☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2018 | |
OR | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Delaware | 94-3282005 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | ☒ | |
Emerging growth company | ☐ |
Page | ||||
September 30, 2017 | December 31, 2016 | September 30, 2018 | December 31, 2017 | |||||||
(Unaudited) | (Unaudited) | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 21,254 | $ | 16,890 | $16,112 | $18,050 | ||||
Short-term investments | 28,138 | 36,519 | 31,806 | 31,183 | ||||||
Accounts receivable, net | 11,755 | 9,567 | 12,539 | 11,951 | ||||||
Prepaid expenses and other current assets | 646 | 1,211 | 980 | 802 | ||||||
Total current assets | 61,793 | 64,187 | 61,437 | 61,986 | ||||||
Property and equipment, net | 1,259 | 1,706 | 846 | 1,133 | ||||||
Intangible assets, net | 250 | 266 | 250 | |||||||
Other assets | 981 | 1,070 | 725 | 984 | ||||||
Total assets | $ | 64,283 | $ | 67,229 | $63,258 | $64,353 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 792 | $ | 1,085 | $408 | $504 | ||||
Accrued compensation | 2,338 | 2,974 | 2,446 | 3,157 | ||||||
Other accrued liabilities | 1,905 | 2,496 | 1,212 | 1,330 | ||||||
Accrued legal settlement | 10,000 | - | ||||||||
Short-term deferred revenue | 2,170 | 2,759 | 1,244 | 2,006 | ||||||
Total current liabilities | 7,205 | 9,314 | 15,310 | 6,997 | ||||||
Long-term deferred revenue | 31 | 106 | - | 13 | ||||||
Other long-term liabilities | 446 | 501 | 725 | 885 | ||||||
Total liabilities | 7,682 | 9,921 | 16,035 | 7,895 | ||||||
Commitments and contingencies (Note 3) | ||||||||||
Stockholders’ equity: | ||||||||||
Common stock; par value $0.0001, 50,000,000 shares authorized; 19,196,412 issued and 18,713,498 outstanding at September 30, 2017; 19,030,024 issued and 18,548,180 outstanding at December 31, 2016 | 2 | 2 | ||||||||
Common stock; par value $0.0001, 50,000,000 shares authorized; 19,396,247 issued and 18,913,333 outstanding at September 30, 2018; 19,211,826 issued and 18,728,912 outstanding at December 31, 2017 | 2 | 2 | ||||||||
Additional paid-in capital | 267,722 | 267,400 | 268,600 | 267,857 | ||||||
Treasury stock, at cost (482,914 shares at September 30, 2017 and 481,844 shares at December 31, 2016) | (5,297 | ) | (5,295 | ) | ||||||
Treasury stock, at cost (482,914 shares at September 30, 2018 and December 31, 2017) | (5,297) | |||||||||
Accumulated other comprehensive loss | (2,136 | ) | (2,329 | ) | (2,568) | (2,108) | ||||
Accumulated deficit | (203,690 | ) | (202,470 | ) | (213,514) | (203,996) | ||||
Total stockholders’ equity | 56,601 | 57,308 | 47,223 | 56,458 | ||||||
Total liabilities and stockholders’ equity | $ | 64,283 | $ | 67,229 | $63,258 | $64,353 |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenue: | ||||||||||||||||||||
Services | $ | 13,682 | $ | 14,163 | $ | 39,744 | $ | 43,055 | $16,759 | $13,682 | $48,179 | $39,744 | ||||||||
Software and other | 1,350 | 1,364 | 4,085 | 3,998 | 1,258 | 1,350 | 3,828 | 4,085 | ||||||||||||
Total revenue | 15,032 | 15,527 | 43,829 | 47,053 | 18,017 | 15,032 | 52,007 | 43,829 | ||||||||||||
Cost of revenue: | ||||||||||||||||||||
Cost of services | 11,559 | 11,847 | 33,760 | 38,403 | 14,412 | 11,559 | 42,985 | 33,760 | ||||||||||||
Cost of software and other | 66 | 120 | 252 | 377 | 51 | 66 | 152 | 252 | ||||||||||||
Total cost of revenue | 11,625 | 11,967 | 34,012 | 38,780 | 14,463 | 11,625 | 43,137 | 34,012 | ||||||||||||
Gross profit | 3,407 | 3,560 | 9,817 | 8,273 | 3,554 | 3,407 | 8,870 | 9,817 | ||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 631 | 1,336 | 2,429 | 4,464 | 690 | 631 | 2,082 | 2,429 | ||||||||||||
