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These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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77-0312442
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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225 Long Avenue, Hillside, NJ
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07205
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
(312) 235-3888
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Securities registered under Section 12(b) of the Exchange Act:
None
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Title of each class
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Name of each exchange on which registered
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None
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Not applicable
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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Glowpoint’s VNOC managed services provide a single point of contact for monitoring, scheduling, and the support and management of telepresence rooms and traditional conference rooms.
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Glowpoint’s Telepresence
inter
Exchange Network (TEN) provides secure B2B calling between subscribed video endpoints. TEN is hosted in our service cloud, and is a suite of services and applications designed to overcome the challenges of using video communications outside of a company's private
IP network, including the challenges associated with interconnectivity and interoperability. Our services are primarily sold on a monthly recurring contracted basis.
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Glowpoint’s conferencing services offer scalable, pre-scheduled and “ad-hoc” conferencing resources to clients with Glowpoint’s hosted infrastructure in the Cloud. In addition to connecting in virtually any device to a call, our conference producers can manage, record, and stream video events to the web, video event based services.
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Glowpoint’s professional services provide a compliment to our core managed service offerings and may be applied toward a branding program or even a video deployment evaluation by an enterprise. Today, Glowpoint has branded its video services for Polycom, the world’s leading video equipment manufacturer, for AVI-SPL, one of the largest integrators
in the world, for a global telecommunications carrier, and for a host of others who offer Glowpoint’s managed services to their client base.
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Videoconferencing and Telepresence Equipment Manufacturers;
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Carriers (Network Providers);
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Managed Service/Conferencing Services Providers (Multi-Point Conference Services); and
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System Integrators and Video and Telepresence Equipment Resellers.
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Internet Connect (Public Network)
– For non-telepresence video systems and desktop video conferencing, the native Internet is sometimes considered an acceptable means to communicate with others. However, when those users attempt to communicate via the Internet in to or out of a private enterprise,
they are almost always blocked because common industry security practices do not allow inbound or outbound video from the Internet. By registering those video endpoints with Glowpoint, however, users will have access to Glowpoint’s hosted video infrastructure, access to Glowpoint’s unique features and services, and make communication from one registered Internet connected endpoint to another registered Internet connected endpoint possible.
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Enterprise Connect (Private Network Enablement)
– In the increasingly popular world of convergence, many enterprises seek to leverage their own networks for video transport, but face challenges when making video calls off of their own network. In these situations, Glowpoint provides them with
secure interconnectivity and firewall traversal capabilities that effectively allow them to get off of their private "island of video" and connect to other video endpoints, while taking advantage of all the other Glowpoint services and infrastructure. This secure interconnect gives customers connectivity to Glowpoint’s TEN, permitting B2B calling, access to Glowpoint’s hosted infrastructure, and access to Glowpoint’s unique features and services.
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Carrier Connect
(via existing IP network carrier)
–
Glowpoint’s exchange is peered with numerous carriers in the world and provides the ability for customers to gain access
to TEN through these carriers’ network services. For carriers, the opportunity to enhance their network offering with Glowpoint’s TEN provides them with a value-added service that is increasingly required for an enterprise’s video applications. Today, Glowpoint provides both customer initiated and carrier branded peering to enable access to our award-winning B2B services, hosted infrastructure, and other unique features and services.
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Overlay Connect
–
Glowpoint can also provide a dedicated, Quality of Service (QoS), managed IP network video connection directly to each customer site with video endpoints. This managed network service may include “last mile”
(or local loop) connectivity, which is the network connection between a TEN access point and the customer’s location. A Glowpoint managed router is placed on site and then connected to the customer’s video endpoint(s). All video traffic is transported through this dedicated connection, which can be delivered from as little as a 512 kbps connection, over the Glowpoint IP video purposed network that connects the TEN access points of presence globally. All Glowpoint overlay connect customers have
access to Glowpoint’s hosted infrastructure, have an automatic connection to TEN, and are equipped with all of Glowpoint’s unique features and services.
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Room Certification; Proactive Monitoring and “Room Sweeps”:
Each customer location, such as a telepresence room, is certified by the VNOC to verify the operational capabilities of that room, including video devices, room technology and video infrastructure. Thereafter,
the room is proactively monitored with dozens of alarm points to allow the VNOC to identify and fix any technology trouble before users are impacted. In addition to the proactive monitoring, we conduct a “room sweep” using a proprietary application, which is not available from any other managed service provider in the industry today. Our proactive monitoring and room sweeps ensure that certified rooms remain operational and are ready for the start of every conference.
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Single Point of Contact:
VNOC “at your service” support is a single point of contact accessible via our video concierge service (a branded version of our patented live video operator assistance),
which is integrated with a “support” button on the control panel or phone that provides dedicated dial-in access or Web mail/portal access right from the room. We also provide this support service in multiple common foreign languages (e.g., Spanish, French, German, Japanese and Mandarin).
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Scheduling:
Scheduling w
i
th the VNOC service removes any concerns of room management and allows customers to book room resources through all available means, such
as a dedicated toll-free number (direct dial for international calls), concierge service through video one touch dialing, and Web portal scheduling tools which are integrated with Microsoft Outlook and Lotus Notes. Confirmation notifications are provided both to requestors and to participants. All scheduling options may be private labeled to match our customer’s attributes (e.g., name, logo and marketing tagline). Glowpoint’s advanced online scheduling tool solves many of the challenges large enterprises
encounter with room resource management today.
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Conference Production and Monitoring:
A Glowpoint telepresence conference producer will set up and manage the successful launch and connection of all sites in the telepresence meeting or video call, including point-to-point or multi-point calls. Our VNOC team then continuously
supports and monitors all calls, including digitally monitoring connectivity levels by a qualified video producer. Our goal is to ensure that the technology is transparent to our users.
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Help Desk Support:
Our VNOC team provides technical support for all active calls during a meeting. When required, we will coordinate with hardware vendors and integrators to repair or replace any component parts or resolve room integration issues. As the single point of technical
support for video solutions, our top priority is resolving endpoint or connectivity issues.
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Training:
We believe that successful use and adoption of video communications requires ease of use, which is in large part a result of knowing how best to use the system. We host training sessions for customers and provide periodic training updates as reasonably requested.
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Stewardship Reporting and Service Reviews:
We provide monthly stewardship reports that capture key metrics related to the performance of the room, the associated network, and various support levels, including statistics related to usage (number of meetings, duration, and hours
of use), network and room connectivity availability, network and room mean time to repair, and failure/root cause analysis. We have quarterly meetings with our customers to review these statistics, providing a forum to discuss areas of success, areas in need of improvement, and address any other concern.
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Advanced Network Monitoring:
If a client chooses to use another network to support its telepresence rooms, Glowpoint offers advanced network monitoring which allows the VNOC service to not only qualify the room readiness at all times, but to also monitor the performance of the
network supporting that room. We will set thresholds based on the requirements of video traffic and react and report on any deficiencies.
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Video calling plans
–
Customers can make and receive unlimited calls to video systems on the Glowpoint video network or the public Internet for one fixed monthly
price. Glowpoint customers also receive a dedicated 10-digit “phone number” for each video endpoint, which people are accustomed to dialing and, we believe, facilitates adoption of video communications.
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Traffic and Technology Monitoring
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Glowpoint provides 24x7x365 monitoring of its network and infrastructure to maintain its Quality of Service (QoS) commitment
to its customers, which is required for today's mission critical video communications. Customer IT departments are often required to determine network problems, such as latency, jitter, packet loss and overall connection quality, which can challenge an IT group, especially while a video call is occurring. Glowpoint’s monitoring gives those professionals peace of mind and can make the video experience predictable and successful.
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Unified Call Scheduling and Call Launching
–
Glowpoint’s unified video call scheduling service is provided by our proprietary web-based portal, which
can be synchronized with an enterprise resource scheduler, such at Microsoft Outlook or Lotus Notes, or through a live reservationist via telephone or email. Glowpoint also provides a call launching service, thereby guaranteeing the successful start of scheduled video conferences. Prior to the start of a scheduled conference, skilled Glowpoint conference producers or Glowpoint’s proprietary systems call each video endpoint to ensure that it is properly connected for the call.
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“000” Live Video Operator Assistance
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With our patented live video operator support, customers obtain live, face-to-face assistance simply by
dialing “000” from any Glowpoint registered endpoint. Video operators can help callers with general questions about their service and can provide them the dialing information they need to process calls.
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Video Endpoint Management
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Many customers enjoy the option of having a single point of contact for all of their video communication needs. Therefore, we offer
remote video endpoint management services and can provide proactive monitoring and support, along with maintenance of video endpoints (such as providing required software updates), to ensure our customer’s video endpoints are always ready and reliably available.
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Automated Video Call Assistant
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When a video call is not answered, fails to connect, or the recipient is busy, callers are greeted by “Lisa”,
Glowpoint’s automated video call assistant, explaining why the call did not complete and providing the caller with an interactive menu to select options, including a connection to a live operator by selecting the option on the menu. Non-Glowpoint videoconferencing users typically are met with a blank screen, a cryptic technical error message or worse, and have no idea why a call was not completed. Our error-handling feature is user-friendly and removes much of the guesswork, which simplifies the video calling
experience and promotes further adoption and use of video communications.
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VideoMailbox
–
Glowpoint has brought voicemail to the video communications world. If a Glowpoint customer receives a video call and is not available or his
video system is turned off, the call is automatically re-routed to a VideoMailbox where the caller is greeted with an outgoing video personally recorded by the Glowpoint customer. The caller may then leave his/her own video message in the VideoMailbox. The Glowpoint customer then receives a message which is stored on his VideoMailbox and receives an email alert with an image of the caller and associated information. Our customer may then view the message as a media file either through the online portal or checking
messages from his video endpoint.
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IP-to-ISDN and/or Internet Gateway Access; Reduced Rate International Calling –
Glowpoint’s shared infrastructure is equipped with a sophisticated gatekeeper platform that enables a seamless transition between ISDN and IP technologies and Internet-based endpoints. Essentially, this capability
allows Glowpoint IP customers to place and receive calls with any ISDN or Internet-based video system or voice phone in the world. Much of the world continues to utilize ISDN as a means for video communications and the cost of placing video calls overseas can cost hundreds of dollars per hour. Glowpoint offers customers significantly reduced rates for ISDN calling by utilizing our least cost routing capabilities. We route video calls over our IP network to our nearest point of presence, where the call is then
handed off to the in-region ISDN network, thereby eliminating or reducing long distance charges.
