Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Sep. 22, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | ATRM Holdings, Inc. | ||
Entity Central Index Key | 908,598 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 2,186,431 | ||
Entity Common Stock, Shares Outstanding | 2,396,219 | ||
Trading Symbol | ATRM | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 28,156,111 | $ 25,631,527 |
Costs and expenses: | ||
Cost of sales | 26,588,700 | 25,982,130 |
Selling, general and administrative expenses | 4,648,483 | 5,082,415 |
Goodwill impairment charge | 1,732,804 | |
Total costs and expenses | 32,969,987 | 31,064,545 |
Operating Loss | (4,813,876) | (5,433,018) |
Other income (expense): | ||
Interest expense, net | (1,675,676) | (1,396,542) |
Change in fair value of contingent earn-outs | (26,878) | (190,681) |
Settlement gain | 3,686,628 | |
Loss before income taxes | (6,516,430) | (3,333,613) |
Income tax expense | (7,900) | (6,000) |
Net loss | $ (6,524,330) | $ (3,339,613) |
Net loss per share - basic and diluted | $ (2.88) | $ (2.26) |
Weighted average common shares outstanding - basic and diluted | 2,264,798 | 1,479,825 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,246,696 | $ 624,070 |
Restricted cash | 150,000 | |
Accounts receivable, net of allowance for doubtful accounts of $96,000 and $370,000 at December 31, 2016 and 2015, respectively | 2,603,549 | 2,562,999 |
Costs and estimated profit in excess of billings | 1,045,045 | 471,539 |
Inventories | 1,404,445 | 1,241,074 |
Fair value of contingent earn-out receivable, current | 359,000 | 329,000 |
Other current assets | 237,896 | 173,028 |
Total current assets | 7,046,631 | 5,401,710 |
Property, plant and equipment: | ||
Land | 857,700 | 857,700 |
Buildings and improvements | 2,795,151 | 2,787,089 |
Equipment | 1,507,809 | 1,342,001 |
Less: accumulated depreciation and amortization | (767,545) | (534,500) |
Property, plant and equipment, net | 4,393,115 | 4,452,290 |
Fair value of contingent earn-out receivable, noncurrent | 202,000 | 548,000 |
Goodwill | 3,019,637 | 1,732,804 |
Intangible assets, net | 2,116,651 | 1,355,001 |
Total assets | 16,778,034 | 13,489,805 |
Current liabilities: | ||
Notes payable | 3,419,924 | |
Current portion of long-term debt | 1,675,149 | 1,104,614 |
Trade accounts payable | 3,776,330 | 3,490,842 |
Billings in excess of costs and estimated profit | 652,150 | 764,517 |
Accrued compensation | 406,620 | 104,023 |
Fair value of contingent earn-out payable | 966,721 | |
Other accrued liabilities | 2,264,303 | 1,985,169 |
Total current liabilities | 13,161,197 | 7,449,165 |
Long-term debt, less current portion | 14,068,511 | 10,251,822 |
Deferred income taxes | 18,900 | 13,000 |
Commitments and contingencies (see Notes 16 and 17) | ||
Shareholders' deficit: | ||
Common stock, $.001 par value; 3,000,000 shares authorized; 2,366,219 and 2,206,219 shares issued and outstanding at December 31, 2016 and 2015, respectively | 2,366 | 2,206 |
Additional paid-in capital | 69,702,342 | 69,424,564 |
Accumulated deficit | (80,175,282) | (73,650,952) |
Total shareholders' deficit | (10,470,574) | (4,224,182) |
Total liabilities and shareholders' deficit | $ 16,778,034 | $ 13,489,805 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 96,000 | $ 370,000 |
Common stock, par value | $ .001 | $ .001 |
Common stock, shares authorized | 3,000,000 | 3,000,000 |
Common stock, shares issued | 2,366,219 | 2,206,219 |
Common stock, shares outstanding | 2,366,219 | 2,206,219 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance beginning at Dec. 31, 2014 | $ 1,186 | $ 66,335,511 | $ (70,311,339) | $ (3,974,642) |
Balance beginning, shares at Dec. 31, 2014 | 1,186,473 | |||
Sale of common stock | $ 1,020 | 2,935,506 | 2,936,526 | |
Sale of common stock, shares | 1,019,746 | |||
Share-based compensation expense | 153,547 | 153,547 | ||
Net loss | (3,339,613) | (3,339,613) | ||
Balance ending at Dec. 31, 2015 | $ 2,206 | 69,424,564 | (73,650,952) | (4,224,182) |
Balance ending, shares at Dec. 31, 2015 | 2,206,219 | |||
Share-based compensation expense | $ 60 | 128,878 | 128,938 | |
Share-based compensation expense, shares | 60,000 | |||
Issuance of stock - EBGL acquisition | $ 100 | 148,900 | 149,000 | |
Issuance of stock - EBGL acquisition, shares | 100,000 | |||
Net loss | (6,524,330) | (6,524,330) | ||
Balance ending at Dec. 31, 2016 | $ 2,366 | $ 69,702,342 | $ (80,175,282) | $ (10,470,574) |
Balance ending, shares at Dec. 31, 2016 | 2,366,219 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (6,524,330) | $ (3,339,613) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 633,026 | 649,728 |
Amortization expense, deferred financing costs | 126,290 | |
Share-based compensation expense | 128,938 | 153,547 |
Provision for (recovery of) bad debts | (66,844) | 481,921 |
Write-down of inventories | 86,016 | |
Settlement gain | (3,686,628) | |
Facility expense accrual credit | (53,834) | |
Loss on sale of equipment | 24,832 | 9,168 |
Deferred income taxes | 5,900 | 13,000 |
Change in fair value of contingent earn-out receivable | 3,631 | 190,681 |
Goodwill impairment charge | 1,732,804 | |
Change in fair value of contingent earn-out payable | 23,247 | |
Imputed interest on seller deferred payment obligations | 22,865 | |
Paid-in-kind (PIK) interest | 534,000 | |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | 26,294 | (241,404) |
Costs and estimated profit in excess of billings | (480,152) | 1,319,237 |
Inventories | 734,272 | 609,226 |
Other current assets | (61,891) | (55,994) |
Trade accounts payable | 230,488 | (1,637,513) |
Billings in excess of costs and estimated profit | (143,203) | 476,935 |
Accrued compensation | 262,349 | 20,041 |
Other accrued liabilities | (40,805) | 7,567 |
Net cash used in operating activities | (2,828,289) | (4,997,919) |
Cash flows from investing activities: | ||
Proceeds from earn-out consideration | 312,369 | 1,232,319 |
Purchase of property and equipment | (72,453) | (50,943) |
Proceeds from sale of equipment | 109,000 | 13,187 |
Purchase of business, net of cash acquired | (2,959,752) | |
Net cash (used in) provided by investing activities | (2,610,836) | 1,194,563 |
Cash flows from financing activities: | ||
Net proceeds from sale of common stock | 2,936,526 | |
Proceeds from issuance of long-term debt | 5,000,000 | 1,059,025 |
Proceeds from revolving lines of credit | 27,844,341 | |
Principal repayments on revolving lines of credit | (24,090,129) | |
Principal payments on long-term debt | (2,110,453) | (1,563,974) |
Payment of deferred financing costs | (432,008) | |
Net cash provided by financing activities | 6,211,751 | 2,431,577 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 772,626 | (1,371,779) |
Cash, cash equivalents and restricted cash at beginning of year | 624,070 | 1,995,849 |
Cash, cash equivalents and restricted cash at end of year | 1,246,696 | 624,070 |
Supplemental cash flow information: | ||
Cash paid for interest expense | 857,061 | 1,104,642 |
Deferred financing costs recorded in accounts payable | 55,000 | |
Acquisition of equipment - financed by note payable | 26,430 | |
Settlement agreement: - reduction of note payable to seller | 3,225,783 | |
Settlement agreement: - forgiveness of accrued interest | 460,845 | |
Promissory note payable to EBGL Sellers issued as partial consideration for purchase of business | 940,812 | |
Contingent earn-out payable to EBGL Sellers as partial consideration for purchase of business | 943,474 | |
Accrued purchase price adjustment paid to EBGL Sellers in January 2017 | 218,447 | |
Issuance of restricted stock to EBGL Sellers as partial consideration for purchase of business | 149,000 | |
Costs and estimated profit in excess of billings | 93,354 | |
Inventories | 897,643 | |
Other current assets | 2,977 | |
Property, plant and equipment | 289,450 | |
Goodwill | 3,019,637 | |
Intangible assets | 1,081,000 | |
Billings in excess of costs and estimated profit | (30,836) | |
Accrued compensation | (40,248) | |
Accrued liabilities | (101,492) | |
Purchase price | $ 5,211,485 |
Business Description
Business Description | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Business Description | NOTE 1: BUSINESS DESCRIPTION Unless the context otherwise requires, references in the Notes to Consolidated Financial Statements to (i) “ATRM,” the “Company,” “we,” “us” and “our,” refer to ATRM Holdings, Inc. and its consolidated subsidiaries, (ii) “KBS” refers to our modular housing manufacturing business operated by our wholly-owned subsidiary KBS Builders, Inc. and (iii) “EBGL” refers to our Minnesota-based operations including Glenbrook Building Supply, Inc. (“Glenbrook”), a retail supplier of lumber and other building supplies, and EdgeBuilder, Inc. (“EdgeBuilder”), a manufacturer of structural wall panels, permanent wood foundation systems and other engineered wood products. Through our wholly-owned subsidiaries, KBS, Glenbrook and EdgeBuilder, we manufacture modular buildings for commercial and residential applications in production facilities located in South Paris and Waterford, Maine, operate a retail lumber yard located in Oakdale, Minnesota, and manufacture structural wall panels, permanent wood foundation systems and other engineered wood products for use in construction of commercial and residential buildings in a production facility located in Prescott, Wisconsin. Our previous wholly-owned subsidiary, Maine Modular Haulers, Inc. (“MMH”) was used to provide transportation, logistics and other related services for the transportation of KBS’s completed modular buildings. In 2016, the Company decided that the shipping of KBS’s modular buildings could be done more efficiently and more economically on an outsourced basis. Under the outsourced model, KBS now directly coordinates the transportation and logistics of the delivery of its modular buildings and contracts with third-party hauling companies to transport the modules. As part of the decision to move to an outsourced transportation model, we disposed of MMH’s trucks to an unrelated third party and the frames (trailers) were transferred (at book value) to KBS from MMH. MMH was officially dissolved on March 21, 2017. The Company’s corporate headquarters is located at the Glenbrook location in Oakdale, Minnesota, a suburb of St. Paul. |
Financial Position, Liquidity a
Financial Position, Liquidity and Capital Resources | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Position, Liquidity and Capital Resources | NOTE 2: FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES We acknowledge that the Company continues to face a challenging operating environment and while we continue to focus on improving our overall profitability, we reported an operating loss for 2016. We have incurred significant operating losses in recent years and, as of December 31, 2016, we had an accumulated deficit of approximately $80 million. Working capital has remained negative over the past several years. Cash used in operating activities, while improved over 2015, remains negative, which has required us to generate funds from investing and financing activities. At December 31, 2016, we had outstanding debt of approximately $19.2 million. We have issued various promissory notes to finance our acquisitions of KBS and EBGL and to provide for our general working capital needs. As of December 31, 2016, we had outstanding debt totaling approximately $19.2 million. Our debt included (i) $2.4 million principal outstanding on KBS’s $4.0 million revolving credit facility under a loan and security agreement with Gerber Finance Inc. (“Gerber Finance”) (the “KBS Loan Agreement”), $1.2 million principal outstanding on EBGL’s $3.0 million revolving credit facility under a loan and security agreement with Gerber Finance (the “EBGL Loan Agreement”) and $3.0 million principal outstanding under a loan and security agreement with Gerber Finance used to finance the acquisition of EBGL (the “Acquisition Loan Agreement”), (ii) $4.3 million principal amount of unsecured promissory notes issued to Lone Star Value Investors, LP (“LSVI”) and $6.8 million principal amount of unsecured promissory notes issued to Lone Star Value Co-Invest I, LP (“LSV Co-Invest I”), with interest payable semiannually and any unpaid principal and interest is due on April 1, 2019, and (iii) $0.7 million principal amount outstanding under an unsecured promissory note issued to the primary sellers of KBS, payable in monthly installments of $100,000, inclusive of interest, through July 1, 2017. We also have obligations to make $1.0 million in deferred cash payments to the sellers of EBGL, payable in quarterly installments of $250,000, inclusive of interest, through October 1, 2017. Jeffrey E. Eberwein, our Chairman of the Board, is the manager of Lone Star Value Investors GP, LLC (“LSVGP”), the general partner of LSVI and LSV Co-Invest I, and sole member of Lone Star Value Management, LLC (“LSVM”), the investment manager of LSVI. On February 23, 2016, we entered into a loan and security agreement (the “KBS Loan Agreement”) with Gerber Finance providing KBS with a credit facility with borrowing availability of up to $4.0 million, based on a formula tied to eligible accounts receivable, inventory, equipment and real estate of the borrowers. On that date, we made an initial draw of approximately $2.6 million. The initial term of the KBS Loan Agreement expires on February 22, 2018, but extends automatically for additional one-year periods unless a party provides prior written notice of termination. The KBS Loan Agreement contains certain affirmative and negative covenants, including financial covenants requiring us to maintain a minimum leverage ratio at fiscal year end and not to incur a net annual post-tax loss in any fiscal year during the term of the KBS Loan Agreement. The borrowers’ obligations under the KBS Loan Agreement are secured by all of their property and assets and are guaranteed by the Company. Our obligations under our unsecured promissory notes are subordinate to the borrowers’ obligations under the KBS Loan Agreement, pursuant to the terms of subordination agreements we entered into with Gerber Finance and the holders of our unsecured promissory notes as a condition to the extension of credit to the borrowers under the KBS Loan Agreement. At December 31, 2016, the outstanding balance on the KBS Loan Agreement was approximately $2.4 million. On August 12, 2016, the Company, LSVI and LSV Co-Invest I amended the LSVI and LSV Co-Invest I unsecured promissory notes allowing the Company, at its sole option, to elect to make any interest payment in paid-in-kind interest (“PIK Interest”) at an annual rate of 12% (versus the 10% interest rate applied to cash payments) for that period. The Company elected the PIK Interest option for the six-month period ended June 30, 2016. Accordingly, interest for the six months ended June 30, 2016, totaling $534,000 (calculated at the PIK Interest rate of 12%), was added to the balance of the LSVI and LSV Co-Invest I unsecured promissory notes. On October 4, 2016, concurrently with the closing of the EBGL acquisition, we entered into the EBGL Loan Agreement with Gerber Finance providing EBGL with a working capital line of credit of up to $3.0 million. Availability under the EBGL Loan Agreement was based on a formula tied to the borrowers’ eligible accounts receivable, inventory and equipment, and borrowings bore interest at the prime rate plus 2.75%, with interest payable monthly and the outstanding principal balance payable upon expiration of the term of the EBGL Loan Agreement. Initially, availability under the EBGL Loan Agreement was limited to $1.0 million, which amount could be increased to up to $3.0 million in increments of $500,000 upon the request of the borrowers and in the discretion of Gerber Finance. The initial term of the EBGL Loan Agreement was set to expire on October 3, 2018, but extending automatically for additional one-year periods unless a party provided prior written notice of termination. The borrowers’ obligations under the EBGL Loan Agreement were secured by all of their property and assets and were guaranteed by the Company and its other subsidiaries. At December 31, 2016, the outstanding balance on the EBGL Loan Agreement was approximately $1.0 million. Additionally, on October 4, 2016, concurrently with the closing of the EBGL acquisition, we entered into the Acquisition Loan Agreement with Gerber Finance providing EBGL with $3.0 million in financing for the acquisition. Borrowings under the Acquisition Loan Agreement bear interest at the prime rate plus 3.00%, with interest payable monthly and the outstanding principal balance payable upon expiration of the term of the Acquisition Loan Agreement. The initial term of the Acquisition Loan Agreement expires on December 31, 2018, but extends automatically for additional one-year periods unless a party provides prior written notice of termination. The borrowers’ obligations under the Acquisition Loan Agreement are secured by all of their property and assets and are guaranteed by the Company and its other subsidiaries. At December 31, 2016, the outstanding balance on the Acquisition Loan Agreement was $3.0 million. In addition, on October 4, 2016, we entered into a securities purchase agreement with LSV Co-Invest I, pursuant to which we issued to LSV Co-Invest I an unsecured promissory note made by the Company in the principal amount of $2.0 million in exchange for $2.0 million in cash, to provide additional working capital for ATRM. During 2015, 2016, and into 2017, we implemented several strategic initiatives, effected certain actions and continue to consider additional actions to improve the Company’s overall profitability and increase cash flows, including: ● KBS’s strategic shift away from large commercial projects with significant site work to focus on its core competency of manufacturing modular buildings; ● KBS’s efforts to improve operating efficiencies, including reconfiguring the South Paris factory to increase production, investments in automated equipment to reduce labor costs, implementing lean manufacturing techniques, and elimination of duplicate overhead costs through the shut-down of the Waterford factory; ● Reduction in KBS workforce including manufacturing, sales, engineering and front-office staff; ● KBS