Sales and marketing | 621 | 1,463 | 2,011 | 5,401 | 424 | 621 | 1,383 | 2,011 | ||||||||||||
General and administrative | 1,996 | 2,703 | 6,847 | 10,186 | 1,800 | 1,996 | 5,623 | 6,847 | ||||||||||||
Legal settlement | 10,000 | - | 10,000 | - | ||||||||||||||||
Amortization of intangible assets and other | 0 | 267 | 16 | 801 | - | 16 | ||||||||||||||
Restructuring | 128 | - | 128 | 423 | - | 128 | - | 128 | ||||||||||||
Total operating expenses | 3,376 | 5,769 | 11,431 | 21,275 | 12,914 | 3,376 | 19,088 | 11,431 | ||||||||||||
Income (loss) from operations | 31 | (2,209 | ) | (1,614 | ) | (13,002 | ) | (9,360) | 31 | (10,218) | (1,614) | |||||||||
Interest income and other, net | 164 | 124 | 451 | 383 | 241 | 164 | 676 | 451 | ||||||||||||
Income (loss) from continuing operations, before income taxes | 195 | (2,085 | ) | (1,163 | ) | (12,619 | ) | |||||||||||||
Income tax (benefit) provision | (36 | ) | 44 | 57 | 132 | |||||||||||||||
Income (loss) from continuing operations, after income taxes | 231 | (2,129 | ) | (1,220 | ) | (12,751 | ) | |||||||||||||
Income from discontinued operations, after income taxes | - | - | - | 284 | ||||||||||||||||
Income (loss) before income taxes | (9,119) | 195 | (9,542) | (1,163) | ||||||||||||||||
Income tax provision (benefit) | 29 | (36) | (24) | 57 | ||||||||||||||||
Net income (loss) | $ | 231 | $ | (2,129 | ) | $ | (1,220 | ) | $ | (12,467 | ) | $(9,148) | $231 | $(9,518) | $(1,220) | |||||
Basic and diluted earnings (loss) per share | ||||||||||||||||||||
Basic | $(0.49) | $0.01 | $(0.51) | $(0.07) | ||||||||||||||||
Diluted | $(0.49) | $0.01 | $(0.51) | $(0.07) | ||||||||||||||||
Basic and diluted income (loss) per share: | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.01 | $ | (0.12 | ) | $ | (0.07 | ) | $ | (0.69 | ) | |||||||||
Income (loss) from discontinued operations | 0.00 | (0.00 | ) | (0.00 | ) | 0.01 | ||||||||||||||
Basic and diluted income (loss) per share | $ | 0.01 | $ | (0.12 | ) | $ | (0.07 | ) | $ | (0.68 | ) | |||||||||
Shares used in computing basic net income (loss) per share | 18,692 | 18,446 | 18,613 | 18,372 | ||||||||||||||||
Shares used in computing diluted net income (loss) per share | 18,714 | 18,446 | 18,613 | 18,372 | ||||||||||||||||
Shares used in computing per share amounts | ||||||||||||||||||||
Basic | 18,805 | 18,692 | 18,786 | 18,613 | ||||||||||||||||
Diluted | 18,805 | 18,714 | 18,786 | 18,613 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
�� | ||||||||||||||||
Net Income (loss) | $ | 231 | $ | (2,129 | ) | $ | (1,220 | ) | $ | (12,467 | ) | |||||
Change in foreign currency translation adjustment | 9 | 25 | 175 | (13 | ) | |||||||||||
Change in net unrealized gain (loss) on investments | 12 | (40 | ) | 18 | 82 | |||||||||||
Other comprehensive income (loss) | 21 | (15 | ) | 193 | 69 | |||||||||||
Comprehensive income (loss) | $ | 252 | $ | (2,144 | ) | $ | (1,027 | ) | $ | (12,398 | ) |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Operating Activities: | ||||||||
Net loss | $ | (1,220 | ) | $ | (12,467 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 479 | 530 | ||||||
Amortization of premiums and discounts on investments | 65 | 244 | ||||||
Amortization of intangible assets and other | 16 | 801 | ||||||
Stock-based compensation | 295 | 1,776 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable, net | (2,188 | ) | (176 | ) | ||||
Prepaid expenses and other current assets | 572 | 122 | ||||||
Other long-term assets | 123 | (5 | ) | |||||
Accounts payable | (292 | ) | 350 | |||||