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Reservation-Less, Bridging on Demand (“Meet Me Rooms”) –
This “bridging on demand” (BOD) service permits multiple users to see and communicate simultaneously on one screen in a virtual room, without the need for reservations or call management. The shared infrastructure
MCU enables various modes of viewing, including continuous presence that allows all parties to see each other at the same time in a collaborative conference session, allows Speaker Only, allows Speaker voice activated, and various other layouts. The BOD service is a cost effective, automated alternative to pre-scheduled managed multi-point calls. We offer this service in both standard and high definition.
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Managed Video Conferencing –
Managed multi-point conferencing services enable customers to utilize Glowpoint’s Multi-point Control Units (MCUs, which are also known as “bridges”) in order to facilitate video conference meetings with more than two locations at the same time.
Glowpoint has the ability to support both ISDN and IP for multi-conference events with enough capacity to support over 500 participating locations at one time. Our world-class global conferencing service and skilled professional technicians provide high quality service to fulfill all conferencing needs – at a competitive price. With our managed multi-point conferencing services, virtually anyone can participate on a video call together. Glowpoint was recognized as offering the world’s first
High Definition (HD) and telepresence managed multi-point conferencing services.
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Event Management –
Glowpoint provides a full range of event management services to support mission critical conferences. Glowpoint’s broadcasting, room rental capabilities and streaming services extend the range of a customer’s video equipment to participants around the globe, and
Glowpoint’s experienced technicians provide the expertise needed for a well organized, professional meeting.
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Web Streaming Events –
Glowpoint provides a full complement of streaming media solutions that enable our customers to leverage their existing video environment and broadcast their meetings over the web for extended viewership. Our solutions offer both live and on-demand offerings.
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Video Call Director
- When you place a voice telephone call, you expect some resolution of it – a completed call, a busy signal, or a message that you dialed the wrong number. In the IP-video world, we do not believe that this functionality existed before Glowpoint. Customers placing IP video
calls would receive cryptic error codes or invalid network error messages. We developed the Video Call Director technology to intelligently redirect calls based on various conditions. The technology is deployed as “Lisa”, our video call assistant. Now, when a Glowpoint TEN subscribed customer places a video call that does not connect, he is greeted with an interactive video message from “Lisa” explaining some reasons and offering him the option of reaching a live video operator for assistance.
The ability to intelligently route video calls based on various conditions lends itself to numerous other capabilities and services, including video mailbox, follow-me video numbers (see below), and video call transfers and forwarding.
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Method and Process for the Glowpoint Video Call Distributor
– Our video call distributor technology permits businesses to route real-time, two-way video calls over an IP network using a call management system (e.g., a traditional PBX-based automatic call distribution system) that may serve
multiple possible endpoints (for example, a call center environment). This video call distributor integrates the features and services of traditional voice call distribution systems with video calls. It is built on previously patented Glowpoint technology as well as new technology developed specifically for this solution, which is marketed as Glowpoint’s Customer Connect offering. We believe this patent-pending technology is a critical component of skills-based video call centers, where video calls can
be routed to the appropriate person based on predetermined skill sets or criteria. For example, in a video banking application, this patent-pending technology has been used to route video calls to English and Spanish speaking video bankers depending on a selection made at the remote branch location.
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Method and Process for Video over IP Network Management
– When Glowpoint was launched, we found no network existed at the time to support high quality two-way video communications. As a result, we developed a highly sophisticated network that included our backbone network architecture, which
currently connects our TEN access POPs globally, along with our core video network architecture. We combined off the shelf components with proprietary design and technology to create what we believe was the world’s first dedicated IP video network. In addition to the method and process for building this network, we developed and deployed unique testing tools that enable us to closely monitor key metrics associated with successfully delivering high quality video communications.
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PC-Based Video Interface Tool
– For the “road warrior” businessman who needs to participate in video meetings from any location with Internet access (e.g., hotel or airport), we developed a downloadable software interface that resides on your personal computer that automatically
initiates video calls or a number of other functions utilizing point-and-click technology. This tool takes advantage of our cloud-based intelligent call routing engine that initiates the communication session with the requested destination. Some examples include clicking a button to reach a live video operator, to retrieve video messages from a video mailbox, to access designated Web sites or tools (e.g., Web collaboration tools such as WebEx®), or to participate in point-to-point or multi-point video
calls to other PC-based or hardware-based video systems from your address book. Other features using this proprietary technology include the ability to record a video or audio session in addition to desktop data sharing with the click of a button.
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Systems and Method for Automated Routing of Incoming and Outgoing Video Calls between IP and ISDN networks
– Even though adoption of IP video has continued to surge, there is still a large number of video communications users in the world using legacy ISDN networks. Early on, we recognized
the need to ensure the migration from ISDN to IP to be simple and seamless in order to connect IP users with ISDN systems around the world. We believe Glowpoint is still the only service that assigns actual phone numbers to customers as their “alias” or identification within the TEN exchange, enabling users to simply dial the phone number to “gateway” from their IP system on Glowpoint’s TEN to ISDN systems globally. In addition, inbound dialing to a TEN registered video system is
possible from virtually any ISDN video system, or even a desk phone or cellular phone anywhere in the world. This patent-pending automated call routing capability has been leveraged to provide a least cost routing and gateway method to customers, routing the call to the most inexpensive gateway exit point off the Glowpoint network before entering the PSTN/ISDN network.
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Video Communications Control System/Parental Control
– In late 2005, Glowpoint introduced IVE (Instant Video Everywhere), a software-based video service that works with a simple web camera over the Internet. During development and market research, it became apparent that the early adopters
of consumer based two-way video communications would be teenagers and young adults. Given that demographic and the proliferation of tools to help parents control what websites are visited by their children, we felt that parental control of two-way video communications was a logical requirement as video communications became more mainstream. This patent-pending technology leverages existing parental control codes and guidelines to restrict video calls from being placed or received from blocked callers. It also
permits parents to establish a “friends and family” directory of allowable video numbers that can be called.
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Method and Process for Follow-Me Video Phone Number
– Our IVE (Instant Video Everywhere) product offering was intended to enable traveling business people to stay connected by video wherever they go. These “road warriors” could log into IVE from a hotel room, airport lounge, or
anywhere else a quality broadband connection was available, and place and receive video calls. In order to enhance the experience and integration with the video systems in their offices, Glowpoint developed technology to create a Follow-Me Video number capability. Essentially, the user has one video phone number and, if logged into IVE, the video call will automatically route there instead of the video system in the user’s office. This patent-pending technology allows our customer to have one video number,
one video mailbox, and yet literally be reached by video anywhere in the world.
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full support of all industry standards and equipment manufacturers;
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full support of all network types, regardless of whether private or public;
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primary focus and competency on two-way video communications;
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breadth of service offerings;
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unique custom built applications and services;
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global distribution and network presence;
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technical expertise, with knowledgeable video service and training personnel;
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commitment to world-class customer service and support; and
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existing wholesale relationships with equipment manufacturers, global carriers, audio/visual integrators, and unified communications providers.
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SEC Public Reference Room
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100 F Street, N.E.
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Washington, D.C. 20549
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Public Reference Section
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Securities and Exchange Commission
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100 F Street N.E.
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Washington, D.C. 20549
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New accounting pronouncements or changes in accounting policies; and
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Legislation or other governmental action that detrimentally impacts our expenses or reduces sales by adversely affecting our customers.
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Glowpoint
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||||||
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Common Stock
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||||||
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High
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Low
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|||||
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Year Ended December 31, 2008
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||||||
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First Quarter
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$
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0.65
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$
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0.41
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||
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Second Quarter
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0.71
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0.44
