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Subsequent Events
3 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events

Note 14: Subsequent Events

 

GraphicMail Migration

 

On November 4, 2015, the Company announced its intentions to eventually discontinue the GraphicMail brand and migrate its existing GraphicMail product customers to its SharpSpring product. This customer migration began in April 2016. Customer attrition is expected to increase during the period of migration. Following the migration, the Company expects to discontinue the use of the GraphicMail brand name and GraphicMail technology platform.

 

SharpSpring Earn Out and Shareholder Approval Requirement

 

The Company paid $1.0 million in cash on April 6, 2016 to the former SharpSpring shareholders and agreed to issue 1,039,636 shares of stock in settlement of the $4.0 million stock-based earn out in the second quarter of 2016. Since such share issuance, when aggregated with other share issuances related to the acquisition of SharpSpring, will exceed 20% of the shares outstanding immediately prior to the acquisition of SharpSpring, the Company is required to receive shareholder approval of the upcoming stock issuance. Therefore, the Company will request shareholder approval at its upcoming annual meeting, scheduled to take place in May 2016. If shareholder approval is not received and the Company cannot issue the stock-based earn out in the form of Company stock, the former owners of SharpSpring may force the Company to pay the stock-based earn out in cash or may put a lien on the assets of the Company, among other alternatives.

 

Restructuring Event

 

On May 3, 2016, the Company initiated a restructuring event whereby approximately 21 resources were made redundant. Severance, notice pay where services are not performed and other restructuring costs related to the event are expected to total approximately $75,000.