x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
Delaware
|
|
90-0933943
|
(State of Incorporation)
|
|
(IRS Employer Identification No.)
|
|
|
|
|
|
|
|
o
Large Accelerated Filer
|
|
o
Accelerated Filer
|
|
o
Non-accelerated Filer
(do not check if a smaller
reporting company)
|
|
x
Smaller Reporting
Company
|
|
|
|
Title of Class
|
|
Number of Shares
|
Common Stock, $0.001 par value
|
|
8,994,814
|
•
|
any financial or other information included herein (including any pro forma financial information) based upon or otherwise incorporating judgments or estimates based upon future performance or events;
|
•
|
our ability to raise additional capital or generate the cash necessary to continue and expand our operations or to fund the liquidation preference on, or redeem, our Series J preferred stock if required to do so;
|
•
|
our ability to protect and make use of our substantial net operating loss carryforwards;
|
•
|
our ability to implement our transformation plan;
|
•
|
our ability to compete in the highly competitive real estate investment industry;
|
•
|
the impact of government regulation, legal requirements or industry standards relating to commercial real estate;
|
•
|
our limited experience acquiring and managing commercial real properties;
|
•
|
our ability to execute real estate acquisitions;
|
•
|
risks generally associated with the commercial real estate investment business, including the credit risk associated with our tenants;
|
•
|
our ability to meet the criteria required to remain quoted on the OTCQB marketplace;
|
•
|
the ongoing benefits and risks related to our relationship with Mr. Carl C. Icahn, our principal beneficial stockholder and principal lender, through certain of his affiliates;
|
•
|
the impact and costs and expenses of any litigation we may be subject to now or in the future, and;
|
•
|
our leadership transition.
|
|
|
Page
|
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
|
||
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2016 and 2015
|
|
|
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2016 and 2015
|
|
|
Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2016 and 2015
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015
|
|
|
||
|
||
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
|
|
|
Item 15.
|
||
|
|
|
|
||
|
||
|
|
|
Item 1.
|
Business.
|
Item 1A.
|
Risk Factors.
|
•
|
limited availability of market quotations for our securities;
|
•
|
reduced liquidity for our securities;
|
•
|
increased volatility in the market price and trading volume for our securities;
|
•
|
a determination that our common stock is a “penny stock” which would require brokers trading in our common
|
•
|
a limited amount of news and analyst coverage; and
|
•
|
a decreased ability to issue additional securities or obtain additional financing in the future
.
|
•
|
we may be unable to acquire a desired property because of competition;
|
•
|
even if we are able to acquire a desired property, competition from other potential acquirers may significantly increase the purchase price;
|
•
|
even if we enter into agreements for the acquisition of properties, these agreements are subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction;
|
•
|
we may incur significant costs and divert management attention in connection with evaluation and negotiation of potential acquisitions, including ones that we are subsequently unable to complete;
|
•
|
we may acquire properties that are not initially accretive to our results upon acquisition, and we may not successfully lease those properties to meet our expectations;
|
•
|
we may be unable to finance the acquisition on favorable terms in the time period we desire, or at all; even if we are able to finance the acquisition, our cash flow may be insufficient to meet our required principal and interest payments;
|
•
|
we may spend more than budgeted to make necessary improvements or renovations to acquired properties;
|
•
|
we may be unable to quickly and efficiently integrate new acquisitions, particularly the acquisition of portfolios of properties, into our existing operations;
|
•
|
market conditions may result in higher than expected vacancy rates and lower than expected rental rates; and
|
•
|
we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities.
|
•
|
changes in general economic or local conditions;
|
•
|
changes in supply of or demand for competing properties in an area;
|
•
|
changes in interest rates and availability of permanent mortgage funds that may render the sale of a property difficult or unattractive;
|
•
|
changes in tax, real estate, environmental and zoning laws; and
|
•
|
periods of high interest rates and tight money supply.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosure
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
|
High
|
|
Low
|
||||
Fiscal Year Ending December 31, 2016
|
|
|
|
|
||||
Fourth Quarter
|
|
$
|
3.70
|
|
|
$
|
1.75
|
|
Third Quarter
|
|
$
|
3.98
|
|
|
$
|
2.50
|
|
Second Quarter
|
|
$
|
4.74
|
|
|
$
|
3.25
|
|
First Quarter
|
|
$
|
5.40
|
|
|
$
|
3.25
|
|
Fiscal Year Ending December 31, 2015
|
|
|
|
|
||||
Fourth Quarter
|
|
$
|
8.60
|
|
|
$
|
3.37
|
|
Third Quarter
|
|
$
|
13.65
|
|
|
$
|
4.51
|
|
Second Quarter
|
|
$
|
21.75
|
|
|
$
|
2.18
|
|
First Quarter
|
|
$
|
1.57
|
|
|
$
|
0.63
|
|
Item 6.