is exploring opportunities to monetize the Waterford facility, including a potential sale or lease to a third party; ● In July 2017, KBS made the final payment due to the primary seller of KBS, freeing up $100,000 per month of cash flows to be used for operations; ● In October 2016, the Company acquired the EBGL businesses, which we believe will generate net income and positive cash flows for the Company; ● As disclosed in Note 15, we amended certain of our debt agreements to allow the Company to pay interest in-kind on approximately $11 million of our debt, reducing strain on current cash flows; ● In 2017, we instituted a lumber hedging program for EBGL to assist in preserving existing margins against the potential large fluctuations in lumber raw material prices; ● As disclosed in Note 25, we refinanced one line of credit and certain debt agreements to obtain more favorable lending and payment terms and reduced total fees paid under these agreements; and ● We continue to look for opportunities to refinance our debt on more favorable terms. Our historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern. We believe that the actions discussed, have already occurred or are probable of occurring, and mitigate the substantial doubt raised by our historical operating results, as well as satisfy our estimated liquidity needs for the 12 months from the issuance of the consolidated financial statements. However, we cannot predict, with certainty, the outcome of our actions to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as currently planned. If we continue to experience operating losses, and we are not able to generate additional liquidity through the mechanisms described above or through some combination of other actions, while not expected, we may not be able to continue operations. Additionally, a failure to generate additional liquidity could negatively impact our access to inventory or services that are important to the operation of our business. In addition, these losses could further trigger violations of covenants under our debt agreements, resulting in accelerated payment of these loans. There can be no assurance that our existing cash reserves, together with funds generated by our operations and any future financings, will be sufficient to satisfy our debt payment obligations, to avoid liquidity issues and/or fund operations beyond this fiscal year. Our inability to generate funds from our operations and/or obtain financing sufficient to satisfy our payment obligations may result in our obligations being accelerated by our lenders, which would likely have a material adverse effect on our business, financial condition and results of operations. Given these uncertainties, there can be no assurance that our existing cash reserves will be sufficient to avoid liquidity issues and/or fund operations beyond this fiscal year. Although not a binding commitment, LSVM has advised us of its present intention to continue to financially support the Company in the event that additional financing is required. In 2014, 2015, and 2016, LSVM has provided financial support in the form financing through various debt agreements disclosed in Note 15. Based on the previous commitments, management believes that additional financing may be provided by LSVM or its affiliates, if necessary, in the future. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation Policy: Use of Estimates: Cash and Cash Equivalents and Restricted Cash: Accounts Receivable and Allowance for Doubtful Accounts: Inventories: Customer Rebate Program: Property, Plant and Equipment: Impairment of Goodwill and Indefinite-Lived Intangible Assets: Impairment of Long-Lived Assets with Finite Lives: Revenue Recognition: EdgeBuilder manufactures structural wall panels and permanent wood foundations pursuant to commercial construction contracts. These wall panels and wood foundation systems are manufactured in EdgeBuilder’s factory and delivered to its customers’ construction sites in accordance with the contractual delivery schedule. Many of EdgeBuilder’s wall panel construction contracts span multiple months. We recognize revenue for modular units and site work, as well as structural wall panels and wood foundations, using the percentage of completion method. Percentage of completion is determined using a units-of-production methodology based on modules delivered in accordance with the terms of the contract and cost-to-cost method with cost determined based on costs incurred to date related to each wall panel (EBGL) contract. Sales tax billed to customers is excluded from revenue. Transportation and freight billed to customers is recorded as revenue and the related costs are included in cost of sales. The current asset “Costs and estimated profit in excess of billings” represents revenues recognized in excess of amounts billed and the current liability “Billings in excess of costs and estimated profit” represents billings in excess of revenues recognized. Application of the cost-to-cost percentage of completion method of accounting requires the use of estimates of costs to be incurred in completing our performance under a contract. The cost estimating process is based on the knowledge and experience of management and involves making significant judgments. Changes in contract performance, change orders, estimated profitability, final contract settlements and other factors may result in changes to estimated and actual costs and profit. The effects of such changes are recognized in the period in which the revisions are determined. In situations where the estimated cost to complete a contract indicates a loss will be incurred, the entire loss is recorded in the period in which it is estimated. Glenbrook is a retail supplier of lumber and other building supplies. Retail sales at Glenbrook are recognized at the point of sale. Returns on retail sales are generally not material and are recognized at the point of return. Warranty Costs: Self-Insurance Costs: Income Taxes: Income (Loss) Per Common Share: Business Combinations: Share-Based Compensation: Fair Value Measurements: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The carrying amounts of our cash equivalents, restricted cash, accounts receivable, costs in excess of billings and estimated profit, other current assets, trade accounts payable, billings in excess of costs and estimated profit and accrued expenses at December 31, 2016 and 2015 approximate fair value due to the short-term maturities of these instruments. Contingent Earn-outs: |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Recently Issued and Adopted Accounting Pronouncements | NOTE 4: RECENTLY ISSUED AND ADOPTED ACCOUNTING PROUNOUNCEMENTS In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern, In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In May 2014, the FASB issued ASU No. 2014-09, which amended Revenue from Contracts with Customers (Topic 606) . In July 2015, the FASB issued ASU No. 2015-11, which amended Inventory (Topic 330) Related to Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740 : Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows Statement of Cash Flows (Topic 230) |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combination | NOTE 5: BUSINESS COMBINATION On October 4, 2016, the Company acquired certain assets of EdgeBuilder Wall Panels, Inc. and Glenbrook Lumber & Supply, Inc. (collectively, the “ EBGL Sellers”) through the Company’s newly-formed wholly-owned subsidiaries EdgeBuilder and Glenbrook, respectively, pursuant to the terms of an Asset Purchase Agreement, dated as of the same date (the “Purchase Agreement”), by and among the Company, EdgeBuilder, Glenbrook, the EBGL Sellers and the individual owners of the EBGL Sellers (the “EBGL Acquisition”). The Company operates the businesses of EdgeBuilder and Glenbrook on a combined basis, and such businesses are referred to on a combined basis as EBGL. EBGL’s business activities include selling lumber and building supplies and manufacturing and selling prefabricated wall panels for commercial and residential construction applications and permanent wood foundation systems for residential buildings. We acquired EBGL because we believe that there is significant growth opportunity in the structural wall panel, permanent wood foundation systems and local building supply businesses. We believe that the acquisition of EBGL, along with the acquisition of KBS in 2014, provide ATRM with the potential to return to profitability. Consideration for the EBGL Acquisition totaled approximately $5.2 million and included (i) $3.0 million in cash paid at closing and $1.0 million of deferred payments payable to the EBGL Sellers in four equal installments on the first day of each of the next four fiscal quarters beginning January 1, 2017, (ii) 100,000 shares of the Company’s common stock, (iii) a potential earn-out payment of up to $1.0 million based upon the amount by which EBGL’s gross profit over the 12 months commencing October 1, 2016 exceeds a specified target and (iv) the assumption of certain liabilities of the EBGL Sellers related to the purchased assets. The cash portion of the purchase price was subject to a post-closing adjustment based on the amount of inventory and pre-paid expenses included in the purchased assets. Such price adjustment resulted in a $0.2 million increase in the purchase price, which amount was paid by the Company to the EBGL Sellers in January 2017. The shares issued as part of the purchase price are subject to transfer restrictions for 12 months following the closing. The Purchase Agreement provided that the potential earn-out payment tied to EBGL’s future gross profit would be calculated based on the EBGL Sellers’ historical accounting practices. The EBGL Sellers’ historical accounting practices were not fully compliant with accounting principles generally accepted in the United States of America (“GAAP”) including not following contract accounting rules for their large long-term wall panel contracts, differences in classification of certain costs which under GAAP would be considered costs-of-goods-sold (which were included below gross profit) and certain costs which were accounted for on a cash versus accrual basis of accounting. The purchase price and the allocation of the purchase price were as follows (in thousands): Purchase price: Cash paid at closing $ 2,960 Fair value of deferred payments owing to EBGL Sellers 941 Fair value of contingent earn-out liability 943 ATRM common stock (100,000 shares at $1.49 per share) 149 Purchase price adjustment – paid in January 2017 218 Total purchase price $ 5,211 Allocation of purchase price: Assets acquired: Inventories $ 898 Costs and estimated profit in excess of billings 93 Prepaid expenses 3 Equipment (1) 289 Goodwill (2) 3,020 Customer relationships (2)(3) 677 Tradenames (2) 104 Purchased backlog (2)(3) 300 Total assets acquired 5,384 Liabilities assumed: Billings in excess of costs and estimated profits (31 ) Accrued compensation (40 ) Accrued other liabilities (102 ) Total liabilities assumed (173 ) Net assets acquired $ 5,211 (1) The fair value of equipment was determined based primarily on an independent appraisal. (2) Goodwill and tradenames are considered indefinite-lived assets and are not subject to future amortization, but will be tested for impairment at least annually. Goodwill is comprised primarily of manufacturing processes and knowhow, assembled workforce and other intangible assets that do not qualify for separate recognition. The full amount of goodwill is expected to be deductible for tax purposes. (3) The amortization period for customer relationships is six years. Purchased backlog will be amortized over the period that the related contracts are completed, which is expected to be less than one year. On June 30, 2017, as described in Note 25, we entered into an agreement to amend the Purchase Agreement in which the parties agreed to replace the three remaining installments of the deferred payments to the EBGL Sellers ($0.75 million) and the contingent earn-out payment ($1.0 million) with set monthly payments totaling $1.8 million, payable in an initial $200,000 payment made on or about July 3, 2017 and 16 monthly installments beginning August 1, 2017 and ending on December 1, 2018. EBGL’s results are included in our consolidated statement of operations since October 4, 2016, the date of the EBGL Acquisition. The following unaudited pro forma financial information presents the combined results of ATRM and EdgeBuilder Wall Panels, Inc. and Glenbrook Lumber & Supply, Inc. for the years ended December 31, 2016 and 2015 as if the EBGL Acquisition had occurred on January 1, 2015 (in thousands): 2016 2015 Pro forma net sales $ 40,589 $ 39,690 Pro forma net loss (5,880 ) (3,448 ) Pro forma loss per share – basic and diluted (2.51 ) (2.18 ) The above unaudited pro forma financial information is not necessarily indicative of what our consolidated results of operations actually would have been or what results may be expected in the future. We incurred expenses for professional fees associated with the EBGL acquisition of approximately $0.2 million in fiscal year 2016. These costs are included in the caption “Selling, general and administrative expenses” in our consolidated statement of operations. |
Contingent Earn-Out Receivable
Contingent Earn-Out Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Contingent Earn-out Receivable | |
Contingent Earn-Out Receivable | NOTE 6: CONTINGENT EARN-OUT RECEIVABLE On April 22, 2014, we entered into an Agreement (the “BSA Agreement”) with Boston Semi Equipment LLC (“BSE”) and Boston Semi Automation LLC (“BSA”), a wholly owned subsidiary of BSE, pursuant to which we transferred our assets and certain liabilities related to our business of designing, manufacturing, marketing and servicing equipment used in the handling of integrated circuits (“test handler product line”) to BSA. The BSA Agreement provides that BSA will pay to ATRM a royalty on all revenue related to the test handler product line through December 31, 2018. Royalties earned are subject to certain qualifications and adjustments. The royalty percentage was 12% as of the quarter ended December 31, 2015 and decreases 0.75% each quarter thereafter. Royalty payments are due 60 days after the end of each calendar quarter. We received payments totaling approximately $0.3 million and $1.3 million at December 31, 2016 and 2015, respectively. The contingent earn-out receivable totaled approximately $0.6 million and $0.9 million at December 31, 2016 and 2015, respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 7: FAIR VALUE MEASUREMENTS Financial assets and liabilities reported at fair value on a recurring basis include the following (in thousands): December 31, 2016 2015 Contingent earn-out receivable (based on Level 3 inputs): Current portion $ 359 $ 329 Noncurrent portion 202 548 Total $ 561 $ 877 Contingent earn-out payable (based on Level 3 inputs) $ (967 ) $ — The following table summarizes the activity for our Level 3 assets and liabilities measured on a recurring basis (in thousands): Earn-Out Receivable (1) Earn-Out Payable (2) Balance at December 31, 2014 $ 2,300 $ — Subtract – decreases based on re-assessments (included in earnings) (191 ) — Settlements (1,232 ) — Balance at December 31, 2015 877 — Add – fair value of earn-out liability at closing of EBGL Acquisition — (943 ) Subtract – net decrease based on re-assessments (included in earnings) (4 ) — Add – net increase based on re-assessments (included in earnings) — (24 ) Settlements (312 ) — Balance at December 31, 2016 $ 561 $ (967 ) (1) Earn-out receivable related to the transfer of our test handler product line in 2014 (see Note 6). (2) Earn-out payable related to the EBGL Acquisition in 2016 (see Note 5). Quantitative information about Level 3 fair value assets and liabilities measured on a recurring basis at December 31, 2016 is summarized in the table below: Fair Value Asset/Liability Valuation Technique Unobservable Input Amount Contingent earn-out receivable Discounted cash flow Estimated revenue for remaining royalty period Performance weighted average Discount rate $11 million 60% to 125% 10 percent Contingent earn-out payable Discounted cash flow Estimated gross profit for earn-out period Discount rate $3.4 million 10 percent Quantitative information about Level 3 fair value assets measured on a recurring basis at December 31, 2015 is summarized in the table below: Fair Value Asset Valuation Technique Unobservable Input Amount Contingent earn-out receivable related to transfer of test handler product line Discounted cash flow Estimated revenue for remaining royalty period Performance weighted average Discount rate $14 million 60% to 125% 10 percent Financial assets reported at fair value on a nonrecurring basis include the following (in thousands): Year ended December 31, 2016 Fair Value (Level 3) Total Gains and (Losses) Goodwill related to KBS acquisition (1) $ — $ (1,733 ) (1) We recorded a goodwill impairment charge of approximately $1.7 million in year 2016 in connection with the write-off of the remaining goodwill related to the KBS acquisition (see Note 10). The following table summarizes the activity for our Level 3 assets measured on a nonrecurring basis (in thousands): KBS Goodwill (1) Balance at December 31, 2015 $ 1,733 Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings) (1,733 ) Balance at December 31, 2016 $ — (1) For more information regarding Goodwill, see Note 10. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Accounts Receivable | NOTE 8: ACCOUNTS RECEIVABLE Accounts receivable are comprised of the following (in thousands): December 31, 2016 2015 Contract billings $ 2,330 $ 2,586 Retainage 370 347 Subtotal 2,700 2,933 Less - allowance for doubtful accounts (96 ) (370 ) Accounts receivable, net $ 2,604 $ 2,563 Retainage balances are expected to be collected within the next twelve months. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 9: INVENTORIES Inventories are comprised of the following (in thousands): December 31, 2016 2015 Raw materials $ 1,404 $ 1,120 Finished goods — 121 Total inventories $ 1,404 $ 1,241 In fiscal year 2015, KBS wrote down two residential home models to their estimated net realizable values. The related charge of approximately $86,000 is included in cost of sales in our consolidated statement of operations for the year ended December 31, 2015. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | NOTE 10: GOODWILL AND INTANGIBLE ASSETS, NET Intangible assets are comprised of the following (in thousands): December 31, 2016 December 31, 2015 Gross Carrying Amount Accumulated Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 3,020 $ — $ 3,020 $ 1,733 $ — $ 1,733 Trademarks 394 — 394 290 — 290 Total 3,414 — 3,414 2,023 — 2,023 Finite-lived intangible assets: Customer relationships 2,097 (586 ) 1,511 1,420 (355 ) 1,065 Purchased backlog 1,290 (1,078 ) 212 990 (990 ) — Total 3,387 (1,664 ) 1,723 2,410 (1,345 ) 1,065 Total intangible assets $ 6,801 $ (1,664 ) $ 5,137 $ 4,433 $ (1,345 ) $ 3,088 The following table summarizes the activity for Goodwill (in thousands): Goodwill Balance at December 31, 2015 $ 1,733 Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings) (1,733 ) Add – goodwill recorded on October 4, 2016 in connection with the EBGL Acquisition 3,020 Balance at December 31, 2016 $ 3,020 Since the acquisition of KBS in 2014, KBS’s operating results lagged behind management’s expectations. Despite the implementation of its strategic plans for change at KBS, which have begun to materialize in KBS’s overall operating results, KBS continues to underperform our projected levels of net revenue and net income. Accordingly, we completed a goodwill impairment assessment as of September 30, 2016 and determined that the carrying value of the KBS goodwill exceeded the fair value by $1.7 million at that date. Accordingly, we recorded a goodwill impairment charge of approximately $1.7 million in 2016. Amortization expense amounted to approximately $319,000 and $333,000 in 2016 and 2015, respectively. Estimated amortization of purchased intangible assets is as follows over the next five years (in thousands): 2017 $ 527 2018 316 2019 316 2020 316 2021 163 Thereafter 85 Total $ 1,723 |
