ACQUISITIONS

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

ACQUISITIONS

13. ACQUISITIONS

Microphase Corporation and Power-Plus Technical Distributors

Enertec Systems 2001 Ltd.

On December 31, 2017, CooliSys entered into a share purchase agreement with Micronet Enertec Technologies, Inc. (“MICT”), a Delaware corporation, Enertec Management Ltd., an Israeli corporation and wholly owned subsidiary of MICT (“EML” and, together with MICT, the “Seller Parties”), and Enertec Systems 2001 Ltd. (“Enertec”), an Israeli corporation and wholly owned subsidiary of EML, pursuant to which Coolisys acquired Enertec (the “Acquisition”). The Company believes that Enertec is Israel’s largest private manufacturer of specialized electronic systems for the military market. On May 23, 2018, Coolisys acquired Enertec for an aggregate cash purchase price of $4,851.

I. AM, Inc.

On May 23, 2018, DP Lending entered into and closed a securities purchase agreement with I. AM, David J. Krause and Deborah J. Krause. Pursuant to the securities purchase agreement, I. AM sold to DPL, 981 shares of common stock for a purchase price of $1, representing, upon the closing, 98.1% of I. AM’s outstanding common stock.

I. AM owns and operates the Prep Kitchen brand restaurants located in the San Diego area. I.AM owed DP Lending $1,715 in outstanding principal, pursuant to a loan and security agreement, between I. AM and DP Lending, which I. AM used to acquire the restaurants. The purchase agreement provides that, as I. AM repays the outstanding loan to DP Lending in accordance with the loan agreement, DP Lending will on a pro rata basis transfer shares of common stock of I. AM to David J. Krause, up to an aggregate of 471 shares.

The acquisition of Enertec and I. AM are being accounted for under the purchase method of accounting in accordance with ASC No. 805, Business Combinations. Under the purchase method, assets acquired and liabilities assumed are recorded at their estimated fair values. Goodwill is recorded to the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired less liabilities assumed at the date of acquisition. The initial accounting for the acquisition is not yet complete, and the Company is still performing procedures to determine the appropriate accounting.

Upon initial measurement, components of the preliminary purchase price are as follows:

	Enertec	I. AM
Accounts receivable	$                    3,078	$                         29
Inventories	1,634	40
Prepaid expenses and other current assets	20	—
Property and equipment	649	1,054
Other assets	96	3
Accounts payable and accrued expenses	(2,615)	(104)
Short term bank credit	(4,236)	—
Accrued severance pay	(132)	—
Net liabilities assumed	(1,506)	1,022
Goodwill	6,357	576
Non-controlling interest	—	(33)
Purchase price	$                     4,851	$                    1,565

The following pro forma data for the three and nine months ended September 30, 2017 summarizes the results of operations for the period indicated as if the Microphase, Power-Plus and Enertec acquisitions, which closed on June 2, 2017, September 1, 2017, and May 23, 2018, respectively, had been completed as of the beginning of each period presented. The pro forma data gives effect to actual operating results prior to the acquisition. These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred as of the beginning of each period presented or that may be obtained in future periods:

	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2018	2017	2018	2017
Total Revenue	$         8,344	$         5,025	$       22,521	$       16,417
Net loss	$      (7,525)	$      (2,669)	$    (22,921)	$      (8,854)
Less: Net loss attributable
to non-controlling interest	74	104	218	726
Net loss attributable to
common stockholders	$      (7,451)	$      (2,565)	$    (22,703)	$      (8,128)
Preferred deemed dividends	—	—	(108)	(319)
Preferred dividends	—	(27)	—	(35)
Loss available to common shareholders	$      (7,451)	$      (2,592)	$    (22,811)	$      (8,482)
Basic and diluted net loss per common share	$        (0.11)	$        (0.19)	$        (0.43)	$        (0.78)
Basic and diluted weighted average
common shares outstanding	67,869,778	13,745,540	52,977,059	10,884,948
Comprehensive Loss
Loss available to common shareholders	$      (7,451)	$      (2,592)	$    (22,811)	$      (8,482)
Other comprehensive income (loss)
Change in net foreign currency
translation adjustments	(78)	42	(210)	141
Net unrealized gain (loss) on
securities available-for-sale	(1,342)	(43)	(6,788)	(43)
Other comprehensive income (loss)	(1,420)	(1)	(6,998)	98
Total comprehensive loss	$      (8,871)	$      (2,593)	$    (29,809)	$      (8,384)