Accrued compensation | (632 | ) | (363 | ) | ||||
Other accrued liabilities | (585 | ) | (1,534 | ) | ||||
Other long-term liabilities | (48 | ) | (324 | ) | ||||
Deferred revenue | (664 | ) | 444 | |||||
Net cash used in operating activities | (4,079 | ) | (10,602 | ) | ||||
Investing Activities: | ||||||||
Purchases of property and equipment | (32 | ) | (481 | ) | ||||
Purchases of investments | (14,939 | ) | (22,901 | ) | ||||
Maturities of investments | 23,273 | 22,109 | ||||||
Net cash provided by (used in) investing activities | 8,302 | (1,273 | ) | |||||
Financing Activities: | ||||||||
Proceeds from employee stock purchase plan | 27 | 45 | ||||||
Repurchase of common stock | (2 | ) | (72 | ) | ||||
Net cash provided by (used in) financing activities | 25 | (27 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 116 | 35 | ||||||
Net increase (decrease) in cash and cash equivalents | 4,364 | (11,867 | ) | |||||
Cash and cash equivalents at beginning of period | 16,890 | 27,598 | ||||||
Cash and cash equivalents at end of period | $ | 21,254 | $ | 15,731 | ||||
Supplemental schedule of cash flow information: | ||||||||
Income taxes paid | $ | 85 | $ | 132 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||
2018 | 2017 | 2018 | 2017 | |
Net income (loss) | $(9,148) | $231 | (9,518) | $(1,220) |
Other comprehensive income: | ||||
Change in foreign currency translation adjustment | (194) | 9 | (473) | 175 |
Change in net unrealized gain on investments | 32 | 12 | 13 | 18 |
Other comprehensive income (loss) | (162) | 21 | (460) | 193 |
Comprehensive income (loss) | $(9,310) | $252 | $(9,978) | $(1,027) |
Nine Months Ended September 30, | ||
2018 | 2017 | |
Operating Activities: | ||
Net loss | $(9,518) | $(1,220) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 478 | 479 |
Amortization of premiums and discounts on investments | 129 | 65 |
Amortization of intangible assets and other | - | 16 |
Stock-based compensation | 586 | 295 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (588) | (2,188) |
Prepaid expenses and other current assets | (191) | 572 |
Other long-term assets | 180 | 123 |
Accounts payable | (95) | (292) |
Accrued compensation | (721) | (632) |
Accrued legal settlement | 10,000 | - |
Other accrued liabilities | (122) | (585) |
Other long-term liabilities | (160) | (48) |
Deferred revenue | (775) | (664) |
Net cash used in operating activities | (797) | (4,079) |
Investing Activities: | ||
Purchases of property and equipment | (191) | (32) |
Purchases of investments | (22,893) | (14,939) |
Maturities of investments | 22,154 | 23,273 |
Net cash (used in) provided by investing activities | (930) | 8,302 |
Financing Activities: | ||
Proceeds from employee stock purchase plan | 35 | 27 |
Proceeds from exercise of stock options | 121 | - |
Repurchase of common stock | - | (2) |
Net cash provided by financing activities | 156 | 25 |
Effect of exchange rate changes on cash and cash equivalents | (367) | 116 |
Net (decrease) increase in cash and cash equivalents | (1,938) | 4,364 |
Cash and cash equivalents at beginning of period | 18,050 | 16,890 |
Cash and cash equivalents at end of period | $16,112 | $21,254 |
Supplemental schedule of cash flow information: | 62 | |
Income taxes paid | $89 | $85 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||
2018 | 2017 | 2018 | 2017 | |
Services | $16,759 | $13,682 | $48,179 | $39,744 |
Software and other | 1,258 | 1,350 | 3,828 | 4,085 |
Total revenue | $18,017 | $15,032 | $52,007 | $43,829 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||
As of September 30, 2017 | ||||||||||||||||||||