Uncompleted Construction Contra
Uncompleted Construction Contracts | 12 Months Ended |
Dec. 31, 2016 | |
Contractors [Abstract] | |
Uncompleted Construction Contracts | NOTE 11: UNCOMPLETED CONSTRUCTION CONTRACTS The status of uncompleted construction contracts is summarized below (in thousands): December 31, 2016 2015 Costs incurred on uncompleted contracts $ 6,575 $ 1,155 Inventory purchased for specific contracts 837 1,819 Estimated profit 1,150 142 Sub-total 8,562 3,116 Less billings to date (8,169 ) (3,409 ) Total $ 393 $ (293 ) Included in the following balance sheet captions: Costs and estimated profit in excess of billings $ 1,045 $ 472 Billings in excess of costs and estimated profit (652 ) (765 ) Total $ 393 $ (293 ) The Company has approximately $10.7 million of work under contract remaining to be recognized at December 31, 2016. |
Trade Accounts Payable Retainag
Trade Accounts Payable Retainage | 12 Months Ended |
Dec. 31, 2016 | |
Trade Accounts Payable Retainage | |
Trade Accounts Payable Retainage | NOTE 12: TRADE ACCOUNTS PAYABLE RETAINAGE Trade accounts payable of approximately $3.8 million at December 31, 2016 included retainage amounts due to subcontractors totaling approximately $0.4 million. Trade accounts payable of approximately $3.5 million at December 31, 2015 included retainage amounts due to subcontractors totaling approximately $0.5 million. Retainage balances at December 31, 2016 are expected to be settled within the next twelve months. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | NOTE 13: OTHER ACCRUED LIABILITIES Other accrued liabilities are comprised of the following (in thousands): December 31, 2016 2015 Accrued interest expense $ 637 $ 502 Accrued sales taxes 739 562 Accrued severance and related costs — 331 Accrued health insurance costs 96 133 Accrued sales rebates 327 402 Accrued warranty 49 39 Other 416 16 Total other accrued liabilities $ 2,264 $ 1,985 In connection with a restructuring of our KBS operations during the third quarter of 2015, we terminated six employees, including two former KBS officers. Pursuant to employment agreements, we recorded a severance charge of approximately $421,000 in 2015 related to this restructuring. The severance amounts are payable in weekly installments through October 2016. The severance charge is included in “Selling, general and administrative expenses” in our consolidated statement of operations for the year ended December 31, 2015. The following table summarizes product warranty expense accruals and settlements for the two years ended December 31, 2016 (in thousands): Accrual balance at beginning of year Accruals for warranties Settlements made Accrual balance at end of year 2016 $ 39 $ 116 $ (106 ) $ 49 2015 78 58 (97 ) 39 |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 14: NOTES PAYABLE As of December 31, 2016, we had outstanding notes payable of approximately $3.4 million. Our notes payable included (i) $2.4 million principal outstanding on KBS’s $4.0 million revolving credit facility under a loan and security agreement with Gerber Finance (the “KBS Loan Agreement”) and (ii) $1.2 million principal outstanding on EBGL’s $3.0 million revolving credit facility under a loan and security agreement with Gerber Finance (the “EBGL Loan Agreement”). On February 23, 2016, ATRM and KBS entered into the KBS Loan Agreement with Gerber Finance, providing KBS with a revolving line of credit with borrowing availability of up to $4.0 million. The initial term of the KBS Loan Agreement expires on February 22, 2018, but extends automatically for additional one-year periods unless a party provides prior written notice of termination. Availability under the line of credit is based on a formula tied to KBS’s eligible accounts receivable, inventory, equipment and real estate. Borrowings bear interest at the prime rate plus 2.75%, with interest payable monthly. The outstanding principal balance is payable upon expiration of the term of the KBS Loan Agreement. The KBS Loan Agreement also provides for certain fees payable to Gerber Finance during its term, including a 1.5% annual facilities fee and a 0.10% monthly collateral monitoring fee. KBS’s obligations under the KBS Loan Agreement are secured by all of its property and assets and are guaranteed by ATRM. Unsecured promissory notes issued by KBS and ATRM are subordinate to KBS’s obligations under the KBS Loan Agreement. The KBS Loan Agreement contains representations, warranties, affirmative and negative covenants, events of default and other provisions customary for financings of this type. Financial covenants require that KBS maintains a maximum leverage ratio (as defined in the KBS Loan Agreement) of 7:1 at December 31, 2016, and that KBS not incur a net annual post-tax loss in any fiscal year during the term of the KBS Loan Agreement. We incurred approximately $230,000 of costs associated with the KBS Loan Agreement which we are amortizing ratably over the term of the loan. At December 31, 2016, the outstanding balance on the KBS Loan Agreement was approximately $2.6 million, which after an offset of approximately $0.2 million of unamortized deferred cost of issuance, nets to approximately $2.4 million. On October 4, 2016, concurrently with the closing of the EBGL Acquisition, we entered into the EBGL Loan Agreement with Gerber Finance providing EBGL with a working capital line of credit of up to $3.0 million. Availability under the EBGL Loan Agreement was based on a formula tied to the borrowers’ eligible accounts receivable, inventory and equipment, and borrowings bore interest at the prime rate plus 2.75%, with interest payable monthly and the outstanding principal balance payable upon expiration of the term of the EBGL Loan Agreement. Initially, availability under the EBGL Loan Agreement was limited to $1.0 million, which amount could be increased to up to $3.0 million in increments of $500,000 upon the request of the borrowers and in the discretion of Gerber Finance. The initial term of the EBGL Loan Agreement was set to expire on October 3, 2018, but extending automatically for additional one-year periods unless a party provided prior written notice of termination. The borrowers’ obligations under the EBGL Loan Agreement were secured by all of their property and assets and were guaranteed by the Company and its other subsidiaries. We incurred approximately $257,000 of costs associated with the EBGL Loan Agreement which we are amortizing ratably over the term of the loan. At December 31, 2016, the outstanding balance on the EBGL Loan Agreement was approximately $1.2 million, which after an offset of approximately $0.2 million of unamortized deferred cost of issuance, nets to approximately $1.0 million. At the applicable test dates, we were not in compliance with the following financial covenants: (i) a requirement for KBS to maintain a minimum leverage ratio of 7:1; (ii) a requirement for KBS not to incur a net annual post-tax loss in any fiscal year of the loan agreements; and (iii) a requirement to deliver the Company’s fiscal year-end financial statements reviewed by an independent certified accounting firm acceptable to Gerber within 105 days from the fiscal year ended December 31, 2016. In August 2017, Gerber Finance provided us with a waiver for these events. Based upon information available to us as of September 13, 2017, we believe we will be in compliance with the financial covenant requiring no net annual post-tax loss for KBS at future test dates. However, it is likely that we will not be in compliance with the minimum leverage ratio covenant as of the next future test date. If we fail to comply with any financial covenant under our loan agreements with Gerber Finance going forward, under certain circumstances after a cure period, Gerber Finance may demand the repayment of the credit facilities amount outstanding and any unpaid interest thereon. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 15: LONG-TERM DEBT Long-term debt is comprised of the following (in thousands): December 31, 2016 2015 LSVI Promissory Note payable to related party, unsecured, interest of 10% per annum (12% per annum PIK interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 (1) $ 4,261 $ 5,000 Promissory notes payable to LSV Co-Invest I, a related party, unsecured, interest of 10% per annum (12% per annum PIK interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 (2) 6,773 4,500 Promissory note payable to KBS sellers, unsecured, interest imputed at 9.5% (3) 678 1,757 Installment payment agreement, 8.0% interest, payable in monthly installments of $1,199 through September 2020 (4) 46 56 Notes payable, secured by equipment, interest rates from 6.6% to 9.5%, with varying maturity dates through September 2018 22 44 Promissory note payable to Gerber Finance, secured, interest at the current prime rate plus 3.0% payable monthly with any unpaid principal and interest due on December 31, 2018 (5) 3,000 — Deferred payments to EBGL Sellers, interest imputed at 10.0% (6) 964 — Total long-term debt 15,744 11,357 Current portion (1,675 ) (1,105 ) Noncurrent portion $ 14,069 $ 10,252 (1) In order to finance the KBS acquisition and to provide general working capital, on April 1, 2014, we entered into a Securities Purchase Agreement with LSVI pursuant to which it purchased for $6.5 million in cash, an unsecured promissory note made by ATRM in the principal amount of $6.0 million (the “LSVI Promissory Note”), bearing interest at 10.0% per annum principal and interest due on April 1, 2019. ATRM may prepay the LSVI Promissory Note at any time after a specified amount of advance notice to LSVI. On December 30, 2014, we made a principal payment of $1.0 million on the LSVI Promissory Note. On February 25, 2016, we made a principal payment of $1.0 million on the LSVI Promissory Note. (2) In order to provide additional working capital to ATRM, we entered into two Securities Purchase Agreements with LSV Co-Invest I pursuant to which it purchased unsecured promissory notes made by ATRM. Each of the notes bears interest at 10.0% per annum (12% per annum PIK Interest), with interest payable semiannually in January and July and any unpaid principal and interest is due on April 1, 2019. Except for the principal amounts, the terms of these promissory notes are identical to the terms of the LSVI Promissory Note. The promissory notes issued to LSV Co-Invest I are listed below: ● $2.5 million promissory note dated July 21, 2014 ● $2.0 million promissory note dated September 19, 2014 ● $2.0 million promissory note dated October 4, 2016 (3) Promissory note payable to the principal seller of KBS, payable in monthly installments of $100,000 through July 2017. Interest imputed at 9.5% (see below). (4) Agreement to finance the purchase of software license rights and consulting services related to the implementation of enterprise management information system. (5) Acquisition Loan with Gerber Finance with a principal amount of $3.0 million, the proceeds of which were used to finance the EBGL Acquisition in October 2016. Borrowings under this loan bear interest at the prime rate plus 3.0%, with interest payable monthly and the outstanding principal payable upon the expiration of the term of the agreement; initially December 31, 2018, but extends automatically for additional one-year periods unless a party provides prior written notice of termination (see Note 2). (6) Deferred Payments to the EBGL Sellers under the Purchase Agreement, payable in quarterly installments of $250,000 on January 1, 2017, April 1, 2017, July 1, 2017 and October 1, 2017. Interest imputed at 10.0% (see Note 2). We received a waiver from LSVI and LSV Co-Invest I with respect to our interest payments under the LSVI and LSV Co-Invest I promissory notes due on July 5, 2016, totaling approximately $445,000, permitting us to make these payments at any time on or before August 31, 2016. On August 12, 2016, the Company and LSVI and LSV Co-Invest I amended the LSVI and LSV Co-Invest I promissory notes allowing the Company, at its sole option, to elect to make any interest payment in PIK Interest at an effective rate of 12% per annum (versus the 10% interest rate applied to cash payments) for that period. For the six-month interest periods ended June 30, 2016 and December 31, 2016, the Company elected the PIK Interest option. As a result, interest expense for the twelve months ended December 31, 2016, includes PIK Interest related to the LSVI and LSV Co-Invest I promissory $1.1 million (calculated at the PIK Interest rate of 12% per annum). The balance of the LSVI and LSV Co-Invest I promissory notes at December 31, 2016 includes approximately $0.5 million of PIK Interest. As partial consideration for the KBS acquisition in April 2014, we issued an unsecured promissory note to the primary seller of KBS in the principal amount of $5.5 million. We were unable to repay the note on its maturity date, December 1, 2014. In April 2015, we asserted certain indemnification and other claims against the sellers of KBS and on June 26, 2015 we entered into a settlement agreement with the sellers related to such claims. The settlement agreement provided for, among other things, the amendment and restatement of the original note to reduce the principal amount from $5.5 million to $2.5 million and the forgiveness of all then-accrued interest related to the original note. The revised principal amount is payable in monthly installments of $100,000 on the first business day of each month, inclusive of imputed interest, beginning on July 1, 2015 and through July 1, 2017. The amended and restated note does not accrue interest unless it is in default, in which case the annual interest rate would be 10%. We recorded a gain of approximately $3.7 million in fiscal year 2015 related to the settlement, which consisted of the following (in thousands): Reduction of principal (including adjustment for imputed interest at 9.5%) $ 3,226 Forgiveness of interest accrued to the date of settlement 461 Gain on settlement agreement $ 3,687 The principal balance of the amended and restated unsecured promissory note issued to the primary seller of KBS was $678,413 ($700,000 less imputed interest of $21,587) and $1,757,292 ($1,900,000 less imputed interest of $142,708) at December 31, 2016 and 2015, respectively, and is included in Long-Term Debt. The Company is party to a Registration Rights Agreement (the “Registration Rights Agreement”) with LSVI, providing LSVI with certain demand and piggyback registration rights, effective at any time after July 30, 2014, with respect to the 107,297 shares of our common stock issued upon the conversion of a convertible promissory note held by LSVI in 2014. As of December 31, 2016, LSVI owned 1,067,885 shares of our common stock, or approximately 45.1% of our outstanding shares, including 900,000 shares purchased in a common stock rights offering we completed in September 2015. Jeffrey E. Eberwein, ATRM’s Chairman of the Board, is the manager of LSVGP, the general partner of LSVI and LSV Co-Invest I, and sole member of LSVM, the investment manager of LSVI. LSVI was granted a waiver under our Tax Benefits Preservation Plan to permit the purchase of shares in the rights offering. ATRM’s entry into the securities purchase agreements with LSVI and LSV Co-Invest I was approved by a Special Committee of our Board consisting solely of independent directors. Future maturities of long-term debt are summarized below: 2017 $ 1,675 2018 3,012 2019 11,047 2020 10 Total long-term debt $ 15,744 |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | NOTE 16: LEGAL PROCEEDINGS The Company is and may become involved in various lawsuits as well as other certain legal proceedings that arise in the ordinary course of business. Information regarding certain material proceedings is provided below. UTHE Technology Corporation v. Aetrium Incorporated Since December 1993, an action brought by UTHE Technology Corporation (“UTHE”) against ATRM and its then sales manager for Southeast Asia (“Sales Manager”), asserting federal securities claims, a RICO claim, and certain state law claims, had been stayed in the United States District Court for the Northern District of California. UTHE’s claims were based on its allegations that four former employees of a Singapore company, which UTHE formerly owned, conspired to and did divert business