|
Selected Financial Data.
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
$ Change
|
||||||
|
(Dollars in thousands)
|
||||||||||
Total revenues
|
$
|
262
|
|
|
$
|
49
|
|
|
$
|
213
|
|
|
Year ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
$ Change
|
||||||
|
(Dollars in thousands)
|
||||||||||
General and administrative
|
$
|
2,778
|
|
|
$
|
4,790
|
|
|
$
|
(2,012
|
)
|
Depreciation and amortization
|
289
|
|
|
194
|
|
|
95
|
|
|||
Impairment charges
|
115
|
|
|
—
|
|
|
115
|
|
|||
Acquisition transaction and integration costs
|
36
|
|
|
84
|
|
|
(48
|
)
|
|||
Total operating expenses
|
$
|
3,218
|
|
|
$
|
5,068
|
|
|
$
|
(1,850
|
)
|
•
|
$0.8 million decrease in personnel costs and severance pay , resulting from continued staff reductions;
|
•
|
$0.5 million decrease in professional fees, primarily from renegotiated contracts;
|
•
|
$0.2 million decrease in Board of Directors fees and insurance resulting from fewer directors and lower fees;
|
•
|
$0.1 million decrease in other professional services resulting from the elimination of services;
|
•
|
$0.1 million decrease in stock related and listing fees resulting from the reduction in services;
|
•
|
$0.1 million decrease in non-income taxes due to our change in authorized shares
|
•
|
$0.1 million decrease in consulting fees resulting from the non-renewal of a contract;
|
•
|
$0.1 million decrease in stock compensation expenses resulting from the non-award of stock compensation;
|
•
|
$0.1 million decrease in various other general administrative expenses partially offset by:
|
•
|
$0.1 million increase in recruiting costs and costs associated with exiting our business in Indonesia.
|
•
|
$0.2 million increase in depreciation on our real estate properties, partially offset by;
|
•
|
$0.1 million decrease in our general office computer equipment, furniture, computer software and leasehold improvements related to the New York City office.
|
|
Year ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
$ Change
|
||||||
|
(Dollars in thousands)
|
||||||||||
Interest expense and Revolving Note fees
|
$
|
(131
|
)
|
|
$
|
(10
|
)
|
|
$
|
(121
|
)
|
|
Year ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
$ Change
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net loss from discontinued operations
|
$
|
(24
|
)
|
|
$
|
(1,593
|
)
|
|
$
|
1,569
|
|
•
|
$1.8 million decrease in direct third party expenses resulting from our exit from the mobile marketing and advertising business;
|
•
|
$1.4 million decrease in sales and marketing expense, resulting from lower 2016 marketing expenses and 2016 staff reductions in connection with executing our transformation plan in August 2015;
|
•
|
$1.0 million decrease related to product development and network operations, which were substantially curtailed in the first quarter of 2015;
|
•
|
$0.8 million reduction in general and administrative and expense, primarily related to restructuring in the first quarter of 2015 and executing our transformation plan in 2016;
|
•
|
$0.2 million reduction in general and administrative expenses;
|
•
|
$0.1 million decrease in depreciation and amortization expense following asset impairment and disposal of assets related to curtailment of data center operations in the first quarter of 2015; partially offset by;
|
•
|
$3.0 million lower revenue in 2016, resulting from our exit from the mobile marketing and advertising business and;
|
•
|
$0.7 million reduction in other income and restructuring gains.
|
|
Year ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2016
|
|
2015
|
|
$ Change
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net loss
|
$
|
(3,111
|
)
|
|
$
|
(6,622
|
)
|
|
$
|
3,511
|
|
•
|
decreased loss from discontinued operations of
$1.6 million
; and
|
•
|
decreased loss from continuing operations of $1.9 million.
|
Item 7A.
|
Qualitative and Quantitative Disclosures about Market Risk.
|
Item 8.
|
Consolidated Financial Statements.