As of September 30, 2018 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||
Cash | $ | 7,654 | $ | — | $ | — | $ | 7,654 | $6,933 | $— | $6,933 | |||||||||
Money market funds | 13,600 | — | — | 13,600 | 5,683 | — | 5,683 | |||||||||||||
Certificates of deposit | 1,211 | — | (1 | ) | 1,210 | 1,196 | — | (2) | 1,194 | |||||||||||
Commercial paper | 997 | — | — | 997 | 7,168 | — | (3) | 7,165 | ||||||||||||
Corporate notes and bonds | 20,036 | 1 | (19 | ) | 20,018 | 18,541 | — | (63) | 18,478 | |||||||||||
U.S. government agency securities | 5,917 | — | (4 | ) | 5,913 | 8,468 | — | (3) | 8,465 | |||||||||||
$ | 49,415 | $ | 1 | $ | (24 | ) | $ | 49,392 | $47,989 | $— | $(71) | $47,918 | ||||||||
Classified as: | ||||||||||||||||||||
Cash and cash equivalents | $ | 21,254 | $ | — | $ | — | $ | 21,254 | $16,113 | $— | $(1) | $16,112 | ||||||||
Short-term investments | 28,161 | 1 | (24 | ) | 28,138 | 31,876 | — | (70) | 31,806 | |||||||||||
$ | 49,415 | $ | 1 | $ | (24 | ) | $ | 49,392 | $47,989 | $— | $(71) | $47,918 |
As of December 31, 2017 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
Cash | $7,408 | $— | $— | $7,408 |
Money market funds | 10,643 | — | (1) | 10,642 |
Certificates of deposit | 1,207 | — | (1) | 1,206 |
Commercial paper | 2,494 | — | (1) | 2,493 |
Corporate notes and bonds | 22,846 | — | (77) | 22,769 |
U.S. government agency securities | 4,719 | — | (4) | 4,715 |
$49,317 | $— | $(84) | $49,233 | |
Classified as: | ||||
Cash and cash equivalents | $18,051 | $— | $(1) | $18,050 |
Short-term investments | 31,266 | — | (83) | 31,183 |
$49,317 | $— | $(84) | $49,233 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
As of December 31, 2016 | ||||||||||||||||
Cash | $ | 7,593 | $ | — | $ | — | $ | 7,593 | ||||||||
Money market funds | 9,297 | — | — | 9,297 | ||||||||||||
Certificates of deposit | 1,273 | — | — | 1,273 | ||||||||||||
Commercial paper | 4,989 | — | — | 4,989 | ||||||||||||
Corporate notes and bonds | 19,357 | — | (40 | ) | 19,317 | |||||||||||
U.S. government agency securities | 10,941 | 1 | (2 | ) | 10,940 | |||||||||||
$ | 53,450 | $ | 1 | $ | (42 | ) | $ | 53,409 | ||||||||
Classified as: | ||||||||||||||||
Cash and cash equivalents | $ | 16,890 | $ | — | $ | — | $ | 16,890 | ||||||||
Short-term investments | 36,560 | 1 | (42 | ) | 36,519 | |||||||||||
$ | 53,450 | $ | 1 | $ | (42 | ) | $ | 53,409 |
September 30, 2017 | December 31, 2016 | September 30, 2018 | December 31, 2017 | |||||||
Due within one year | $ | 21,647 | $ | 27,730 | $29,299 | $22,228 | ||||
Due within two years | 6,491 | 8,789 | 2,507 | 8,955 | ||||||
$ | 28,138 | $ | 36,519 | $31,806 | $31,183 |
As of September 30, 2017 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
As of September 30, 2018 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Money market funds | $ | 13,600 | $ | — | $ | — | $ | 13,600 | $5,683 | $— | $5.683 | |||||||||
Certificates of deposit | — | 1,210 | — | 1,210 | — | 1,194 | — | 1,194 | ||||||||||||
Commercial paper | — | 997 | — | 997 | — | 7,165 | — | 7,165 | ||||||||||||
Corporate notes and bonds | — | 20,018 | — | 20,018 | — | 18,478 | — | 18,478 | ||||||||||||
U.S. government agency securities | — | 5,913 | — | 5,913 | — | 8,465 | — | 8,465 | ||||||||||||
Total | $ | 13,600 | $ | 28,138 | $ | — | $ | 41,738 | $5,683 | $35,302 | $— | $40,985 |
As of December 31, 2017 | Level 1 | Level 2 | Level 3 | Total |
Money market funds | $10,642 | $— | $— | $10,642 |
Certificates of deposit | — | 1,206 | — | 1,206 |
Commercial paper | — | 2,493 | — | 2,493 |
Corporate notes and bonds | — | 22,769 | — | 22,769 |