from the subsidiary, and in turn UTHE, and directed that business to themselves and a secret company they had formed, which forced UTHE to sell its subsidiary shares to the former employee defendants at a distressed price. The complaint alleged that ATRM and the Sales Manager participated in the conspiracy carried out by the former employee defendants. In December 1993, the case was dismissed as to the former employee defendants because of a contract requiring UTHE and them to arbitrate their claims in Singapore. The District Court stayed the case against ATRM and the Sales Manager pending the resolution of arbitration in Singapore involving UTHE and three of the former employee defendants, but not involving ATRM or the Sales Manager. ATRM received notice in March 2012 that awards were made in the Singapore arbitration against one or more of the former employee defendants who were parties to the arbitration. In June 2012, UTHE filed a motion to reopen the case against ATRM and the Sales Manager and to lift the stay, which the court granted. On September 13, 2013, the court entered final judgment dismissing all remaining claims UTHE asserted against ATRM in the litigation. On September 23, 2013, UTHE appealed the district court judgment to the United States Court of Appeal for the Ninth Circuit only as to the dismissal of UTHE’s RICO claim. The appeal was argued in a court hearing on November 19, 2015. On December 11, 2015, the Court of Appeal issued an order reversing the district court’s grant of summary judgment of UTHE’s RICO claim and remanded the case back to the district court for further proceedings. On April 20, 2016, the district court stayed the case pending a decision in the Supreme Court case RJR Nabisco, Inc. v. The European Community RJR Nabisco RJR Nabisco KBE Building Corporation v. KBS Builders, Inc., and ATRM Holdings, Inc., et al. At the time of the KBS acquisition in April 2014, KBS purchased receivables for a construction project known as the Nelton Court Housing Project (“Nelton Court”) in Hartford, CT, and also performed certain “punch-list” and warranty work. Modular units for the Nelton Court project were supplied by KBS Building Systems, Inc. (“KBS-BSI”) pursuant to a contract with KBE Building Corporation (“KBE”). KBE has asserted claims against KBS-BSI, KBS and ATRM arising out of alleged delays, and for the repair of certain alleged defects in the modular units supplied to the project. KBE’s claim seeks an unspecified amount of damages. The action has been transferred to the complex litigation docket of the Hartford Superior Court. The Court has set a trial date for February 2018, but that date will likely be continued because all of the parties have participated in mediation and settlement negotiations are ongoing, so no depositions have yet been conducted. We continue to believe that the claims asserted in this matter do not have any merit although our carriers agreed to participate in a mediation given the cost of defense. If the case is not settled, we intend to vigorously defend the action. From time to time, in the ordinary course of ATRM’s business, it is party to various other disputes, claims and legal proceedings. In the opinion of management, based on information available at this time, such disputes, claims and proceedings will not have a material effect on ATRM’s consolidated financial statements. |
Leases And Rent Expense
Leases And Rent Expense | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases And Rent Expense | NOTE 17: LEASES AND RENT EXPENSE EBGL leases its facilities in Oakdale, Minnesota and Prescott, Wisconsin. These facilities are being leased from limited liability companies controlled by two owners of the EBGL Sellers who are shareholders of ATRM. Neither shareholder is a director nor an officer of ATRM, and, to our knowledge, does not own more than five percent of our common stock. These lease agreements provide for monthly base rents totaling $22,135 as of December 31, 2016 and expire on September 30, 2021, with an option to renew for an additional five-year period. As of December 31, 2016, future minimum lease payments under operating leases were as follows (in thousands): 2017 $ 266 2018 266 2019 267 2020 272 2021 207 Total minimum lease payments $ 1,278 We previously leased a facility in North St. Paul, Minnesota pursuant to a lease agreement that was terminated on May 1, 2015. The facility is owned by a limited liability company controlled by a shareholder of ATRM. The shareholder is neither a director nor an officer of ATRM, and, to our knowledge, does not own more than five percent of our common stock. Rent expense, including facility and various short-term equipment operating leases, was as follows (in thousands): Year ended December 31, 2016 2015 Paid to companies controlled by shareholder $ 85 $ 94 Paid to others 15 22 Total rent expense $ 100 $ 116 We subleased a portion of the North St. Paul facility and provided administrative services to BSA and another subcontract until the lease, subleases and administrative agreements were terminated effective May 1, 2015. We received payments totaling approximately $131,000 in 2015, for such sublease rent and administrative services. Such payments are not reflected in the table above. |
Common Stock Rights Offering
Common Stock Rights Offering | 12 Months Ended |
Dec. 31, 2016 | |
Common Stock Rights Offering | |
Common Stock Rights Offering | NOTE 18: COMMON STOCK RIGHTS OFFERING On September 18, 2015, pursuant to a rights offering to our existing shareholders, we sold 1,019,746 shares of our common stock at $3.00 per share, which included 900,000 shares sold to LSVI, our largest shareholder. Net proceeds from the offering amounted to $2,936,526, reflecting gross proceeds of $3,059,238 less $122,712 of offering-related expenses. |
Stock Incentive Plans and Share
Stock Incentive Plans and Share-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plan and Share-Based Compensation | NOTE 19: STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION ATRM uses the fair value method to measure and recognize share-based compensation. We determine the fair value of stock options on the grant date using the Black-Scholes option valuation model. We determine the fair value of restricted stock awards based on the quoted market price of our common stock on the grant date. We recognize the compensation expense for stock options and restricted stock awards on a straight-line basis over the vesting period of the applicable awards. 2014 Incentive Plan Our 2014 Incentive Plan (the “2014 Plan”) was approved by the Board on October 9, 2014 and became effective on December 4, 2014 upon approval by shareholders. The 2014 Plan is administered by the Compensation Committee of the Board. The purpose of the 2014 Plan is to provide employees, consultants and Board members the opportunity to acquire an equity interest in the Company through the issuance of various stock-based awards such as stock options and restricted stock. On November 17, 2016, at the 2016 Annual Meeting of Shareholders, the shareholders approved an amendment to the 2014 Plan which increased the number of shares of the Company’s common stock authorized and reserved for issuances thereunder to 400,000 shares. On June 5, 2015, ATRM granted restricted stock awards for a total of 60,000 shares of the Company’s common stock to its directors and Chief Financial Officer. The shares vested one year after the grant date. The fair value of the awards was determined to be $4.48 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $115,000 and $154,000 for the years ended December 31, 2016 and 2015, respectively, and is included in the caption “Selling, general and administrative expenses” in our consolidated statement of operations. On October 19, 2016, ATRM granted restricted stock awards for a total of 30,000 shares of the Company’s common stock to its Chief Executive Officer, Chief Financial Officer and former Chief Financial Officer (10,000 shares each). The shares vest one year after the grant date. The fair value of the awards was determined to be $2.25 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $14,000 for the year ended December 31, 2016, and is included in the caption “Selling, general and administrative expenses” in our consolidated statement of operations. The remaining compensation expense of approximately $54,000 will be recognized on a straight-line basis through October 19, 2017, subject to forfeitures. 2003 Stock Incentive Plan A stock incentive plan approved by our shareholders and adopted in 2003 (the “2003 Plan”) terminated in 2013. Stock options granted under the 2003 Plan continue to be exercisable according to their individual terms. The following table summarizes stock option activity under the 2003 Plan for the year ended December 31, 2016: Number Of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value (in thousands) Outstanding, January 1, 2016 27,500 $ 6.88 Expired — Outstanding, December 31, 2016 27,500 $ 6.88 0.5 years $ 0 Exercisable, December 31, 2016 27,500 $ 6.88 0.5 years $ 0 All stock options outstanding at , 2016 December 31 |
Tax Benefit Preservation Plan _
Tax Benefit Preservation Plan / Preferred Stock Rights | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Tax Benefit Preservation Plan / Preferred Stock Rights | NOTE 20: TAX BENEFIT PRESERVATION PLAN / PREFERRED STOCK RIGHTS As of December 31, 2016, ATRM had federal net operating loss carryforwards (“NOLs”) of approximately $97 million and state NOLs of approximately $34 million. Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), imposes an annual limitation on the amount of taxable income that may be offset by a corporation’s NOLs if the corporation experiences an “ownership change” as defined in Section 382 of the Code. An ownership change occurs when the corporation’s “5-percent shareholders” (as defined in Section 382 of the Code) collectively increase their ownership in the corporation by more than 50 percentage points (by value) over a rolling three-year period. Additionally, various states have similar limitations on the use of state NOLs following an ownership change. On February 13, 2014, to protect the tax benefits of ATRM’s NOLs, the Board adopted a Tax Benefit Preservation Plan (the “Rights Plan”) that generally was designed to deter any person from acquiring shares of ATRM’s common stock if the acquisition would result in such person beneficially owning 4.99% or more of the common stock without the approval of the Board. In connection with the adoption of the Rights Plan, on February 13, 2014, the Board authorized and declared a dividend distribution of one right for each outstanding share of ATRM’s common stock to stockholders of record as of the close of business on February 24, 2014. Each right entitled the registered holder to purchase from the Company one one-thousandth of a share of Series B Participating Preferred Stock, par value $0.001 per share, of the Company at an exercise price of $30.00 per one one-thousandth of a Preferred Share, subject to adjustment. Subject to certain exceptions specified in the Rights Plan, the rights were to separate from ATRM’s common stock and become exercisable following (i) the 10 th th Additionally, at any time after the date on which an acquiring person beneficially owned 4.99% or more, but less than 50%, of ATRM’s common stock, the Board was permitted to exchange the rights (except for rights that were voided due to their beneficial ownership by an acquiring person or group), in whole or in part, for shares of ATRM’s common stock at an exchange ratio of one share per right (subject to adjustment), or in certain circumstances, cash or other securities of the Company having a value approximately equal to one share. The operation of the Rights Plan could have caused substantial dilution to a person or group that acquired 4.99% or more of the Company’s common stock on terms not approved by the Board. The adoption of the Rights Plan had no impact on the Company’s consolidated financial statements for fiscal years 2016 or 2015. No rights were exercisable at December 31, 2016. The Rights Plan expired on February 13, 2017. |
Employee Savings 401(K) Plan
Employee Savings 401(K) Plan | 12 Months Ended |
Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |
Employee Savings 401(K) Plan | NOTE 21: EMPLOYEE SAVINGS 401(k) PLAN ATRM has a 401(k) employee savings plan, which covers full-time ATRM employees who are at least 21 years of age. Contributions to the savings plan are at the discretion of management. No contributions were made to the plan in fiscal years 2016 or 2015. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 22: INCOME TAXES A reconciliation of income tax expense (benefit) computed using the federal statutory rate to the income tax expense (benefit) in our consolidated statements of operations is as follows (in thousands): Year ended December 31, 2016 2015 Tax benefit computed at federal statutory rate $ (2,216 ) $ (1,133 ) State taxes, net of federal benefit (156 ) (127 ) Increase valuation allowance 2,048 735 State NOL expiration/write-off 321 39 Adjustment to income tax accruals 5 423 State research credit expiration 3 65 Non-deductible expenses 3 3 Other, net — 1 Total income tax expense $ 8 $ 6 Deferred tax assets (liabilities) are comprised of the following (in thousands): December 31, 2016 2015 Accounts receivable $ 36 $ 141 Employee compensation and benefits 100 91 Contingent consideration (169 ) (268 ) Amortization 1,305 1,089 Deferred acquisition costs 245 265 NOL and tax credit carryforwards 34,807 32,895 Warranty accrual 18 15 Severance accrual — 97 Other, net 60 34 Deferred tax assets (liabilities), net $ 36,402 $ 34,359 Less valuation allowance (36,421 ) (34,372 ) Net deferred tax assets (liabilities) $ (19 ) $ (13 ) We record the benefit we will derive in future accounting periods from tax losses and credits and deductible temporary differences as “deferred tax assets.” We record a valuation allowance to reduce the carrying value of our net deferred tax assets if, based on all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Since 2009, we have maintained a valuation allowance to fully reserve our deferred tax assets. We recorded a full valuation allowance in 2009 because we determined there was not sufficient positive evidence regarding our potential for future profits to outweigh the negative evidence of our three-year cumulative loss position at that time. We expect to continue to maintain a full valuation allowance until we determine that we can sustain a level of profitability that demonstrates our ability to realize these assets. To the extent we determine that the realization of some or all of these benefits is more likely than not based upon expected future taxable income, a portion or all of the valuation allowance will be reversed. Such a reversal would be recorded as an income tax benefit and, for some portion related to deductions for stock option exercises, an increase in shareholders’ equity. ATRM has federal NOLs of approximately $97 million that will begin to expire in 2020 if not utilized. We also have state NOLs of approximately $34 million that will expire at various times, beginning in 2017, if not utilized. We also have federal and state research tax credit carryforwards of approximately $1.3 million that will expire at various times, beginning in 2017, if not utilized. The utilization of NOLs and research tax credit carryforwards may be subject to changes in tax regulations and/or to annual limitations as a result of changes in ownership that may already have occurred or future changes in ownership pursuant to the requirements of Section 382 of the Code. Such limitations could result in the expiration of NOL and tax credit carryforwards before utilization. Our federal and state operating loss carryforwards include windfall tax deductions from stock option exercises. The amount of windfall tax benefit recognized in additional paid-in capital is limited to the amount of benefit realized currently in income taxes payable. As of December 31, 2016, ATRM had suspended additional paid-in capital credits of $1.3 million related to windfall tax deductions. Upon realization of the NOLs from such windfall tax deductions, we would record a benefit of up to $1.3 million in additional paid-in capital. We assessed our income tax positions at December 31, 2016 and 2015 for all years subject to examination and determined that our unrecognized tax positions were immaterial at those dates. ATRM is subject to income tax examinations in the U.S. federal and certain state jurisdictions. Our 2013 and 2012 federal income tax returns were reviewed by the Internal Revenue Service during fiscal years 2015 and 2014, respectively, and resulted in no adjustments. Federal tax returns are subject to review for fiscal years 2014 through 2016 and state income tax returns are subject to review for fiscal years 2012 through 2016. |
Product Line, Geographic, Signi
Product Line, Geographic, Significant Customer and Concentration of Credit Risk Data | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Product Line, Geographic, Significant Customer and Concentration of Credit Risk Data | NOTE 23: PRODUCT LINE, GEOGRAPHIC, SIGNIFICANT CUSTOMER AND CONCENTRATION OF CREDIT RISK DATA The following table sets forth the various components of net sales by product line as a percentage of total net sales: Year ended December 31, 2016 2015 Residential homes 79 % 76 % Commercial structures 21 % 24 % Total 100 % 100 % All of our long-lived assets are located in the United States. All of our sales based on product shipment destination were within the United States. Sales to customers comprising more than 10% of our total net sales and corresponding accounts receivable concentration information for such customers is summarized below: Percent of total sales for year ended December 31, Percent of total accounts receivable as of December 31, 2016 2015 2016 2015 Residential Customers Customer A 10.7 % * * 12.0 % Customer B * * 11.8 % * Commercial Customers Customer C * 14.7 % * * Customer D * * * 26.9 % Customer E * * 27.0 % * * Percent was less than 10% of the total. |
Operating Segments
