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Discontinued Operations
 12 Months Ended
Dec. 31, 2016
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

NOTE 4—Discontinued Operations

 

(a) GridSense

 

On April 21, 2016, the Company announced that it decided to cease operations of its GridSense subsidiary and initiate the liquidation of the GridSense assets. As a result of this decision, GridSense is being reported as a discontinued operation. Following the decision to cease GridSense operations, the Company wrote down all GridSense assets to their estimated realizable values at the time and accrued for estimated severance costs of $140 and lease commitments of $100 in GridSense’s first quarter results.

 

On July 12, 2016, the Company and its GridSense subsidiary completed the sale of the GridSense assets to Franklin Fueling Systems, Inc., a wholly-owned subsidiary of Franklin Electric Co., Inc. for a gross sales price of $1,000 of which $100 was set aside as an indemnity escrow. Under the terms of the escrow, if there were no pending indemnifiable claims, $50 was to be released to GridSense on January 7, 2017, with the balance to be released to GridSense on July 7, 2017. The buyers refused to authorize the escrow agent to release the $50 on January 7, 2017 and, subsequent to that date, submitted purported third-party indemnifiable claims which the Company believes to be both untimely and without merit. This dispute has yet to be resolved.

 

Following the sale, GridSense paid off approximately $240 of previously accrued severance and other payroll costs. GridSense recorded a gain of $944 (net of transaction costs) on this transaction as the value of the GridSense assets sold had previously been written down to nearly zero. Such gain was included in discontinued operations in the third quarter of 2016.

 

Also, following the sale, GridSense engaged a third-party liquidation officer to satisfy, to the extent of the funds available from the remaining proceeds, the claims of GridSense creditors, including Acorn which is GridSense’s largest creditor. Through December 31, 2016, the third-party liquidator settled approximately $459 of outside creditor claims while disbursing approximately $47 to those creditors. At December 31, 2016, GridSense had approximately $19 of cash available (excluding escrow amounts) for satisfaction of remaining creditor claims of approximately $314.

 

Assets and liabilities related to the discontinued operations of GridSense are as follows:

 

    As of  
    December 31, 2016     December 31, 2015  
             
Cash   $ 19     $ 48  
Other current assets and non-current assets     100       1,060  
Total assets   $ 119     $ 1,108  
Short-term bank credit   $ —     $ 138  
Accounts payable     501       950  
Accrued payroll, payroll taxes and social benefits     90       186  
Other current and non-current liabilities     406       572  
Total liabilities   $ 997     $ 1,846  

 

GridSense had a working agreement with its bank to allow GridSense to borrow against 80% of certain accounts receivable balances up to $750 at an interest equal to 1.25% per month. At December 31, 2015, GridSense was utilizing approximately $138 of its accounts receivable line. Such balance was repaid prior to the expiration of the accounts receivable line on July 16, 2016.

 

GridSense’s operating results for the years ended December 31, 2015 and 2016 are included in “Income (loss) from discontinued operations, net of income taxes” in the Company’s Consolidated Statements of Operations. Selected financial information for GridSense’s operations for those periods are presented below:

 

    Year ended
December 31,		  
    2016     2015  
Revenue   $ 212     $ 2,507  
Gross profit   $ 28     $ 21  
                 
Net loss   $ (286 )   $ (3,923 )

 

(b) US Seismic Systems Inc. (“USSI”)

 

As of January 1, 2015, the Company owned 9,376,401 shares of USSI’s Series A-1 Preferred Stock (“USSI Preferred Stock”). Such holdings in USSI’s Preferred Stock together with the common stock owned by the Company represented approximately 95.7% of USSI on an as converted basis. Through September 30, 2015, the Company invested $7,584 in USSI common shares (of which $5,355 was in cash and $2,229 was in Acorn common shares) and an additional $16,750 in USSI Preferred Stock. In addition, the Company lent USSI a total of $10,058. Such loans bore interest at 8% per annum.

 

In early 2015, the Company’s Board of Directors decided that it would no longer continue to fund USSI’s activities following the significant decline in oil prices which led to significantly reduced demand for USSI’s products. At that time, USSI effectively suspended operations and terminated substantially all employees.

 

On September 28, 2015, the Board of Directors of USSI approved a motion to file a voluntary petition for protection under Chapter 7 of the United States Bankruptcy Code (a “Chapter 7 Bankruptcy”). Such filing was made on September 30, 2015. Under a Chapter 7 Bankruptcy, control of USSI no longer rests with the Company, but rather with a court-appointed trustee. Accordingly, effective September 30, 2015, the Company no longer consolidated the assets, liabilities or operating results of USSI. Following USSI’s Chapter 7 Bankruptcy, the Company does not expect that there will be any cash available to repay any of the aforementioned loaned amounts after the disposition of USSI’s assets.

 

Assets and liabilities related to the discontinued operations of USSI were as follows:

 

    At
September 29, 2015
– prior to deconsolidation		  
Cash and cash equivalents   $ —  
Other current assets     —  
Total assets   $ —  
Short-term bank credit   $ 999  
Accounts payable     1,029  
Accrued payroll, payroll taxes and social benefits     90  
Other current liabilities     1,721  
Total liabilities   $ 3,839  

 

USSI’s losses for the year ended December 31, 2015 are included in “Loss from discontinued operations, net of income taxes” in the Company’s Consolidated Statements of Income. Summarized financial information for USSI’s operations for the period is presented below:

 

    Year ended
December 31,2015		  
Revenues   $ 163  
Gross profit   $ (68 )
         
Net loss   $ (772 )
Loss on deconsolidation   $ (401 )
Loss from discontinued operations, net of income taxes   $ (1,173 )

 

Net loss includes stock-based compensation expense of $4 in the year ended December 31, 2015.