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Real estate investments, net
|
$
|
6,215
|
|
|
$
|
3,592
|
|
Cash and cash equivalents
|
414
|
|
|
1,180
|
|
||
Accounts receivable, net of allowance
|
—
|
|
|
32
|
|
||
Prepaid expenses
|
520
|
|
|
856
|
|
||
Property and equipment, net
|
—
|
|
|
252
|
|
||
Other assets
|
101
|
|
|
92
|
|
||
Total assets
|
$
|
7,250
|
|
|
$
|
6,004
|
|
Liabilities, redeemable preferred stock and stockholders’ deficit
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
508
|
|
|
$
|
683
|
|
Accrued compensation
|
17
|
|
|
93
|
|
||
Deferred rent income
|
17
|
|
|
17
|
|
||
Revolving note
|
4,500
|
|
|
—
|
|
||
Interest payable
|
141
|
|
|
10
|
|
||
Deferred rent expense
|
25
|
|
|
29
|
|
||
Accrued preferred stock dividends
|
1,598
|
|
|
1,405
|
|
||
Other liabilities
|
116
|
|
|
136
|
|
||
Total liabilities
|
6,922
|
|
|
2,373
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Redeemable preferred stock, $0.001 par value; 1,170,327 shares issued and outstanding at December 31, 2016 and 2015. Redemption value: $50,355 and $44,292 at December 31, 2016 and 2015, respectively.
|
48,024
|
|
|
41,305
|
|
||
Stockholders’ deficit
|
|
|
|
||||
Common stock, $0.001 par value; 25,000,000 shares authorized at December 31, 2016 and 2015; 8,994,814 shares issued and outstanding at December 31, 2016 and 2015.
|
9
|
|
|
9
|
|
||
Additional paid-in capital
|
555,286
|
|
|
562,204
|
|
||
Accumulated deficit
|
(603,049
|
)
|
|
(599,938
|
)
|
||
Accumulated other comprehensive income
|
58
|
|
|
51
|
|
||
Total stockholders’ deficit
|
(47,696
|
)
|
|
(37,674
|
)
|
||
Total liabilities, redeemable preferred stock and stockholders’ deficit
|
$
|
7,250
|
|
|
$
|
6,004
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Revenue
|
$
|
262
|
|
|
$
|
49
|
|
Operating expenses
|
|
|
|
||||
General and administrative
|
2,778
|
|
|
4,790
|
|
||
Depreciation and amortization
|
289
|
|
|
194
|
|
||
Impairment charges
|
115
|
|
|
—
|
|
||
Acquisition and transaction related
|
36
|
|
|
84
|
|
||
Total operating expenses
|
3,218
|
|
|
5,068
|
|
||
Operating loss
|
(2,956
|
)
|
|
(5,019
|
)
|
||
Interest expense and Revolving Note fees
|
(131
|
)
|
|
(10
|
)
|
||
Net loss from continuing operations
|
(3,087
|
)
|
|
(5,029
|
)
|
||
Net loss from discontinued operations, net of taxes
|
(24
|
)
|
|
(1,593
|
)
|
||
Net loss
|
$
|
(3,111
|
)
|
|
$
|
(6,622
|
)
|
Accretion of redeemable preferred stock
|
(848
|
)
|
|
(720
|
)
|
||
Series J redeemable preferred stock dividends
|
(6,062
|
)
|
|
(5,355
|
)
|
||
Net loss attributable to common stockholders
|
$
|
(10,021
|
)
|
|
$
|
(12,697
|
)
|
|
|
|
|
||||
Net loss per share attributable to common stockholders - basic and diluted:
|
|
|
|
||||
Continuing operations
|
$
|
(1.11
|
)
|
|
$
|
(1.40
|
)
|
Discontinued operations
|
—
|
|
|
(0.20
|
)
|
||
Total net loss per share attributable to common stockholders
|
$
|
(1.11
|
)
|
|
$
|
(1.60
|
)
|
|
|
|
|
||||
Weighted-average common shares outstanding – basic and diluted
|
8,994,814
|
|
|
7,956,291
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net loss
|
$
|
(3,111
|
)
|
|
$
|
(6,622
|
)
|
Other comprehensive income:
|
|
|
|
||||
Foreign currency translation adjustment
|
7
|
|
|
20
|
|
||
Comprehensive loss
|
$
|
(3,104
|
)
|
|
$
|
(6,602
|
)
|
|
Shares
|
|
Amount
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Income (Loss)
|
|
Total
|
|||||||||||
Balance as of December 31, 2014
|
4,763,358
|
|
|
$
|
5
|
|
|
$
|
563,643
|
|
|
$
|
(593,316
|
)
|
|
$
|
31
|
|
|
$
|
(29,637
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,622
|
)
|
|
—
|
|
|
(6,622