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||||
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Third Quarter
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0.64
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0.42
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Fourth Quarter
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0.50
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0.20
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||||
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Year Ended December 31, 2009
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||||||
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First Quarter
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$
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0.45
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$
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0.26
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||
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Second Quarter
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0.45
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0.28
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||||
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Third Quarter
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0.63
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0.32
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||||
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Fourth Quarter
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0.69
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0.48
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Plan Category
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Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
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Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
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Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(excluding Securities
Reflecting in Column
(a))
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|||||||||
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Equity compensation plans approved
by security holders
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4,686,051
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$ |
0.82
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|
1,529,219
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|||||
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Equity compensation plans not approved
by security holders
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20,000
|
3.94
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—
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|||||||||
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Total
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4,706,051
|
$ |
0.84
|
1,529,219
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||||||||
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Years Ended December 31,
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2009
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2008
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2007
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2006
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2005
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Core Revenues
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$ | 25,192 | $ | 21,942 | $ | 19,150 | $ | 16,679 | $ | 14,376 | ||||||||||
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Non-Core Revenues
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1,348 | 2,595 | 3,642 | 2,832 | 3,359 | |||||||||||||||
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Total Revenues
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$ | 26,540 | $ | 24,537 | $ | 22,792 | $ | 19,511 | $ | 17,735 | ||||||||||
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Operating expenses:
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Network and infrastructure
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11,838 | 12,762 | 13,917 | 11,910 | 12,956 | |||||||||||||||
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Global managed services
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7,476 | 5,849 | 4,092 | 4,342 | 7,055 | |||||||||||||||
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Sales and marketing
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3,193 | 3,382 | 2,732 | 2,230 | 3,684 | |||||||||||||||
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General and administrative
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4,465 | 4,662 | 5,398 | 6,744 | 7,461 | |||||||||||||||
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Depreciation and amortization
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1,056 | 1,261 | 1,467 | 1,947 | 2,292 | |||||||||||||||
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Sales taxes and regulatory fees
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(2,500 | ) | (172 | ) | (193 | ) | 845 | 926 | ||||||||||||
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Total operating expenses
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25,528 | 27,744 | 27,413 | 28,018 | 34,374 | |||||||||||||||
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Income (loss) from operations
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1,012 | (3,207 | ) | (4,621 | ) | (8,507 | ) | (16,639 | ) | |||||||||||
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Interest and other expense (income):
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||||||||||||||||||||
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Interest (income) expense, net, including $0, $141, $261, $0 and $0 for expense, respectively, for Insider Purchasers
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(543 | ) | 4,517 | 5,984 | 3,886 | (97 | ) | |||||||||||||
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Amortization of deferred financing costs, including $0, $46, $14, $0, and $0 respectively, for Insider Purchasers
|
— | 448 | 531 | 389 | — | |||||||||||||||
|
Loss on extinguishment of debt, including $0 and $99, respectively, for Insider Purchasers
|
254 | 1,816 | — | — | — | |||||||||||||||
|
Gain on settlement with Gores
|
— | — | — | — | (379 | ) | ||||||||||||||
|
Increase (decrease) in fair value of derivative financial instruments' liability, including $0, $86, $440, $0 and $0, respectively, for Insider Purchasers
|
1,848 | (2,673 | ) | (5,665 | ) | (1,992 | ) | 271 | ||||||||||||
|
Total interest and other expense (income), net
|
1,559 | 4,108 | 850 | 2,283 | (205 | ) | ||||||||||||||
|
Net loss
|
(547 | ) | (7,315 | ) | (5,471 | ) | (10,790 | ) | (16,434 | ) | ||||||||||
|
(Loss) gain on redemption of preferred stock
|
(64 | ) | 2,419 | 799 | — | — | ||||||||||||||
|
Preferred stock deemed dividends
|
— | — | — | — | (1,282 | ) | ||||||||||||||
|
Preferred stock dividends
|
— | — | (252 | ) | (347 | ) | (315 | ) | ||||||||||||
|
Net loss attributable to common stockholders
|
$ | (611 | ) | $ | (4,896 | ) | $ | (4,924 | ) | $ | (11,137 | ) | $ | (18,031 | ) | |||||
|
Net loss attributable to common stockholders per share:
|
||||||||||||||||||||
|
Basic and diluted
|
$ | (0.01 | ) | $ | (0.11 | ) | $ | (0.11 | ) | $ | (0.24 | ) | $ | (0.41 | ) | |||||
|
Weighted average number of common shares:
|
||||||||||||||||||||
|
Basic and diluted
|
52,938 | 45,477 | 45,914 | 46,246 | 44,348 | |||||||||||||||
|
Balance Sheet Information:
|
as of December 31,
|
|||||||||||||||||||
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
|
Cash
|
$ | 587 | $ | 1,227 | $ | 2,312 | $ | 2,153 | $ | 2,023 | ||||||||||
|
Working capital deficit
|
(1,365 | ) | (4,225 | ) | (9,092 | ) | (11,868 | ) | (3,526 | ) | ||||||||||
|
Total assets
|
6,914 | 7,177 | 8,562 | 8,393 | 9,037 | |||||||||||||||
|
Long-term debt (including current portion)
|
— | 1,715 | 7,231 | 4,326 | — | |||||||||||||||
|
Total stockholders’ equity (deficit)
|
$ | 1,153 | $ | (3,213 | ) | $ | (17,172 | ) | $ | (11,591 | ) | $ | (2,405 | ) | ||||||
|
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
|
Core Revenues
|
94.9 | % | 89.4 | % | 84.0 | % | 85.5 | % | 81.1 | % | ||||||||||
|
Non-Core Revenues
|
5.1 | 10.6 | 16.0 | 14.5 | 18.9 | |||||||||||||||
|
Total Revenues
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Network and infrastructure
|
44.6 | 52.0 | 61.1 | 61.0 | 73.1 | |||||||||||||||
|
Global managed services
|
28.2 | 23.8 | 18.0 | 22.3 | 39.8 | |||||||||||||||
|
Sales and marketing
|
12.0 | 13.8 | 12.0 | 11.4 | 20.8 | |||||||||||||||
|
General and administrative
|
16.8 | 19.0 | 23.7 | 34.6 | 42.1 | |||||||||||||||
|
Depreciation and amortization
|
4.0 | 5.1 | 6.4 | 10.0 | 12.9 | |||||||||||||||
|
Sales taxes and regulatory fees
|
(9.4 | ) | (0.7 | ) | (0.8 | ) | 4.3 | 5.2 | ||||||||||||
|
Total operating expenses
|
96.2 | 113.0 | 120.4 | 143.6 | 193.9 | |||||||||||||||
|
Income (loss) from operations
|
3.8 | (13.0 | ) | (20.4 | ) | (43.6 | ) | (93.9 | ) | |||||||||||
|
Interest and other expense (income):
|
||||||||||||||||||||
|
Interest (income) expense, net, including 0.0% and 0.6% of expense, respectively, for Insider Purchasers
|
(2.0 | ) | 18.4 | 26.3 | 19.9 | (0.5 | ) | |||||||||||||
|
Amortization of deferred financing costs, including 0.2%, 0.0% and 0.0% for Insider Purchasers
|
— | 1.8 | 2.3 | 2.0 | — | |||||||||||||||
|
Loss on extinguishment of debt, including 0.0% and 0.4%, respectively, for Insider Purchasers
|
1.0 | 7.4 | — | — | — | |||||||||||||||
|
Gain on settlement with Gores
|
— | — | — | — | (2.1 | ) | ||||||||||||||
|
Increase (decrease) in fair value of derivative financial instruments’ liability, including 0.0% , 0.4%, 0.0%, 0.0% and 0.0% respectively, for Insider Purchasers
|
7.0 | (10.9 | ) | (24.9 | ) | (10.2 | ) | 1.5 | ||||||||||||
|
Total interest and other expense (income), net
|
6.0 | 16.7 | 3.7 | 11.7 | (1.1 | ) | ||||||||||||||
|
Net loss
|
(2.2 | ) | (29.7 | ) | (24.1 | ) | (55.3 | ) | (92.8 | ) | ||||||||||
|
Loss (gain) on redemption of preferred stock
|
(0.2 | ) | 9.9 | 3.5 | — | — | ||||||||||||||
|
Preferred stock deemed dividends
|
— | — | — | — | (7.2 | ) | ||||||||||||||
|
Preferred stock dividends
|
— | — | (1.1 | ) | (1.8 | ) | (1.8 | ) | ||||||||||||
|
Net loss attributable to common stockholders
|
(2.4 | )% | (19.8 | )% | (21.7 | )% | (57.1 | )% | (101.8 | )% | ||||||||||
|
·
|
Subscription network and related services, represent about 65% of our total current revenue and is generally tied to contracts of 12 months or more;
|
|
·
|
Subscription managed video services, which represent about 10% of our total current revenue (up from 1% in 2008) and is generally tied to contracts of 12 months or more;
|
|
·
|
Multi-point Bridging, which represents about 17% of our total current revenue and is a usage based service where we enable customers to have video meetings with multiple locations on the screen at one time; and
|
|
·
|
Events and Professional Services, which represent about 3% of our total current revenue and is revenue derived from non-recurring services (e.g., the professional football draft event) or from providing professional services to develop custom solutions.
|
|
·
|
ISDN resale business, which represents about 5% of our total current revenue. We do not actively pursue more ISDN resale business and have actively sought to reduce the amount of low margin revenue from this line of business; and
|
|
·
|
Integration services, which include integrating various hardware components, or procuring hardware components for our customers, to support our managed video services. In most cases, we provide integration services as a “pass-through” or at low margin in order to facilitate the completion of the project on behalf of our customer. We
do not actively pursue this type of revenue.
|
|
Year Ended December 31,
(in thousands)
|
||||||||||||||||
|
Revenue
|
2009
|
2008
|
Increase (Decrease)
|
% Change
|
||||||||||||
|
Core revenue:
|
||||||||||||||||
|
Subscription revenue:
|
||||||||||||||||
|
Network and related services
|
$ | 16,993 | $ | 17,081 | $ | (88 | ) | (0.6 | %) | |||||||
|
Managed video services
(1)
|
2,888 | 391 | 2,497 | 638.6 | % | |||||||||||
| 19,881 | 17,472 | 2,409 | 13.8 | % | ||||||||||||
|
Non-subscription revenue:
|
||||||||||||||||
|
Bridging
(2)
|
4,439 | 3,924 | 515 | 13.1 | % | |||||||||||
|
Special events and professional services
(3)
|
872 | 546 | 326 | 59.7 | % | |||||||||||
| 25,192 | 21,942 | 3,250 | 14.8 | % | ||||||||||||
|
Non-core revenue:
|
||||||||||||||||
|
