG-TERM LIABILITIES | ||
Notes payable and capital lease obligations | 4,881 | 4,935 |
Notes payable - related parties | 498 | 648 |
Deferred revenue | 9,630 | 11,776 |
Deferred tax liability | 196 | 112 |
Other long-term liabilities | 1,225 | 1,349 |
Total long-term liabilities | 16,430 | 18,820 |
COMMITMENTS AND CONTINGENCIES (NOTE N) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at June 30, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $.001 par value; 250,000,000 shares authorized; 175,257,554 and 173,811,533 shares issued at June 30, 2017 and December 31, 2016, respectively; 164,949,467 and 163,503,446 shares outstanding at June 30, 2017 and December 31, 2016, respectively | 175 | 174 |
Additional paid-in capital | 63,170 | 62,856 |
Accumulated deficit | (50,908) | (47,790) |
Accumulated other comprehensive loss | (238) | (329) |
Treasury stock, at cost, 10,308,087 shares at June 30, 2017 and December 31, 2016 | (2,000) | (2,000) |
Total stockholders' equity | 10,199 | 12,911 |
Total liabilities and stockholders' equity | $ 53,349 | $ 57,381 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Accounts and other receivables, allowance for doubtful accounts and commission adjustments | $ 4,370 | $ 4,159 |
PROPERTY AND EQUIPMENT, accumulated depreciation | $ 4,418 | $ 3,835 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 175,257,554 | 173,811,533 |
Common stock, shares outstanding (in shares) | 164,949,467 | 163,503,446 |
Treasury stock, at cost (in shares) | 10,308,087 | 10,308,087 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | ||||
Managed IT systems and services | $ 10,811 | $ 10,124 | $ 20,611 | $ 19,851 |
Professional sales services | 6,005 | 6,860 | 11,876 | 13,706 |
Equipment sales and services | 1,037 | 1,230 | 1,740 | 2,199 |
Total revenues | 17,853 | 18,214 | 34,227 | 35,756 |
Cost of revenues | ||||
Cost of managed IT systems and services | 6,437 | 6,165 | 12,215 | 11,886 |
Cost of professional sales services | 1,298 | 1,582 | 2,560 | 2,993 |
Cost of equipment sales and services | 320 | 354 | 584 | 752 |
Total cost of revenues | 8,055 | 8,101 | 15,359 | 15,631 |
Gross profit | 9,798 | 10,113 | 18,868 | 20,125 |
Operating expenses | ||||
Selling, general and administrative | 10,247 | 9,744 | 20,937 | 19,450 |
Research and development | 260 | 105 | 481 | 252 |
Total operating expenses | 10,507 | 9,849 | 21,418 | 19,702 |
Operating (loss) income | (709) | 264 | (2,550) | 423 |
Other income (expense) | ||||
Interest and financing costs | (171) | (156) | (340) | (313) |
Interest and other income (expense), net | 4 | 54 | (8) | 50 |
Total other expense, net | (167) | (102) | (348) | (263) |
(Loss) income before income taxes | (876) | 162 | (2,898) | 160 |
Income tax (expense) benefit | (111) | 51 | (220) | (51) |
Net (loss) income | (987) | 213 | (3,118) | 109 |
Other comprehensive (loss) income | ||||
Foreign currency translation gain (loss) | 59 | (130) | 91 | (92) |
Comprehensive (loss) income | $ (928) | $ 83 | $ (3,027) | $ 17 |
(Loss) income per common share | ||||
- basic and diluted (in dollars per share) | $ (0.01) | $ 0 | $ (0.02) | $ 0 |
Weighted average common shares outstanding | ||||
- basic (in shares) | 161,600 | 158,513 | 161,060 | 157,952 |
- diluted (in shares) | 161,600 | 158,704 | 161,060 | 158,373 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2015 | $ 168 | $ (2,000) | $ 62,263 | $ (48,610) | $ (80) | $ 11,741 |
Balance (in shares) at Dec. 31, 2015 | 168,750 | (10,308) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | $ 4 | $ 0 | 424 | 0 | 0 | 428 |
Share-based compensation (in shares) | 3,949 | |||||
Shares issued to settle liability | $ 2 | 0 | 176 | 0 | 0 | 178 |
Shares issued to settle liability (in shares) | 1,113 | |||||
Shares not issued for employee tax liability | $ 0 | 0 | (7) | 0 | 0 | (7) |
Foreign currency translation gain (loss) | 0 | 0 | 0 | 0 | (249) | (249) |
Net income (loss) | 0 | 0 | 0 | 820 | 0 | 820 |
Balance at Dec. 31, 2016 | $ 174 | $ (2,000) | 62,856 | (47,790) | (329) | 12,911 |
Balance (in shares) at Dec. 31, 2016 | 173,812 | (10,308) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | $ 1 | $ 0 | 316 | 0 | 0 | 317 |
Share-based compensation (in shares) | 1,446 | |||||
Shares issued to settle liability | 0 | |||||
Shares not issued for employee tax liability | $ 0 | 0 | (2) | 0 | 0 | (2) |
Foreign currency translation gain (loss) | 0 | 0 | 0 | 0 | 91 | 91 |
Net income (loss) | 0 | 0 | 0 | (3,118) | 0 | (3,118) |
Balance at Jun. 30, 2017 | $ 175 | $ (2,000) | $ 63,170 | $ (50,908) | $ (238) | $ 10,199 |
Balance (in shares) at Jun. 30, 2017 | 175,258 | (10,308) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities | ||
Net (loss) income | $ (3,118) | $ 109 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities | ||
Depreciation and amortization | 1,170 | 1,043 |
Deferred income taxes | 192 | 41 |
Loss from interest in joint venture | 59 | 77 |
Provision for doubtful accounts and commission adjustments | 65 | 75 |
Amortization of debt issue costs | 16 | 16 |
Share-based compensation | 317 | 67 |
Provision for allowance for loss on loan receivable | 0 | 412 |
Changes in operating assets and liabilities: | ||
Accounts and other receivables | 3,865 | 2,596 |
Receivables due from related parties | (116) | 108 |
Inventories, net | (395) | 132 |
Deferred commission expense | (629) | 90 |
Prepaid expenses and other current assets | (36) | 0 |
Other assets, net | 621 | 377 |
Accounts payable | (586) | 194 |
Accrued commissions | (814) | (481) |
Accrued expenses and other liabilities | (492) | (198) |
Sales tax payable | (5) | 48 |
Income taxes payable | 13 | (202) |
Deferred revenue | 1,288 | (734) |
Deferred tax liability | 84 | 0 |
Other long-term liabilities | (124) | (22) |
Net cash provided by operating activities | 1,375 | 3,748 |
Cash flows from investing activities | ||
Purchases of equipment and software | (1,323) | (907) |
Redemption of short-term investments | 0 | 38 |
Investment in VSK | 0 | (422) |
Net cash used in investing activities | (1,323) | (1,291) |
Cash flows from financing activities | ||
Net (repayments) borrowings on revolving line of credit | (426) | 994 |
Debt issuance costs | 0 | (130) |
Payroll taxes paid by withholding shares | (2) | (6) |
Repayment of notes payable and capital lease obligations | (202) | (89) |
Proceeds from note payable - related party | 0 | 300 |
Payments on notes payable - related parties | 0 | (72) |
Net cash (used in) provided by financing activities | (630) | 997 |