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
|||||
Redeemable preferred stock dividends
|
—
|
|
|
—
|
|
|
(5,355
|
)
|
|
—
|
|
|
—
|
|
|
(5,355
|
)
|
|||||
Accretion of redeemable preferred stock
|
—
|
|
|
—
|
|
|
(720
|
)
|
|
—
|
|
|
—
|
|
|
(720
|
)
|
|||||
Sale of common stock, net of offering costs
|
4,300,000
|
|
|
4
|
|
|
4,551
|
|
|
—
|
|
|
—
|
|
|
4,555
|
|
|||||
Restricted stock forfeiture
|
(73,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock options and warrants exercised
|
4,981
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|||||
Balance as of December 31, 2015
|
8,994,814
|
|
|
9
|
|
|
562,204
|
|
|
(599,938
|
)
|
|
51
|
|
|
(37,674
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,111
|
)
|
|
—
|
|
|
(3,111
|
)
|
|||||
Sale of common stock, net of offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|||||
Redeemable preferred stock dividends
|
—
|
|
|
—
|
|
|
(6,062
|
)
|
|
—
|
|
|
—
|
|
|
(6,062
|
)
|
|||||
Accretion of redeemable preferred stock
|
—
|
|
|
—
|
|
|
(848
|
)
|
|
—
|
|
|
—
|
|
|
(848
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Balance as of December 31, 2016
|
8,994,814
|
|
|
$
|
9
|
|
|
$
|
555,286
|
|
|
$
|
(603,049
|
)
|
|
$
|
58
|
|
|
$
|
(47,696
|
)
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(3,111
|
)
|
|
$
|
(6,622
|
)
|
Loss from discontinued operations
|
24
|
|
|
1,593
|
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|||||
Depreciation and amortization
|
289
|
|
|
194
|
|
||
Amortization of favorable lease
|
42
|
|
|
10
|
|
||
Stock-based compensation expense
|
(8
|
)
|
|
92
|
|
||
Impairment charges
|
115
|
|
|
—
|
|
||
Non-cash interest expense
|
131
|
|
|
10
|
|
||
Changes in operating assets and liabilities:
|
|
|
|||||
Prepaid expenses and other assets
|
339
|
|
|
(366
|
)
|
||
Accounts payable and accrued expenses
|
(264
|
)
|
|
76
|
|
||
Deferred revenue
|
(3
|
)
|
|
—
|
|
||
Net cash used in operating activities - continuing operations
|
(2,446
|
)
|
|
(5,013
|
)
|
||
Net cash used in operating activities - discontinued operations
|
(6
|
)
|
|
(1,034
|
)
|
||
Net cash used in operating activities
|
(2,452
|
)
|
|
(6,047
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Investment in real estate
|
(2,817
|
)
|
|
(3,629
|
)
|
||
Net cash used in investing activities - continuing operations
|
(2,817
|
)
|
|
(3,629
|
)
|
||
Net cash provided by investing activities - discontinued operations
|
3
|
|
|
280
|
|
||
Net cash used in investing activities
|
(2,814
|
)
|
|
(3,349
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from sale of common stock
|
—
|
|
|
5,755
|
|
||
Rights offering costs
|
—
|
|
|
(465
|
)
|
||
Proceeds from debt facilities
|
4,500
|
|
|
—
|
|
||
Proceeds from exercise of common stock options
|
—
|
|
|
22
|
|
||
Redemption of Series J preferred stock
|
—
|
|
|
(1,012
|
)
|
||
Net cash provided by financing activities - continuing operations
|
4,500
|
|
|
4,300
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
20
|
|
||
Net decrease in cash and cash equivalents
|
(766
|
)
|
|
(5,076
|
)
|
||
Cash and cash equivalents at beginning of year
|
1,180
|
|
|
6,256
|
|
||
Cash and cash equivalents at end of year
|
$
|
414
|
|
|
$
|
1,180
|
|
|
|
|
|
||||
Supplemental schedule of non-cash financing activities:
|
|
|
|
||||
Series J redeemable preferred stock dividend paid-in-kind
|
$
|
5,870
|
|
|
$
|
5,217
|
|
|
Remaining Useful life
|
|
As of
|
|
||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
|
|||||
Real Estate Investments, at cost:
|
|
|
|
|
|
|||||
Land
|
|
|
$
|
2,345
|
|
|
$
|
1,454
|
|
|
Building, fixtures and improvements
|
10 - 43 yrs.
