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13. SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

On November 2, 2015, the Company completed the Sale Transaction. At closing, Ecolab paid the closing purchase price of approximately $40.5 million, less a $2 million holdback to address working capital and other adjustments in accordance with the agreement governing the Sale Transaction (the “Agreement”). The closing purchase price proceeds received by the Company were reduced to pay (i) a $2.0 million fine pursuant to the terms of the DPA; (ii) indebtedness of the Company of approximately $5.7 million; (iii) a deposit securing letters of credit of approximately $1.6 million; (iv) certain transaction fees of approximately $1.2 million; and (v) other accrued and post-closing obligations that survived the transaction.

 

Following the closing of the Sale Transaction, the Company will use the remaining balance of proceeds from the Sale Transaction to pay ongoing corporate and administrative costs and expenses associated with winding down the Company, should the Board of Directors decide to proceed with the Plan of Dissolution, liabilities and potential liabilities relating to or arising out of pension plan obligations to employees of its predecessor, outstanding litigation matters of the Company, including but not limited to pending stockholder litigation related to the Sale Transaction, and potential liabilities relating to the Company's indemnification obligations, if any, to Ecolab pursuant to the Agreement, or to current and former officers and directors pursuant to the Company's bylaws and certificate of incorporation (collectively, the "On-going Obligations"). As a result of the On-going Obligations, if the Board of Directors determines to proceed with the Plan of Dissolution and Complete Liquidation, which plan was approved by the Company's stockholders at its Annual Meeting on October 15, 2015, the Company believes the value of its remaining assets that will ultimately be available for distribution to stockholders, if any distribution is made, will be significantly and materially less, in the aggregate, than the proceeds received in the Sale Transaction. The Company can neither estimate nor provide any assurance regarding amounts to be distributed to stockholders if the Board of Directors proceeds with the dissolution. However, if the Board of Directors determines that the Dissolution is not in our best interests and the best interest of the shareholders, the Board of Directors may, in its sole discretion, abandon the Plan of Dissolution or may amend or modify the Plan of Dissolution to the extent permitted by Delaware law without the necessity of further stockholder approval.

 

As discussed in Notes 2 and 3, as a result of the Sale Transaction, the Company performed an impairment analysis of its assets in accordance with ASC 360-10, Impairment or Disposal of Long-Lived Assets, and ASC 350, Intangible-Goodwill and Other, as of August 31, 2015. Based on the analysis performed, it was determined that an impairment of the Company’s fixed assets and intangible assets had occurred, resulting in an impairment charge of $12.6 million and $10.0 million, respectively, contributing to the current loss from discontinued operations. If the Company continues to incur losses at the current rate, it may result in a gain on sale which will be recorded in November 2015.

 

In connection with the Sale Transaction, on November 2, 2015, the Company terminated its Credit Facility with Siena Lending Group LLC and paid the outstanding indebtedness and fees under the Credit Facility of approximately $4.8 million and made a deposit securing remaining letters of credit of approximately $1.6 million.

 

On October 7, 2015, the Company entered into the DPA with the USAO relating to the USAO’s investigation of the Company’s accounting practices. Under the terms of the DPA, the USAO filed, but deferred prosecution of, a criminal information charging Swisher Hygiene Inc. with conspiracy to commit securities fraud and other charges relating to the Company’s accounting and financial reporting practices reflected in the Company’s originally filed Quarterly Reports on Form 10-Q for the periods ended March 31, 011, June 30, 2011, and September 30, 2011. Pursuant to the DPA, the Company agreed to pay a $2 million fine to the USAO payable in four annual installments of $500,000 each if the Company is financially able to do so. Pursuant to the terms of the DPA, the fine became immediately due and payable in full on November 2, 2015 upon a change in control of the Company. As a result, the fine was paid in full upon the closing of the Sale Transaction, and was accrued at September 30, 2015 in other expenses.

 

In connection with the Sale Transaction options to purchase 268,673 shares of common stock vested.  All of these options have exercise prices greater than the current market price of the Company’s common stock.  Also, in connection with the Sale Transaction, all restricted stock units representing the right to receive an aggregate of 80,272 shares of common stock are being cancelled and holders thereof will receive cash in lieu of shares, an aggregate of $84,286.