Integration services for a broadcast customer
(4
)
|
63 | 350 | (287 | ) | (82.0 | %) | ||||||||||
|
ISDN resale revenue
(5)
|
1,285 | 2,245 | (960 | ) | (42.8 | %) | ||||||||||
| 1,348 | 2,595 | (1,247 | ) | (48.1 | %) | |||||||||||
|
Total revenue
|
$ | 26,540 | $ | 24,537 | $ | 2,003 | 8.2 | % | ||||||||
|
2009
|
% of 2009 Revenues
|
2008
|
% of 2008 Revenues
|
Change from Prior Year
|
% Change from Prior Year
|
|||||||||||||||||||
|
Telecommunication carrier charges
|
$ | 10,026 | 37.8 | % | $ | 10,877 | 44.3 | % | $ | (851 | ) | (7.8 | %) | |||||||||||
|
Cost for taxes billed to customers
|
1,812 | 6.8 | % | 1,885 | 7.7 | % | (73 | ) | (3.9 | %) | ||||||||||||||
|
Total for the year
|
$ | 11,838 | 44.6 | % | $ | 12,762 | 52.0 | % | $ | (924 | ) | (7.2 | %) | |||||||||||
|
2009
|
% of 2009 Revenues
|
2008
|
% of 2008 Revenues
|
Change from Prior Year
|
% Change from Prior Year
|
|||||||||||||||||||
|
Salaries and benefits
|
$ | 5,156 | 19.4 | % | $ | 3,700 | 15.1 | % | $ | 1,456 | 39.4 | % | ||||||||||||
|
Contract employees
|
784 | 3.1 | % | 615 | 2.5 | % | 169 | 27.5 | % | |||||||||||||||
|
Communication costs
|
436 | 1.6 | % | 389 | 1.6 | % | 47 | 12.1 | % | |||||||||||||||
|
Repairs and maintenance
|
403 | 1.5 | % | 429 | 1.7 | % | (26 | ) | (6.1 | %) | ||||||||||||||
|
Rent and occupancy
|
389 | 1.5 | % | 298 | 1.2 | % | 91 | 30.5 | % | |||||||||||||||
|
Office expenses
|
117 | 0.4 | % | 140 | 0.6 | % | (23 | ) | (16.4 | %) | ||||||||||||||
|
Travel and entertainment
|
48 | 0.2 | % | 132 | 0.5 | % | (84 | ) | (63.6 | %) | ||||||||||||||
|
Other expenses
|
143 | 0.5 | % | 146 | 0.6 | % | (3 | ) | (2.1 | %) | ||||||||||||||
|
Total for the year
|
$ | 7,476 | 28.2 | % | $ | 5,849 | 23.8 | % | $ | 1,627 | 27.8 | % | ||||||||||||
|
2009
|
% of 2009 Revenues
|
2008
|
% of 2008 Revenues
|
Change from Prior Year
|
% Change from Prior Year
|
|||||||||||||||||||
|
Salaries and benefits
|
$ | 2,458 | 9.3 | % | $ | 2,285 | 9.3 | % | $ | 173 | 7.6 | % | ||||||||||||
|
Agent commissions
|
326 | 1.1 | % | 362 | 1.5 | % | (36 | ) | (9.9 | %) | ||||||||||||||
|
Advertising and marketing
|
178 | 0.7 | % | 312 | 1.3 | % | (134 | ) | (42.9 | %) | ||||||||||||||
|
Travel and entertainment
|
128 | 0.5 | % | 224 | 0.9 | % | (96 | ) | (42.9 | %) | ||||||||||||||
|
Other expenses
|
103 | 0.4 | % | 199 | 0.8 | % | (96 | ) | (48.2 | %) | ||||||||||||||
|
Total for the year
|
$ | 3,193 | 12.0 | % | $ | 3,382 | 13.8 | % | $ | (189 | ) | (5.6 | %) | |||||||||||
|
2009
|
% of 2009 Revenues
|
2008
|
% of 2008 Revenues
|
Change from Prior Year
|
% Change from Prior Year
|
|||||||||||||||||||
|
Salaries and benefits
|
$ | 2,398 | 9.0 | % | $ | 2,361 | 9.6 | % | $ | 37 | 1.6 | % | ||||||||||||
|
Professional fees
|
518 | 1.9 | % | 653 | 2.8 | % | (135 | ) | (20.7 | %) | ||||||||||||||
|
Severance costs
|
253 | 0.9 | % | — | 0.0 | % | 253 | N/A | ||||||||||||||||
|
Bad debts
|
258 | 1.01 | % | 257 | 1.0 | % | 1 | 0.4 | % | |||||||||||||||
|
Insurance
|
147 | 0.6 | % | 165 | 0.7 | % | (18 | ) | (10.9 | %) | ||||||||||||||
|
Communication costs
|
133 | 0.5 | % | 38 | 0.2 | % | 95 | 250.0 | % | |||||||||||||||
|
Board of director costs
|
114 | 0.4 | % | 171 | 0.7 | % | (57 | ) | (33.3 | %) | ||||||||||||||
|
Office expenses and postage
|
102 | 0.4 | % | 107 | 0.4 | % | (5 | ) | (4.7 | %) | ||||||||||||||
|
Consultants
|
122 | 0.5 | % | 351 | 1.4 | % | (229 | ) | (65.2 | %) | ||||||||||||||
|
Travel and entertainment
|
74 | 0.3 | % | 101 | 0.4 | % | (27 | ) | (26.7 | %) | ||||||||||||||
|
Rent
|
77 | 0.3 | % | 72 | 0.3 | % | 5 | 6.9 | % | |||||||||||||||
|
Repairs and maintenance
|
54 | 0.2 | % | 41 | 0.2 | % | 13 | 31.7 | % | |||||||||||||||
|
Other expenses
|
215 | 0.8 | % | 345 | 1.4 | % | (130 | ) | (37.7 | %) | ||||||||||||||
|
Total for the year
|
$ | 4,465 | 16.8 | % | $ | 4,662 | 19.1 | % | $ | (197 | ) | (4.2 | %) | |||||||||||
|
December 31, 2009
|
2010 Private Placement – Conversion of Series A-2 Preferred Stock
|
2010 Private Placement -
Series B Preferred Stock Exchange
|
Expiration of Warrants
|
Other Transactions (Note 1)
|
March 29, 2010
|
|||||||||||||||||||
|
Common Shares Outstanding
|
64,966 | 15,452 | — | — | 184 | 80,602 | ||||||||||||||||||
|
Series B Preferred Stock
|
— | — | — | — | — | — | ||||||||||||||||||
|
Options
|
4,706 | — | — | — | 4 | 4,710 | ||||||||||||||||||
|
Warrants
|
3,464 | — | — | (1,640 | ) | (121 | ) | 1,703 | ||||||||||||||||
|
Series A-2 Preferred Stock
|
45,087 | (15,452 | ) | (13,333 | ) | — | — | 16,302 | ||||||||||||||||
|
Total
|
118,223 | — | (13,333 | ) | (1,640 | ) | 67 | 103,317 | ||||||||||||||||
|
December 31, 2009
|
2010 Private Placement -
Series B Preferred Stock Exchange
|
2010 Private Placement – Conversion of Series A-2 Preferred Stock
|
2010 Private Placement -
Sale of Series B Preferred Stock
|
March 29, 2010
|
||||||||||||||||
|
Series B Preferred Stock
|
$ | — | $ | 5,000 | $ | — | $ | 3,000 | $ | 8,000 | ||||||||||
|
Series A-2 Preferred Stock
|
33,815 | (10,000 | ) | (11,589 | ) | — | 12,226 | |||||||||||||
|
Total
|
$ | 33,815 | $ | (5,000 | ) | $ | (11,589 | ) | $ | 3,000 | $ | 20,226 | ||||||||
|
|
|
|
|
A.
|
The following documents are filed as part of this report:
|
|
|
1. Consolidated Financial Statements:
|
|
|
Page
|
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
|
Consolidated Balance Sheets at December 31, 2009 and 200
8
|
F-2
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2009 and 200
8
|
F-3
|
|
|
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2009 and 2008
|
F-4
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 200
8
|
F-5
|
|
|
Notes to Consolidated Financial Statements
|
F-7
|
|
|
2. Financial Statement Schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.
|
|
|
3.
Exhibits:
A list of exhibits required to be filed as part of this report is set forth in the Exhibit Index on page 52 of this Form 10-K, which immediately precedes such exhibits, and is incorporated by reference.
|
|
Exhibit
Number
|
Description
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation. (1)
|
|
3.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Wire One Technologies, Inc. changing its name to Glowpoint, Inc. (3)
|
|
|
3.3
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Glowpoint, Inc. increasing its authorized common stock to 150,000,000 shares from 100,000,000 shares. (9)
|
|
|
3.4
|
Amended and Restated Bylaws. (3)
|
|
|
3.5
|
Amendment to Amended and Restated Bylaws (11)
|
|
|
4.1
|
Specimen Common Stock Certificate. (7)
|
|
|
4.2
|
Certificate of Designations, Preferences and Rights of Series D Preferred Stock. (9)
|
|
|
4.3
|
Certificate of Designations, Preferences and Rights of Series A Preferred Stock of Glowpoint. (14)
|
|
|
4.4
|
Form of Series A-3 Warrant dated November 25, 2008. (14)
|
|
|
4.5
|
Form of Amendment to Warrants to Purchase Shares of Common Stock of Glowpoint, dated as of November 25, 2008. (14)
|
|
|
4.6
|
Certificate of Designations, Preferences and Rights of Series A-1 Preferred Stock of Glowpoint. (16)
|
|
|
4.7
|
Certificate of Designations, Preferences and Rights of Series A-2 Preferred Stock of Glowpoint. (18)
|
|
|
4.8
|
Form of Amendment to Series A-3 Warrant dated March 16, 2009. (16)
|
|
|
4.9
|
Form of Amendment to Series A-3 Warrant dated August 10, 2009. (18)
|
|
|
4.10
|
Certificate of Designations, Preferences and Rights of Series B Preferred Stock of Glowpoint. (19)
|
|
|
10.1
|
Glowpoint, Inc. 2000 Stock Incentive Plan. (2)
|
|
|
10.2
|
Employment Agreement with Joseph Laezza, dated as of March 11, 2004. (3)
|
|
|
10.3
|
Employment Agreement with David W. Robinson, dated May 1, 2006 (4)
|
|
|
10.4
|
Employment Agreement with Edwin F. Heinen, dated January 30, 2007. (5)
|
|
|
10.5
|
Employment Agreement Amendment with Edwin F. Heinen, dated April 24, 2007. (6)
|
|
|
10.6
|
Employment Agreement Amendment with David W. Robinson, dated April 24, 2007. (6)
|
|
|
10.7
|
Employment Agreement Amendment with Joseph Laezza, dated May 15, 2007. (6)
|
|
|
10.8
|
Glowpoint, Inc. 2007 Stock Incentive Plan. (8)
|
|
|
10.9
|
Employment Agreement Amendment with David W. Robinson, dated September 20, 2007. (9)
|
|
|
10.10
|
Exchange Agreement, dated September 21, 2007, between Glowpoint and the Holders set forth therein. (9)
|
|
|
10.11
|
Letter Agreement, dated as of December 18, 2007, amending the amended Registration Rights Agreement, dated as of September 21, 2007, between Glowpoint and the Purchasers set forth therein. (10)
|
|
|
10.12
|
Lease Agreement for premises located at 225 Long Avenue, Hillside, New Jersey, dated as of December 31, 2007, between Glowpoint and Vitamin Realty Associates, L.L.C. (12)
|
|
|
10.13
|
Employment Agreement Amendment with David W. Robinson dated April 30, 2008. (13)
|
|
|
10.14
|
Form of Series A Convertible Stock Purchase Agreement, dated as of November 25, 2008, between Glowpoint and the purchasers set forth therein. (14)
|
|
|
10.15
|
Form of Registration Rights Agreement, dated as of November 25, 2008, between Glowpoint and the purchasers set forth therein. (14)
|
|
|
10.16
|
Form of Note Exchange Agreement, dated November 25, 2008, between Glowpoint and the holders set forth therein. (14)
|
|
|
10.17
|
Form of Series C Preferred Consent and Exchange Agreement, dated November 25, 2008, between Glowpoint and the holders set forth therein. (14)
|
|
|
10.18
|
Employment Agreement Amendment with Joseph Laezza, dated November 24, 2008. (14)
|
|
10.19
|
Employment Agreement Amendment with Edwin F. Heinen, dated November 24, 2008. (14)
|
|
|
10.20
|
Form of Note Exchange Agreement, dated December 31, 2008, between Glowpoint and the holders set for the therein. (15)
|
|
|
10.21
|
Form of Series A-1 Convertible Stock Purchase Agreement, dated as of March 16, 2009, between Glowpoint and the purchasers set forth therein. (16)
|
|
|
10.22
|
Amendment No. 1 to Registration Rights Agreement, dated February 19, 2009. (16)
|
|
|
10.23
|
Form of Note Exchange Agreement, dated March 16, 2009, between Glowpoint and the holders set forth therein. (16)
|
|
|
10.24
|
Form of Securities Purchase Agreement, dated March 16, 2009, between Glowpoint and the holder set forth therein. (16)
|
|
|
10.25
|
Form of Series A Preferred Consent and Exchange Agreement, dated March 16, 2009, between Glowpoint and the holders set forth therein. (16)
|
|
|
10.26
|
Employment Agreement Amendment with Joseph Laezza, dated March 12, 2009. (16)
|
|
|
10.27
|
Employment Agreement Amendment with Edwin F. Heinen, dated March 12, 2009. (16)
|
|
|
10.28
|
Employment Agreement Amendment with David W. Robinson, dated March 12, 2009. (16)
|
|
|
10.29
|
Form of Series A-1 Preferred Consent and Exchange Agreement, dated August 11, 2009, between Glowpoint and the holders set forth therein. (18)
|
|
|
10.30
|
Form of Warrant Exchange Agreement, dated August 11, 2009, between Glowpoint and the holders set forth therein. (18)
|
|
|
10.31
|
Form of Registration Rights Agreement, dated August 11, 2009, between Glowpoint and the holders set forth therein. (18)
|
|
|
10.32
|
Form of Series B Stock Purchase Agreement, dated as of March 29, 2010, between Glowpoint and the purchasers set forth therein. (19)
|
|
|
10.33
|
Form of Series A-2 Preferred Exchange Agreement, dated March 29, 2010, between Glowpoint and the holders set forth therein. (19)
|
|
|
10.34
|
Form of Series A-2 Preferred Consent Agreement, dated March 29, 2010, between Glowpoint and the holders set forth therein. (19)
|
|
|
10.35
|
Employment Agreement Amendment with Joseph Laezza, dated March 30, 2010. (21)
|
|
|
10.36
|
Employment Agreement Amendment with David W. Robinson, dated March 30, 2010. (21)
|
|
|
10.37
|
Employment Agreement Amendment with Edwin F. Heinen, dated March 30, 2010. (21)
|
|
| 10.38 | Master Subcontracting Agreement between Polycom, Inc. and Glowpoint, Inc., dated November 26, 2007. (21) | |
|
10.39
|
Form of Restricted Stock Award Agreement (20) and Schedule of Recently Reported Restricted Stock Awards. (21)
|
|
|
17.1
|
Letter of Resignation from Aziz Ahmad, dated March 18, 2009. (16)
|
|
|
17.2
|
Letter of Resignation from Richard Reiss, dated March 18, 2009. (16)
|
|
|
17.3
|
Letter of Resignation from Bami Bastani, dated May 28, 2009. (17)
|
|
|
17.4
|
Letter of Resignation from Dean Hiltzik, dated May 28, 2009. (17)
|
|
|
21.1
|
Subsidiaries of Glowpoint, Inc. (12)
|
|
|
31.1
|
Rule 13a—14(a)/15d—14(a) Certification of the Chief Executive Officer. (21)
|
|
|
31.2
|
Rule 13a—14(a)/15d—14(a) Certification of the Chief Financial Officer. (21)
|
|
|
32.1
|
Section 1350 Certification of the Chief Executive Officer. (21)
|
|
|
32.2
|
Section 1350 Certification of the Chief Financial Officer. (21)
|
|
|
99.
