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Subsequent Events
12 Months Ended
Dec. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events

NOTE 21—SUBSEQUENT EVENTS

 

Suspension of operations at USSI

 

In March 2015, the Company announced that it has stopped funding USSI and that USSI has suspended operations and terminated substantially all employees. During the period from January 1, 2015 to March 31, 2015, the Company provided $1,235 of funding to USSI. The Company intends to sell USSI’s assets and is exploring ways to maximize value for USSI’s creditors and other stakeholders. The decision, which followed efforts to raise strategic outside capital and/or find an oil field service partner were unsuccessful, was influenced by the catastrophic market conditions for oil field services in general and specifically the microseismic monitoring market. USSI expects that most of the proceeds from any sale of its assets will be used to pay creditors. It is uncertain whether there will be any proceeds available to Acorn or other USSI shareholders.

 

The Company has recorded write offs in its 2014 financial statement of substantially all USSI assets at the end of December 2014, including write offs of approximately $4,935 of inventory, $3,436 of goodwill and intangibles and $969 of fixed assets. See Note 3.

 

USSI has granted a lien to its bank on substantially all of its assets including intellectual property. The debt due to the bank ($1,460) has matured, is currently due and is bearing interest at the default rate of 5% per annum. The Company is currently in discussions with the bank regarding a forbearance agreement that would allow it to sell the USSI assets for the benefit of all stakeholders. The Company has no assurance that it will be able to successfully reach a forbearance agreement with the bank or ultimately sell the USSI assets for any material amounts.

 

Non-compliance with financial covenants

 

Acorn is not in compliance with the financial covenants under its guaranty of GridSense’s line-of-credit. As a result of this default, the debt of $1,480 is due on the bank’s demand. Acorn is currently negotiating with the bank regarding terms of repayment.

 

Notice of failure to satisfy a listing rule

 

On January 13, 2015, the Company received a letter from the Nasdaq Listings Qualification Staff stating that it was not in compliance with the continued listing requirements of The Nasdaq Global Market because the bid price of its common stock had closed below the minimum $1.00 per share requirement for 30 consecutive business days.

 

In accordance with Nasdaq rules, the Company was provided a period of 180 calendar days, or until July 13, 2015, to regain compliance. The Company will regain compliance if at any time before July 13, 2015, the bid price of its common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days. In the event the Company does not regain compliance, it may be eligible for an additional 180-days if it drops its listing down to the Nasdaq Capital Market.