|
|
3,494
|
|
|
1,780
|
|
|
||
Total tangible assets
|
|
|
5,839
|
|
|
3,234
|
|
|
||
Acquired Intangibles - In-place leases
|
5 - 13 yrs.
|
|
607
|
|
|
395
|
|
|
||
Total cost of Real Estate Investments
|
|
|
6,446
|
|
|
3,629
|
|
|
||
Less: Accumulated depreciation and amortization
|
|
|
(231
|
)
|
|
(37
|
)
|
|
||
Total cost of Real Estate Investments, net
|
|
|
$
|
6,215
|
|
|
$
|
3,592
|
|
|
|
Useful Life
|
|
As of December 31,
|
||||||
|
(in years)
|
|
2016
|
|
2015
|
||||
Capitalized software
|
3
|
|
$
|
331
|
|
|
$
|
331
|
|
Computer software and equipment
|
3-5
|
|
23
|
|
|
111
|
|
||
Leasehold improvements
|
4-10
|
|
—
|
|
|
214
|
|
||
Equipment, furniture and fixtures
|
7
|
|
—
|
|
|
129
|
|
||
Total property and equipment
|
|
|
354
|
|
|
785
|
|
||
Less: Accumulated depreciation and amortization
|
|
|
(354
|
)
|
|
(533
|
)
|
||
Property and equipment, net
|
|
|
$
|
—
|
|
|
$
|
252
|
|
|
Year Ended December 31, 2016
|
||||||
|
Mobile Marketing & Advertising
|
|
Total
|
||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
Operating expenses
|
24
|
|
|
24
|
|
||
Depreciation and amortization
|
—
|
|
|
—
|
|
||
Operating loss
|
$
|
(24
|
)
|
|
$
|
(24
|
)
|
Gain on sale of equipment
|
—
|
|
|
—
|
|
||
Other income (expense)
|
—
|
|
|
—
|
|
||
Net loss from discontinued operations
|
$
|
(24
|
)
|
|
$
|
(24
|
)
|
|
Year Ended December 31, 2015
|
||||||||||
|
Mobile Marketing & Advertising
|
|
U.S. Messaging & Other
|
|
Total
|
||||||
Revenue
|
$
|
3,035
|
|
|
$
|
—
|
|
|
$
|
3,035
|
|
Operating expenses
|
4,523
|
|
|
137
|
|
|
4,660
|
|
|||
Depreciation and amortization
|
150
|
|
|
—
|
|
|
150
|
|
|||
Operating loss
|
$
|
(1,638
|
)
|
|
$
|
(137
|
)
|
|
$
|
(1,775
|
)
|
Gain on sale of equipment
|
182
|
|
|
—
|
|
|
182
|
|
|||
Other income (expense)
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Net loss from discontinued operations
|
$
|
(1,455
|
)
|
|
$
|
(138
|
)
|
|
$
|
(1,593
|
)
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Accounts payable
|
$
|
140
|
|
|
$
|
209
|
|
Accrued taxes, not related to income
|
352
|
|
|
367
|
|
||
Other accrued expenses
|
16
|
|
|
107
|
|
||
|
$
|
508
|
|
|
$
|
683
|
|
Stock Options
|
Shares
|
|
Weighted-Average Exercise Price Per Share
|
|
Remaining Average Contractual Term (Years)
|
|
||||
Outstanding, December 31, 2015
|
41,150
|
|
|
$
|
7.85
|
|
|
7.81
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
||
Forfeited
|
(41,150
|
)
|
|
$
|
7.85
|
|
|
—
|
|
|
Outstanding, December 31, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||
United States federal tax at statutory rate
|
34.0
|
%
|
|
34.0
|
%
|
Change in valuation allowance
|
(379.9
|
)
|
|
9.0
|
|
Foreign entity liquidation
|
—
|
|
|
—
|
|
State taxes (net of federal tax benefit)
|
345.9
|
|
|
(47.2
|
)
|
Other
|
—
|
|
|
4.2
|
|
Effective rate
|
—
|
%
|
|
—
|
%
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Domestic net operating loss carryforwards
|
$
|
187,356
|
|
|
$
|
169,278
|
|
Foreign net operating loss carryforwards
|
8,682
|
|
|
8,680
|
|
||
Research and development credits
|
5,436
|
|
|
5,436
|
|
||
Other
|
1,919
|
|
|
2,775
|
|
||
Deferred tax assets
|
203,393
|
|
|
186,169
|
|
||
Valuation allowance
|
(203,393
|
)
|
|
(186,169
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Net loss attributable to common stockholders
|
$
|
(10,021
|
)
|
|
$
|
(12,697
|
)
|
Weighted-average common shares outstanding - basic and diluted
|
8,994,814
|
|
|
7,956,291
|
|
||
Net loss per share attributable to common stockholders - basic and diluted
|
$
|
(1.11
|
)
|
|
$
|
(1.60
|
)
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||
Common stock issuable upon exercise of warrants
|
1,014,958
|
|
|
1,014,958
|
|
Options to purchase common stock
|
—
|
|
|
41,150
|
|
Restricted stock
|
—
|
|
|
—
|
|
Total securities excluded from net loss per share attributable to common stockholders
|
1,014,958
|
|
|
1,056,108
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Tax Valuation Allowance:
|
|
|
|
||||
Beginning balance
|
$
|
186,169
|
|
|
$
|
186,967
|
|
Charged (reversed) to net loss
|
17,224
|
|
|
(798
|
)
|
||
Ending balance
|
$
|
203,393
|
|
|
$
|
186,169
|
|
|
|
|
|
||||
Allowance for Doubtful Accounts:
|
|
|
|
||||
Beginning balance
|
$
|
12
|
|
|
$
|
109
|
|
Charged (reversed) to costs and expenses
|
—
|
|
|
(56
|
)
|
||
Write-offs
|
(12
|
)
|
|
(41
|
)
|
||
Ending Balance
|
$
|
—
|
|
|
$
|
12
|
|
COLUMN A
|
COLUMN B
|
Column C Initial Cost
|
COLUMN D Cost Capitalized Subsequent to Acquisition
|
COLUMN E Gross amount carried at Close of Period
|
COLUMN F
|
COLUMN G
|
COLUMN H
|
|||||||||||||||||||||||
Location
|
Encumbrances
|
Land
|
Building & Improvements
|
Land Building & Improvements
|
Land
|
Building and
Improvements
|
Total
|
Accumulated Depreciation
|
Total
|
Date Acquired
|
Life on which
depreciation is
computed
|
|||||||||||||||||||
Long Branch, NJ
|
$
|
—
|
|
$
|
1,454
|
|
$
|
2,175
|
|
$
|
—
|
|
$
|
1,454
|
|
$
|
2,175
|
|
$
|
3,629
|
|
$
|
186
|
|
$
|
3,443
|
|
9/17/2015
|
35 years
|
|
Flanders, NY
|
—
|
|
891
|
|
1,926
|
|
—
|
|
891
|
|
1,926
|
|
2,817
|
|
45
|
|
2,772
|
|
5/18/2016
|
43 years
|
||||||||||
Total
|
$
|
—
|
|
$
|
2,345
|
|
$
|
4,101
|
|
$
|
—
|
|
$
|
2,345
|
|
$
|
4,101
|
|
$
|
6,446
|
|
$
|
231
|
|
$
|
6,215
|
|
|
|
|
2016
|
2015
|
||||
Beginning balance
|
$
|
3,629
|
|
$
|
—
|
|
Property acquisitions
|
2,817
|
|
3,629
|
|
||
Ending Balance
|
$
|
6,446
|
|
$
|
3,629
|
|
|
2016
|
2015
|
||||
Beginning balance
|
$
|
37
|
|
$
|
—
|
|
Depreciation and amortization expense
|
194
|
|
37
|
|
||
Ending Balance
|
$
|
231
|
|
$
|
37
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
|
Page
|
Audited Consolidated Financial Statements
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the years ended December 31, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2016 and 2015
|
|
Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2016 and 2015
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015
|
|
Item 16.