1
|
Press Release. (21)
|
|
(1)
|
Filed as an appendix to View Tech, Inc.’s Registration Statement on Form S-4 (File No. 333-95145) and incorporated herein by reference.
|
|
(2)
|
Filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000, and incorporated herein by reference.
|
|
(3)
|
Filed as an Exhibit to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, and incorporated herein by reference.
|
|
(4)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2006, and incorporated herein by reference.
|
|
(5)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2007, and incorporated herein by reference.
|
|
(6)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 21, 2007, and incorporated herein by reference.
|
|
(7)
|
Filed as an exhibit to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and incorporated herein by reference.
|
|
(8)
|
Filed as an exhibit to Registrant’s Definitive Proxy on Schedule 14A filed with the Securities and Exchange Commission on July 30, 2007, and incorporated herein by reference.
|
|
(9)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2007, and incorporated herein by reference.
|
|
(10)
|
Filed as an exhibit to Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 11, 2008, and incorporated herein by reference.
|
|
(11)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 30, 2008, and incorporated herein by reference.
|
|
(12)
|
Filed as an exhibit to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
|
|
(13)
|
Filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2008, and incorporated herein by reference.
|
|
(14)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 26, 2008, and incorporated herein by reference.
|
|
(15)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2009, and incorporated herein by reference.
|
|
(16)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2009, and incorporated herein by reference.
|
|
(17)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 3, 2009, and incorporated herein by reference.
|
|
(18)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 11, 2009, and incorporated herein by reference.
|
|
(19)
|
Filed as an exhibit to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 30, 2010, and incorporated herein by reference.
|
|
(20)
(21)
|
Filed as an exhibit to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and incorporated herein by reference.
Filed herewith.
|
|
GLOWPOINT, INC.
|
||
|
By:
|
/s/ Joseph Laezza
|
|
|
Joseph Laezza
|
||
|
Co-Chief Executive Officer and President
|
||
|
/s/ Joseph Laezza
|
|
Co-Chief Executive Officer and President (Principal Executive Officer)
|
|
Joseph Laezza
|
||
|
|
||
|
/s/ Edwin F. Heinen
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
Edwin F. Heinen
|
||
|
|
||
|
/s/ Grant Dawson
|
Director
|
|
|
Grant Dawson
|
||
|
|
||
|
/s/ James Lusk
|
Director
|
|
|
James Lusk
|
||
|
|
||
|
/s/ David W. Robinson
|
Director and Co-Chief Executive Officer
|
|
|
David W. Robinson
|
||
|
|
||
|
/s/ Peter Rust
|
Director
|
|
|
Peter Rust
|
|
|
Board of Directors and Stockholders of Glowpoint, Inc.
|
|
December 31,
|
||||||||
|
ASSETS
|
2009
|
2008
|
||||||
|
Current assets:
|
||||||||
|
Cash
|
$ | 587 | $ | 1,227 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $262 and $301, respectively
|
3,323 | 3,090 | ||||||
|
Prepaid expenses and other current assets
|
291 | 294 | ||||||
|
Total current assets
|
4,201 | 4,611 | ||||||
|
Property and equipment, net
|
2,682 | 2,533 | ||||||
|
Other assets
|
31 | 33 | ||||||
|
Total assets
|
$ | 6,914 | $ | 7,177 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 3,232 | $ | 2,367 | ||||
|
Accrued expenses
|
879 | 842 | ||||||
|
Accrued sales taxes and regulatory fees
|
888 | 4,535 | ||||||
|
Customer deposits
|
308 | 606 | ||||||
|
Deferred revenue
|
259 | 325 | ||||||
|
Current portion of capital lease
|
— | 161 | ||||||
|
Total current liabilities
|
5,566 | 8,836 | ||||||
|
Long term liabilities:
|
||||||||
|
Accrued sales taxes and regulatory fees, less current portion
|
195 | — | ||||||
|
Senior Secured Notes, net of discount of $240
|
— | 1,482 | ||||||
|
Capital lease, less current portion
|
— | 72 | ||||||
|
Total long term liabilities
|
195 | 1,554 | ||||||
|
Total liabilities
|
5,761 | 10,390 | ||||||
|
Commitments and contingencies
|
||||||||
|
Stockholders’ equity (deficit):
|
||||||||
|
Preferred stock, $.0001 par value; 7,500 shares authorized and convertible; 4,509 and 3,790 shares issued and outstanding recorded at fair value (liquidation value of $33,815 and $28,423), respectively (see Note 12 for information related to Insider Purchasers – related parties)
|
14,275 | 11,574 | ||||||
|
Common stock, $.0001 par value; 150,000,000 shares authorized; 66,531,087 and 48,374,954 shares issued; 64,966,196 and 46,810,063 shares outstanding, respectively
|
7 | 5 | ||||||
|
Additional paid-in capital
|
150,659 | 172,000 | ||||||
|
Accumulated deficit
|
(162,405 | ) | (185,409 | ) | ||||
| 2,536 | (1,830 | ) | ||||||
|
Less: Treasury stock, 1,564,891 shares at cost
|
(1,383 | ) | (1,383 | ) | ||||
|
Total stockholders’ equity (deficit)
|
1,153 | (3,213 | ) | |||||
|
Total liabilities and stockholders’ equity (deficit)
|
$ | 6,914 | $ | 7,177 | ||||
|
Year Ended
December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Revenue
|
$ | 26,540 | $ | 24,537 | ||||
|
Operating expenses:
|
||||||||
|
Network and infrastructure
|
11,838 | 12,762 | ||||||
|
Global managed services
|
7,476 | 5,849 | ||||||
|
Sales and marketing
|
3,193 | 3,382 | ||||||
|
General and administrative
|
4,465 | 4,662 | ||||||
|
Depreciation and amortization
|
1,056 | 1,261 | ||||||
|
Sales taxes and regulatory fees
|
(2,500 | ) | (172 | ) | ||||
|
Total operating expenses
|
25,528 | 27,744 | ||||||
|
Income (loss) from operations
|
1,012 | (3,207 | ) | |||||
|
Interest and other expense (income):
|
||||||||
|
Interest (income) expense, net, including $0 and $141 of expense, respectively, for Insider Purchasers
|
(543 | ) | 4,517 | |||||
|
Amortization of deferred financing costs, including $46 for Insider Purchasers
|
— | 448 | ||||||
|
Loss on extinguishment of debt, including $0 and $99, respectively, for Insider Purchasers
|
254 | 1,816 | ||||||
|
Increase (decrease) in fair value of derivative financial instruments’ liability, including $0 and $86, respectively, for Insider Purchasers
|
1,848 | (2,673 | ) | |||||
|
Total interest and other expense, net
|
1,559 | 4,108 | ||||||
|
Net loss
|
(547 | ) | (7,315 | ) | ||||
|
(Loss) gain on redemption of preferred stock
|
(64 | ) | 2,419 | |||||
|
Net loss attributable to common stockholders
|
$ | (611 | ) | $ | (4,896 | ) | ||
|
Net loss attributable to common stockholders per share:
|
||||||||
|
Basic and diluted
|
$ | (0.01 | ) | $ | (0.11 | ) | ||
|
Weighted average number of common shares:
|
||||||||
|
Basic and diluted
|
52,938 | 45,477 | ||||||
|
Series A-2
|
|||||||||||||||||||||||||||||||
|
Additional
|
Accum- |
(Note A)
|
|||||||||||||||||||||||||||||
|
Common Stock
|
Paid In
|
ulated
|
Preferred Stock
|
Treasury Stock
|
|||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit
|
Shares
|
Amount
|
Shares
|
Amount
|
Total
|
|||||||||||||||||||||||
|
Balance at January 1, 2008
|
47,630 | $ | 5 | $ | 162,300 | $ | (178,094 | ) | — | $ | — | 1,565 | $ | (1,383 | ) | $ | (17,172 | ) | |||||||||||||
|
Stock-based compensation - restricted stock
|
745 |
—
|
394 | — | — | — | — | — | 394 | ||||||||||||||||||||||
|
Stock-based compensation - stock options
|
— | — | 353 | — | — | — | — | — | 353 | ||||||||||||||||||||||
|
Warrants issued in connection with the 2008 Private Placements
|
— | — | 4,853 | — | — | — | — | — | 4,853 | ||||||||||||||||||||||
|
Series A Convertible Preferred Stock issued in connection with the 2008 Private Placements
|
— | — | — | — | 4 | 11,574 | — | — | 11,574 | ||||||||||||||||||||||
|
