XML 34 R15.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Related Party Transactions | 12 Months Ended
--- | ---
Dec. 31, 2016
Related Party Transactions [Abstract] |
Related Party Transactions | Related Party Transactions Accounts Receivables The following table shows the Company's receivable balance associated with related parties as of December 31, 2016 and 2015, respectively:
|  | As of December 31,
(in thousands) |  | 2016 |  | 2015
Receivable from related party - Tinuum Group |  | $ | 1,934 |  |  | $ | 1,918 |
Accounts Payable and Advanced Deposits The following table shows the Company's payable balance associated with related parties, exclusive of amounts owed to employees and directors in the normal course of business, as of December 31, 2016 and 2015, respectively:
|  | As of December 31,
(in thousands) |  | 2016 |  | 2015
Payable to related party - RCM6 |  | $ | — |  |  | $ | 270 |
Prior to 2014, the Company received advanced payments totaling $10.0 million for M-45 TM technology royalties from Tinuum Group. As of December 31, 2016 and 2015, the Company's remaining advanced deposit balance was zero and $3.0 million, respectively. Revenues The following table shows the revenues recognized with related parties during the years ended December 31, 2016, 2015 and 2014, respectively:
|  | Years Ended December 31,
(in thousands) |  | 2016 |  | 2015 |  | 2014
Revenues from related party - Tinuum Group |  | $ | — |  |  | $ | 55 |  |  | $ | 665 |
The Tinuum Group revenues in the table above are included within the Chemicals line in the Consolidated Statements of Operations. Other Income The following table shows the other income recognized with related parties during the years ended December 31, 2016, 2015 and 2014, respectively:
|  | Years Ended December 31,
(in thousands) |  | 2016 |  | 2015 |  | 2014
Royalties, related party - Tinuum Group |  | $ | 6,125 |  |  | $ | 10,642 |  |  | $ | 6,410 |
The above Tinuum Group royalties are included within the Royalties, related party line in the Consolidated Statements of Operations. Notes Payable The following table summarizes the Company's notes payable (net of debt discount and issuance costs) classified according to payment terms, all of which are with related parties:
|  |  |  | As of December 31,
(in thousands) |  | Related Party |  | 2016 |  | 2015
Short-term note payable |  |  |  |  |  |
Credit Agreement, net of discount |  | Franklin Mutual |  | $ | — |  |  | $ | 12,676 |
Total Short-term borrowings |  |  |  | — |  |  | 12,676 |
Current portion of long-term borrowings |  |  |  |  |  |
RCM6 note payable, net of discount |  | Tinuum Group |  | — |  |  | 1,207 |
DSI Business Owner note payable |  | DSI Business Owner |  | — |  |  | 630 |
Total Current portion of long-term borrowings |  |  |  | — |  |  | 1,837 |
Total Short-term and current portion of long-term borrowings |  |  |  | — |  |  | 14,513 |
Long-term borrowings |  |  |  |  |  |
RCM6 note payable, net of discount |  | Tinuum Group |  | — |  |  | 13,023 |
DSI Business Owner note payable |  | DSI Business Owner |  | — |  |  | 489 |
Total Long-term borrowings |  |  |  | — |  |  | 13,512 |
Total Borrowings |  |  |  | $ | — |  |  | $ | 28,025 |
Credit Agreement On October 22, 2015, the Company entered into a credit agreement for a $15.0 million short-term loan with Franklin Mutual Quest Fund and MFP Investors LLC (the "Lenders"), and Wilmington Trust, National Association, as the administrative agent and collateral agent ("Administrative Agent") (the “Credit Agreement”), which was subsequently amended in 2016 as discussed below. Under the original terms and conditions, the Credit Agreement matured on April 22, 2016, subject to a three month extension at the Company's option to the extent certain conditions are met. The Credit Agreement bore interest at an annual rate equal to 10.5% and was subject to various prepayment and other premiums if certain events, including a change in control, occur. The Company received net proceeds of $13.5 million and recorded debt discount and debt issuance costs of $1.5 million. The debt discounts and debt issuance costs were amortized to interest expense using the effective interest method over the life of the Credit Agreement. The net proceeds were being used to fund working capital needs and for general operating purposes of the Company and its subsidiaries. All obligations of the Company under the Credit Agreement were unconditionally guaranteed by each of the Company’s wholly-owned domestic subsidiaries (other than ADA Analytics, LLC) and were secured by perfected security interests in substantially all of the assets of the Company and the guarantors, subject to certain agreed upon exceptions. The Lenders were beneficial owners of Common Stock in the Company. The Credit Agreement was approved by the Board and the Audit Committee as a related party transaction. In connection with the Credit Agreement, and the Company's pledge and assignment to the Collateral Agent for all of ADA's equity interests in Tinuum Services, the Lenders required that NexGen consent to a pledge. The Company entered into an Indemnity Agreement with NexGen whereby ADES and ADA agreed to indemnify NexGen from and against any and all losses, claims, damages, liabilities, costs, fees or expenses, which may arise in connection with the Company pledging its Tinuum Services equity interests. The Indemnity Agreement was approved by the Board and the Audit Committee as a related party transaction. On February 8, 2016, the Company entered into the first amendment to the Credit Agreement ("First Amendment") that extended the SEC filings date to March 30, 2016. On March 30, 2016, the Company entered into the second amendment to the Credit Agreement ("Second Amendment"). The Second Amendment extended the maturity date to July 8, 2016, extended the Company's filing date deadline related to its 2015 SEC filings to April 20, 2016, increased the stated interest rate from 10.5% to 15.0% and increased the minimum cash balance requirement from $3.0 million to $3.5 million. The Company incurred approximately $0.6 million in fees related to the Second Amendment. On June 30, 2016, the Company, the required Lenders under the Credit Agreement and the Administrative Agent agreed to terminate the Credit Agreement (the "Payoff Letter") prior to the maturity date of July 8, 2016, effective upon the Company’s $9.9 million prepayment, which amount included the total unpaid principal balance of the loans and advances made to or for the benefit of the Company, together with all