U.S. government agency securities | — | 4,715 | — | 4,715 |
Total | $10,642 | $31,183 | $— | $41,825 |
As of December 31, 2016 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Money market funds | $ | 9,297 | $ | — | $ | — | $ | 9,297 | ||||||||
Certificates of deposit | — | 1,273 | — | 1,273 | ||||||||||||
Commercial paper | — | 4,989 | — | 4,989 | ||||||||||||
Corporate notes and bonds | — | 19,317 | — | 19,317 | ||||||||||||
U.S. government agency securities | — | 10,940 | — | 10,940 | ||||||||||||
Total | $ | 9,297 | $ | 36,519 | $ | — | $ | 45,816 |
Foreign Currency Translation Losses | Unrealized Losses on Investments | Total | ||||||||||
Balance as of December 31, 2016 | $ | (2,288 | ) | $ | (41 | ) | $ | (2,329 | ) | |||
Current-period other comprehensive income | 175 | 18 | 193 | |||||||||
Balance as of September 30, 2017 | $ | (2,113 | ) | $ | (23 | ) | $ | (2,136 | ) |
Foreign Currency Translation Losses | Unrealized Losses on Investments | Total | |
Balance as of December 31, 2017 | $(2,024) | $(84) | $(2,108) |
Current-period other comprehensive gain (loss) | (473) | 13 | (460) |
Balance as of September 30, 2018 | $(2,497) | $(71) | $(2,568) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Stock Option Plan: | ||||||||||||||||
Risk-free interest rate | — | 0.99 | % | 1.43 | % | 0.92 | % | |||||||||
Expected term | — | 3.90 years | 3.58 years | 3.89 years | ||||||||||||
Volatility | — | 48.89 | % | 46.21 | % | 48.34 | % | |||||||||
Expected dividend | — | 0 | % | 0 | % | 0 | % | |||||||||
Weighted average fair value (per share) | — | $ | 0.99 | $ | 0.96 | $ | 0.96 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||
2018 | 2017 | 2018 | 2017 | |
Stock Option Plan: | ||||
Risk-free interest rate | 2.9% | — | 2.4% | 1.43% |
Expected term | 3.2 years | — | 3.0 years | 3.58 years |
Volatility | 39.5% | — | 41.2% | 46.21% |
Expected dividend | —% | — | —% | 0% |
Weighted average fair value (per share) | $0.88 | — | $0.84 | $0.96 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||
2018 | 2017 | 2018 | 2017 | |
Employee Stock Purchase Plan: | ||||
Risk-free interest rate | 2.09% | 1.02% | 2.09% | 1.02% |
Expected term | 0.5 years | 0.5 years | 0.5 years | 0.5 years |
Volatility | 32.55% | 33.66% | 32.55% | 33.66% |
Expected dividend | 0% | 0% | 0% | 0% |
Weighted average fair value (per share) | $0.72 | $0.59 | $0.72 | $0.59 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Employee Stock Purchase Plan: | ||||||||||||||||
Risk-free interest rate | 1.02 | % | 0.38 | % | 1.02 | % | 0.38 | % | ||||||||
Expected term | 0.5 years | 0.5 years | 0.5 years | 0.5 years | ||||||||||||
Volatility | 33.66 | % | 48.86 | % | 33.66 | % | 48.86 | % | ||||||||
Expected dividend | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
Weighted average fair value (per share) | $ | .59 | $ | 0.84 | $ | .59 | $ | 0.84 |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Stock-based compensation expense related to grants of: | Stock-based compensation expense related to grants of: | Stock-based compensation expense related to grants of: | ||||||||||||||||||
Stock options | $ | 27 | $ | 266 | $ | 86 | $ | 679 | $38 | $27 | $358 | $86 | ||||||||
Employee Stock Purchase Plan (“ESPP”) | 5 | 10 | 16 | 32 | - | 5 | 11 | 16 | ||||||||||||
Restricted Stock Units (“RSU”) | (4 | ) | 385 | 193 | 1,065 | 64 | (4) | 217 | 193 | |||||||||||
$ | 28 | $ | 661 | $ | 295 | $ | 1,776 | $102 | $28 | $586 | $295 | |||||||||
Stock-based compensation expense recognized in: | Stock-based compensation expense recognized in: | Stock-based compensation expense recognized in: | ||||||||||||||||||