Operating Segments | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Operating Segments | NOTE 24: OPERATING SEGMENTS Prior to the EBGL Acquisition in October 2016, the Company’s operating results reflected the operating results of KBS, along with certain corporate overhead and corporate borrowing activity. Since the October 2016 EBGL Acquisition, the Company manages and organizes its business in two distinct reportable segments: (i) modular building manufacturing and (ii) structural wall panel and wood foundation manufacturing, including building supply retail operations. The modular building manufacturing segment, through KBS (including MMH), manufactures modular buildings for both single-family residential homes and larger, commercial building projects. The structural wall panel and wood foundation manufacturing segment (which also includes the building supply retail operations), manufactures structural wall panels for both residential and commercial projects as well as permanent wood foundation systems for residential homes, through the EdgeBuilder subsidiary, in addition to operating a local building supply retail operation through the Glenbrook subsidiary. The Company also has corporate level activities and expenditures which are not considered a reportable segment. Each segments’ accounting policies are the same as those described in the summary of significant accounting policies (Note 3). There are no intersegment sales. The Company’s reportable business segments are strategic business units that offer different products and services. Each segment is managed separately because they have different manufacturing processes and market to different customer bases, in geographically different markets. The following table presents certain financial information regarding each reportable segment as of and for the year ended December 31, 2016: Modular Home Manufacturing Structural Wall Panel Manufacturing Total Segment net sales $ 24,654,447 $ 3,501,664 $ 28,156,111 Depreciation and amortization expense 501,920 131,106 633,026 Segment goodwill impairment expense 1,732,804 — 1,732,804 Interest expense, net 408,912 120,012 528,924 Segment net loss 3,503,268 155,074 3,658,342 Total segment assets 8,007,031 7,126,033 15,133,064 Expenditures for segment assets 50,726 21,727 72,453 Reconciliation of Segment Information Revenues Total net sales for reportable segments $ 28,156,111 Other net sales — Consolidated net sales $ 28,156,111 Net loss Total net loss for reportable segments $ 3,658,342 Other net sales — Unallocated amounts: Other corporate expenses 1,707,705 Interest expense 1,146,752 Change in fair value of contingent earn-out 3,631 Provision for income taxes 7,900 Consolidated net loss $ 6,524,330 Assets Total assets for reportable segments $ 15,133,064 Other assets 1,644,970 Consolidated assets $ 16,778,034 Other Significant Adjustments Segment Totals Adjustments Consolidated Totals Depreciation and amortization expense $ 633,026 $ — $ 633,026 Segment goodwill impairment expense $ 1,732,804 $ — $ 1,732,804 Interest expense $ 528,924 $ 1,146,752 $ 1,675,676 The reconciling item to adjust interest expense is the amount of interest incurred by the Company at the parent level, but not allocated to the operating segments. The other adjustments reflect amounts incurred at the parent not allocated to the operating segments. None of the other adjustments are considered significant. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 25: SUBSEQUENT EVENTS On March 31, 2017, ATRM entered into an additional Securities Purchase Agreement with LSV Co-Invest I. Pursuant to this agreement, LSV Co-Invest I purchased for $0.5 million in cash, an unsecured promissory note dated March 31, 2017, made by ATRM in the principal amount of $0.5 million. The note bears interest at 10.0% per annum, with interest payable semiannually in January and July; provided, however, LSV Co-Invest I may elect to receive any PIK Interest at an annual rate of 12.0%, so long as any such interest payment is made either (x) entirely in PIK Interest or (y) 50% cash and 50% PIK Interest. Except for the principal amount and the PIK Interest feature, the terms of this promissory note are identical to the terms of the previous LSV Co-Invest I promissory notes and the LSVI Promissory Note. On June 30, 2017, EBGL entered into a Revolving Credit Loan Agreement (the “Premier Loan Agreement”) with Premier Bank (“Premier”) providing EBGL with a working capital line of credit of up to $3.0 million. The Premier Loan Agreement replaced the EBGL Loan Agreement, which was terminated on the same date. Availability under the Premier Loan Agreement is based on a formula tied to EBGL’s eligible accounts receivable, inventory and equipment, and borrowings bear interest at the prime rate plus 1.50%, with interest payable monthly and the outstanding principal balance payable upon expiration of the term of the Premier Loan Agreement. The Premier Loan Agreement also provides for certain fees payable to Premier during its term. The initial term of the Premier Loan Agreement expires on June 30, 2018, but may be extended from time to time at our request, subject to approval by Premier. EBGL’s obligations under the Premier Loan Agreement are secured by all of their inventory, equipment, accounts and other intangibles, fixtures and all proceeds of the foregoing. The Premier Loan Agreement contains representations, warranties, affirmative and negative covenants, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the Premier Loan Agreement may result in the obligations of EBGL becoming immediately due and payable. As a condition to closing the Premier Loan Agreement, each of the Company and Jeffrey E. Eberwein, a director of the Company, executed a guaranty, dated as of the same date, in favor of Premier, absolutely and unconditionally guaranteeing all of EBGL’s obligations under the Premier Loan Agreement. On June 30, 2017, the Company entered into a Second Agreement of Amendment to Loan and Security Agreement to amend the Acquisition Loan Agreement to waive certain covenants and to make certain amendments in connection with the termination of the EBGL Loan Agreement and refinancing under the Premier Loan Agreement. As discussed in Note 5, the Company entered into an Asset Purchase Agreement, dated as of October 4, 2016 (as amended, the “EBGL APA”), by and among the Company, EBGL, the EBGL Sellers and the individual owners of the EBGL Sellers, providing for the EBGL Acquisition. On June 30, 2017, the parties entered into an Amendment to Asset Purchase Agreement to amend the EBGL APA to replace EBGL’s obligations to pay certain deferred payments to the EBGL Sellers ($0.75 million) and the contingent earn-out payment ($1.0 million) thereunder with set monthly payments totaling $1.8 million, payable with an initial $200,000 payment made on or about July 3, 2017 and 16 monthly installments beginning August 1, 2017 and ending on December 1, 2018. On June 30, 2017, the parties to the KBS Loan Agreement entered into a Third Agreement of Amendment to Loan and Security Agreement providing for increased availability under the KBS Loan Agreement to KBS under certain circumstances, and certain other changes, as well as a waiver of certain covenants. On July 20, 2017, the parties to the KBS Loan Agreement entered into a Fourth Agreement of Amendment to Loan and Security Agreement providing for increased availability under the KBS Loan Agreement to KBS for new equipment additions, as well as a waiver for certain covenants. In connection with EBGL’s entry into the Premier Loan Agreement, and on the same date, EBGL repaid in full all of their obligations under and terminated the EBGL Loan Agreement. Pursuant to the termination of the EBGL Loan Agreement, all obligations of the Company in favor Gerber in connection with the EBGL Loan Agreement were extinguished. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation Policy | Consolidation Policy: |
Use of Estimates | Use of Estimates: |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash: |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts: |
Inventories | Inventories: |
Customer Rebate Program | Customer Rebate Program: |
Property, Plant and Equipment | Property, Plant and Equipment: |
Impairment of Goodwill and Indefinite-Lived Intangible Assets | Impairment of Goodwill and Indefinite-Lived Intangible Assets: |
Impairment of Long-Lived Assets with Finite Lives | Impairment of Long-Lived Assets with Finite Lives: |
Revenue Recognition | Revenue Recognition: EdgeBuilder manufactures structural wall panels and permanent wood foundations pursuant to commercial construction contracts. These wall panels and wood foundation systems are manufactured in EdgeBuilder’s factory and delivered to its customers’ construction sites in accordance with the contractual delivery schedule. Many of EdgeBuilder’s wall panel construction contracts span multiple months. We recognize revenue for modular units and site work, as well as structural wall panels and wood foundations, using the percentage of completion method. Percentage of completion is determined using a units-of-production methodology based on modules delivered in accordance with the terms of the contract and cost-to-cost method with cost determined based on costs incurred to date related to each wall panel (EBGL) contract. Sales tax billed to customers is excluded from revenue. Transportation and freight billed to customers is recorded as revenue and the related costs are included in cost of sales. The current asset “Costs and estimated profit in excess of billings” represents revenues recognized in excess of amounts billed and the current liability “Billings in excess of costs and estimated profit” represents billings in excess of revenues recognized. Application of the cost-to-cost percentage of completion method of accounting requires the use of estimates of costs to be incurred in completing our performance under a contract. The cost estimating process is based on the knowledge and experience of management and involves making significant judgments. Changes in contract performance, change orders, estimated profitability, final contract settlements and other factors may result in changes to estimated and actual costs and profit. The effects of such changes are recognized in the period in which the revisions are determined. In situations where the estimated cost to complete a contract indicates a loss will be incurred, the entire loss is recorded in the period in which it is estimated. Glenbrook is a retail supplier of lumber and other building supplies. Retail sales at Glenbrook are recognized at the point of sale. Returns on retail sales are generally not material and are recognized at the point of return. |
Warranty Costs | Warranty Costs: |
Self-Insurance Costs | Self-Insurance Costs: |
Income Taxes | Income Taxes: |
Income (Loss) Per Common Share | Income (Loss) Per Common Share: |
Business Combinations | Business Combinations: |
Share-Based Compensation | Share-Based Compensation: |
Fair Value Measurements | Fair Value Measurements: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The carrying amounts of our cash equivalents, restricted cash, accounts receivable, costs in excess of billings and estimated profit, other current assets, trade accounts payable, billings in excess of costs and estimated profit and accrued expenses at December 31, 2016 and 2015 approximate fair value due to the short-term maturities of these instruments. |
Contingent Earn-outs | Contingent Earn-outs: |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price and Allocation of Purchase Price | The purchase price and the allocation of the purchase price were as follows (in thousands): Purchase price: Cash paid at closing $ 2,960 Fair value of deferred payments owing to EBGL Sellers 941 Fair value of contingent earn-out liability 943 ATRM common stock (100,000 shares at $1.49 per share) 149 Purchase price adjustment – paid in January 2017 218 Total purchase price $ 5,211 Allocation of purchase price: Assets acquired: Inventories $ 898 Costs and estimated profit in excess of billings 93 Prepaid expenses 3 Equipment (1) 289 Goodwill (2) 3,020 Customer relationships (2)(3) 677 Tradenames (2) 104 Purchased backlog (2)(3) 300 Total assets acquired 5,384 Liabilities assumed: Billings in excess of costs and estimated profits (31 ) Accrued compensation (40 ) Accrued other liabilities (102 ) Total liabilities assumed (173 ) Net assets acquired $ 5,211 (1) The fair value of equipment was determined based primarily on an independent appraisal. (2) Goodwill and tradenames are considered indefinite-lived assets and are not subject to future amortization, but will be tested for impairment at least annually. Goodwill is comprised primarily of manufacturing processes and knowhow, assembled workforce and other intangible assets that do not qualify for separate recognition. The full amount of goodwill is expected to be deductible for tax purposes. (3) The amortization period for customer relationships is six years. Purchased backlog will be amortized over the period that the related contracts are completed, which is expected to be less than one year. |
Schedule of Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents the combined results of ATRM and EdgeBuilder Wall Panels, Inc. and Glenbrook Lumber & Supply, Inc. for the years ended December 31, 2016 and 2015 as if the EBGL Acquisition had occurred on January 1, 2015 (in thousands): 2016 2015 Pro forma net sales $ 40,589 $ 39,690 Pro forma net loss (5,880 ) (3,448 ) Pro forma loss per share – basic and diluted (2.51 ) (2.18 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Assets Measured on Recurring Basis | Financial assets and liabilities reported at fair value on a recurring basis include the following (in thousands): December 31, 2016 2015 Contingent earn-out receivable (based on Level 3 inputs): Current portion $ 359 $ 329 Noncurrent portion 202 548 Total $ 561 $ 877 Contingent earn-out payable (based on Level 3 inputs) $ (967 ) $ — |
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | The following table summarizes the activity for our Level 3 assets and liabilities measured on a recurring basis (in thousands): Earn-Out Receivable (1) Earn-Out Payable (2) Balance at December 31, 2014 $ 2,300 $ — Subtract – decreases based on re-assessments (included in earnings) (191 ) — Settlements (1,232 ) — Balance at December 31, 2015 877 — Add – fair value of earn-out liability at closing of EBGL Acquisition — (943 ) Subtract – net decrease based on re-assessments (included in earnings) (4 ) — Add – net increase based on re-assessments (included in earnings) — (24 ) Settlements (312 ) — Balance at December 31, 2016 $ 561 $ (967 ) (1) Earn-out receivable related to the transfer of our test handler product line in 2014 (see Note 6). (2) Earn-out payable related to the EBGL Acquisition in 2016 (see Note 5). |
Schedule of Quantitative Information Level 3 Fair Assets and Liabilities | Quantitative information about Level 3 fair value assets and liabilities measured on a recurring basis at December 31, 2016 is summarized in the table below: Fair Value Asset/Liability Valuation Technique Unobservable Input Amount Contingent earn-out receivable Discounted cash flow Estimated revenue for remaining royalty period Performance weighted average Discount rate $11 million 60% to 125% 10 percent Contingent earn-out payable Discounted cash flow Estimated gross profit for earn-out period Discount rate $3.4 million 10 percent Quantitative information about Level 3 fair value assets measured on a recurring basis at December 31, 2015 is summarized in the table below: Fair Value Asset Valuation Technique Unobservable Input Amount Contingent earn-out receivable related to transfer of test handler product line Discounted cash flow Estimated revenue for remaining royalty period Performance weighted average Discount rate $14 million 60% to 125% 10 percent |
Schedule of Assets Reported Fair Value on Nonrecurring Basis | Financial assets reported at fair value on a nonrecurring basis include the following (in thousands): Year ended December 31, 2016 Fair Value (Level 3) Total Gains and (Losses) Goodwill related to KBS acquisition (1) $ — $ (1,733 ) (1) We recorded a goodwill impairment charge of approximately $1.7 million in year 2016 in connection with the write-off of the remaining goodwill related to the KBS acquisition (see Note 10). |
Schedule of Fair Value of Goodwill Activity | The following table summarizes the activity for our Level 3 assets measured on a nonrecurring basis (in thousands): KBS Goodwill (1) Balance at December 31, 2015 $ 1,733 Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings) (1,733 ) Balance at December 31, 2016 $ — (1) For more information regarding Goodwill, see Note 10. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable are comprised of the following (in thousands): December 31, 2016 2015 Contract billings $ 2,330 $ 2,586 Retainage 370 347 Subtotal 2,700 2,933 Less - allowance for doubtful accounts (96 ) (370 ) Accounts receivable, net $ 2,604 $ 2,563 Retainage balances are expected to be collected within the next twelve months. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are comprised of the following (in thousands): December 31, 2016 2015 Raw materials $ 1,404 $ 1,120 Finished goods — 121 Total inventories $ 1,404 $ 1,241 |
Goodwill and Intangible Asset37
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets are comprised of the following (in thousands): December 31, 2016 December 31, 2015 Gross Carrying Amount Accumulated Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Indefinite-lived intangible assets: Goodwill $ 3,020 $ — $ 3,020 $ 1,733 $ — $ 1,733 Trademarks 394 — 394 290 — 290 Total 3,414 — 3,414 2,023 — 2,023 Finite-lived intangible assets: Customer relationships 2,097 (586 ) 1,511 1,420 (355 ) 1,065 Purchased backlog 1,290 (1,078 ) 212 990 (990 ) — Total 3,387 (1,664 ) 1,723 2,410 (1,345 ) 1,065 Total intangible assets $ 6,801 $ (1,664 ) $ 5,137 $ 4,433 $ (1,345 ) $ 3,088 |
Summary of Goodwill Activity | The following table summarizes the activity for Goodwill (in thousands): Goodwill Balance at December 31, 2015 $ 1,733 Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings) (1,733 ) Add – goodwill recorded on October 4, 2016 in connection with the EBGL Acquisition 3,020 Balance at December 31, 2016 $ 3,020 |