Effect of exchange rate differences on cash and cash equivalents | 8 | 8 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (570) | 3,462 |
Cash and cash equivalents - beginning of period | 7,087 | 2,160 |
Cash and cash equivalents - end of period | 6,517 | 5,622 |
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION | ||
Interest paid | 319 | 436 |
Income taxes paid | 30 | 310 |
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Inventories transferred to property and equipment, net | 1 | 144 |
Liability settled through issuance of common stock | $ 0 | $ 178 |
ORGANIZATION AND PLAN OF OPERAT
ORGANIZATION AND PLAN OF OPERATIONS | 6 Months Ended |
Jun. 30, 2017 | |
ORGANIZATION AND PLAN OF OPERATIONS [Abstract] | |
ORGANIZATION AND PLAN OF OPERATIONS | NOTE A - ORGANIZATION AND PLAN OF OPERATIONS Vaso Corporation was incorporated in Delaware in July 1987. Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Vaso” or “management” refer to Vaso Corporation and its subsidiaries. The Company changed its name from Vasomedical, Inc. to Vaso Corporation in November 2016 at its annual shareholders meeting. The name was changed because the Company in the several years prior to the name change had substantially diversified its business and the original name, Vasomedical, Inc., no longer portrayed the nature of its overall business. In addition, the Company retained the name of VasoMedical, Inc. and now uses it exclusively for its proprietary medical device business, as the name originally represented. Overview Vaso Corporation principally operates in three distinct business segments in the healthcare and information technology (“IT”) industries. We manage and evaluate our operations, and report our financial results, through these three business segments. · IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focuses on healthcare IT and managed network technology services; · Professional sales service segment, operating through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, primarily focuses on the sale of healthcare capital equipment for General Electric Healthcare (“GEHC”) into the healthcare provider middle market; and · Equipment segment, operating through a wholly-owned subsidiary VasoMedical, Inc., primarily focuses on the design, manufacture, sale and service of proprietary medical devices. VasoTechnology VasoTechnology, Inc. all of the assets of NetWolves, LLC and its affiliates, including the membership interests in NetWolves Network Services, LLC (collectively, “NetWolves”) · Managed diagnostic imaging applications (national channel partner of GEHC IT). · Managed network infrastructure (routers, switches and other core equipment). · Managed network transport (FCC licensed carrier reselling 175+ facility partners). · Managed security services. VasoTechnology uses a combination of proprietary technology, methodology and third-party applications to deliver its value proposition. VasoHealthcare VasoHealthcare commenced operations in 2010, in conjunction with the Company’s execution of its exclusive sales representation agreement (“GEHC Agreement”) with GEHC, which is the healthcare business division of the General Electric Company, to further the sale of certain healthcare capital equipment in the healthcare provider middle market. Sales of GEHC equipment by the Company have grown significantly since then. VasoHealthcare’s current offerings consist of: · GEHC diagnostic imaging capital equipment. · GEHC service agreements. · GEHC and third party financial services. VasoMedical VasoMedical is the Company’s business division for its proprietary medical device operations, including the design, development, manufacturing, sales and service of various medical devices in the domestic and international markets and includes the Vasomedical Global and Vasomedical Solutions business units. These devices are primarily for cardiovascular monitoring, diagnostic and therapeutic systems. Its current offerings consist of: · Biox™ series Holter monitors and ambulatory blood pressure recorders. · ARCS ® · MobiCare™ multi-parameter wireless vital-sign monitoring system. · EECP ® This segment uses its extensive cardiovascular device knowledge coupled with its significant engineering resources to cost-effectively create and market its proprietary technology. It works with a global distribution network of channel partners, as well as a global joint venture arrangement, to sell its products. It also provides engineering and OEM services to other medical device companies. |
BASIS OF PRESENTATION AND CRITI
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES [Abstract] | |
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES | NOTE B - BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in connection with the audited consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 30, 2017. These unaudited condensed consolidated financial statements include the accounts of the companies over which we exercise control. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim results for the Company. The results of operations for any interim period are not necessarily indicative of results to be expected for any other interim period or the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities in the unaudited condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenues, expenses and cash flows during the periods presented. Actual amounts and results could differ from those estimates. The estimates and assumptions the Company makes are based on historical factors, current circumstances and the experience and judgment of the Company's management. The Company evaluates its estimates and assumptions on an ongoing basis. Significant Accounting Policies and Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) In 2016, the FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), on narrow-scope improvements and practical expedients (ASU 2016-12), and on the revenue recognition criteria and other technical corrections (ASU 2016-20). In February 2016, The FASB issued ASU 2016-02 (Topic 842), “Leases”. ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This new standard would be effective for the Company beginning January 1, 2019 with early adoption permitted. The Company does not expect the adoption of this standard to have a material effect on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The standard is effective for fiscal periods beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company does not expect the adoption of this standard to have a material effect on its Consolidated Financial Statements. Variable Interest Entities The Company follows the guidance of accounting for variable interest entities, which requires certain variable interest entities to be consolidated by the primary beneficiary of the entities. Biox is a Variable Interest Entity (“VIE”). Liabilities recognized as a result of consolidating this VIE do not represent additional claims on the Company’s general assets. The financial information of Biox, which is included in the accompanying condensed consolidated financial statements, is presented as follows: (in thousands) As of June 30, 2017 As of December 31, 2016 (unaudited) Cash and cash equivalents $ 82 $ 13 Total assets $ 1,310 $ 1,451 Total liabilities $ 1,503 $ 1,133 (in thousands) Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Total net revenue $ 420 $ 566 $ 731 $ 914 Net (loss) income $ (501 ) $ 162 $ (536 ) $ 160 Reclassifications Certain reclassifications have been made to prior period amounts to conform with the current period presentation. |
SEGMENT REPORTING AND CONCENTRA
SEGMENT REPORTING AND CONCENTRATIONS | 6 Months Ended |
Jun. 30, 2017 | |
SEGMENT REPORTING AND CONCENTRATIONS [Abstract] | |
SEGMENT REPORTING AND CONCENTRATIONS | NOTE C – SEGMENT REPORTING AND CONCENTRATIONS Vaso Corporation principally operates in three distinct business segments in the healthcare and information technology industries. We manage and evaluate our operations, and report our financial results, through these three reportable segments. · IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focuses on healthcare IT and managed network technology services; · Professional sales service segment, operating through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, primarily focuses on the sale of healthcare capital equipment for GEHC into the healthcare provider middle market; and · Equipment segment, operating through a wholly-owned subsidiary VasoMedical, Inc., primarily focuses on the design, manufacture, sale and service of proprietary medical devices. The chief operating decision maker is the Company’s Chief Executive Officer, who, in conjunction with upper management, evaluates segment performance based on operating income and adjusted EBITDA (net income (loss), plus interest expense (income), net; tax expense; depreciation and amortization; and non-cash stock-based compensation). Administrative functions such as finance, human resources, and information technology are centralized and related expenses allocated to each segment. Other costs not directly attributable to operating segments, such as audit, legal, director fees, investor relations, and others, as well as certain assets – primarily cash balances – are reported in the Corporate entity below. There are no intersegment revenues. Summary financial information for the segments is set forth below: (in thousands) Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Revenues from external customers IT $ 10,811 $ 10,124 $ 20,611 $ 19,851 Professional sales service 6,005 6,860 11,876 13,706 Equipment 1,037 1,230 1,740 2,199 Total revenues $ 17,853 $ 18,214 $ 34,227 $ 35,756 Gross Profit IT $ 4,374 $ 3,959 $ 8,396 $ 7,965 Professional sales service 4,707 5,278 9,316 10,713 Equipment 717 876 1,156 1,447 Total gross profit $ 9,798 $ 10,113 $ 18,868 $ 20,125 Operating (loss) income IT $ (712 ) $ (853 ) $ (1,630 ) $ (1,596 ) Professional sales service 403 1,422 318 3,410 Equipment (127 ) (13 ) (532 ) (711 ) Corporate (273 ) (292 ) (706 ) (680 ) Total operating (loss) income $ (709 ) $ 264 $ (2,550 ) $ 423 Capital expenditures IT $ 432 $ 481 $ 1,188 $ 741 Professional sales service 36 69 114 111 Equipment 16 28 21 55 Corporate - - - - Total cash capital expenditures $ 484 $ 578 $ 1,323 $ 907 (in thousands) June 30, 2017 December 31, 2016 (unaudited) Identifiable Assets IT $ 27,868 $ 27,724 Professional sales service 11,365 14,611 Equipment 7,629 7,446 Corporate 6,487 7,600 Total assets $ 53,349 $ 57,381 In the fourth quarter of 2016, the Company revised its method for allocating certain corporate expenses to its reportable segments resulting in lower amounts allocated to the IT segment and higher amounts allocated to the professional sales service and equipment segments. Consequently, due primarily to the change in allocation method, as well as to a $33,000 increase in total corporate costs allocated, the IT segment received $115,000 lower allocations, and the professional sales service segment and equipment segment received $139,000 and $8,000 higher allocations, respectively, for the three months ended June 30, 2017 as compared to the corresponding period of the prior year. Similarly, for the six months ended June 30, 2017, total corporate costs allocated increased $17,000, the IT segment received $254,000 lower allocations, and the professional sales service segment and equipment segment received $260,000 and $11,000 higher allocations, respectively, as compared to the corresponding period of the prior year. GE Healthcare accounted for 34% and 38% of revenue for the three months ended June 30, 2017 and 2016, respectively, and 35% and 38% of revenue for the six months ended June 30, 2017 and 2016, respectively. GE Healthcare also accounted for $5.3 million or 60%, and $7.9 million or 62%, of accounts and other receivables at June 30, 2017 and December 31, 2016, respectively. |
(LOSS) EARNINGS PER COMMON SHAR
(LOSS) EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2017 | |
(LOSS) EARNINGS PER COMMON SHARE [Abstract] | |
LOSS PER COMMON SHARE | NOTE D – (LOSS) EARNINGS PER COMMON SHARE Basic (loss) earnings per common share is computed as (loss) earnings applicable to common stockholders divided by the weighted-average number of common shares outstanding for the period. Diluted (loss) earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted to common stock. Diluted (loss) earnings per common share were computed based on the weighted average shares outstanding plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows: For the three months ended For the six months ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Basic weighted average shares outstanding 161,600 158,513 161,060 157,952 Dilutive effect of options and unvested restricted shares - 191 - 421 Diluted weighted average shares outstanding 161,600 158,704 161,060 158,373 The following table represents common stock equivalents that were excluded from the computation of diluted (loss) earnings per share for the three and six months ended June 30, 2017 and 2016, because the effect of their inclusion would be anti-dilutive. (in thousands) For the three months ended For the six months ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Stock options 600 - 600 - Restricted common stock grants 5,792 2,246 5,792 500 6,392 2,246 6,392 500 |
ACCOUNTS AND OTHER RECEIVABLES,
ACCOUNTS AND OTHER RECEIVABLES, NET | 6 Months Ended |
Jun. 30, 2017 | |
ACCOUNTS AND OTHER RECEIVABLES, NET [Abstract] | |
ACCOUNTS AND OTHER RECEIVABLES, NET | NOTE E – ACCOUNTS AND OTHER RECEIVABLES, NET The following table presents information regarding the Company’s accounts and other receivables as of June 30, 2017 and December 31, 2016: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Trade receivables $ 13,092 $ 16,470 Due from employees 94 430 Allowance for doubtful accounts and commission adjustments (4,370 ) (4,159 ) Accounts and other receivables, net $ 8,816 $ 12,741 Trade receivables include amounts due for shipped products and services rendered. Amounts currently due under the GEHC Agreement are subject to adjustment in subsequent periods should the underlying sales order amount, upon which the receivable is based, change. Allowance for doubtful accounts and commission adjustments include estimated losses resulting from the inability of our customers to make required payments, and adjustments arising from subsequent changes in sales order amounts that may reduce the amount the Company will ultimately receive under the GEHC Agreement. Due from employees is primarily commission advances made to sales personnel. |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Jun. 30, 2017 | |
INVENTORIES, NET [Abstract] | |
INVENTORIES, NET | NOTE F – INVENTORIES, NET Inventories, net of reserves, consist of the following: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Raw materials $ 549 $ 501 Work in process 907 727 Finished goods 1,351 1,167 $ 2,807 $ 2,395 At June 30, 2017 and December 31, 2016, the Company maintained reserves for slow moving inventories of $823,000 and $827,000, respectively. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 6 Months Ended |
Jun. 30, 2017 | |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | NOTE G – GOODWILL AND OTHER INTANGIBLES Goodwill aggregating $17,351,000 and $17,280,000 was recorded on the Company’s condensed consolidated balance sheets at June 30, 2017 and December 31, 2016, respectively, of which $14,375,000, allocated to the IT segment, resulted from the acquisition of NetWolves in May 2015. The remaining $2,976,000 of goodwill is allocated to the Company’s equipment segment. The components of the change in goodwill are as follows: (in thousands) Carrying Amount Balance at December 31, 2016 $ 17,280 Foreign currency translation 71 Balance at June 30, 2017 (unaudited) $ 17,351 The Company’s other intangible assets consist of capitalized customer-related intangibles, patent and technology costs, and software costs, as set forth in the following: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Customer-related Costs $ 5,831 $ 5,831 Accumulated amortization (2,134 ) (1,768 ) 3,697 4,063 Patents and Technology Costs 2,363 2,363 Accumulated amortization (1,183 ) (1,061 ) 1,180 1,302 Software Costs 1,673 1,394 Accumulated amortization (865 ) (763 ) 808 631 $ 5,685 $ 5,996 Patents and technology are amortized on a straight-line basis over their estimated useful lives of ten and eight years, respectively. The cost of significant customer-related intangibles is amortized in proportion to estimated total related revenue; cost of other customer-related intangible assets is amortized on a straight-line basis over the asset's estimated economic life of seven years Amortization expense amounted to $305,000 and $283,000 for the three months ended June 30, 2017 and 2016, respectively, and $591,000 and $563,000 for the six months ended June 30, 2017 and 2016, respectively. Amortization of intangibles for the next five years is: (in thousands) Years ending December 31, (unaudited) Remainder of 2017 $ 578 2018 1,006 2019 884 2020 801 2021 723 |
OTHER ASSETS, NET
OTHER ASSETS, NET | 6 Months Ended |
Jun. 30, 2017 | |
OTHER ASSETS, NET [Abstract] | |
OTHER ASSETS, NET | NOTE H – OTHER ASSETS, NET Other assets, net consist of the following at June 30, 2017 and December 31, 2016: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Deferred commission expense - noncurrent $ 2,356 $ 2,967 Trade receivables - noncurrent 933 1,064 Other, net of allowance for loss on loan receivable of $412 at June 30, 2017 and December 31, 2016 866 970 $ 4,155 $ 5,001 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE I – ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following at June 30, 2017 and December 31, 2016: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Accrued compensation $ 709 $ 1,133 Accrued expenses - other 1,072 1,140 Other liabilities 3,001 3,002 $ 4,782 $ 5,275 |
DEFERRED REVENUE
DEFERRED REVENUE | 6 Months Ended |
Jun. 30, 2017 | |
DEFERRED REVENUE [Abstract] | |
DEFERRED REVENUE | NOTE J - DEFERRED REVENUE The changes in the Company’s deferred revenues are as follows: (in thousands) For the three months ended For the six months ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Deferred revenue at beginning of period $ 19,785 $ 17,903 $ 19,404 $ 18,516 Additions: Deferred extended service contracts 248 115 435 328 Deferred in-service and training 8 5 8 8 Deferred service arrangements 20 10 20 20 Deferred commission revenues 3,367 2,785 6,251 5,083 Recognized as revenue: Deferred extended service contracts (164 ) (199 ) (341 ) (398 ) Deferred in-service and training (8 ) (8 ) (10 ) (13 ) Deferred service arrangements (11 ) (11 ) (23 ) (20 ) Deferred commission revenues (2,553 ) (2,817 ) (5,052 ) (5,741 ) Deferred revenue at end of period 20,692 17,783 20,692 17,783 Less: current portion 11,062 9,613 11,062 9,613 Long-term deferred revenue at end of period $ 9,630 $ 8,170 $ 9,630 $ 8,170 |
LINE OF CREDIT
LINE OF CREDIT | 6 Months Ended |
Jun. 30, 2017 | |
LINE OF CREDIT [Abstract] | |
