ZCO LIQUIDATING Corp

CIK:0001355128|SEC Filings

Net Loss Per Share

6 Months Ended

Aug. 31, 2013

11.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of the common shares outstanding during the period. The diluted net loss per share is the same as basic net loss per share for the three and six months ended August 31, 2013 and 2012, because potential common shares, such as common shares issuable under the exercise of stock options or warrants, are only considered when their effect would be dilutive.

Following is a reconciliation of the numerators and denominators of the basic and diluted net loss per share computations (in thousands, except per share amounts):


	Three Months Ended August 31,						Six Months Ended August 31,
	2013			2012			2013			2012
Net loss (numerator)	$	(26,053	)	$	(33,179	)	$	(39,285	)	$	(57,663	)
Shares calculation (denominator)
Weighted average shares outstanding – basic		68,292			67,679			68,232			67,592
Effect of dilutive securities:
Potential common stock relating to stock options, restricted stock units and warrants		—			—			—			—

Weighted average shares outstanding – diluted		68,292			67,679			68,232			67,592

Net loss per share – basic and diluted	$	(0.38	)	$	(0.49	)	$	(0.58	)	$	(0.85	)

Included in the weighted average shares above for August 31, 2013, are 430,000 RSU’s which had vested in the quarter ended August 31, 2013, but had not yet been issued.

The following table shows the potentially dilutive shares, consisting of options, restricted stock units, warrants, and shares issuable upon conversion of Debentures for the periods presented that were excluded from the net loss per share computations because their effect was anti-dilutive as of (in thousands):


	August 31, 2013		August 31, 2012
Potentially dilutive equity awards outstanding:
Stock options and restricted stock units		9,690		8,843
Warrants		9,236		3,458
Conversion of debentures		7,705		—

Total		26,631		12,301

Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Cash flows from operating activities:
Net loss	$ (39,285)	$ (57,663)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment	2,088	1,124
Amortization of intangible assets	851	968
Write-off of excess debenture debt discount	1,771
Write-off of revolving loan issuance costs	817
Impairment of intangible assets		781
Payment in kind interest accrual	259
Provision for accounts receivable allowances	2,385	54,083
Stock-based compensation	3,989	3,550
Change in fair value of common stock warrants and derivative liabilities	3,731	(4,933)
Deferred income taxes		(171)
Provision for inventory write-downs	2,568	8,613
Loss on disposal of property and equipment, net		552
Changes in assets and liabilities:
Accounts receivable	738	(48,196)
Inventories	6,413	(40,226)
Prepaid expenses and other assets	3,002	(1,444)
Accounts payable	(7,006)	(4,729)
Accrued and other liabilities	(4,856)	4,477
Net cash used in operating activities	(22,535)	(83,214)
Cash flows from investing activities:
Property and equipment purchases	(435)	(5,501)
Restricted cash for letters of credit	62	(62)
Purchased intangible assets		(151)
Net cash used in investing activities	(373)	(5,714)
Cash flows from financing activities:
Proceeds of loans, net	9,529	20,000
Proceeds from issuance of subordinate convertible debentures	11,780
Net proceeds from issuance of common stock, net		8,508
Proceeds from employee stock programs, net		122
Proceeds from exercise of warrants for common stock		97
Net cash provided by financing activities	21,309	28,727
Effect of foreign exchange rates on cash and cash equivalents	(45)	134
Net decrease in cash and cash equivalents	(1,644)	(60,067)
Cash and cash equivalents at beginning of period	12,224	92,049
Cash and cash equivalents at end of period	10,580	31,982
Supplemental disclosures:
Interest paid	171	27
Income taxes paid	123	1
Non-cash investing and financing activities:
Issuance of common stock upon cashless warrant exercises		144
Change in derivative fair value due to Loan Agreement modifications	(1,441)
March Warrants
Non-cash investing and financing activities:
Issuance of Warrants and derivatives	1,000
March and June Warrants
Non-cash investing and financing activities:
Cancellation of March and June Warrants	6,320
June and August Warrants
Non-cash investing and financing activities:
Issuance of Warrants and derivatives	8,693
Derivatives
Non-cash investing and financing activities:
Issuance of Warrants and derivatives	$ 5,939

Balance Sheet Details

6 Months Ended

Aug. 31, 2013

Balance Sheet Details

4.	Balance Sheet Details

Inventories

Ending inventories by major category includes (in thousands):


	August 31, 2013		February 28, 2013
Raw materials	$	11,492	$	8,846
Work in progress		3,087		2,756
Finished goods		9,193		21,151

Total net inventories	$	23,772	$	32,753

Finished goods inventories at August 31, 2013 and February 28, 2013 includes $0.9 million and $2.7 million, respectively, of estimated inventories expected to be returned to the Company as part of its allowance for sales returns.

Accrued and Other Liabilities

Accrued and other liabilities consist of the following (in thousands):


	August 31, 2013		February 28, 2013
Warranty	$	8,902	$	11,773
Professional fees		1,496		2,769
Wages and other compensation		3,397		2,658
Customer deposits		980		2,430
Other liabilities		2,301		2,542

Accrued and other liabilities	$	17,076	$	22,172