accrued but unpaid interest, and the total amount of all fees, costs, expenses and other amounts owed by the Company thereunder, including a prepayment premium. The $9.9 million prepayment amount was paid on June 30, 2016 (the "Payoff Date"). The Payoff Letter included a waiver by the Lenders for a portion of the 4% prepayment premium required by the terms of the Credit Agreement. Tinuum Group - RCM6 Note Payable The Company acquired membership interests in RCM6 from Tinuum Group in February 2014 through an up-front payment and a note payable (the "RCM6 Note Payable"). Due to the payment terms of the note purchase agreement, the RCM6 Note Payable periodically added interest to the outstanding principal balance. The stated rate associated with the note was 1.65% and the effective rate of the note at inception was 20%. Due to the difference between the stated rate and the effective rate, the note payable was carried at a discount of $7.6 million as of December 31, 2015. As described in Note 7, on March 3, 2016, the Company sold its 24.95% membership interest in RCM6 and, as a result, the Company had no future obligations related to the previously recorded RCM6 Note Payable. DSI Business Owner As of December 31, 2014, the Company terminated the consulting portion of the agreements with the DSI Business Owner. However, according to the terms of the remaining agreements, the Company was required to make all remaining payments structured as a note payable through the third quarter of 2017. In February 2016, the Company entered into an agreement with the DSI Business Owner and settled the remaining amounts owed as of the date of the agreement of approximately $1.1 million for $0.3 million, which was paid during the first quarter of 2016. The difference between the remaining amounts owed and the settlement amount has been included within the Gain on settlement of note payable and licensed technology line item in the Consolidated Statements of Operations for the year ended December 31, 2016. Highview Long-term License Agreement During 2014, the Company entered into an exclusive, ten-year agreement ("License Agreement") with Highview to utilize certain licensed technology. Pursuant to the License Agreement, the Company recorded a long-term licensed technology asset and related obligation. As of December 31, 2015, the Company's obligation under the long-term licensing agreement was approximately $1.6 million. On June 15, 2016, the Company entered into an agreement with Highview to terminate the License Agreement in exchange for a one-time payment by the Company of £0.2 million (approximately $0.2 million). Per the agreement, payment of the termination fee, if any, will only be settled by relinquishing shares of Highview currently owned by the Company equal to £0.2 million. As a result of terminating the License Agreement, the Company wrote off the licensed technology asset, reduced the corresponding long-term liability to the amount of the one-time payment, and recognized a gain of approximately $0.2 million. The gain on the settlement of the Highview license technology obligation is included in the Other income line on the Company's Consolidated Statement of Operations for the year ended December 31, 2016. Clearview As discussed in Note 8, on November 20, 2014, the Company entered into an agreement with InSyst Ltd. and ClearView Monitoring Solutions Ltd., both Israel-based companies specializing in data analytics, to allow the Company the exclusive option to purchase certain assets of ClearView. The Company paid $0.2 million related to this option. Additionally, from November 20, 2014 through the date of the acquisition, the Company paid certain operating costs of Clearview. During the year ended December 31, 2014, the Company recorded expenses of $0.2 million related to these payments within the General and administrative line in the Consolidated Statements of Operations. During 2015, prior to the acquisition, the Company recorded expenses of $0.2 million related to these payments within the General and administrative line in the Consolidated Statements of Operations. Arch Coal License In June 2010, the Company entered into a Development and License Agreement and executed a Securities Subscription and Investment Agreement with Arch Coal, Inc. ("Arch"), a related party as discussed below, pursuant to which the Company licensed, on an exclusive, non-transferable basis, the use of certain of its technology to enhance coal by a proprietary treatment process. The Company received a non-refundable license fee payment from Arch in the amount of $2.0 million and incurred non-reimbursable costs associated with this agreement in the amount of $0.3 million. However, as the agreement does not specify an end date related to the completion of the agreement, the Company has recorded the non-reimbursable costs in the Deposits line item within Other Long-term assets and the non-refundable license fee payment in the Deferred revenue line item in Other long-term liabilities, as shown in Note 11. Board of Director Matters An Arch designee holds one seat on the Board. The appointment of one designee to the Board was made pursuant to a 2003 Subscription and Investment Agreement, as amended to reflect the effect of the Company's two-for-one stock split in March 2014, whereby the Company’s management agreed to make available one seat on the Board for an Arch designee and to vote all shares and proxies they are entitled to vote in favor of such designee for so long as Arch continues to hold at least 200,000 shares of our common stock. From May 2014 through September 2014, a member of the Board entered into a consulting agreement with the Company to assist in the Restatement process and received compensation of $0.1 million during this period related to the services provided. In addition, as required by the Company's related-party transaction policy, the above noted agreement was approved by the Company’s Audit Committee before being recommended to the Board for approval and was then approved by the disinterested members of the Board. In addition, this individual subsequently served as the Company's Chief Financial Officer from June 2015 through June 2016. Refer to Note 7 for a discussion of transactions entered into with the Company's equity investees.

X
- References No definition available. + Details
Name: | us-gaap_RelatedPartyTransactionsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 + Details
Name: | us-gaap_RelatedPartyTransactionsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration