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Liquidity
12 Months Ended
Dec. 31, 2014
Liquidity [Abstract]  
Liquidity
Liquidity

The Company’s primary sources of liquidity are cash and cash equivalents as well as availability under the 2013 Loan and Security Agreement (refer to Note 9). At December 31, 2014, the Company had $5.2 million cash and cash equivalents and no outstanding debt.    

The Company incurred a loss from continuing operations of $5.9 million for the year ended December 31, 2014. The Company's net cash used in operating activities during the year ended December 31, 2014 was $3.4 million. The Company has managed its liquidity through sales of the Portamedic, Heritage Labs and Hooper Holmes Services business units, the sale of the Basking Ridge, New Jersey property, a series of cost reduction and accounts receivable collection initiatives and availability under the 2013 Loan and Security Agreement.

The Company has historically used availability under the 2013 Loan and Security Agreement to fund operations. The Company did not borrow under the 2013 Loan and Security Agreement during the year ended December 31, 2014. The Company used the proceeds from the sale of Heritage Labs and Hooper Holmes Services as well as the proceeds from the sale of the Basking Ridge real estate to fund capital expenditures and operating expenses associated with the increased screening volume experienced in the second half of the year. The Company experiences a timing difference between the operating expense and cash collection of the associated revenue as Health and Wellness customers generally have longer payment terms.

Transition Initiatives

During the year ended December 31, 2014, the Company incurred $1.9 million of costs, which are recorded in selling, general and administrative expenses in the consolidated statement of operations, in connection with the relocation of its corporate headquarters to Olathe, Kansas, and contributed to the year-to-date loss from continuing operations during 2014. The Company relocated its headquarters to Olathe, Kansas during the first quarter of 2014, where its Health and Wellness operations facilities are located. Costs incurred during 2014 relate to expenses associated with maintaining the Basking Ridge, New Jersey real estate through the date of sale and the transition of information technology infrastructure.

Under the Alliance Agreement with CRL (refer to Note 1), the Company completed the sale of certain assets of Heritage Labs and Hooper Holmes Services as of August 31, 2014 with a purchase price, after inventory-related price adjustments, of $3.5 million.

On May 13, 2014, the Company entered into an agreement for the sale of the Basking Ridge, New Jersey property for an aggregate purchase price of $3.0 million. The sale closed on August 7, 2014 resulting in cash proceeds to the Company of $2.5 million, which is net of customary closing costs and broker fees (refer to Note 1).

2013 Loan and Security Agreement
    
The Company maintains the 2013 Loan and Security Agreement with ACF FinCo I LP ("ACF"), the assignee of Keltic Financial Partners II, LP ("Keltic Financial") (refer to Note 9). Borrowings under the 2013 Loan and Security Agreement are to be used for working capital purposes and capital expenditures. The amount available for borrowing may be less than the $10 million under this facility at any given time due to the manner in which the maximum available amount is calculated.  The Company has an available borrowing base subject to reserves established at the lender's discretion of 85% of Eligible Receivables (as defined in the 2013 Loan and Security Agreement) up to $10 million under this facility.  Eligible Receivables do not include certain receivables deemed ineligible by the lender. As of December 31, 2014, the lender applied a discretionary reserve of $0.5 million. Available borrowing capacity, net of this discretionary reserve was $2.6 million based on Eligible Receivables as of December 31, 2014. As of December 31, 2014, there were no borrowings outstanding under the 2013 Loan and Security Agreement.

The Company and ACF entered into an amendment to the 2013 Loan and Security Agreement on July 9, 2014 (refer to Note 9) to modify the definition of Eligible Receivables was amended to include up to fifty percent of Unbilled Eligible Receivables (as defined in the 2013 Loan and Security Agreement), which results in an increase in the Company's borrowing capacity.

The 2013 Loan and Security Agreement contains various covenants, including financial covenants which require the Company to achieve a minimum EBITDA amount (earnings before interest expense, income taxes, depreciation and amortization). On March 27, 2015, the lender modified the covenants to waive the minimum EBITDA covenant for the twelve months ending March 31, 2015 and replaced it with minimum EBITDA covenants of negative $2.5 million for the six months ending June 30, 2015, negative $2.25 million for the nine months ended September 30, 2015 and negative $2.0 million for the twelve months ending December 31, 2015. The discretionary reserve applied by the lender was also increased to $2.0 million.

The Company continues to have limitations on the maximum amount of capital expenditures for each fiscal year. The Company is in compliance with the covenants under the 2013 Loan and Security Agreement as of December 31, 2014. Given the seasonal nature of the Company's operations, management expects to use the revolver at certain points in the year and believes the Company has sufficient borrowing capacity to do so. The Company also believes it will meet its covenants during 2015.

Other Considerations

The Company's Health and Wellness business principally sells through wellness, disease management, benefit brokers and insurance companies (referred to as channel partners) who ultimately have the relationship with the end customer. The Company's current services are often aggregated with other offerings from its channel partners to provide a total solution to the end-user. As such, the Company's success is largely dependent on that of its partners.

The Company's ability to generate cash flow in the future is dependent on realizing the benefits from the consolidation of its operations in Kansas and growing the Health and Wellness business as it seeks to streamline operations and improve efficiency through increased revenue and cost reduction initiatives. These and other factors could adversely affect liquidity if not achieved.

The Company has completed the sale of the Basking Ridge, New Jersey property and Portamedic, Heritage Labs and Hooper Holmes Services business units. The capital raised from these transactions provided the Company with additional capital to invest as it focuses on growth supporting Health and Wellness operations.

While the Company received an aggregate of $5.3 million in net proceeds during the year ended December 31, 2014 from the sale of the Basking Ridge, New Jersey property and sale of Heritage Labs and Hooper Holmes Services business units, the Company had cash outflows of $1.9 million during the year ended December 31, 2014 in connection with transition costs.

In 2014, the Company also invested $1.4 million in capital expenditures, primarily for information technology enhancements and to prepare for increased screening volumes. The remaining change in cash for the year ended December 31, 2014 is due to the remaining higher fixed cost structure as discussed below and fulfillment and execution of screening events in advance of cash receipts from the Company's customers. To conduct successful screenings the Company must expend cash to deliver equipment and supplies required for the screenings as well as pay its health professionals and site management, which is in advance of the customer invoicing process and ultimate cash receipts for services performed.

The Company continues to focus its attention on the long-term strategy and believe it has the necessary assets to make the most of its immediate opportunities while positioning the Company for long-term growth. In connection with the Alliance Agreement with CRL, he Company has transitioned out of the life insurance industry to focus on the Health and Wellness business. As a part of the transition, the Company reduced corporate fixed cost structure by evaluating head count, professional fees and other expenses.

Based on the Company's anticipated level of future revenues and gross profits, continued cost reduction initiatives and existing cash and cash equivalents and borrowing capacity, the Company believes it has sufficient funds to meet its cash needs to fund operation expenses and capital expenditures for the twelve months following December 31, 2014.