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DISCONTINUED OPERATIONS
 12 Months Ended
Dec. 31, 2012
DISCONTINUED OPERATIONS [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
DISCONTINUED OPERATIONS
 
(a)  CoaLogix

CoaLogix losses for the year ended December 31, 2010 and the period from January 1, 2011 to the Closing Date are reflected as “Loss from discontinued operations, net of income taxes” in the Company's Consolidated Statements of Operations.

(b)  Coreworx

(i) Acquisition of Decision Dynamics Technology Ltd.  

On April 30, 2010, the Company's former subsidiary, Coreworx, completed the acquisition of all of the issued and outstanding common shares of Decision Dynamics Technology Ltd., a Canadian corporation (“Decision Dynamics”), in consideration for the issuance of 1,000,000 shares of the Company's common stock to the stockholders of Decision Dynamics.  The purchase price of $5,640 represents the market value of the 1,000,000 shares of Acorn common stock issued to the former stockholders of Decision Dynamics (based on the closing price of Acorn shares on the date of the transaction in accordance with generally accepted accounting principles).
 
The transaction was accounted for as a purchase business combination. Decision Dynamics' results from operations for the period from acquisition (April 30, 2010) were initially included in the Company's Consolidated Statement of Operations (see Deconsolidation of Coreworx).
 
(ii)  Deconsolidation of Coreworx

On November 9, 2010, following a decision by the Company's board of directors to cease providing funding for Coreworx, the Company entered into a letter of intent with Coreworx (the “Letter of Intent”) for the Company to sell all of its common stock in Coreworx to a management buyout group consisting of Coreworx' management, certain employees and other investors.  On December 17, 2010, the Company and Coreworx entered into agreements (the “MBO Transaction”) to effectuate the terms of the Letter of Intent and close on the transactions, which agreements included a Share Exchange Agreement, Debt Conversion Agreement, Amended and Restated Loan Agreement and other ancillary agreements and documents (collectively the “Transaction Documents”).   Under the terms of the Transaction Documents: 

i.Coreworx’ remaining indebtedness owed to the Company of approximately $5,436 was reduced by $1,436 to $4,000 with the Company exchanging all of its shares of common stock of Coreworx for 10% (or 3,625,209 shares) of the newly issued and outstanding shares of common stock of Coreworx with such shares received by the Company being non-voting shares; 

ii.The Company received a warrant to acquire 3,625,209 shares of common stock of Coreworx for 5 years from the closing date, December 17, 2010.  The  warrant represented 10% of Coreworx then outstanding common stock.

iii.The debt of $4,000 owed by Coreworx to the Company (the “Coreworx Debt”) was non-interest bearing, and the first payment was due January 31, 2012.

iv.Following repayment of the Coreworx Debt, Coreworx would pay the Company a royalty fee equal to 4% of Coreworx’ gross revenues up to a maximum amount of $20,000.
 
v. Coreworx would pay the Company a restructuring fee of $40 on or before July 1, 2011.

 



 

 
In connection with the sale of the Company’s shares of common stock of Coreworx, the Company recorded a gain of $1,834 as a result of the deconsolidation of Coreworx which is included in Loss from discontinued operations in the Company’s Consolidated Statements of Operations.
 
The gain on the deconsolidation of Coreworx is comprised of the following:

•
A gain of $5,929 on the deconsolidation of Coreworx of assets and liabilities.
•
A full provision on the Coreworx Debt of $4,000 due the Company from Coreworx following the MBO Transaction as there was significant doubt as to Coreworx' ability to repay the debt.
•
An estimated $95 of legal fees.

The Company did not attribute any value to the 10% holdings retained by the Company following the sale of its stake in Coreworx on December 17, 2010, the warrants to acquire an additional 10% of Coreworx, the $4,000 of Coreworx Debt or the $40 restructuring fee due from Coreworx on July 1, 2011.

On October 31, 2011, the Company sold its 10% stake in Coreworx and the entire $4,000 of Coreworx Debt, its right to future royalties and the $40 restructuring fee (which was at the time still unpaid) back to Coreworx for $100. The Company recorded a $64 gain (net of income taxes of $34) on the transaction in Gain on the sale of discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations. The Company still retains its warrants to acquire 10% of Coreworx.


(c) Summary of Discontinued Operations

(i) Revenues

Revenues generated from the Company's discontinued operations are as follows:

 
 
Year ended December 31,
 
 
2010
 
2011
CoaLogix*
 
$
21,450

 
$
12,084

Coreworx**
 
3,200

 
—

   Total revenues from discontinued operations
 
$
24,650

 
$
12,084


* Revenues with respect to CoaLogix in 2011 was for the period from January 1 to August 31.
** Revenues with respect to Coreworx in 2010 was for the period from January 1 to December 17.

(ii) Results from discontinued operations

 
 
Year ended December 31,
 
 
2010
 
2011
Net loss from discontinued operations, net of income taxes - CoaLogix
 
$
(309
)
 
$
(1,948
)
Gain on the deconsolidation of Coreworx
 
1,834

 
—

Net loss from discontinued operations, net of income taxes - Coreworx
 
(19,494
)
 
—

Net loss from discontinued operations, net of income taxes
 
$
(17,969
)
 
$
(1,948
)



The non-controlling interests' share of CoaLogix's net loss in the years ending December 31 2010 and the period from January 1, 2011 to August 31, 2011 was $67 and $540, respectively.

The Company's Loss from discontinued operations, net of income taxes in 2010 includes an impairment of the Company's goodwill and other intangible assets related to Coreworx of $9,474 representing the book value of the goodwill ($4,970) and other intangible assets ($4,504) related to Coreworx. The impairments were recorded as at October 31, 2010 following the Company's decision to stop funding Coreworx and included in Loss from discontinued operations, net of income taxes in the Company's Consolidated Statements of Operations.

In 2010, CoaLogix signed an agreement to acquire a license to use certain technology developed by a third-party for $82. CoaLogix was amortizing the license over its estimated useful life. The license agreement was terminated by CoaLogix in May 2011. Accordingly, CoaLogix wrote-off the $74 unamortized balance of the license. Such impairment is included in Loss from discontinued operations, net of income taxes.