LINE OF CREDIT | NOTE K – LINE OF CREDIT In August 2016, the Company executed a $2.0 million line of credit agreement with a lending institution. Advances under the line, which expires on August 23, 2017, bear interest at a rate of LIBOR plus 2.25% and are secured by substantially all of the assets of the Company. No advances under the line had been drawn as of June 30, 2017. The line of credit agreement includes certain financial covenants. At June 30, 2017, the Company was not in compliance with one of the covenants, and has received a waiver of the non-compliance from the lending institution for the period through the expiration date. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
EQUITY [Abstract] | |
EQUITY | NOTE L – EQUITY In March 2017, the Company granted 975,000 shares of restricted common stock to officers and key employees under the 2016 Stock Plan. The shares vested in April 2017. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
RELATED-PARTY TRANSACTIONS [Abstract] | |
RELATED-PARTY TRANSACTIONS | NOTE M – RELATED-PARTY TRANSACTIONS On May 29, 2015, the Company entered into a Note Purchase Agreement with MedTechnology Investments, LLC (“MedTech”) pursuant to which it issued MedTech a secured subordinated promissory note (“Note”) for $3,800,000 for the purchase of NetWolves. MedTech was formed to acquire the Note, and $1,950,000 of the aggregate funds used to acquire the Note was provided by six of our directors. In June 2015, a second Note for $750,000 was issued to MedTech for working capital purposes, of which $250,000 was provided by a director and a director’s relative. In July 2015, an additional $250,000 was borrowed under the Note Purchase Agreement. The Notes bear interest, payable quarterly, at an annual rate of 9%, mature on May 29, 2019, may be prepaid without penalty, and are subordinated to any current or future Senior Debt as defined in the Subordinated Security Agreement. The Subordinated Security Agreement secures payment and performance of the Company’s obligations under the Notes and as a result, MedTech was granted a subordinated security interest in the Company’s assets. David Lieberman, the Vice Chairman of the Company’s Board of Directors, is a practicing attorney in the State of New York and a senior partner at the law firm of Beckman, Lieberman & Barandes, LLP, which performs certain legal services for the Company. Fees of approximately $85,000 were billed by the firm for the three month periods ended June 30, 2017 and 2016, and fees of approximately $170,000 were billed for the six month periods ended June 30, 2017 and 2016, respectively, at which dates no amounts were outstanding. At June 30, 2017, the Company had contributed $522,000 to the VSK joint venture, and $269,000, net, was due to VSK. The Company’s pro-rata share in VSK’s loss from operations approximated $14,000 and $4,000 for the three months ended June 30, 2017 and 2016, respectively, and $59,000 and $77,000 for the six months ended June 30, 2017 and 2016, respectively, and is included in interest and other income (expense), net in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE N – COMMITMENTS AND CONTINGENCIES Litigation The Company is currently, and has been in the past, a party to various legal proceedings, primarily employee related matters, incident to its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is unlikely to have a material adverse effect on the business or consolidated financial condition of the Company. Sales representation agreement In June 2012, the Company concluded an amendment of the GEHC Agreement with GEHC, originally signed on May 19, 2010. The amendment, effective July 1, 2012, extended the initial term of three years commencing July 1, 2010 to five years through June 30, 2015. In December 2014, the Company concluded an additional amendment, effective January 1, 2015, extending the term through December 31, 2018, subject to earlier termination under certain circumstances and termination without cause on six months written notice. These circumstances include not materially achieving certain sales goals, not maintaining a minimum number of sales representatives, and various legal and GEHC policy requirements. Under the terms of the agreement, the Company is required to lease dedicated computer equipment from GEHC for connectivity to their network. |
BASIS OF PRESENTATION AND CRI21
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in connection with the audited consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on March 30, 2017. These unaudited condensed consolidated financial statements include the accounts of the companies over which we exercise control. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim results for the Company. The results of operations for any interim period are not necessarily indicative of results to be expected for any other interim period or the full year. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities in the unaudited condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenues, expenses and cash flows during the periods presented. Actual amounts and results could differ from those estimates. The estimates and assumptions the Company makes are based on historical factors, current circumstances and the experience and judgment of the Company's management. The Company evaluates its estimates and assumptions on an ongoing basis. |
Significant Accounting Policies and Recent Accounting Pronouncements | Significant Accounting Policies and Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) In 2016, the FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), on narrow-scope improvements and practical expedients (ASU 2016-12), and on the revenue recognition criteria and other technical corrections (ASU 2016-20). In February 2016, The FASB issued ASU 2016-02 (Topic 842), “Leases”. ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This new standard would be effective for the Company beginning January 1, 2019 with early adoption permitted. The Company does not expect the adoption of this standard to have a material effect on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The standard is effective for fiscal periods beginning after December 15, 2019. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company does not expect the adoption of this standard to have a material effect on its Consolidated Financial Statements. |