Gain on redemption of Series C preferred stock
|
— | — | 2,419 | — | — | — | — | — | 2,419 | ||||||||||||||||||||||
|
Costs related to 2008 private placements
|
— | — | (538 | ) | — | — | — | — | — | (538 | ) | ||||||||||||||||||||
|
Gain on elimination of derivative liabilities
|
— | — | 2,219 | — | — | — | — | — | 2,219 | ||||||||||||||||||||||
|
Net loss for the year
|
— | — | — | (7,315 | ) | — | — | — | — | (7,315 | ) | ||||||||||||||||||||
|
Balance at December 31, 2008
|
48,375 | $ | 5 | $ | 172,000 | $ | (185,409 | ) | 4 | $ | 11,574 | 1,565 | $ | (1,383 | ) | $ | (3,213 | ) | |||||||||||||
|
Cumulative effect of reclassification of warrants (ASC Topic 815)
|
— | — | (26,173 | ) | 23,551 | — | — | — | — | (2,622 | ) | ||||||||||||||||||||
|
Balance at January 1, 2009, as adjusted
|
48,375 | 5 | 145,827 | (161,858 | ) | 4 | 11,574 | 1,565 | (1,383 | ) | (5,835 | ) | |||||||||||||||||||
|
Stock-based compensation - restricted stock
|
735 |
—
|
277 | — | — | — | — | — | 277 | ||||||||||||||||||||||
|
Stock-based compensation - stock options
|
— | — | 279 | — | — | — | — | — | 279 | ||||||||||||||||||||||
|
Loss on redemption of Series A Preferred Stock
|
— | — | (1,999 | ) | — | — | 1,999 | — | — | — | |||||||||||||||||||||
|
August 2009 Warrant Exchange
|
17,372 | 2 | (2 | ) | — | — | — | — | — | — | |||||||||||||||||||||
|
Exercise of stock options
|
49 | — | 17 | — | — | — | — | — | 17 | ||||||||||||||||||||||
|
Series A-1 Preferred Stock issued in connection with the 2009 Private Placement
|
— | — | — | — | 1 | 2,637 | — | — | 2,637 | ||||||||||||||||||||||
|
Elimination of derivative liabilities
|
— | — | 4,751 | — | — | — | — | — | 4,751 | ||||||||||||||||||||||
|
Gain on redemption of Series A-1 Preferred Stock
|
— | — | 1,935 | — | — | (1,935 | ) | — | — | — | |||||||||||||||||||||
|
Costs related to 2009 Private Placement, warrant and Preferred Stock exchange
|
— | — | (426 | ) | — | — | — | — | — | (426 | ) | ||||||||||||||||||||
|
Net loss for the year
|
— | — | — | (547 | ) | — | — | — | — | (547 | ) | ||||||||||||||||||||
|
Balance at December 31, 2009
|
66,531 | $ | 7 | $ | 150,659 | $ | (162,405 | ) | 5 | $ | 14,275 | 1,565 | $ | (1,383 | ) | $ | 1,153 | ||||||||||||||
|
Year Ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net loss
|
$ | (547 | ) | $ | (7,315 | ) | ||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation and amortization
|
1,056 | 1,261 | ||||||
|
Bad debt expense
|
258 | 257 | ||||||
|
Loss on extinguishment of debt
|
254 | 1,816 | ||||||
|
Amortization of deferred financing costs
|
— | 448 | ||||||
|
Accretion of discount on Senior Secured Notes
|
23 | 2,732 | ||||||
|
Loss on disposal of equipment
|
8 | 77 | ||||||
|
Expense recognized for the decrease in the estimated fair value of derivative financial instruments’ liability
|
1,848 | (2,673 | ) | |||||
|
Stock-based compensation
|
556 | 568 | ||||||
|
Increase (decrease) in cash attributable to changes in assets and liabilities:
|
||||||||
|
Accounts receivable .
|
(491 | ) | (801 | ) | ||||
|
Prepaid expenses and other current assets
|
3 | 54 | ||||||
|
Other assets
|
2 | (5 | ) | |||||
|
Accounts payable
|
865 | 793 | ||||||
|
Accrued expenses
|
105 | 1,112 | ||||||
|
Accrued sales taxes and regulatory fees .
|
(3,452 | ) | 524 | |||||
|
Customer deposits
|
(298 | ) | (107 | ) | ||||
|
Deferred revenue
|
(66 | ) | (5 | ) | ||||
|
Net cash provided by (used in) operating activities .
|
124 | (1,264 | ) | |||||
|
Cash flows from investing activities:
|
||||||||
|
Purchases of property and equipment
|
(1,213 | ) | (1,179 | ) | ||||
|
Net cash used in investing activities
|
(1,213 | ) | (1,179 | ) | ||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from preferred stock offering, including $0 and $13 from Insider Purchaser, respectively
|
1,800 | 1,825 | ||||||
|
Proceeds from exercise of stock options
|
17 | — | ||||||
|
Principal payments for capital lease
|
(234 | ) | (125 | ) | ||||
|
Purchase of Senior Secured Notes
|
(750 | ) | — | |||||
|
Costs related to private placements and preferred stock and warrant exchange
|
(384 | ) | (342 | ) | ||||
|
Net cash provided by financing activities
|
449 | 1,358 | ||||||
|
Decrease in cash
|
(640 | ) | (1,085 | ) | ||||
|
Cash at beginning of year
|
1,227 | 2,312 | ||||||
|
Cash at end of year
|
$ | 587 | $ | 1,227 | ||||
|
Supplement disclosures of cash flow information:
|
||||||||
|
Cash paid during the year for interest
|
$ | 80 | $ | 100 | ||||
|
Year Ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Non-cash investing and financing:
|
||||||||
|
Exchange of Senior Secured Notes for Series A-1 Preferred Stock
|
$ | 1,076 | $ | — | ||||
|
Exchange of Senior Secured Notes for Series A Preferred Stock
|
— | 10,802 | ||||||
|
Redemption of Series C Preferred Stock
|
— | 4,330 | ||||||
|
Gain on elimination of derivative liability
|
— | 2,219 | ||||||
|
Additional Senior Secured Notes issued as payment for interest including $0 and $48 for Insider Purchasers, respectively
|
55 | 1,459 | ||||||
|
Costs related to private placements incurred by issuance of placement agent warrants
|
42 | 196 | ||||||
|
2009
|
2008
|
|||||||
|
Risk free interest rate
|
2.0 | % | 2.9 | % | ||||
|
Expected option lives
|
5 Years
|
5 Years
|
||||||
|
Expected volatility
|
113.3 | % | 97.0 | % | ||||
|
Estimated forfeiture rate
|
10 | % | 10 | % | ||||
|
Expected dividend yields
|
None
|
None
|
||||||
|
Weighted average grant date fair value of options
|
$ | 0.33 | $ | 0.31 | ||||
|
2009
|
2008
|
|||||||
|
Prepaid maintenance contracts
|
$ | 113 | $ | 112 | ||||
|
Deferred installation costs
|
97 | 76 | ||||||
|
Prepaid insurance
|
40 | 40 | ||||||
|
Other prepaid expenses
|
41 | 66 | ||||||
| $ | 291 | $ | 294 | |||||
|
2009
|
2008
|
Estimated Useful Life
|
|||||||
|
Network equipment and software
|
$ | 9,593 | $ | 9,200 |
3 to 5 Years
|
||||
|
Computer equipment and software
|
2,571 | 2,356 |
3 to 4 Years
|
||||||
|
Bridging equipment
|
2,008 | 2,008 |
5 Years
|
||||||
|
Leasehold improvements
|
296 | 255 |
Note A
|
||||||
|
Office furniture and equipment
|
451 | 324 |
5 Years
|
||||||
| 14,919 | 14,143 | ||||||||
|
Accumulated depreciation and amortization
|
(12,237 | ) | (11,610 | ) | |||||
| $ | 2,682 | $ | 2,533 | ||||||
|
Settlements to be remitted to taxing authorities
|
Accrued sales taxes and regulatory fees
|
Collected sales taxes and regulatory fees
|
Total
|
|||||||||||||
|
January 1, 2008
|
$ | — | $ | 3,611 | $ | 400 | $ | 4,011 | ||||||||
|
Collections, net of payments
|
— | — | 188 | 188 | ||||||||||||
|
Refunds
|
— | 525 | — | 525 | ||||||||||||
|
Payments
|
— | (285 | ) | — | (285 | ) | ||||||||||
|
Net Adjustments to accrual (Note A)
|
— | 96 | — | 96 | ||||||||||||
|
December 31, 2008
|
— | 3,947 | 588 | 4,535 | ||||||||||||
|
Collections, net of payments
|
— | — | 45 | 45 | ||||||||||||
|
Settlements with tax authorities
|
926 | (293 | ) | (633 | ) | — | ||||||||||
|
Payments
|
— | (213 | ) | — | (213 | ) | ||||||||||
|
Net Adjustments to accrual (Note A)
|
— | (3,284 | ) | — | (3,284 | ) | ||||||||||
|
December 31, 2009
|
$ | 926 | $ | 157 | $ | — | $ | 1,083 | ||||||||
|
Less amounts included in long term liabilities
|
(195 | ) | — | — | (195 | ) | ||||||||||
|
December 31, 2009 – current portion
|
$ | 731 | $ | 157 | $ | — | $ | 888 | ||||||||
|
2009
|
2008
|
|||||||
|
Change in estimate
|
$ | 1,829 | $ | (309 | ) | |||
|
Settlements from amnesty programs
|
812 | — | ||||||
|
Expiration of statute of limitations
|
529 | 213 | ||||||
|
Settlements from audits
|
114 | — | ||||||
| $ | 3,284 | $ | (96 | ) | ||||
|
2009
|
2008
|
|||||||
|
Sales taxes and regulatory fees
|
$ | (2,500 | ) | $ | (172 | ) | ||
|
Interest (income) expense
|
(784 | ) | 268 | |||||
| $ | (3,284 | ) | $ | 96 | ||||
|
2009
|
2008
|
|||||||
|
Accrued compensation
|
$ | 610 | $ | 502 | ||||
|