|
Form 10-K Summary.
|
|
|
|
VOLTARI CORPORATION
|
|
|
|
|
Date:
|
March 31, 2017
|
By:
|
/s/ Kenneth Goldmann
|
|
|
|
Kenneth Goldmann
|
|
|
|
Chief Administrative and Accounting Officer (Principal Executive and Principal Financial Officer)
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Kenneth Goldmann
|
|
Chief Administrative and Accounting Officer (Principal Executive and Principal Financial Officer)
|
|
March 31, 2017
|
Kenneth Goldmann
|
|
|
||
|
|
|
|
|
/s/ Peter Shea
|
|
Chairman of the Board
|
|
March 31, 2017
|
Peter Shea
|
|
|
|
|
|
|
|
|
|
/s/ Jaffrey A. Firestone
|
|
Director
|
|
March 31, 2017
|
Jaffrey A. Firestone
|
|
|
|
|
|
|
|
|
|
/s/ Kevin Lewis
|
|
Director
|
|
March 31, 2017
|
Kevin Lewis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Exhibit Description
|
|
Form
|
|
Filing Date
|
|
Filed by
|
2.2
|
|
Agreement and Plan of Reorganization, dated as of February 8, 2013, by and among Motricity, Inc., Voltari Merger Sub, Inc., and Voltari Corporation
|
|
S-4
|
|
2/11/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Voltari Corporation
|
|
S-4
|
|
2/11/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
3.2
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Voltari Corporation
|
|
8-K
|
|
4/23/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
3.3
|
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Voltari Corporation
|
|
8-K
|
|
9/16/2015
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
3.4
|
|
Amended and Restated Bylaws of Voltari Corporation
|
|
S-4
|
|
2/11/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Specimen Stock Certificate for Voltari Corporation Common Stock
|
|
S-4
|
|
2/11/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
4.2
|
|
Specimen Stock Certificate for Voltari Series J Preferred Stock
|
|
S-4
|
|
2/11/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
4.3
|
|
Form of Warrant for Voltari Corporation
|
|
S-4
|
|
2/11/2013
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
4.4
|
|
Warrant Agreement by and between Motricity, Inc. and American Stock Transfer & Trust Company, dated October 11, 2012
|
|
8-K
|
|
10/12/2012
|
|
Motricity
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Form of Motricity, Inc. Indemnification Agreement#
|
|
S-1
|
|
1/22/2010
|
|
Motricity
|
|
|
|
|
|
|
|
|
|
10.2
|
|
Form of Stock Option Agreement under the 2010 Long-Term Incentive Plan#
|
|
S-1/A
|
|
6/2/2010
|
|
Motricity
|
|
|
|
|
|
|
|
|
|
10.3
|
|
Form of Restricted Stock Agreement under the 2010 Long-Term Incentive Plan#
|
|
10-Q
|
|
8/6/2010
|
|
Motricity
|
|
|
|
|
|
|
|
|
|
10.4
|
|
Motricity, Inc. 2010 Long-Term Incentive Plan, as amended#
|
|
8-K
|
|
11/2/2011
|
|
Motricity
|
|
|
|
|
|
|
|
|
|
10.5
|
|
Waiver Letter, dated as of March 30, 2015, from High River Limited Partnership and Koala Holdings LP.