Variable Interest Entities | Variable Interest Entities The Company follows the guidance of accounting for variable interest entities, which requires certain variable interest entities to be consolidated by the primary beneficiary of the entities. Biox is a Variable Interest Entity (“VIE”). Liabilities recognized as a result of consolidating this VIE do not represent additional claims on the Company’s general assets. The financial information of Biox, which is included in the accompanying condensed consolidated financial statements, is presented as follows: (in thousands) As of June 30, 2017 As of December 31, 2016 (unaudited) Cash and cash equivalents $ 82 $ 13 Total assets $ 1,310 $ 1,451 Total liabilities $ 1,503 $ 1,133 (in thousands) Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Total net revenue $ 420 $ 566 $ 731 $ 914 Net (loss) income $ (501 ) $ 162 $ (536 ) $ 160 |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to conform with the current period presentation. |
BASIS OF PRESENTATION AND CRI22
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES [Abstract] | |
Schedule of Variable Interest Entities | The financial information of Biox, which is included in the accompanying condensed consolidated financial statements, is presented as follows: (in thousands) As of June 30, 2017 As of December 31, 2016 (unaudited) Cash and cash equivalents $ 82 $ 13 Total assets $ 1,310 $ 1,451 Total liabilities $ 1,503 $ 1,133 (in thousands) Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Total net revenue $ 420 $ 566 $ 731 $ 914 Net (loss) income $ (501 ) $ 162 $ (536 ) $ 160 |
SEGMENT REPORTING AND CONCENT23
SEGMENT REPORTING AND CONCENTRATIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
SEGMENT REPORTING AND CONCENTRATIONS [Abstract] | |
Summary Financial Information for Segments | Summary financial information for the segments is set forth below: (in thousands) Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 (unaudited) (unaudited) (unaudited) (unaudited) Revenues from external customers IT $ 10,811 $ 10,124 $ 20,611 $ 19,851 Professional sales service 6,005 6,860 11,876 13,706 Equipment 1,037 1,230 1,740 2,199 Total revenues $ 17,853 $ 18,214 $ 34,227 $ 35,756 Gross Profit IT $ 4,374 $ 3,959 $ 8,396 $ 7,965 Professional sales service 4,707 5,278 9,316 10,713 Equipment 717 876 1,156 1,447 Total gross profit $ 9,798 $ 10,113 $ 18,868 $ 20,125 Operating (loss) income IT $ (712 ) $ (853 ) $ (1,630 ) $ (1,596 ) Professional sales service 403 1,422 318 3,410 Equipment (127 ) (13 ) (532 ) (711 ) Corporate (273 ) (292 ) (706 ) (680 ) Total operating (loss) income $ (709 ) $ 264 $ (2,550 ) $ 423 Capital expenditures IT $ 432 $ 481 $ 1,188 $ 741 Professional sales service 36 69 114 111 Equipment 16 28 21 55 Corporate - - - - Total cash capital expenditures $ 484 $ 578 $ 1,323 $ 907 (in thousands) June 30, 2017 December 31, 2016 (unaudited) Identifiable Assets IT $ 27,868 $ 27,724 Professional sales service 11,365 14,611 Equipment 7,629 7,446 Corporate 6,487 7,600 Total assets $ 53,349 $ 57,381 |
(LOSS) EARNINGS PER COMMON SH24
(LOSS) EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
(LOSS) EARNINGS PER COMMON SHARE [Abstract] | |
Reconciliation of Basic to Diluted Shares Used in the Earnings Per Share Calculation | A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows: For the three months ended For the six months ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Basic weighted average shares outstanding 161,600 158,513 161,060 157,952 Dilutive effect of options and unvested restricted shares - 191 - 421 Diluted weighted average shares outstanding 161,600 158,704 161,060 158,373 |
Common Stock Equivalents Excluded from Computation of Diluted Earnings Per Share | The following table represents common stock equivalents that were excluded from the computation of diluted (loss) earnings per share for the three and six months ended June 30, 2017 and 2016, because the effect of their inclusion would be anti-dilutive. (in thousands) For the three months ended For the six months ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Stock options 600 - 600 - Restricted common stock grants 5,792 2,246 5,792 500 6,392 2,246 6,392 500 |
ACCOUNTS AND OTHER RECEIVABLE25
ACCOUNTS AND OTHER RECEIVABLES, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
ACCOUNTS AND OTHER RECEIVABLES, NET [Abstract] | |
Accounts and Other Receivables | The following table presents information regarding the Company’s accounts and other receivables as of June 30, 2017 and December 31, 2016: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Trade receivables $ 13,092 $ 16,470 Due from employees 94 430 Allowance for doubtful accounts and commission adjustments (4,370 ) (4,159 ) Accounts and other receivables, net $ 8,816 $ 12,741 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
INVENTORIES, NET [Abstract] | |
Inventories, Net of Reserves | Inventories, net of reserves, consist of the following: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Raw materials $ 549 $ 501 Work in process 907 727 Finished goods 1,351 1,167 $ 2,807 $ 2,395 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
GOODWILL AND OTHER INTANGIBLES [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The components of the change in goodwill are as follows: (in thousands) Carrying Amount Balance at December 31, 2016 $ 17,280 Foreign currency translation 71 Balance at June 30, 2017 (unaudited) $ 17,351 |
Schedule of Other Intangible Assets | The Company’s other intangible assets consist of capitalized customer-related intangibles, patent and technology costs, and software costs, as set forth in the following: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Customer-related Costs $ 5,831 $ 5,831 Accumulated amortization (2,134 ) (1,768 ) 3,697 4,063 Patents and Technology Costs 2,363 2,363 Accumulated amortization (1,183 ) (1,061 ) 1,180 1,302 Software Costs 1,673 1,394 Accumulated amortization (865 ) (763 ) 808 631 $ 5,685 $ 5,996 |
Amortization of Intangibles | Amortization of intangibles for the next five years is: (in thousands) Years ending December 31, (unaudited) Remainder of 2017 $ 578 2018 1,006 2019 884 2020 801 2021 723 |
OTHER ASSETS, NET (Tables)
OTHER ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
OTHER ASSETS, NET [Abstract] | |
Schedule of Other Assets, Net | Other assets, net consist of the following at June 30, 2017 and December 31, 2016: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Deferred commission expense - noncurrent $ 2,356 $ 2,967 Trade receivables - noncurrent 933 1,064 Other, net of allowance for loss on loan receivable of $412 at June 30, 2017 and December 31, 2016 866 970 $ 4,155 $ 5,001 |
ACCRUED EXPENSES AND OTHER LI29
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following at June 30, 2017 and December 31, 2016: (in thousands) June 30, 2017 December 31, 2016 (unaudited) Accrued compensation $ 709 $ 1,133 Accrued expenses - other 1,072 1,140 Other liabilities 3,001 3,002 $ 4,782 $ 5,275 |