Schedule of Estimated Amortization of Intangible Assets | Estimated amortization of purchased intangible assets is as follows over the next five years (in thousands): 2017 $ 527 2018 316 2019 316 2020 316 2021 163 Thereafter 85 Total $ 1,723 |
Uncompleted Construction Cont38
Uncompleted Construction Contracts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Contractors [Abstract] | |
Schedule of Uncompleted Contracts | The status of uncompleted construction contracts is summarized below (in thousands): December 31, 2016 2015 Costs incurred on uncompleted contracts $ 6,575 $ 1,155 Inventory purchased for specific contracts 837 1,819 Estimated profit 1,150 142 Sub-total 8,562 3,116 Less billings to date (8,169 ) (3,409 ) Total $ 393 $ (293 ) Included in the following balance sheet captions: Costs and estimated profit in excess of billings $ 1,045 $ 472 Billings in excess of costs and estimated profit (652 ) (765 ) Total $ 393 $ (293 ) |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Other Accrued Liabilities | Other accrued liabilities are comprised of the following (in thousands): December 31, 2016 2015 Accrued interest expense $ 637 $ 502 Accrued sales taxes 739 562 Accrued severance and related costs — 331 Accrued health insurance costs 96 133 Accrued sales rebates 327 402 Accrued warranty 49 39 Other 416 16 Total other accrued liabilities $ 2,264 $ 1,985 |
Schedule of Changes in Accrued Warranty | The following table summarizes product warranty expense accruals and settlements for the two years ended December 31, 2016 (in thousands): Accrual balance at beginning of year Accruals for warranties Settlements made Accrual balance at end of year 2016 $ 39 $ 116 $ (106 ) $ 49 2015 78 58 (97 ) 39 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt is comprised of the following (in thousands): December 31, 2016 2015 LSVI Promissory Note payable to related party, unsecured, interest of 10% per annum (12% per annum PIK interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 (1) $ 4,261 $ 5,000 Promissory notes payable to LSV Co-Invest I, a related party, unsecured, interest of 10% per annum (12% per annum PIK interest) payable semi-annually in July and January, with any unpaid principal and interest due on April 1, 2019 (2) 6,773 4,500 Promissory note payable to KBS sellers, unsecured, interest imputed at 9.5% (3) 678 1,757 Installment payment agreement, 8.0% interest, payable in monthly installments of $1,199 through September 2020 (4) 46 56 Notes payable, secured by equipment, interest rates from 6.6% to 9.5%, with varying maturity dates through September 2018 22 44 Promissory note payable to Gerber Finance, secured, interest at the current prime rate plus 3.0% payable monthly with any unpaid principal and interest due on December 31, 2018 (5) 3,000 — Deferred payments to EBGL Sellers, interest imputed at 10.0% (6) 964 — Total long-term debt 15,744 11,357 Current portion (1,675 ) (1,105 ) Noncurrent portion $ 14,069 $ 10,252 (1) In order to finance the KBS acquisition and to provide general working capital, on April 1, 2014, we entered into a Securities Purchase Agreement with LSVI pursuant to which it purchased for $6.5 million in cash, an unsecured promissory note made by ATRM in the principal amount of $6.0 million (the “LSVI Promissory Note”), bearing interest at 10.0% per annum principal and interest due on April 1, 2019. ATRM may prepay the LSVI Promissory Note at any time after a specified amount of advance notice to LSVI. On December 30, 2014, we made a principal payment of $1.0 million on the LSVI Promissory Note. On February 25, 2016, we made a principal payment of $1.0 million on the LSVI Promissory Note. (2) In order to provide additional working capital to ATRM, we entered into two Securities Purchase Agreements with LSV Co-Invest I pursuant to which it purchased unsecured promissory notes made by ATRM. Each of the notes bears interest at 10.0% per annum (12% per annum PIK Interest), with interest payable semiannually in January and July and any unpaid principal and interest is due on April 1, 2019. Except for the principal amounts, the terms of these promissory notes are identical to the terms of the LSVI Promissory Note. The promissory notes issued to LSV Co-Invest I are listed below: ● $2.5 million promissory note dated July 21, 2014 ● $2.0 million promissory note dated September 19, 2014 ● $2.0 million promissory note dated October 4, 2016 (3) Promissory note payable to the principal seller of KBS, payable in monthly installments of $100,000 through July 2017. Interest imputed at 9.5% (see below). (4) Agreement to finance the purchase of software license rights and consulting services related to the implementation of enterprise management information system. (5) Acquisition Loan with Gerber Finance with a principal amount of $3.0 million, the proceeds of which were used to finance the EBGL Acquisition in October 2016. Borrowings under this loan bear interest at the prime rate plus 3.0%, with interest payable monthly and the outstanding principal payable upon the expiration of the term of the agreement; initially December 31, 2018, but extends automatically for additional one-year periods unless a party provides prior written notice of termination (see Note 2). (6) Deferred Payments to the EBGL Sellers under the Purchase Agreement, payable in quarterly installments of $250,000 on January 1, 2017, April 1, 2017, July 1, 2017 and October 1, 2017. Interest imputed at 10.0% (see Note 2). |
Summary of Gain on Settlement | Reduction of principal (including adjustment for imputed interest at 9.5%) $ 3,226 Forgiveness of interest accrued to the date of settlement 461 Gain on settlement agreement $ 3,687 |
Schedule of Maturities of Long-term Debt | Future maturities of long-term debt are summarized below: 2017 $ 1,675 2018 3,012 2019 11,047 2020 10 Total long-term debt $ 15,744 |
Leases and Rent Expense (Tables
Leases and Rent Expense (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Future Minimum Operating Lease Payments | As of December 31, 2016, future minimum lease payments under operating leases were as follows (in thousands): 2017 $ 266 2018 266 2019 267 2020 272 2021 207 Total minimum lease payments $ 1,278 |
Schedule of Operating Leases Rent Expense | Rent expense, including facility and various short-term equipment operating leases, was as follows (in thousands): Year ended December 31, 2016 2015 Paid to companies controlled by shareholder $ 85 $ 94 Paid to others 15 22 Total rent expense $ 100 $ 116 |
Stock Incentive Plans and Sha42
Stock Incentive Plans and Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity under the 2003 Plan for the year ended December 31, 2016: Number Of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term Aggregate Intrinsic Value (in thousands) Outstanding, January 1, 2016 27,500 $ 6.88 Expired — Outstanding, December 31, 2016 27,500 $ 6.88 0.5 years $ 0 Exercisable, December 31, 2016 27,500 $ 6.88 0.5 years $ 0 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | A reconciliation of income tax expense (benefit) computed using the federal statutory rate to the income tax expense (benefit) in our consolidated statements of operations is as follows (in thousands): Year ended December 31, 2016 2015 Tax benefit computed at federal statutory rate $ (2,216 ) $ (1,133 ) State taxes, net of federal benefit (156 ) (127 ) Increase valuation allowance 2,048 735 State NOL expiration/write-off 321 39 Adjustment to income tax accruals 5 423 State research credit expiration 3 65 Non-deductible expenses 3 3 Other, net — 1 Total income tax expense $ 8 $ 6 |
Schedule of Net Deferred Tax Assets (Liabilities) | Deferred tax assets (liabilities) are comprised of the following (in thousands): December 31, 2016 2015 Accounts receivable $ 36 $ 141 Employee compensation and benefits 100 91 Contingent consideration (169 ) (268 ) Amortization 1,305 1,089 Deferred acquisition costs 245 265 NOL and tax credit carryforwards 34,807 32,895 Warranty accrual 18 15 Severance accrual — 97 Other, net 60 34 Deferred tax assets (liabilities), net $ 36,402 $ 34,359 Less valuation allowance (36,421 ) (34,372 ) Net deferred tax assets (liabilities) $ (19 ) $ (13 ) |
Product Line, Geographic, Sig44
Product Line, Geographic, Significant Customer and Concentration of Credit Risk Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Product Information | The following table sets forth the various components of net sales by product line as a percentage of total net sales: Year ended December 31, 2016 2015 Residential homes 79 % 76 % Commercial structures 21 % 24 % Total 100 % 100 % |
Schedule of Percentage of Total Sales and Accounts Receivable from Customer | Sales to customers comprising more than 10% of our total net sales and corresponding accounts receivable concentration information for such customers is summarized below: Percent of total sales for year ended December 31, Percent of total accounts receivable as of December 31, 2016 2015 2016 2015 Residential Customers Customer A 10.7 % * * 12.0 % Customer B * * 11.8 % * Commercial Customers Customer C * 14.7 % * * Customer D * * * 26.9 % Customer E * * 27.0 % * * Percent was less than 10% of the total. |
Operating Segments (Tables)
Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information of Reportable Segment | The following table presents certain financial information regarding each reportable segment as of and for the year ended December 31, 2016: Modular Home Manufacturing Structural Wall Panel Manufacturing Total Segment net sales $ 24,654,447 $ 3,501,664 $ 28,156,111 Depreciation and amortization expense 501,920 131,106 633,026 Segment goodwill impairment expense 1,732,804 — 1,732,804 Interest expense, net 408,912 120,012 528,924 Segment net loss 3,503,268 155,074 3,658,342 Total segment assets 8,007,031 7,126,033 15,133,064 Expenditures for segment assets 50,726 21,727 72,453 |
Schedule of Reconciliation of Operating Segment Information | Reconciliation of Segment Information Revenues Total net sales for reportable segments $ 28,156,111 Other net sales — Consolidated net sales $ 28,156,111 Net loss Total net loss for reportable segments $ 3,658,342 Other net sales — Unallocated amounts: Other corporate expenses 1,707,705 Interest expense 1,146,752 Change in fair value of contingent earn-out 3,631 Provision for income taxes 7,900 Consolidated net loss $ 6,524,330 Assets Total assets for reportable segments $ 15,133,064 Other assets 1,644,970 Consolidated assets $ 16,778,034 |
Schedule of Other Operating Segment Adjustments | Other Significant Adjustments Segment Totals Adjustments Consolidated Totals Depreciation and amortization expense $ 633,026 $ — $ 633,026 Segment goodwill impairment expense $ 1,732,804 $ — $ 1,732,804 Interest expense $ 528,924 $ 1,146,752 $ 1,675,676 |
Financial Position, Liquidity46
Financial Position, Liquidity and Capital Resources (Details Narrative) - USD ($) | Oct. 04, 2016 | Feb. 23, 2016 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 12, 2016 | Sep. 19, 2014 | Jul. 21, 2014 |
Accumulated deficit | $ (80,175,282) | $ (73,650,952) | ||||||
Outstanding debt | 19,200,000 | |||||||
Debt principal amount | $ 2,000,000 | $ 2,000,000 | $ 2,500,000 | |||||
Interest Expense | 1,675,676 | $ 1,396,542 | ||||||
KBS Loan Agreement [Member] | ||||||||
Outstanding debt | 2,400,000 | |||||||
Debt principal amount | 1,200,000 | |||||||
Line of credit with maximum borrowing availability | $ 4,000,000 | |||||||
Debt due date | Feb. 22, 2018 | |||||||
Line of credit initial amount | $ 2,600,000 | |||||||
EBGL Loan Agreement [Member] | ||||||||
Outstanding debt | 1,000,000 | |||||||
Debt principal amount | 1,000,000 | 3,000,000 | ||||||
Line of credit with maximum borrowing availability | $ 3,000,000 | |||||||
Debt due date | Oct. 3, 2018 | |||||||
Notes payable monthly installment | $ 500,000 | |||||||
Acquisition Loan Agreement [Member] | ||||||||
Debt principal amount | 3,000,000 | |||||||
EBGL Acquisition [Member] | ||||||||
Line of credit with maximum borrowing availability | $ 3,000,000 | |||||||
Note payable, bears interest percentage | 2.75% | |||||||
Payment In-Kind [Member] | ||||||||
Note payable, bears interest percentage | 12.00% | |||||||
LSVI and LSV Co-Invest I Unsecured Promissory Notes [Member] | ||||||||
Debt principal amount | $ 2,000,000 | |||||||
Working capital | $ 2,000,000 | |||||||
KBS Builders [Member] | ||||||||
Debt principal amount | 2,400,000 | |||||||
KBS Builders [Member] | Unsecured Promissory Note [Member] | ||||||||
Notes payable monthly installment | 100,000 | |||||||
Line of credit, current, net of deferred financing costs | 1,000,000 | |||||||
Gerber Finance Inc [Member] | ||||||||
Line of credit with maximum borrowing availability | 4,000,000 | |||||||
Gerber Finance Inc [Member] | KBS Loan Agreement [Member] | ||||||||
Debt principal amount | 2,400,000 | |||||||
Line of credit with maximum borrowing availability | $ 4,000,000 | |||||||
Debt due date | Feb. 22, 2018 | |||||||
Gerber Finance Inc [Member] | EBGL Loan Agreement [Member] | ||||||||
Debt principal amount | 1,200,000 | |||||||
Debt due date | Oct. 3, 2018 | |||||||
Line of credit, current, net of deferred financing costs | 200,000 | |||||||
Gerber Finance Inc [Member] | EBGL Acquisition [Member] | ||||||||
Outstanding debt | 3,000,000 | |||||||
Line of credit with maximum borrowing availability | $ 3,000,000 | |||||||
Debt due date | Dec. 31, 2018 | |||||||
Note payable, bears interest percentage | 3.00% | |||||||
Lone Star Value Investors, LP [Member] | ||||||||
Debt principal amount | 4,300,000 | |||||||
Lone Star Value Co-Invest I. LP [Member] | ||||||||
Debt principal amount | $ 6,800,000 | |||||||
Debt due date | Apr. 1, 2019 | |||||||
Note payable, bears interest percentage | 10.00% | |||||||
Lone Star Value Co-Invest I. LP [Member] | Payment In-Kind [Member] | ||||||||
Note payable, bears interest percentage | 12.00% | |||||||
Interest Expense | $ 534,000 | |||||||
EBGL [Member] | Unsecured Promissory Note [Member] | ||||||||
Notes payable monthly installment | $ 250,000 | |||||||
Line of credit, current, net of deferred financing costs | 1,000,000 | |||||||
KBS Operations [Member] | ||||||||
Interest Expense | 11,000,000 | |||||||
KBS Operations [Member] | July 2017 [Member] | ||||||||
Notes payable monthly installment | $ 100,000 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash equivalents | $ 0 | $ 9,313 |
Rebates earned by builders amount | 564,000 | 400,000 |
Depreciation and amortization of property and plant equipment | 314,000 | 317,000 |
Goodwill impairment charge | $ 1,732,804 | |
Percentage of tax benefit realized upon settlement | greater than 50 percent | |
KBS Builders [Member] | ||
Warranty period | 12 months | |
Buildings and Improvements [Member] | ||
Estimated useful lives | P30Y | |
Machinery and Equipment [Member] | Minimum [Member] | ||
Estimated useful lives | P3Y | |
Machinery and Equipment [Member] | Maximum [Member] | ||
Estimated useful lives | P7Y |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) | Oct. 04, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Consideration for KBS acquisition in cash paid at closing | $ 5,211,485 | $ 5,211,485 | |
Expenses for professional fees | 200,000 | ||
EBGL Sellers [Member] | June 30, 2017 [Member] | |||
Deferred payments payable | 750,000 | ||
Contingent earn out payment | 100,000 | ||
Monthly payments payable | 1,800,000 | ||
EBGL Sellers [Member] | July 3, 2017 [Member] | |||
Contingent consideration initial payment payable | $ 200,000 | ||
EBGL Acquisition [Member] | |||
Consideration for KBS acquisition in cash paid at closing | 5,211,485 | ||
Payment paid at closing | 3,000,000 | ||
Deferred payments payable | $ 1,000,000 | ||
Number of common stock shares issued for acquisition | 100,000 | ||
Net purchase price | $ 200,000 | ||
Contingent earn out payment | $ 1,000,000 |
Business Combination - Schedule
Business Combination - Schedule of Purchase Price and Allocation of Purchase Price (Details) - USD ($) | Oct. 04, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||||
Cash paid at closing | $ 2,960,000 | |||
Fair value of deferred payments owing to EBGL Sellers | 941,000 | |||
Fair value of contingent earn-out liability | 943,000 | |||
ATRM common stock (100,000 shares at $1.49 per share) | 149,000 | $ 149,000 | ||
Purchase price adjustment - paid in January 2017 | 218,000 | |||
Total purchase price | 5,211,485 | $ 5,211,485 | ||
Inventories | 898,000 | |||
Costs and estimated profit in excess of billings | 93,000 | |||
Prepaid expenses | 3,000 | |||
Equipment | [1] | 289,000 | ||
Goodwill | [2] | 3,020,000 | ||
Customer relationships | [2],[3] | 677,000 | ||
Tradenames | [2] | 104,000 | ||
Purchased backlog | [2],[3] | 300,000 | ||
Total assets acquired | 5,384,000 | |||
Billings in excess of costs and estimated profits | (31,000) | |||
Accrued compensation | (40,000) | |||
Accrued other liabilities | (102,000) | |||
Total liabilities assumed | (173,000) | |||
Net assets acquired | $ 5,211,000 | |||
[1] | The fair value of equipment was determined based primarily on an independent appraisal. | |||
[2] | Goodwill and tradenames are considered indefinite-lived assets and are not subject to future amortization, but will be tested for impairment at least annually. Goodwill is comprised primarily of manufacturing processes and knowhow, assembled workforce and other intangible assets that do not qualify for separate recognition. The full amount of goodwill is expected to be deductible for tax purposes. | |||
[3] | The amortization period for customer relationships is six years. Purchased backlog will be amortized over the period that the related contracts are completed, which is expected to be less than one year. |
Business Combination - Schedu50
Business Combination - Schedule of Purchase Price and Allocation of Purchase Price (Details) (Parenthetical) | Oct. 04, 2016$ / sharesshares |
Business Combinations [Abstract] | |
Number of common stock shares | shares | 100,000 |
Per share price | $ / shares | $ 1.49 |
Business Combination - Schedu51
Business Combination - Schedule of Business Acquisition, Pro Forma Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | ||
Pro forma net sales | $ 40,589 | $ 39,690 |
Pro forma net loss | $ (5,880) | $ (3,448) |
Pro forma loss per share - basic and diluted | $ (2.51) | $ (2.18) |