|
|
8-K
|
|
3/30/2015
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.6
|
|
Offer Letter by and between Voltari Corporation and Aaron Epstein, dated May 11, 2015
|
|
10-Q
|
|
5/14/2015
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.7
|
|
Separation Agreement and Release by and between Voltari Corporation and Richard Sadowsky, dated May 11, 2015
|
|
10-Q
|
|
5/14/2015
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.8
|
|
Revolving Note with Koala LP (as lender) dated August 7, 2015
|
|
10-Q
|
|
8/7/15
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.9
|
|
Agreement for Sale and Purchase with 160 Brighton Acquisition LLC dated August 7, 2015
|
|
10-Q
|
|
8/7/15
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.10
|
|
Ground Lease with JPMorgan Chase Bank, N.A., together with Bill of Sale and General Assignment to 160 Brighton Acquisition LLC, dated March 2, 2006
|
|
10-Q
|
|
8/7/15
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.11
|
|
Offer Letter by and between Voltari Corporation and Kenneth Goldmann, dated September 28, 2015.
|
|
8-K
|
|
9/30/15
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.12
|
|
Non-Disclosure and Intellectual Property Protection Agreement by and between Voltari Corporation and Kenneth Goldmann, dated September 28, 2015.
|
|
8-K
|
|
9/30/15
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.13
|
|
Purchase and Sale Agreement, dated as of December 3, 2015, by and between Flanders Holding, LLC and Voltari Real Estate Holding, LLC.
|
|
8-K
|
|
12/9/15
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.14
|
|
First Amendment to Purchase and Sale Agreement, dated as of January 11, 2016, by and between Flanders Holding, LLC and Voltari Real Estate Holding, LLC.
|
|
8-K
|
|
2/19/16
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.15
|
|
Second Amendment to Purchase and Sale Agreement, dated as of February 10, 2016, by and between Flanders Holding, LLC and Voltari Real Estate Holding, LLC.
|
|
8-K
|
|
2/19/16
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.16
|
|
Third Amendment to Purchase and Sale Agreement, dated as of March 10, 2016, by and between Flanders Holding, LLC and Voltari Real Estate Holding, LLC.*
|
|
10-K
|
|
3/16/16
|
|
Voltari
|
|
|
|
|
|
|
|
|
|
10.17
|
|
Revolving Note with Koala (as lender) dated March 29, 2017*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.1
|
|
Subsidiaries of Voltari Corporation*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Chief Administrative and Accounting Officer*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Administrative and Accounting Officer**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document*
|
|
|
|
|
|
|
*
|
Filed herewith.
|
|
|
|
|
**
|
Furnished herewith.
|
|
|
|
|
‡
|
Confidential treatment was granted for certain provisions of this Exhibit pursuant to Exchange Act Rule 24b-2. These provisions have been omitted from the filing and submitted separately to the Securities and Exchange Commission.
|
|
|
|
|
#
|
Indicates a management contract or compensatory plan or arrangement.
|
|
|
|
|
(1)
|
If not filed herewith, filed as an exhibit to the document referred to above by either Motricity, Inc. (CIK# 0001336691) or Voltari Corporation (CIK# 0001568319), as indicated.
|
|
New York, New York
|
30,000,00.00
|
March 29, 2017
|
Date of Borrowing/
Repayment
|
Amount of Borrowing/ Repayment
|
Aggregate Amount of Borrowings Outstanding after Borrowing/ Repayment
|
Current Commitment Available (including any Increased Commitment)
|
Lender’s Initials
|
Borrower’s Initials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Subsidiary and Name Under Which It Does Business
|
Jurisdiction of Incorporation
|
Voltari Operating Corp. (f/k/a Motricity, Inc.)
|
Delaware
|
Voltari Real Estate Holding LLC
|
Delaware
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Voltari Corporation;
|
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ Kenneth Goldmann
|
Kenneth Goldmann
|
Chief Administrative and Accounting Officer (Principal Executive and Principal Financial Officer)
|
|
|
1.
|
The Registrant’s annual report on Form 10-K for the year ended
December 31, 2016
(the “Periodic Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
|
2.
|
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
|
|
/s/ Kenneth Goldmann
|
Kenneth Goldmann
|
Chief Administrative and Accounting Officer (Principal Executive and Principal Financial Officer)
|