DEFERRED REVENUE (Tables)
DEFERRED REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
DEFERRED REVENUE [Abstract] | |
Changes in Deferred Revenues | The changes in the Company’s deferred revenues are as follows: (in thousands) For the three months ended For the six months ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Deferred revenue at beginning of period $ 19,785 $ 17,903 $ 19,404 $ 18,516 Additions: Deferred extended service contracts 248 115 435 328 Deferred in-service and training 8 5 8 8 Deferred service arrangements 20 10 20 20 Deferred commission revenues 3,367 2,785 6,251 5,083 Recognized as revenue: Deferred extended service contracts (164 ) (199 ) (341 ) (398 ) Deferred in-service and training (8 ) (8 ) (10 ) (13 ) Deferred service arrangements (11 ) (11 ) (23 ) (20 ) Deferred commission revenues (2,553 ) (2,817 ) (5,052 ) (5,741 ) Deferred revenue at end of period 20,692 17,783 20,692 17,783 Less: current portion 11,062 9,613 11,062 9,613 Long-term deferred revenue at end of period $ 9,630 $ 8,170 $ 9,630 $ 8,170 |
ORGANIZATION AND PLAN OF OPER31
ORGANIZATION AND PLAN OF OPERATIONS (Details) | 6 Months Ended |
Jun. 30, 2017SegmentFacilityPartner | |
Segment Reporting Information [Line Items] | |
Number of business segments | Segment | 3 |
Minimum [Member] | |
Segment Reporting Information [Line Items] | |
Number of facility partners | FacilityPartner | 175 |
BASIS OF PRESENTATION AND CRI32
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Variable Interest Entity [Line Items] | ||||||
Cash and cash equivalents | $ 6,517 | $ 5,622 | $ 6,517 | $ 5,622 | $ 7,087 | $ 2,160 |
Total net revenue | 17,853 | 18,214 | 34,227 | 35,756 | ||
Net (loss) income | (987) | 213 | (3,118) | 109 | 820 | |
Biox [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Cash and cash equivalents | 82 | 82 | 13 | |||
Total assets | 1,310 | 1,310 | 1,451 | |||
Total liabilities | 1,503 | 1,503 | $ 1,133 | |||
Total net revenue | 420 | 566 | 731 | 914 | ||
Net (loss) income | $ (501) | $ 162 | $ (536) | $ 160 |
SEGMENT REPORTING AND CONCENT33
SEGMENT REPORTING AND CONCENTRATIONS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)Segment | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
SEGMENT REPORTING AND CONCENTRATIONS [Abstract] | |||||
Number of segments | Segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Revenues | $ 17,853 | $ 18,214 | $ 34,227 | $ 35,756 | |
Gross Profit | 9,798 | 10,113 | 18,868 | 20,125 | |
Operating (loss) income | (709) | 264 | (2,550) | 423 | |
Total cash capital expenditures | 484 | 578 | 1,323 | 907 | |
Identifiable Assets | 53,349 | 53,349 | $ 57,381 | ||
IT [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Lower allocation of amount to segment | 115 | 254 | |||
Professional Sales Service [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Higher allocation of amount to segment | 139 | 260 | |||
Equipment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Higher allocation of amount to segment | 8 | 11 | |||
Operating Segments [Member] | IT [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 10,811 | 10,124 | 20,611 | 19,851 | |
Gross Profit | 4,374 | 3,959 | 8,396 | 7,965 | |
Operating (loss) income | (712) | (853) | (1,630) | (1,596) | |
Total cash capital expenditures | 432 | 481 | 1,188 | 741 | |
Identifiable Assets | 27,868 | 27,868 | 27,724 | ||
Operating Segments [Member] | Professional Sales Service [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 6,005 | 6,860 | 11,876 | 13,706 | |
Gross Profit | 4,707 | 5,278 | 9,316 | 10,713 | |
Operating (loss) income | 403 | 1,422 | 318 | 3,410 | |
Total cash capital expenditures | 36 | 69 | 114 | 111 | |
Identifiable Assets | 11,365 | 11,365 | 14,611 | ||
Operating Segments [Member] | Equipment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,037 | 1,230 | 1,740 | 2,199 | |
Gross Profit | 717 | 876 | 1,156 | 1,447 | |
Operating (loss) income | (127) | (13) | (532) | (711) | |
Total cash capital expenditures | 16 | 28 | 21 | 55 | |
Identifiable Assets | 7,629 | 7,629 | 7,446 | ||
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating (loss) income | (273) | (292) | (706) | (680) | |
Total cash capital expenditures | 0 | $ 0 | 0 | $ 0 | |
Identifiable Assets | 6,487 | 6,487 | $ 7,600 | ||
Increase in allocated expenses | $ 33 | $ 17 |
SEGMENT REPORTING AND CONCENT34
SEGMENT REPORTING AND CONCENTRATIONS, Concentration Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | |||||
Accounts and other receivables | $ 8,816 | $ 8,816 | $ 12,741 | ||
Sales Revenue [Member] | Credit Concentration Risk [Member] | GE Healthcare [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 34.00% | 38.00% | 35.00% | 38.00% | |
Accounts and Other Receivables [Member] | Credit Concentration Risk [Member] | GE Healthcare [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts and other receivables | $ 5,300 | $ 5,300 | $ 7,900 | ||
Concentration risk percentage | 60.00% | 62.00% |
(LOSS) EARNINGS PER COMMON SH35
(LOSS) EARNINGS PER COMMON SHARE (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reconcilliation of Basic to Diluted Shares Used in the Earnings Per Share Calculation [Abstract] | ||||
Basic weighted average shares outstanding (in shares) | 161,600 | 158,513 | 161,060 | 157,952 |
Dilutive effect of options and unvested restricted shares (in shares) | 0 | 191 | 0 | 421 |
Diluted weighted average shares outstanding (in shares) | 161,600 | 158,704 | 161,060 | 158,373 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock equivalents excluded from computation of diluted earnings per share (in shares) | 6,392 | 2,246 | 6,392 | 500 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock equivalents excluded from computation of diluted earnings per share (in shares) | 600 | 0 | 600 | 0 |
Restricted Common Stock Grants [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock equivalents excluded from computation of diluted earnings per share (in shares) | 5,792 | 2,246 | 5,792 | 500 |
ACCOUNTS AND OTHER RECEIVABLE36
ACCOUNTS AND OTHER RECEIVABLES, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ACCOUNTS AND OTHER RECEIVABLES, NET [Abstract] | ||
Trade receivables | $ 13,092 | $ 16,470 |
Due from employees | 94 | 430 |
Allowance for doubtful accounts and commission adjustments | (4,370) | (4,159) |
Accounts and other receivables, net | $ 8,816 | $ 12,741 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