Accrued communication costs
|
182 | 187 | ||||||
|
Accrued professional fees
|
30 | 71 | ||||||
|
Accrued interest
|
— | 9 | ||||||
|
Other accrued expenses
|
57 | 73 | ||||||
| $ | 879 | $ | 842 | |||||
|
Sale of Series A Preferred Stock
|
Preferred Stock Exchange
|
Senior Secured Note Exchange
|
Elimination
of Derivative Liability
|
Senior Secured Note Modification
|
Placement Agent
Warrant Fee
|
Total
|
||||||||||||||||||||||
|
Consideration received:
|
||||||||||||||||||||||||||||
|
Gross proceeds – cash
|
$ | 1,825 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,825 | ||||||||||||||
|
Senior Secured Notes
|
$ | — | $ | — | $ | (10,802 | ) | $ | — | $ | — | $ | — | $ | (10,802 | ) | ||||||||||||
|
Series C Preferred Stock surrendered:
|
||||||||||||||||||||||||||||
|
Shares
|
— | (475 | ) | — | — | — | — | (475 | ) | |||||||||||||||||||
|
Carrying amount
|
$ | — | $ | (4,330 | ) | $ | — | $ | — | $ | — | $ | — | $ | (4,330 | ) | ||||||||||||
|
Consideration provided to holders:
|
||||||||||||||||||||||||||||
|
Series A-3 Warrants issued:
|
||||||||||||||||||||||||||||
|
Shares
|
2,281 | — | 12,377 | — | 2,384 | 1,000 | 18,042 | |||||||||||||||||||||
|
Carrying amount
|
$ | 448 | $ | — | $ | 2,516 | $ | 1,225 | $ | 468 | $ | 196 | $ | 4,853 | ||||||||||||||
|
Series A Preferred Stock issued:
|
||||||||||||||||||||||||||||
|
Shares
|
456 | 633 | 2,701 | — | — | — | 3,790 | |||||||||||||||||||||
|
Carrying amount
|
$ | 1,377 | $ | 1,911 | $ | 8,286 | $ | — | $ | — | $ | — | $ | 11,574 | ||||||||||||||
|
Total Costs
|
||||
|
Cash financing costs:
|
||||
|
Burnham Hill Partners placement agent fees
|
$ | 203 | ||
|
Legal and other professional fees
|
139 | |||
| 342 | ||||
|
Non-cash financing costs:
|
||||
|
Burnham Hill Partners placement agent warrants
|
196 | |||
| $ | 538 | |||
|
Sale of Series A-1 Preferred Stock
|
Preferred Stock Exchange
|
Senior Secured Note Exchange
|
Senior Secured Note Purchase
|
Placement Agent
Warrant Fee
|
Total
|
|||||||||||||||||||
|
Consideration received by Company:
|
||||||||||||||||||||||||
|
Cash:
|
||||||||||||||||||||||||
|
Amount received
|
$ | 1,800 | $ | — | $ | — | $ | (750 | ) | $ | — | $ | 1,050 | |||||||||||
|
Senior Secured Notes:
|
||||||||||||||||||||||||
|
Carrying amount
|
$ | — | $ | — | $ | (1,076 | ) | $ | (713 | ) | $ | — | $ | (1,789 | ) | |||||||||
|
Series A Preferred Stock:
|
||||||||||||||||||||||||
|
Shares
|
— | (3,790 | ) | — | — | — | (3,790 | ) | ||||||||||||||||
|
Carrying amount
|
$ | — | $ | (11,574 | ) | $ | — | $ | — | $ | — | $ | (11,574 | ) | ||||||||||
|
Consideration provided to holders:
|
||||||||||||||||||||||||
|
Series A-3 Warrants issued:
|
||||||||||||||||||||||||
|
Shares
|
2,250 | — | 594 | — | 500 | 3,344 | ||||||||||||||||||
|
Carrying amount
|
$ | 189 | $ | — | $ | 50 | $ | — | $ | 42 | $ | 281 | ||||||||||||
|
Series A-1 Preferred Stock issued:
|
||||||||||||||||||||||||
|
Shares
|
450 | 3,790 | 269 | — | — | 4,509 | ||||||||||||||||||
|
Carrying amount
|
$ | 1,611 | $ | 13,573 | $ | 1,026 | $ | — | $ | — | $ | 16,210 | ||||||||||||
|
Total Costs
|
||||
|
Cash financing costs:
|
||||
|
Burnham Hill Partners placement agent fees
|
$ | 201 | ||
|
Legal and other professional fees
|
85 | |||
| 286 | ||||
|
Non-cash financing costs:
|
||||
|
Burnham Hill Partners placement agent warrants
|
42 | |||
| $ | 328 | |||
|
Preferred Stock Exchange
|
Warrant Exchange
|
Total
|
||||||||||
|
Consideration received by Company:
|
||||||||||||
|
Series A-1 Preferred Stock:
|
||||||||||||
|
Shares
|
(4,509 | ) | — | (4,509 | ) | |||||||
|
Carrying amount
|
$ | (16,210 | ) | $ | — | $ | (16,210 | ) | ||||
|
Series A-3 Warrants:
Shares
|
— | 39,088 | 39,088 | |||||||||
|
Consideration provided to holders:
|
||||||||||||
|
Common Stock :
|
||||||||||||
|
Shares
|
— | 17,372 | 17,372 | |||||||||
|
Carrying amount
|
$ | — | $ | 2 | $ | 2 | ||||||
|
Series A-2 Preferred Stock issued:
|
||||||||||||
|
Shares
|
4,509 | — | 4,509 | |||||||||
|
Carrying amount
|
$ | 14,275 | $ | — | $ | 14,275 | ||||||
|
Total Costs
|
||||
|
Cash financing costs:
|
||||
|
Burnham Hill Partners placement agent fees
|
$ | 75 | ||
|
Legal and other professional fees
|
23 | |||
| $ | 98 | |||
|
December 31, 2008
|
2009 Activity
|
2009 Private Placements Entries, Net
|
December 31, 2009
|
|||||||||||||
|
Principal of Senior Secured Notes:
|
||||||||||||||||
|
2006 Private Placements
|
$ | 1,500 | $ | — | $ | (1,500 | ) | $ | — | |||||||
|
Senior Secured Notes issued as payment for interest
|
222 | 55 | (277 | ) | — | |||||||||||
| 1,722 | 55 | (1,777 | ) | — | ||||||||||||
|
Discount:
|
||||||||||||||||
|
Series A-3 warrants
|
(260 | ) | — | 260 | — | |||||||||||
| (260 | ) | — | 260 | — | ||||||||||||
|
Accretion of discount
|
20 | 23 | (43 | ) | — | |||||||||||
| (240 | ) | 23 | 217 | — | ||||||||||||
|
Senior Secured Notes, net of discount
|
$ | 1,482 | $ | 78 | $ | (1,560 | ) | $ | — | |||||||
|
December 31, 2008
|
Cumulative Effect of Change in Accounting Principle
|
Activity during the period
|
Increase in Fair Value
|
Elimination
of Derivative Liability
|
December 31, 2009
|
|||||||||||||||||||
|
Derivative financial instrument – warrants
|
$ | — | $ | 2,546 | $ | 281 | $ | 1,797 | $ | (4,624 | ) | $ | — | |||||||||||
|
Derivative financial instrument – warrants – insider purchasers
|
— | 76 | — | 51 | (127 | ) | — | |||||||||||||||||
| $ | — | $ | 2,622 | $ | 281 | $ | 1,848 | $ | (4,751 | ) | $ | — | ||||||||||||
|
2009
|
2008
|
|||||||
|
Interest (Income) Expense:
|
||||||||
|
Accretion of discount on Senior Secured Notes
|
$ | 23 | $ | 2,591 | ||||
|
Accretion of discount on Senior Secured Notes, Insider Purchasers
|
— | 141 | ||||||
|
Interest on Senior Secured Notes
|
57 | 1,376 | ||||||
|
Interest on Senior Secured Notes, Insider Purchasers
|
— | 44 | ||||||
|
Adjustment of interest accrual for sales and use taxes and regulatory fees
|
(784 | ) | 268 | |||||
|
Interest expense for capital lease
|
42 | 78 | ||||||
|
Other interest (income) expense
|
119 | 19 | ||||||
|
Interest (income) expense, net
|
$ | (543 | ) | $ | 4,517 | |||
|
Series A
as of December 31, 2008
Note A
|
2009 Private Placement
|
Series A
& A-1 Exchange
Note B
|
Series A-1 & A-2 Exchange Note C
|
Series A-2 as of December 31, 2009
|
||||||||||||||||
|
Shares of Preferred Stock:
|
||||||||||||||||||||
|
Investors
|
3,675 | 719 | — | — | 4,394 | |||||||||||||||
|
Insider Purchasers
|
115 | — | — | — | 115 | |||||||||||||||
| 3,790 | 719 | — | — | 4,509 | ||||||||||||||||
|
Book Value:
|
||||||||||||||||||||
|
Investors
|
$ | 11,226 | $ | 2,637 | $ | 1,934 | $ | (1,886 | ) | $ | 13,911 | |||||||||
|
Insider Purchasers
|
348 | — | 65 | (49 | ) | 364 | ||||||||||||||
| $ | 11,574 | $ | 2,637 | $ | 1,999 | $ | (1,935 | ) | $ | 14,275 | ||||||||||
|
Liquidation Value:
|
||||||||||||||||||||
|
Investors
|
$ | 27,560 | $ | 5,392 | $ | — | $ | — | $ | 32,952 | ||||||||||
|
Insider Purchasers
|
863 | — | — | — | 863 | |||||||||||||||
| $ | 28,423 | $ | 5,392 | $ | — | $ | — | $ | 33,815 | |||||||||||
|
Outstanding
|
Exercisable
|
|||||||||||||||
|
Number of Options
|
Weighted
Average
Exercise
Price
|
Number of Options
|
Weighted
Average
Exercise
Price
|
|||||||||||||
|
Options outstanding, January 1, 2008
|
4,213 | $ | 1.47 | 2,519 | $ | 2.06 | ||||||||||
|
Granted
|
892 | 0.43 | ||||||||||||||
|
Exercised
|
— | 0.00 | ||||||||||||||
|
Expired
|
— | 0.00 | ||||||||||||||
|
Forfeited
|
(132 | ) | 0.58 | |||||||||||||
|
Options outstanding, December 31, 2008
|
4,973 | 1.31 | 3,334 | 1.72 | ||||||||||||
|
Granted
|
1,155 | 0.43 | ||||||||||||||
|
Exercised
|
(49 | ) | 0.42 | |||||||||||||
|
Expired
|
(98 | ) | 3.50 | |||||||||||||
|
Forfeited
|
(1,275 | ) | 2.12 | |||||||||||||
|
Options outstanding, December 31, 2009
|
4,706 | $ | 0.84 | 2,910 | $ | 1.08 | ||||||||||
|