Contingent Earn-Out Receivable
Contingent Earn-Out Receivable (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Royalty percentage | 12.00% | |
Royalty percentage decrease each quarter thereafter | 0.75% | |
Royalty payment received | $ 300,000 | $ 1,300,000 |
Contingent earn out receivable | $ 600,000 | $ 900,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Financial Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Contingent earn-out receivable, Current portion | $ 359 | $ 329 |
Contingent earn-out receivable, Noncurrent portion | 202 | 548 |
Contingent earn out receivable, Total | 561 | 877 |
Contingent earn-out payable | $ (967) |
Fair Value Measurements - Sch54
Fair Value Measurements - Schedule of Fair Value of Assets and Liabilities Measured on Recurring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Earn-Out Receivable [Member] | |||
Balance, beginning | [1] | $ 877 | $ 2,300 |
Subtract - decreases based on re-assessments (included in earnings) | [1] | (191) | |
Add - fair value of earn-out liability at closing of EBGL Acquisition | [1] | ||
Subtract – net decrease based on re-assessments (included in earnings) | [1] | (4) | |
Add – net increase based on re-assessments (included in earnings) | [1] | ||
Settlements | [1] | (312) | (1,232) |
Balance, ending | [1] | 561 | 877 |
Earn-Out Payable [Member] | |||
Balance, beginning | [2] | ||
Subtract - decreases based on re-assessments (included in earnings) | [2] | ||
Add - fair value of earn-out liability at closing of EBGL Acquisition | [2] | (943) | |
Subtract – net decrease based on re-assessments (included in earnings) | [2] | ||
Add – net increase based on re-assessments (included in earnings) | [2] | (24) | |
Settlements | [2] | ||
Balance, ending | [2] | $ (967) | |
[1] | Earn-out receivable related to the transfer of our test handler product line in 2014 (see Note 6). | ||
[2] | Earn-out payable related to the EBGL Acquisition in 2016 (see Note 5). |
Fair Value Measurements - Sch55
Fair Value Measurements - Schedule of Quantitative Information Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value Asset/Liability | Contingent earn-out receivable | Contingent earn-out receivable related to transfer of test handler product line |
Fair value of assets, valuation technique | Discounted cash flow | Discounted cash flow |
Unobservable input projected revenue | $ 11,000 | $ 14,000 |
Unobservable input Revenue growth rate | 0.00% | |
Unobservable input performance weighted average, Minimum | 60.00% | 60.00% |
Unobservable input performance weighted average, Maximum | 125.00% | 125.00% |
Unobservable input discount rate | 10.00% | 10.00% |
Fair Value, Measurements, Recurring One [Member] | ||
Fair Value Asset/Liability | Contingent earn-out payable | |
Fair value of assets, valuation technique | Discounted cash flow | |
Unobservable input projected revenue | $ 3,400 | |
Unobservable input discount rate | 10.00% |
Fair Value Measurements - Sch56
Fair Value Measurements - Schedule of Assets Reported Fair Value on Nonrecurring (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | $ 3,019,637 | $ 1,732,804 | |
Fair Value Measurements Nonrecurring [Member] | |||
Goodwill | [1] | $ 1,733,000 | |
Total losses | [2] | (1,733,000) | |
Level 3 [Member] | Fair Value Measurements Nonrecurring [Member] | |||
Goodwill | [2] | ||
[1] | For more information regarding Goodwill, see Note 10. | ||
[2] | We recorded a goodwill impairment charge of approximately $1.7 million in year 2016 in connection with the write-off of the remaining goodwill related to the KBS acquisition (see Note 10). |
Fair Value Measurements - Sch57
Fair Value Measurements - Schedule of Assets Reported Fair Value on Nonrecurring (Details) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Goodwill impairment | $ 1,700 |
Fair Value Measurements - Sch58
Fair Value Measurements - Schedule of Fair Value of Goodwill Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Goodwill, Beginning balance | $ 1,732,804 | ||
Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings) | (1,732,804) | ||
Goodwill, Ending balance | 3,019,637 | 1,732,804 | |
Fair Value Measurements Nonrecurring [Member] | |||
Goodwill, Beginning balance | [1] | 1,733,000 | |
Subtract – KBS goodwill impairment recorded at June 30, 2016 (included in earnings) | [1] | (1,733,000) | |
Goodwill, Ending balance | [1] | $ 1,733,000 | |
[1] | For more information regarding Goodwill, see Note 10. |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Receivables [Abstract] | ||
Contract billings | $ 2,330,000 | $ 2,586,000 |
Retainage | 370,000 | 347,000 |
Subtotal | 2,700,000 | 2,933,000 |
Less - allowance for doubtful accounts | (96,000) | (370,000) |
Accounts receivable, net | $ 2,603,549 | $ 2,562,999 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | ||
Inventory write down | $ 86,016 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,404,000 | $ 1,120,000 |
Finished goods | 121,000 | |
Total inventories | $ 1,404,445 | $ 1,241,074 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment charge | $ 1,732,804 | |
Amortization expense | $ 319,000 | $ 333,000 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Indefinite-lived intangible assets Gross Net Carrying Value | $ 3,020 | $ 1,733 |
Total finite-lived intangible assets Net Carrying Value | 1,723 | |
Gross Carrying Amount | 6,801 | 4,433 |
Accumulated Amortization | (1,664) | (1,345) |
Net Carrying Value | 5,137 | 3,088 |
Indefinite Lived Intangible Assets [Member] | ||
Indefinite-lived intangible assets Gross Carrying Amount | 3,414 | 2,023 |
Indefinite-lived intangible assets Gross Accumulated Amortization | ||
Indefinite-lived intangible assets Gross Net Carrying Value | 3,414 | 2,023 |
Indefinite Lived Intangible Assets [Member] | Trademarks [Member] | ||
Indefinite-lived intangible assets Gross Carrying Amount | 394 | 290 |
Indefinite-lived intangible assets Gross Accumulated Amortization | ||
Indefinite-lived intangible assets Gross Net Carrying Value | 394 | 290 |
Finite Lived Intangible Assets [Member] | ||
Finite lived intangible assets Gross Carrying Amount | 3,387 | 2,410 |
Finite lived intangible assets Accumulated Amortization | (1,664) | (1,345) |
Total finite-lived intangible assets Net Carrying Value | 1,723 | 1,065 |
Finite Lived Intangible Assets [Member] | Customer Relationships [Member] | ||
Finite lived intangible assets Gross Carrying Amount | 2,097 | 1,420 |
Finite lived intangible assets Accumulated Amortization | (586) | (355) |
Total finite-lived intangible assets Net Carrying Value | 1,511 | 1,065 |
Finite Lived Intangible Assets [Member] | Purchased Backlog [Member] | ||
Finite lived intangible assets Gross Carrying Amount | 1,290 | 990 |
Finite lived intangible assets Accumulated Amortization | (1,078) | (990) |
Total finite-lived intangible assets Net Carrying Value | 212 | |
Goodwill [Member] | Indefinite Lived Intangible Assets [Member] | ||
Indefinite-lived intangible assets Gross Carrying Amount | 3,020 | 1,733 |
Indefinite-lived intangible assets Gross Accumulated Amortization | ||
Indefinite-lived intangible assets Gross Net Carrying Value | $ 3,020 | $ 1,733 |
Goodwill and Intangible Asset64
Goodwill and Intangible Assets, Net - Summary of Goodwill Activity (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance, beginning | $ 1,733 |
Subtract - KBS goodwill impairment recorded at June 30, 2016 (included in earnings) | (1,733) |
Add - goodwill recorded on October 4, 2016 in connection with the EBGL Acquisition | 3,020 |
Balance, ending | $ 3,020 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets, Net - Summary of Estimated Amortization of Intangible Assets (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,017 | $ 527 |
2,018 | 316 |
2,019 | 316 |
2,020 | 316 |
2,021 | 163 |
Thereafter | 85 |
Total finite-lived intangible assets | $ 1,723 |
Uncompleted Construction Cont66
Uncompleted Construction Contracts (Details Narrative) $ in Thousands | Dec. 31, 2016USD ($) |
Contractors [Abstract] | |
Amount of remaining contract | $ 10,700 |
Uncompleted Construction Cont67
Uncompleted Construction Contracts - Schedule of Uncompleted Contracts (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Contractors [Abstract] | ||
Costs incurred on uncompleted contracts | $ 6,575,000 | $ 1,155,000 |
Inventory purchased for specific contracts | 837,000 | 1,819,000 |
Estimated profit | 1,150,000 | 142,000 |
Subtotal | 8,562,000 | 3,116,000 |
Less billings to date | (8,169,000) | (3,409,000) |
Total | 393,000 | (293,000) |
Costs and estimated profit in excess of billings | 1,045,045 | 471,539 |
Billings in excess of costs and estimated profit | (652,150) | (764,517) |
Total | $ 393,000 | $ (293,000) |
Trade Accounts Payable Retain68
Trade Accounts Payable Retainage (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts payable | $ 3,776,330 | $ 3,490,842 |
Subcontractors [Member] | ||
Accounts payable retainage | $ 400,000 | $ 500,000 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details Narrative) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2015Employees | Dec. 31, 2015USD ($) | |
Severance charge | $ | $ 421,000 | |
KBS Operations [Member] | ||
Number of employees terminated during the period | Employees | 6 |
Other Accrued Liabilities - Sch
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued interest expense | $ 637,000 | $ 502,000 |
Accrued sales taxes | 739,000 | 562,000 |
Accrued severance and related costs | 331,000 | |
Accrued health insurance costs | 96,000 | 133,000 |
Accrued sales rebates | 327,000 | 402,000 |
Accrued warranty | 49,000 | 39,000 |
Other | 416,000 | 16,000 |
Total other current accrued liabilities | $ 2,264,303 | $ 1,985,169 |
Other Accrued Liabilities - S71
Other Accrued Liabilities - Schedule of Changes in Accrued Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Payables and Accruals [Abstract] | ||
Accrual balance at beginning of year | $ 39 | $ 78 |
Accruals for warranties | 116 | 58 |
Settlements made | (106) | (97) |
Accrual balance at end of year | $ 49 | $ 39 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Oct. 04, 2016 | Feb. 23, 2016 | Dec. 31, 2016 | Sep. 19, 2014 | Jul. 21, 2014 |
Debt principal amount | $ 2,000,000 | $ 2,000,000 | $ 2,500,000 | ||
Gerber Finance Inc [Member] | |||||
Line of credit with maximum borrowing availability | $ 4,000,000 | ||||
KBS Loan Agreement [Member] | |||||
Debt principal amount | 1,200,000 | ||||
Line of credit with maximum borrowing availability | $ 4,000,000 | ||||
Notes payable maturity date | Feb. 22, 2018 | ||||
KBS Loan Agreement [Member] | Gerber Finance Inc [Member] | |||||
Notes payable | 3,400,000 | ||||
Debt principal amount | 2,400,000 | ||||
Revolving line of credit | 4,000,000 | ||||
Line of credit with maximum borrowing availability | $ 4,000,000 | ||||
Notes payable maturity date | Feb. 22, 2018 | ||||
Annual facilities fee percentage | 1.50% | ||||
Monthly collateral monitoring fee percentage | 10.00% | ||||
KBS Loan Agreement [Member] | Gerber Finance Inc [Member] | Prime Rate [Member] | |||||
Borrowing bearing variable interest rate | 2.75% | ||||
EBGL Loan Agreement [Member] | |||||
Debt principal amount | 1,000,000 | 3,000,000 | |||
Line of credit with maximum borrowing availability | $ 3,000,000 | ||||
Notes payable maturity date | Oct. 3, 2018 | ||||
EBGL Loan Agreement [Member] | Gerber Finance Inc [Member] | |||||
Debt principal amount | 1,200,000 | ||||
Revolving line of credit | 3,000,000 | ||||
Notes payable maturity date | Oct. 3, 2018 | ||||
Debt issuance costs | $ 257,000 | ||||
Line of credit | 1,000,000 | ||||
Line of credit, current, net deferred financing costs | 200,000 | ||||
Initial line of credit availability | 1,000,000 | ||||
Maximum increased amount of line of credit | 3,000,000 | ||||
Amount of line of credit increment | 500,000 | ||||
EBGL Loan Agreement [Member] | Gerber Finance Inc [Member] | Maximum [Member] | |||||
Line of credit | $ 3,000,000 | ||||
EBGL Loan Agreement [Member] | Gerber Finance Inc [Member] | Prime Rate [Member] | |||||
Borrowing bearing variable interest rate | 2.75% | ||||
KBS Loan Agreement [Member] | |||||
Debt principal amount | 2,600,000 | ||||
Debt issuance costs | 230,000 | ||||
Line of credit | 2,400,000 | ||||
Line of credit, current, net deferred financing costs | $ 200,000 | ||||
KBS Loan Agreement [Member] | Gerber Finance Inc [Member] | |||||
Note payable maximum leverage ratio | 7:1 |
Long-Term Debt (Details Narrati
Long-Term Debt (Details Narrative) - USD ($) | Apr. 02, 2014 | Sep. 30, 2015 | Apr. 30, 2015 | Apr. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 04, 2016 | Aug. 12, 2016 | Jul. 05, 2016 | Feb. 25, 2016 | Dec. 30, 2014 | Sep. 19, 2014 | Jul. 21, 2014 |
Debt principal amount | $ 2,000,000 | $ 2,000,000 | $ 2,500,000 | ||||||||||
Long term debt | $ 15,744,000 | $ 11,357,000 | |||||||||||
Gain on settlement of debt | $ 3,687,000 | ||||||||||||
KBS Acquisition [Member] | |||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Debt maturity date | Dec. 1, 2014 | ||||||||||||
Promissory note, payable in installments | $ 100,000 | ||||||||||||
Unsecured promissory note | $ 5,500,000 | ||||||||||||
Gain on settlement of debt | 3,700,000 | ||||||||||||
KBS Acquisition [Member] | Minimum [Member] | |||||||||||||
Original note to reduce the principal amount | $ 5,500,000 | ||||||||||||
KBS Acquisition [Member] | Maximum [Member] | |||||||||||||
Original note to reduce the principal amount | $ 2,500,000 | ||||||||||||
Payment In-Kind [Member] | |||||||||||||
Debt interest rate | 12.00% | ||||||||||||
LSVI [Member] | |||||||||||||
Number of shares owned | 1,067,885 | ||||||||||||
Percentage of outstanding shares | 45.10% | ||||||||||||
Number of shares purchased | 900,000 | ||||||||||||
LSVI Promissory Note [Member] | |||||||||||||
Debt principal payments | $ 1,000,000 | $ 1,000,000 | |||||||||||
Acquisition Loan [Member] | Gerber Finance Inc [Member] | |||||||||||||
Debt principal amount | $ 3,000,000 | ||||||||||||
Acquisition Loan [Member] | Gerber Finance Inc [Member] | Prime Rate [Member] | |||||||||||||
Debt interest rate | 3.00% | ||||||||||||
KBS Builders [Member] | |||||||||||||
Debt principal amount | $ 2,400,000 | ||||||||||||
Long term note payable | $ 100,000 | ||||||||||||
Promissory note imputed interest rate | 9.50% | ||||||||||||
Unsecured promissory note | $ 678,413 | 1,757,292 | |||||||||||
Proceeds from unsecured debt | 700,000 | 1,900,000 | |||||||||||
Imputed interest amount | $ 21,587 | $ 142,708 | |||||||||||
EBGL [Member] | January 1, 2017 [Member] | |||||||||||||
Promissory note imputed interest rate | 10.00% | ||||||||||||
Promissory note, payable in installments | $ 250,000 | ||||||||||||
EBGL [Member] | April 1, 2017 [Member] | |||||||||||||
Promissory note imputed interest rate | 10.00% | ||||||||||||
Promissory note, payable in installments | $ 250,000 | ||||||||||||
EBGL [Member] | July 1, 2017 [Member] | |||||||||||||
Promissory note imputed interest rate | 10.00% | ||||||||||||
Promissory note, payable in installments | $ 250,000 | ||||||||||||
EBGL [Member] | October 1, 2017 [Member] | |||||||||||||
Promissory note imputed interest rate | 10.00% | ||||||||||||
Promissory note, payable in installments | $ 250,000 | ||||||||||||
Lone Star Value Co-Invest I. LP [Member] | |||||||||||||
Debt principal amount | $ 6,800,000 | ||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Debt maturity date | Apr. 1, 2019 | ||||||||||||
Lone Star Value Co-Invest I. LP [Member] | Payment In-Kind [Member] | |||||||||||||
Debt interest rate | 12.00% | ||||||||||||
Lone Star Value Co-Invest I. LP [Member] | Promissory Notes [Member] | |||||||||||||
Debt principal amount | $ 445,000 | ||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Interest expense debt | $ 1,100,000 | ||||||||||||
Long term debt | $ 500,000 | ||||||||||||
Lone Star Value Co-Invest I. LP [Member] | Promissory Notes [Member] | Payment In-Kind [Member] | |||||||||||||
Debt interest rate | 12.00% | ||||||||||||
Securities Purchase Agreement [Member] | LSVI [Member] | |||||||||||||
Total purchase amount | $ 6,500,000 | ||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Debt maturity date | Apr. 1, 2019 | ||||||||||||
Securities Purchase Agreement [Member] | LSVI [Member] | Payment In-Kind [Member] | |||||||||||||
Debt interest rate | 12.00% | ||||||||||||
Securities Purchase Agreement [Member] | LSVI [Member] | LSVI Promissory Note [Member] | |||||||||||||
Debt principal amount | $ 6,000,000 | ||||||||||||
Debt interest rate | 10.00% | ||||||||||||
Debt maturity date | Apr. 1, 2019 | ||||||||||||
Registration Rights Agreement [Member] | LSVI [Member] | |||||||||||||
Converted into common stock, shares | 107,297 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Total long-term debt | $ 15,744,000 | $ 11,357,000 | |
Current portion | (1,675,149) | (1,104,614) | |
Noncurrent portion | 14,068,511 | 10,251,822 | |
LSVI Promissory Note Payable to Related Party, Unsecured, Interest of 10% Per Annum (12% Per Annum PIK Interest) Payable Semi-annually in July and January, with Any Unpaid Principal and Interest Due On April 1, 2019 [Member] | |||
Total long-term debt | [1] | 4,261,000 | 5,000,000 |
Promissory Notes Payable to LSV Co-Invest I, a Related Party, Unsecured, Interest of 10% Per Annum (12% Per Annum PIK Interest) Payable Semi-annually in July and January, with Any Unpaid Principal and Interest Due On April 1, 2019 [Member] | |||
Total long-term debt | [2] | 6,773,000 | 4,500,000 |
Promissory Note Payable to KBS Sellers, Unsecured, Interest Imputed at 9.5% [Member] | |||
Total long-term debt | [3] | 678,000 | 1,757,000 |
Installment Payment Agreement, 8.0% Interest, Payable in Monthly Installments of $1,199 Through September 2020 [Member] | |||
Total long-term debt | [4] | 46,000 | 56,000 |
Notes Payable, Secured by Equipment, Interest Rates from 6.6% to 9.5%, with Varying Maturity Dates Through September 2018 [Member] | |||
Total long-term debt | [5] | 22,000 | 44,000 |
Promissory Note Payable to Gerber Finance, Secured, Interest at the Current Prime Rate Plus 3.0% Payable Monthly with Any Unpaid Principal and Interest Due On December 31, 2018 [Member] | |||
Total long-term debt | [5] | 3,000,000 | |
Deferred Payments to EBGL Sellers, Interest Imputed at 10.0% [Member] | |||
Total long-term debt | [6] | $ 964,000 | |