Cost of services | $ | 19 | $ | 43 | $ | 83 | $ | 134 | $11 | $19 | $49 | $83 | ||||||||
Cost of software and other | — | 1 | 3 | 4 | — | 3 | ||||||||||||||
Research and development | (18 | ) | 156 | 62 | 346 | 9 | (18) | 33 | 62 | |||||||||||
Sales and marketing | 12 | 79 | 34 | 121 | 14 | 12 | 40 | 34 | ||||||||||||
General and administrative | 15 | 382 | 113 | 1,171 | 68 | 15 | 464 | 113 | ||||||||||||
$ | 28 | $ | 661 | $ | 295 | $ | 1,776 | $102 | $28 | $586 | $295 |
Three Months | Nine Months | |||||||||||||||||||
Ended | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | September 30, | ||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss) | $ | 231 | $ | (2,129 | ) | $ | (1,220 | ) | $ | (12,467 | ) | $(9,148) | $231 | $(9,518) | $(1,220) | |||||
Basic: | ||||||||||||||||||||
Weighted-average shares of common stock outstanding | 18,692 | 18,446 | 18,613 | 18,372 | 18,805 | 18,692 | 18,786 | 18,613 | ||||||||||||
Shares used in computing basic income (loss) per share | 18,692 | 18,446 | 18,613 | 18,372 | 18,805 | 18,692 | 18,786 | 18,613 | ||||||||||||
Basic income (loss) per share | 0.01 | (0.12 | ) | (0.07 | ) | (0.69 | ) | |||||||||||||
Basic earnings (loss) per share | (0.49) | 0.01 | (0.51) | (0.07) | ||||||||||||||||
Diluted: | ||||||||||||||||||||
Weighted-average shares of common stock outstanding | 18,692 | 18,446 | 18,613 | 18,372 | 18,805 | 18,692 | 18,786 | 18,613 | ||||||||||||
Add: Common equivalent shares outstanding | 22 | - | - | - | - | 22 | - | - | ||||||||||||
Shares used in computing diluted income (loss) per share | 18,714 | 18,446 | 18,613 | 18,372 | ||||||||||||||||
Diluted income (loss) per share | $ | 0.01 | $ | (0.12 | ) | $ | (0.07 | ) | $ | (0.69 | ) | |||||||||
Shares used in computing diluted earnings (loss) per share | 18,805 | 18,714 | 18,786 | 18,613 | ||||||||||||||||
Diluted earnings (loss) per share | $(0.49) | $0.01 | $(0.51) | $(0.07) |
As of September 30, | ||||||||||
As of September 30, | 2018 | 2017 | ||||||||
2017 | 2016 | |||||||||
Stock options | 417 | 4,475 | 872 | 417 | ||||||
RSUs | - | 1,375 | 96 | - | ||||||
Warrants | - | 324 | ||||||||
Total common share equivalents | 417 | 6,174 | ||||||||
968 | 417 |
Non- compete | Partner Relationships | Customer Base | Technology Rights | Tradenames | Indefinite Life Intangibles | Total | ||||||||||||||||||||||
As of September 30, 2017 | ||||||||||||||||||||||||||||
Gross carrying value | $ | 593 | $ | 145 | $ | 641 | $ | 5,330 | $ | 760 | $ | 250 | $ | 7,719 | ||||||||||||||
Accumulated amortization | (593 | ) | (145 | ) | (641 | ) | (5,330 | ) | (760 | ) | — | (7,469 | ) | |||||||||||||||
Net carrying value | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 250 | $ | 250 | ||||||||||||||
As of December 31, 2016 | ||||||||||||||||||||||||||||
Gross carrying value | $ | 593 | $ | 145 | $ | 641 | $ | 5,330 | $ | 760 | $ | 250 | $ | 7,719 | ||||||||||||||
Accumulated amortization | (581 | ) | (145 | ) | (637 | ) | (5,330 | ) | (760 | ) | — | (7,453 | ) | |||||||||||||||
Net carrying value | $ | 12 | $ | — | $ | 4 | $ | — | $ | — | $ | 250 | $ | 266 |
Indefinite Life Intangibles | |
As of September 30, 2018 | |
Gross carrying value | $250 |
Accumulated amortization | — |
Net carrying value | $250 |
As of December 31, 2017 | |
Gross carrying value | $250 |
Accumulated amortization | — |
Net carrying value | $250 |
September 30, 2017 | December 31, 2016 | September 30, 2018 | December 31, 2017 | |||||||
Accrued expenses | $ | 999 | $ | 842 | $408 | $462 | ||||
Self-insurance accruals | 711 | 911 | 633 | 679 | ||||||
Customer deposits | — | 556 | ||||||||