INVENTORIES, NET [Abstract] | ||
Raw materials | $ 549 | $ 501 |
Work in process | 907 | 727 |
Finished goods | 1,351 | 1,167 |
Inventories, net | 2,807 | 2,395 |
Reserve for slow moving inventory | $ 823 | $ 827 |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 | |
Change in carrying amount of goodwill [Roll Forward] | ||||||
Goodwill, Beginning Balance | $ 17,280 | |||||
Foreign currency translation | 71 | |||||
Goodwill, Ending Balance | $ 17,351 | 17,351 | ||||
Other intangible assets, net [Abstract] | ||||||
Intangible assets, net | $ 5,685 | $ 5,996 | ||||
Goodwill | 17,351 | 17,280 | 17,351 | 17,280 | ||
Amortization expense | 305 | $ 283 | 591 | $ 563 | ||
Amortization Expense, Fiscal Year Maturity [Abstract] | ||||||
Remainder of 2017 | 578 | |||||
2,018 | 1,006 | |||||
2,019 | 884 | |||||
2,020 | 801 | |||||
2,021 | 723 | |||||
IT [Member] | ||||||
Change in carrying amount of goodwill [Roll Forward] | ||||||
Goodwill, Ending Balance | 14,375 | 14,375 | ||||
Other intangible assets, net [Abstract] | ||||||
Goodwill | 14,375 | 14,375 | 14,375 | |||
Equipment [Member] | ||||||
Change in carrying amount of goodwill [Roll Forward] | ||||||
Goodwill, Ending Balance | 2,976 | 2,976 | ||||
Other intangible assets, net [Abstract] | ||||||
Goodwill | $ 2,976 | $ 2,976 | 2,976 | |||
Customer-Related [Member] | ||||||
Other intangible assets, net [Abstract] | ||||||
Costs | 5,831 | 5,831 | ||||
Accumulated amortization | (2,134) | (1,768) | ||||
Intangible assets, net | 3,697 | 4,063 | ||||
Useful life of patents | 7 years | |||||
Patents and Technology [Member] | ||||||
Other intangible assets, net [Abstract] | ||||||
Costs | 2,363 | 2,363 | ||||
Accumulated amortization | (1,183) | (1,061) | ||||
Intangible assets, net | 1,180 | 1,302 | ||||
Patents and Technology [Member] | Minimum [Member] | ||||||
Other intangible assets, net [Abstract] | ||||||
Useful life of patents | 8 years | |||||
Patents and Technology [Member] | Maximum [Member] | ||||||
Other intangible assets, net [Abstract] | ||||||
Useful life of patents | 10 years | |||||
Software [Member] | ||||||
Other intangible assets, net [Abstract] | ||||||
Costs | 1,673 | 1,394 | ||||
Accumulated amortization | (865) | (763) | ||||
Intangible assets, net | $ 808 | $ 631 | ||||
Useful life of patents | 5 years |
OTHER ASSETS, NET (Details)
OTHER ASSETS, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
OTHER ASSETS, NET [Abstract] | ||
Deferred commission expense - noncurrent | $ 2,356 | $ 2,967 |
Trade receivables - noncurrent | 933 | 1,064 |
Other, net of allowance for loss on loan receivable of $412 at June 30, 2017 and December 31, 2016 | 866 | 970 |
Total | 4,155 | 5,001 |
Allowance for loss on loan receivable | $ 412 | $ 412 |
ACCRUED EXPENSES AND OTHER LI40
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ACCRUED EXPENSES AND OTHER LIABILITIES [Abstract] | ||
Accrued compensation | $ 709 | $ 1,133 |
Accrued expenses - other | 1,072 | 1,140 |
Other liabilities | 3,001 | 3,002 |
Accrued expenses and other liabilities | $ 4,782 | $ 5,275 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Changes in deferred revenue [Roll Forward] | |||||
Deferred revenue at beginning of period | $ 19,785 | $ 17,903 | $ 19,404 | $ 18,516 | |
Deferred revenue at end of period | 20,692 | 17,783 | 20,692 | 17,783 | |
Less: current portion | 11,062 | 9,613 | 11,062 | 9,613 | $ 7,628 |
Long-term deferred revenue at end of period | 9,630 | 8,170 | 9,630 | 8,170 | $ 11,776 |
Deferred Extended Service Contracts [Member] | |||||
Changes in deferred revenue [Roll Forward] | |||||
Additions | 248 | 115 | 435 | 328 | |
Recognized as revenue | (164) | (199) | (341) | (398) | |
Deferred In-Service and Training [Member] | |||||
Changes in deferred revenue [Roll Forward] | |||||
Additions | 8 | 5 | 8 | 8 | |
Recognized as revenue | (8) | (8) | (10) | (13) | |
Deferred Service Arrangements [Member] | |||||
Changes in deferred revenue [Roll Forward] | |||||
Additions | 20 | 10 | 20 | 20 | |
Recognized as revenue | (11) | (11) | (23) | (20) | |
Deferred Commission Revenues [Member] | |||||
Changes in deferred revenue [Roll Forward] | |||||
Additions | 3,367 | 2,785 | 6,251 | 5,083 | |
Recognized as revenue | $ (2,553) | $ (2,817) | $ (5,052) | $ (5,741) |
LINE OF CREDIT (Details)
LINE OF CREDIT (Details) - Line of Credit [Member] $ in Millions | 6 Months Ended | |
Jun. 30, 2017USD ($)Covenant | Aug. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity amount | $ 2 | |
Amount of line of credit drawn | $ 0 | |
Number of covenants not in compliance | Covenant | 0 | |
LIBOR [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate percentage | 2.25% |
EQUITY (Details)
EQUITY (Details) | Mar. 31, 2017shares |
Plan 2016 [Member] | Officers [Member] | Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted (in shares) | 975,000 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) $ in Thousands | Jun. 30, 2015USD ($) | May 29, 2015USD ($)Director | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jul. 31, 2015USD ($) |
Related Party Transaction [Line Items] | |||||||
Loss from joint venture | $ (59) | $ (77) | |||||
Note [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Notes payable and capital lease obligations | $ 3,800 | $ 250 | |||||
Debt instrument, interest rate | 9.00% | 9.00% | |||||
Note maturity | May 29, 2019 | ||||||
Notes Payable - MedTech [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Notes payable and capital lease obligations | $ 750 | ||||||
VSK Medical Limited [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Contribution to related parties | $ 522 | $ 522 | |||||
Receivables due from related parties | 269 | 269 | |||||
Loss from joint venture | (14) | $ (59) | (4) | (77) | |||
Director - David Lieberman [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Fees for legal services | 85 | 85 | 170 | 170 | |||
Outstanding legal fees amount | $ 0 | $ 0 | $ 0 | $ 0 | |||
Six Directors [Member] | Note [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregate amount used to acquire note | $ 1,950 | ||||||
Number of directors | Director | 6 | ||||||
Director and Director's Relative [Member] | Notes Payable - MedTech [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregate amount used to acquire note | $ 250 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Sales Representation Agreement [Abstract] | |
Initial term of sales representation agreement | 3 years |
Amended term of sales representation agreement | 5 years |