[1] | In order to finance the KBS acquisition and to provide general working capital, on April 1, 2014, we entered into a Securities Purchase Agreement with LSVI pursuant to which it purchased for $6.5 million in cash, an unsecured promissory note made by ATRM in the principal amount of $6.0 million (the "LSVI Promissory Note"), bearing interest at 10.0% per annum principal and interest due on April 1, 2019. ATRM may prepay the LSVI Promissory Note at any time after a specified amount of advance notice to LSVI. On December 30, 2014, we made a principal payment of $1.0 million on the LSVI Promissory Note. On February 25, 2016, we made a principal payment of $1.0 million on the LSVI Promissory Note. | ||
[2] | In order to provide additional working capital to ATRM, we entered into two Securities Purchase Agreements with LSV Co-Invest I pursuant to which it purchased unsecured promissory notes made by ATRM. Each of the notes bears interest at 10.0% per annum (12% per annum PIK Interest), with interest payable semiannually in January and July and any unpaid principal and interest is due on April 1, 2019. Except for the principal amounts, the terms of these promissory notes are identical to the terms of the LSVI Promissory Note. The promissory notes issued to LSV Co-Invest I are listed below: • $2.5 million promissory note dated July 21, 2014 • $2.0 million promissory note dated September 19, 2014 • $2.0 million promissory note dated October 4, 2016 | ||
[3] | Promissory note payable to the principal seller of KBS, payable in monthly installments of $100,000 through July 2017. Interest imputed at 9.5%. | ||
[4] | Agreement to finance the purchase of software license rights and consulting services related to the implementation of enterprise management information system. | ||
[5] | Acquisition Loan with Gerber Finance with a principal amount of $3.0 million, the proceeds of which were used to finance the EBGL Acquisition in October 2016. Borrowings under this loan bear interest at the prime rate plus 3.0%, with interest payable monthly and the outstanding principal payable upon the expiration of the term of the agreement; initially December 31, 2018, but extends automatically for additional one-year periods unless a party provides prior written notice of termination. | ||
[6] | Deferred Payments to the EBGL Sellers under the Purchase Agreement, payable in quarterly installments of $250,000 on January 1, 2017, April 1, 2017, July 1, 2017 and October 1, 2017. Interest imputed at 10.0%. |
Long-Term Debt - Schedule of 75
Long-Term Debt - Schedule of Long-Term Debt (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
LSVI Promissory Note Payable to Related Party, Unsecured, Interest of 10% Per Annum (12% Per Annum PIK Interest) Payable Semi-annually in July and January, with Any Unpaid Principal and Interest Due On April 1, 2019 [Member] | ||
Long-term debt, interest percentage, per annum | 10.00% | 10.00% |
Notes payable maturity date | Apr. 1, 2019 | Apr. 1, 2019 |
Pay in kind interest | 12.00% | 12.00% |
Promissory Notes Payable to LSV Co-Invest I, a Related Party, Unsecured, Interest of 10% Per Annum (12% Per Annum PIK Interest) Payable Semi-annually in July and January, with Any Unpaid Principal and Interest Due On April 1, 2019 [Member] | ||
Long-term debt, interest percentage, per annum | 10.00% | 10.00% |
Notes payable maturity date | Apr. 1, 2019 | Apr. 1, 2019 |
Pay in kind interest | 12.00% | 12.00% |
Promissory Note Payable to KBS Sellers, Unsecured, Interest Imputed at 9.5% [Member] | ||
Long-term debt, interest percentage, per annum | 9.50% | 9.50% |
Installment Payment Agreement, 8.0% Interest, Payable in Monthly Installments of $1,199 Through September 2020 [Member] | ||
Long-term debt, interest percentage, per annum | 8.00% | 8.00% |
Notes payable maturity date | Sep. 30, 2020 | Sep. 30, 2020 |
Promissory note, payable in monthly installments | $ 1,199 | $ 1,199 |
Notes Payable, Secured by Equipment, Interest Rates from 6.6% to 9.5%, with Varying Maturity Dates Through September 2018 [Member] | ||
Notes payable maturity date | Sep. 30, 2018 | Sep. 30, 2018 |
Notes Payable, Secured by Equipment, Interest Rates from 6.6% to 9.5%, with Varying Maturity Dates Through September 2018 [Member] | Minimum [Member] | ||
Long-term debt, interest percentage, per annum | 6.60% | 6.60% |
Notes Payable, Secured by Equipment, Interest Rates from 6.6% to 9.5%, with Varying Maturity Dates Through September 2018 [Member] | Maximum [Member] | ||
Long-term debt, interest percentage, per annum | 9.50% | 9.50% |
Promissory Note Payable to Gerber Finance, Secured, Interest at the Current Prime Rate Plus 3.0% Payable Monthly with Any Unpaid Principal and Interest Due On December 31, 2018 [Member] | ||
Long-term debt, interest percentage, per annum | 3.00% | 3.00% |
Notes payable maturity date | Dec. 31, 2018 | Dec. 31, 2018 |
Deferred Payments to EBGL Sellers, Interest Imputed at 10.0% [Member] | ||
Long-term debt, interest percentage, per annum | 10.00% | 10.00% |
Long-Term Debt - Summary of Gai
Long-Term Debt - Summary of Gain on Settlement (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Debt Disclosure [Abstract] | |
Reduction of principal (including adjustment for imputed interest at 9.5%) | $ 3,226,000 |
Forgiveness of interest accrued to the date of settlement | 461,000 |
Gain on settlement agreement | $ 3,687,000 |
Long-Term Debt - Summary of G77
Long-Term Debt - Summary of Gain on Settlement (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Imputed interest rate | 9.50% |
Long-Term Debt - Schedule of Ma
Long-Term Debt - Schedule of Maturities of Long-term Debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Total long-term debt | $ 15,744,000 | $ 11,357,000 |
Long-term Debt [Member] | ||
2,017 | 1,675 | |
2,018 | 3,012 | |
2,019 | 11,047 | |
2,020 | 10 | |
Total long-term debt | $ 15,744 |
Leases and Rent Expense (Detail
Leases and Rent Expense (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Leases [Abstract] | ||
Lease rental expense | $ 22,135 | |
Lease expiration date | Sep. 30, 2021 | |
Sublease payments received | $ 131,000 |
Leases and Rent Expense - Sched
Leases and Rent Expense - Schedule of Future Minimum Operating Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 266 |
2,018 | 266 |
2,019 | 267 |
2,020 | 272 |
2,021 | 207 |
Total minimum lease payments | $ 1,278 |
Leases and Rent Expense - Sch81
Leases and Rent Expense - Schedule of Operating Leases Rent Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Total rent expense | $ 100 | $ 116 |
Paid To Companies Controlled By Shareholder [Member] | ||
Total rent expense | 85 | 94 |
Paid To Others [Member] | ||
Total rent expense | $ 15 | $ 22 |
Common Stock Rights Offering (D
Common Stock Rights Offering (Details Narrative) | Sep. 18, 2015USD ($)$ / sharesshares |
Common stock sold shares | shares | 1,019,746 |
Common stock share price per share | $ / shares | $ 3 |
Net proceeds from offering | $ 2,936,526 |
Gross proceeds from offering | 3,059,238 |
Offering related expenses | $ 122,712 |
LSVI [Member] | |
Common stock sold shares | shares | 900,000 |
Stock Incentive Plans and Sha83
Stock Incentive Plans and Share-Based Compensation (Details Narrative) - USD ($) | Oct. 19, 2016 | Jun. 05, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 17, 2016 |
Restricted stock awards | 30,000 | ||||
Vesting period | 1 year | ||||
Fair value of stock awards | $ 2.25 | ||||
Share-based compensation expense | $ 128,938 | $ 153,547 | |||
Remaining shares-based compensation expense related to forfeitures | 54,000 | ||||
Chief Executive Officer [Member] | |||||
Restricted stock awards | 10,000 | ||||
Chief Financial Officer [Member] | |||||
Restricted stock awards | 10,000 | ||||
Former Chief Financial Officer [Member] | |||||
Restricted stock awards | 10,000 | ||||
Directors And Chief Financial Officer [Member] | |||||
Restricted stock awards | 60,000 | ||||
Vesting period | 1 year | ||||
Fair value of stock awards | $ 4.48 | ||||
2014 Incentive Plan [Member] | |||||
Shares authorized for incentive plan | 400,000 | ||||
ATRM Grand [Member] | |||||
Share-based compensation expense | 115,000 | $ 154,000 | |||
ATRM Grand [Member] | Selling, General and Administrative Expenses [Member] | |||||
Share-based compensation expense | $ 14,000 |
Stock Incentive Plans and Sha84
Stock Incentive Plans and Share-Based Compensation - Schedule of Share-based Compensation, Stock Options, Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares, Outstanding, Beginning balance | shares | 27,500 |
Number of Shares, Expired | shares | |
Number of Shares, Outstanding, Ending balance | shares | 27,500 |
Number of Shares, Exercisable, Balance | shares | 27,500 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares | $ 6.88 |
Weighted Average Exercise Price, Expired | $ / shares | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares | 6.88 |
Weighted Average Exercise Price, Exercisable, Balance | $ / shares | $ 6.88 |
Weighted Average Remaining Contract Term, Outstanding, Balance | 6 months |
Weighted Average Remaining Contract Term, Exercisable, Balance | 6 months |
Aggregate Intrinsic Value, Outstanding, Balance | $ | $ 0 |
Aggregate Intrinsic Value, Exercisable, Balance | $ | $ 0 |
Tax Benefit Preservation Plan85
Tax Benefit Preservation Plan / Preferred Stock Rights (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Feb. 13, 2014 | |
Acquired beneficial ownership | 50.00% | 4.99% |
Series B Preferred Stock [Member] | ||
Series B preferred stock, par value | $ 0.001 | |
Exercise price per one one-thousandth of a Preferred Share | $ 30 | |
Preferred stock exercise features | Each right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B Participating Preferred Stock, par value $0.001 per share, of the Company at an exercise price of $30.00 per one one-thousandth of a Preferred Share, subject to adjustment. | |
Federal [Member] | ||
Operating loss carryforwards | $ 97,000,000 | |
State [Member] | ||
Operating loss carryforwards | $ 34,000,000 |
Employee Savings 401(K) Plan (D
Employee Savings 401(K) Plan (Details Narrative) | 12 Months Ended |
Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |
Minimum age for full time employees | 21 years |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Income tax windfall tax deductions | $ 1,300,000 |
Maximum benefit in additional paid in capital from windfall tax deductions | 1,300,000 |
Federal [Member] | |
Operating loss carryforwards | $ 97,000,000 |
Operating loss carryforwards expire date | expire in 2020 |
State [Member] | |
Operating loss carryforwards | $ 34,000,000 |
Operating loss carryforwards expire date | Expire at various times, beginning in 2017 |
Research Tax Credit Carryforward [Member] | |
Tax credit carryforwards | $ 1,300,000 |
Tax credit carryforwards expire date | Expire at various times, beginning in 2017 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit computed at federal statutory rate | $ (2,216,000) | $ (1,133,000) |
State taxes, net of federal benefit | (156,000) | (127,000) |
Increase valuation allowance | 2,048,000 | 735,000 |
State NOL expiration/write-off | 321,000 | 39,000 |
Adjustment to income tax accruals | 5,000 | 423,000 |
State research credit expiration | 3,000 | 65,000 |
Non-deductible expenses | 3,000 | 3,000 |
Other, net | 1,000 | |
Total income tax expense | $ 7,900 | $ 6,000 |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Accounts receivable | $ 36 | $ 141 |
Employee compensation and benefits | 100 | 91 |
Contingent consideration | (169) | (268) |
Amortization | 1,305 | 1,089 |
Deferred acquisition costs | 245 | 265 |
NOL and tax credit carryforwards | 34,807 | 32,895 |
Warranty accrual | 18 | 15 |
Severance accrual | 97 | |
Other, net | 60 | 34 |
Deferred tax assets (liabilities), net | 36,402 | 34,359 |
Less valuation allowance | (36,421) | (34,372) |
Net deferred tax assets (liabilities) | $ (19) | $ (13) |
Product Line, Geographic, Sig90
Product Line, Geographic, Significant Customer and Concentration of Credit Risk Data - Schedule of Product Information (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Percentage of total sales | 100.00% | 100.00% |
Residential Homes [Member] | ||
Percentage of total sales | 79.00% | 76.00% |
Commercial Structures [Member] | ||
Percentage of total sales | 21.00% | 24.00% |
Product Line, Geographic, Sig91
Product Line, Geographic, Significant Customer and Concentration of Credit Risk Data - Schedule of Percentage of Total Sales and Accounts Receivable from Customer (Details) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | ||||
Percentage of total sales | 100.00% | 100.00% | |||
Residential Customers [Member] | Customer A [Member] | |||||
Percentage of total sales | 10.70% | [1] | |||
Percentage of accounts receivable | [1] | 12.00% | |||
Residential Customers [Member] | Customer B [Member] | |||||
Percentage of total sales | [1] | ||||
Percentage of accounts receivable | 11.80% | [1] | |||
Commercial Customers [Member] | Customer C [Member] | |||||
Percentage of total sales | [1] | 14.70% | |||
Percentage of accounts receivable | [1] | ||||
Commercial Customers [Member] | Customer D [Member] | |||||
Percentage of total sales | [1] | ||||
Percentage of accounts receivable | [1] | 26.90% | |||
Commercial Customers [Member] | Customer E [Member] | |||||
Percentage of total sales | [1] | ||||
Percentage of accounts receivable | 27.00% | [1] | |||
[1] | Percent was less than 10% of the total. |
Operating Segments (Details Nar
Operating Segments (Details Narrative) | 12 Months Ended |
Dec. 31, 2016segments | |
Segment Reporting [Abstract] | |
Number of operating segment | 2 |
Operating Segments - Schedule o
Operating Segments - Schedule of Financial Information of Reportable Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Segment net sales | $ 28,156,111 | $ 25,631,527 |
Depreciation and amortization expense | 633,026 | |
Segment goodwill impairment expense | 1,732,804 | |
Interest expense, net | 528,924 | |
Segment net loss | 3,658,342 | |
Total segment assets | 15,133,064 | |
Expenditures for segment assets | 72,453 | |
Operating Segments [Member] | ||
Segment net sales | 28,156,111 | |
Depreciation and amortization expense | 633,026 | |
Segment goodwill impairment expense | 1,732,804 | |
Segment net loss | 3,658,342 | |
Total segment assets | 15,133,064 | |
Operating Segments [Member] | Modular Home Manufacturing [Member] | ||
Segment net sales | 24,654,447 | |
Depreciation and amortization expense | 501,920 | |
Segment goodwill impairment expense | 1,732,804 | |
Interest expense, net | 408,912 | |
Segment net loss | 3,503,268 | |
Total segment assets | 8,007,031 | |
Expenditures for segment assets | 50,726 | |
Operating Segments [Member] | Structural Wall Panel Manufacturing [Member] | ||
Segment net sales | 3,501,664 | |
Depreciation and amortization expense | 131,106 | |
Segment goodwill impairment expense | ||
Interest expense, net | 120,012 | |
Segment net loss | 155,074 | |
Total segment assets | 7,126,033 | |
Expenditures for segment assets | $ 21,727 |
Operating Segments - Schedule94
Operating Segments - Schedule of Reconciliation of Operating Segment Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated net sales | $ 28,156,111 | $ 25,631,527 |
Total net loss for reportable segments | 3,658,342 | |
Change in fair value of contingent earn-out | 3,631 | 190,681 |
Provision for income taxes | 7,900 | 6,000 |
Consolidated net loss | 6,524,330 | 3,339,613 |
Total assets for reportable segments | 15,133,064 | |
Consolidated assets | 16,778,034 | $ 13,489,805 |
Operating Segments [Member] | ||
Total net sales for reportable segments | 28,156,111 | |
Other net sales | ||
Consolidated net sales | 28,156,111 | |
Total net loss for reportable segments | 3,658,342 | |
Other corporate expenses | 1,707,705 | |
Interest expense | 1,146,752 | |
Change in fair value of contingent earn-out | 3,631 | |
Provision for income taxes | 7,900 | |
Consolidated net loss | 6,524,330 | |
Total assets for reportable segments | 15,133,064 | |
Other assets | 1,644,970 | |
Consolidated assets | $ 16,778,034 |
Operating Segments - Schedule95
Operating Segments - Schedule of Other Operating Segment Adjustments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Depreciation and amortization expense | $ 633,026 | |
Segment goodwill impairment expense | 1,732,804 | |
Interest expense | 1,675,676 | $ 1,396,542 |
Operating Segments [Member] | ||
Depreciation and amortization expense | 633,026 | |
Segment goodwill impairment expense | 1,732,804 | |
Interest expense | 1,675,676 | |
Operating Segments [Member] | Segment Totals [Member] | ||
Depreciation and amortization expense | 633,026 | |
Segment goodwill impairment expense | 1,732,804 | |
Interest expense | 528,924 | |
Operating Segments [Member] | Adjustments [Member] | ||
Depreciation and amortization expense | ||
Segment goodwill impairment expense | ||
Interest expense | $ 1,146,752 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 30, 2017 | Mar. 31, 2017 | Jul. 03, 2017 | Dec. 31, 2016 | Oct. 04, 2016 | Aug. 12, 2016 | Sep. 19, 2014 | Jul. 21, 2014 |
Unsecured promissory note principal amount | $ 2,000,000 | $ 2,000,000 | $ 2,500,000 | |||||
Lone Star Value Co-Invest I. LP [Member] | ||||||||
Unsecured promissory note principal amount | $ 6,800,000 | |||||||
Debt interest rate | 10.00% | |||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Lone Star Value Co-Invest I. LP [Member] | ||||||||
Unsecured promissory note principal amount | $ 500,000 | |||||||
Debt conversion converted debt | $ 500,000 | |||||||
Debt interest rate | 10.00% | |||||||
Promissory notes, annual interest rate | 12.00% | |||||||
Percentage of paid in kind interest rate description | PIK Interest or 50% cash and 50% PIK Interest | |||||||
Subsequent Event [Member] | Revolving Credit Loan Agreement [Member] | ||||||||
Working capital line of credit | $ 3,000,000 | |||||||
Loan agreement expiry date | Jun. 30, 2018 | |||||||
Subsequent Event [Member] | Revolving Credit Loan Agreement [Member] | Prime Rate [Member] | ||||||||
Debt interest rate | 1.50% | |||||||
Subsequent Event [Member] | Asset Purchase Agreement [Member] | EBGL [Member] | ||||||||
Debt obligation | $ 750,000 | |||||||
Contingent earn-out payment | 1,000,000 | |||||||
Debt instrument periodic payment | $ 1,800,000 | |||||||
Contingent earn-out initial payment | $ 200,000 |