Shares of common stock available for future grant under Company plans
|
1,529 | |||||||||||||||
|
Outstanding
|
Exercisable
|
|||||||||||||||||||||
|
Range of price
|
Number
of Options
|
Weighted
Average
Remaining
Contractual
Life (In Years)
|
Weighted
Average
Exercise
Price
|
Number
of Options
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
| $ | 0.20 – 0.40 | 1,301 | 8.20 | $ | 0.36 | 550 | $ | 0.36 | ||||||||||||||
| 0.41 – 0.50 | 1,109 | 8.45 | 0.45 | 417 | 0.43 | |||||||||||||||||
| 0.51 – 0.65 | 1,088 | 7.72 | 0.60 | 738 | 0.59 | |||||||||||||||||
| 0.66 – 1.19 | 671 | 5.01 | 1.14 | 668 | 1.14 | |||||||||||||||||
| 1.27 – 5.50 | 537 | 3.42 | 2.89 | 537 | 2.89 | |||||||||||||||||
| $ | 0.20 – 5.50 | 4,706 | 7.15 | $ | 0.84 | 2,910 | $ | 1.08 | ||||||||||||||
|
Options
|
Weighted Average
Grant Date
Fair Value
|
|||||||
|
Nonvested options outstanding, January 1, 2008
|
1,695 | $ | 0.46 | |||||
|
Granted
|
892 | 0.31 | ||||||
|
Vested
|
(828 | ) | 0.51 | |||||
|
Forfeited
|
(120 | ) | 0.42 | |||||
|
Nonvested options outstanding, December 31, 2008
|
1,639 | 0.36 | ||||||
|
Granted
|
1,155 | 0.33 | ||||||
|
Vested
|
(793 | ) | 0.35 | |||||
|
Forfeited
|
(205 | ) | 0.36 | |||||
|
Nonvested options outstanding, December 31, 2009
|
1,796 | $ | 0.34 | |||||
|
2009
|
2008
|
|||||||
|
Global managed services
|
$ | 122 | $ | 115 | ||||
|
Sales and marketing
|
38 | 64 | ||||||
|
General and administrative
|
119 | 174 | ||||||
| $ | 279 | $ | 353 | |||||
|
Restricted Shares
|
Weighted Average
Exercise Price
|
|||||||
|
Unvested restricted shares outstanding, January 1, 2008
|
1,027 | $ | 0.54 | |||||
|
Granted
|
745 | 0.47 | ||||||
|
Vested
|
(552 | ) | 0.55 | |||||
|
Forfeited
|
— | 0.00 | ||||||
|
Unvested restricted shares outstanding, December 31, 2008
|
1,220 | 0.49 | ||||||
|
Granted
|
1,225 | 0.34 | ||||||
|
Vested
|
(793 | ) | 0.42 | |||||
|
Forfeited
|
(490 | ) | 0.50 | |||||
|
Unvested restricted shares outstanding, December 31, 2009
|
1,162 | $ | 0.38 | |||||
|
2009
|
2008
|
|||||||
|
Global managed services
|
$ | 21 | $ | 14 | ||||
|
General and administrative
|
249 | 372 | ||||||
|
Sales and marketing
|
7 | 8 | ||||||
| $ | 277 | $ | 394 | |||||
|
Warrants
|
Weighted Average
Exercise Price
|
|||||||
|
Warrants outstanding, January 1, 2008
|
22,975 | $ | 0.86 | |||||
|
Granted
|
18,042 | 0.40 | ||||||
|
Exercised
|
— | — | ||||||
|
Forfeited
|
(100 | ) | 0.50 | |||||
|
Warrants outstanding, December 31, 2008
|
40,917 | 0.54 | ||||||
|
Granted
|
3,344 | 0.40 | ||||||
|
Exercised
|
— | — | ||||||
|
Exchanged – Note 9
|
(39,088 | ) | 0.40 | |||||
|
Forfeited
|
(1,709 | ) | 2.56 | |||||
|
Warrants outstanding, December 31, 2009
|
3,464 | $ | 0.97 | |||||
|
Exercise Price
|
Number
Outstanding
|
Expiration Date
|
Subject to Anti-dilution Protection
|
||||||
| $ | 0.40 | 1,824 |
11/25/2013
|
Yes
|
|||||
| 1.61 | 1,640 |
3/14/2010
|
No
|
||||||
| 3,464 | |||||||||
|
2009
|
2008
|
|||||||
|
Risk free interest rate
|
2.69 | % | 1.55 | % | ||||
|
Warrant lives
|
5 Years
|
5 Years
|
||||||
|
Expected volatility
|
113.9 | % | 108.8 | % | ||||
|
Expected dividend yields
|
None
|
None
|
||||||
|
December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Series A-2 Preferred Stock
|
45,087 | — | ||||||
|
Warrants
|
3,464 | 40,917 | ||||||
|
Options
|
4,706 | 4,973 | ||||||
|
Unvested restricted stock
|
1,162 | 1,220 | ||||||
|
Senior Secured Notes
|
— | 3,463 | ||||||
|
Series A Preferred Stock
|
— | 37,898 | ||||||
| 54,419 | 88,471 | |||||||
|
|
•
|
Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.
|
|
|
•
|
Level 2 - inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
|
|
|
•
|
Level 3 - unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date.
|
|
Fair Value as of December 31, 2009
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant other Observable Inputs (Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Increases (decreases) during the year ended December 31, 2009
|
||||||||||||||||
|
Liabilities:
|
||||||||||||||||||||
|
Derivative financial instruments
|
$ | — | $ | — | $ | — | $ | — | $ | 1,848 | ||||||||||
|
Increases (decreases) during the year ended December 31, 2009
|
||||
|
Liabilities:
|
||||
|
Balance as of January 1, 2009
|
$ | 2,622 | ||
|
Initial measurement of warrants issued in the period
|
281 | |||
|
Elimination of derivative liability
|
(4,751 | ) | ||
|
Increase in fair value of derivative liability of warrants
|
1,848 | |||
|
Balance as of December 31, 2009
|
$ | — | ||
|
Original Value
|
November 2008
|
December 31, 2008
|
March
2009
|
August
2009
|
||||||||||||||||
|
Number of warrants
|
40,917 | 18,042 | 40,917 | 3,344 | 44,262 | |||||||||||||||
|
Exercise price
|
$ | 0.97 | $ | 0.40 | $ | 0.54 | $ | 0.40 | $ | 0.53 | ||||||||||
|
Risk free interest rate
|
3.3 | % | 2.1 | % | 0.7 | % | 1.0 | % | 0.7 | % | ||||||||||
|
Expected warrant lives in years
|
5.0 | 5.0 | 1.9 | 1.8 | 1.3 | |||||||||||||||
|
Expected volatility
|
102.7 | % | 105.7 | % | 132.3 | % | 139.0 | % | 143.3 | % | ||||||||||
|
Expected dividend yields
|
None
|
None
|
None
|
None
|
None
|
|||||||||||||||
|
Fair value per share
|
$ | 0.64 | $ | 0.20 | $ | 0.06 | $ | 0.08 | $ | 0.11 | ||||||||||
|
Common stock price
|
$ | 0.83 | $ | 0.27 | $ | 0.15 | $ | 0.17 | $ | 0.23 | ||||||||||
|
Fair value of warrants
|
$ | 26,173 | $ | 448 | $ | 2,622 | $ | 281 | $ | 4,763 | ||||||||||
|
Fair Value at Measurement Date
|
Quoted
Prices in Active Markets for Identical Assets (Level 1)
|
Significant other Observable Inputs (Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Gains
(losses)
|
||||||||||||||||
|
Liabilities:
|
||||||||||||||||||||
|
Warrants issued in connection with:
|
||||||||||||||||||||
|
Sale of Series A-1 Preferred Stock
|
$ | 189 | $ | — | $ | — | $ | 189 | $ | — | ||||||||||
|
Senior Secured Note Exchange
|
50 | — | — | 50 | — | |||||||||||||||
|
Placement agent warrant fee
|
42 | — | — | 42 | — | |||||||||||||||
| $ | 281 | $ | — | $ | — | $ | 281 | $ | — | |||||||||||
|
2009
|
2008
|
|||||||
|
U.S. federal income taxes at the statutory rate
|
$ | (186 | ) | $ | (2,487 | ) | ||
|
State taxes, net of federal effects
|
(33 | ) | (439 | ) | ||||
|
Nondeductible expenses
|
885 | 2,449 | ||||||
|
Expired state operating loss carry forwards
|
1,333 | — | ||||||
|
Non-recognizable income
|
— | (3,074 | ) | |||||
|
Beneficial conversion feature
|
— | 216 | ||||||
|
Other
|
(7 | ) | — | |||||
|
Change in valuation allowance
|
(1,992 | ) | 3,335 | |||||
| $ | — | $ | — | |||||
|
Deferred tax assets:
|
2009
|
2008
|
||||||
|
Tax benefit of operating loss carry forward
|
$ | 48,760 | $ | 48,739 | ||||
|
Reserves and allowances
|
168 | 1,700 | ||||||
|
Accrued expenses
|
73 | 149 | ||||||
|
Goodwill
|
453 | 524 | ||||||
|
Warrants issued for services
|
457 | 742 | ||||||
|
Equity based compensation
|
994 | 996 | ||||||
|
Fixed assets
|
64 | 111 | ||||||
|
Total deferred tax assets
|
50,969 | 52,961 | ||||||
|
Deferred tax liability:
|
||||||||
|
Fair value adjustments to derivative financial instruments
|
- | - | ||||||
|
Deferred tax assets and liability, net
|
50,969 | 52,961 | ||||||
|
Valuation allowance
|
(50,969 | ) | (52,961 | ) | ||||
|
Net deferred tax assets
|
$ | — | $ | — | ||||
|
December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Consulting Services
|
$ | 26 | $ | 180 | ||||
|
Video Services
|
$ | 305 | $ | 293 | ||||
|
Severance pay plus payroll taxes
|
$ | 300 | ||
|
Restricted stock award and extension of exercise period for vested options
|
57 | |||
|
Other benefits and costs
|
36 | |||
| 393 | ||||
|
Less:
|
||||
|
Amounts paid or vested
|
(318 | ) | ||
|
Reduction in severance amounts
|
(75 | ) | ||
|
Accrual as of December 31, 2009
|
$ | - | ||
|
Year Ending December 31
|
||||
|
2010
|
$ | 260 | ||
|
2011
|
96 | |||
|
2012
|
19 | |||
| $ | 375 | |||
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|