Restructuring obligations | 71 | 81 | ||||||||
Other accrued liabilities | 124 | 106 | 171 | 189 | ||||||
Total other accrued liabilities | $ | 1,905 | $ | 2,496 | $1,212 | $1,330 |
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |
Outstanding options at December 31, 2017 | 732,190 | $3.72 | 8.17 | $56 |
Granted | 330,000 | $2.75 | ||
Exercised | (49,043) | $2.47 | ||
Forfeited | (140,712) | $6.53 | ||
Outstanding options at September 30, 2018 | 872,435 | $2.97 | 8.61 | $311 |
Options vested and expected to vest | 848,495 | $2.99 | 8.60 | $297 |
Exercisable at September 30, 2018 | 555,707 | $3.32 | 8.42 | $143 |
Number of Shares | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding options at December 31, 2016 | 1,381,843 | $ | 5.88 | 4.95 | $ | 50 | ||||||||||
Granted | 2,000 | $ | 2.57 | |||||||||||||
Exercised | — | — | ||||||||||||||
Forfeited | (966,751 | ) | $ | 6.03 | ||||||||||||
Outstanding options at September 30, 2017 | 417,092 | $ | 5.50 | 6.03 | $ | 0 | ||||||||||
Options vested and expected to vest | 405,254 | $ | 5.58 | 5.95 | $ | 0 | ||||||||||
Exercisable at September 30, 2017 | 267,171 | $ | 7.08 | 4.57 | $ | 0 |
Number of Shares | Weighted Average Grant-Date Fair Value per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |
Outstanding RSUs at December 31, 2017 | 136,329 | $2.80 | 0.80 | $329 |
Awarded | 90,905 | 2.20 | ||
Released | (119,943) | 2.71 | ||
Forfeited | (10,937) | 2.67 | ||
Outstanding RSUs at September 30, 2018 | 96,354 | $2.36 | 0.84 | $279 |
Number of Shares | Weighted Average Grant-Date Fair Value per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||||||
Outstanding RSUs at December 31, 2016 | 351,921 | $ | 4.59 | 1.06 | $ | 908 | ||||||||||
Awarded | 102,880 | $ | 2.43 | |||||||||||||
Released | (151,886 | ) | $ | 3.41 | ||||||||||||
Forfeited | (146,165 | ) | $ | 6.01 | ||||||||||||
Outstanding RSUs at September 30, 2017 | 156,750 | $ | 3.00 | 0.95 | $ | 368 |
Relocation | Severance | Total | ||||||||||
Restructuring obligations, June 30, 2017 | - | - | - | |||||||||
Restructuring costs incurred | 42,000 | 86,000 | 128,000 | |||||||||
Cash payments | - | (57,000 | ) | (57,000 | ) | |||||||
Restructuring obligations, September 30, 2017 | 42,000 | 29,000 | 71,000 |
Three Months | Nine Months | |||
Ended | Ended | |||
September 30, | September 30, | |||
2018 | 2017 | 2018 | 2017 | |
Revenue: | ||||
Services | 93% | 91% | 93% | 91% |
Software and other | 7 | 9 | 7 | 9 |
Total revenue | 100 | 100 | 100 | 100 |
Costs of revenue: | ||||
Cost of services | 79 | 77 | 82 | 77 |
Cost of software and other | 1 | 0 | 1 | 1 |
Total cost of revenue | 80 | 77 | 83 | 78 |
Gross profit | 20 | 23 | 17 | 22 |
Operating expenses: | ||||
Research and development | 4 | 4 | 4 | 6 |
Sales and marketing | 2 | 4 | 3 | 5 |
General and administrative | 10 | 13 | 11 | 16 |
Legal settlement | 56 | - | 19 | 16 |
Restructuring | - | 1 | - | - |
Total operating expenses | 72 | 22 | 37 | 27 |
Income (loss) from operations | (52) | 1 | (20) | (5) |
Interest and other income, net | 1 | 1 | 1 | 1 |
Income (loss), before income taxes | (51) | 2 | (19) | (4) |
Income tax provision | — | — | — | — |
Net income (loss) | (51)% | 2% | (19)% | (4)% |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue: | ||||||||||||||||
Services | 91 | % | 91 | % | 91 | % | 92 | % | ||||||||
Software and other | 9 | 9 | 9 | 8 | ||||||||||||
Total revenue | 100 | 100 | 100 | 100 | ||||||||||||
Costs of revenue: | ||||||||||||||||
Cost of services | 77 | 76 | 77 | 81 | ||||||||||||
Cost of software and other | 0 | 1 | 1 | 1 | ||||||||||||
