Quarterly report pursuant to Section 13 or 15(d)

Termination of Merger Agreement

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Termination of Merger Agreement
3 Months Ended
Mar. 31, 2017
Disclosure Text Block Supplement [Abstract]  
Mergers, Acquisitions and Dispositions Disclosures [Text Block]
4.
Termination of Merger Agreement
 
On October 5, 2016, the Company entered into a merger agreement to acquire the business of Soluble Systems, LLC (“Soluble”) through a series of transactions. On February 27, 2017, the Company terminated this agreement, due to its inability to secure the requisite financing to meet the closing conditions of the merger agreement.
 
In connection with the merger agreement to acquire the business of Soluble, the Company provided Soluble with bridge loans in the form of subordinated promissory notes totaling approximately $1.4 million.  The Company advanced Soluble $1.0 million during the year ended December 31, 2016 and $350,000 on January 30, 2017.  Pursuant to the terms of the merger agreement, the amount is to be repaid in full upon termination of the agreement.  The Company believes that the collectability of the amount due from Soluble is in doubt and, therefore, has fully reserved the amount due as of March 31, 2017. As of December 31, 2016, the Company had provided for a full reserve for the amount that had been advanced to Soluble as of that date.  During the three months ended March 31, 2017, the Company recorded bad debt expense of $350,000. This expense is included in acquisition related expense. The Company also incurred approximately $285,000 of other acquisition related expenses related to the Soluble transaction during the three months ended March 31, 2017. The net balance of the note receivable is $0 and is included in prepaid and other current assets as of March 31, 2017 and December 31, 2016.