Total cost of revenue | 77 | 77 | 78 | 82 | ||||||||||||
Gross profit | 23 | 23 | 22 | 18 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 4 | 9 | 6 | 9 | ||||||||||||
Sales and marketing | 4 | 9 | 5 | 11 | ||||||||||||
General and administrative | 13 | 17 | 16 | 22 | ||||||||||||
Amortization of intangible assets and other | — | 2 | — | 2 | ||||||||||||
Restructuring | 1 | — | — | 1 | ||||||||||||
Total operating expenses | 22 | 37 | 27 | 45 | ||||||||||||
Income (loss) from operations | 1 | (14 | ) | (5 | ) | (27 | ) | |||||||||
Interest and other income, net | 1 | 0 | 1 | 0 | ||||||||||||
Income (loss) from continuing operations, before income taxes | 2 | (14 | ) | (4 | ) | (27 | ) | |||||||||
Income tax provision | — | — | — | — | ||||||||||||
Income (loss) from continuing operations, after income taxes | 2 | (14 | ) | (4 | ) | (27 | ) | |||||||||
Income (loss) from discontinued operations, after income taxes | — | — | — | 1 | ||||||||||||
Net income (loss) | 2 | % | (14 | )% | (4 | )% | (26 | )% |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
In thousands, except percentages | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||
Services | $ | 13,682 | $ | 14,163 | $ | (481 | ) | (3 | )% | $ | 39,744 | $ | 43,055 | $ | (3,311 | ) | (8 | )% | $16,759 | $13,682 | $3,077 | 22% | $48,179 | $39,744 | $8,435 | 21% | |||||||||||||||
Software and other | 1,350 | 1,364 | (14 | ) | (1 | )% | 4,085 | 3,998 | 87 | 1 | % | 1,258 | 1,350 | (92) | (7)% | 3,828 | 4,085 | (257) | (6)% | ||||||||||||||||||||||
Total revenue | $ | 15,032 | $ | 15,527 | $ | (495 | ) | (3 | )% | $ | 43,829 | $ | 47,053 | $ | (3,224 | ) | (7 | )% | $18,017 | $15,032 | $2,985 | 20% | $52,007 | $43,829 | $8,178 | 19% |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
In thousands, except percentages | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||
Cost of services | $ | 11,559 | $ | 11,847 | $ | (288 | ) | (2 | )% | $ | 33,760 | $ | 38,403 | $ | (4,643 | ) | (12 | )% | $14,412 | $11,559 | $2,853 | 25% | $42,985 | $33,760 | $9,255 | 27% | |||||||||||||||
Cost of software and other | 66 | 120 | (54 | ) | (45 | )% | 252 | 377 | (125 | ) | (33 | )% | 51 | 66 | (15) | (23)% | 152 | 252 | (100) | (40)% | |||||||||||||||||||||
Total cost of revenue | $ | 11,625 | $ | 1,967 | $ | (342 | ) | (3 | )% | $ | 34,012 | $ | 38,780 | $ | (4,768 | ) | (12 | )% | $14,463 | $11,625 | $2,838 | 24% | $43,137 | $34,012 | $9,125 | 27% |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
In thousands, except percentages | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||
Research and development | $ | 631 | $ | 1,336 | $ | (705 | ) | (53 | )% | $ | 2,429 | $ | 4,464 | $ | (2,035 | ) | (46 | )% | $690 | $631 | $(59) | 9% | $2,082 | $2,429 | $(347) | (14)% | |||||||||||||||
Sales and marketing | $ | 621 | $ | 1,463 | $ | (842 | ) | (58 | )% | $ | 2,011 | $ | 5,401 | $ | (3,390 | ) | (63 | )% | $424 | $621 | $(197) | (32)% | $1,383 | $2,011 | $(628) | (31)% | |||||||||||||||
General and administrative | $ | 1,996 | $ | 2,703 | $ | (707 | ) | (26 | )% | $ | 6,847 | $ | 10,186 | $ | (3,339 | ) | (33 | )% | $1,800 | $1,996 | $(196) | (10)% | $5,623 | $6,847 | $(1,224) | (18)% | |||||||||||||||
Legal settlement | $10,000 | $— | $10,000 | 100% | $10,000 | $— | $10,000 | 100% | |||||||||||||||||||||||||||||||||
Amortization of intangibles assets and other | $ | - | $ | 267 | $ | (267 | ) | (100 | )% | $ | 16 | $ | 801 | $ | (785 | ) | (98 | )% | $— | 0% | $— | $16 | $(16) | (100)% | |||||||||||||||||
Restructuring | $ | 128 | $ | - | $ | 128 | 100 | % | $ | 128 | $ | 423 | $ | (295 | ) | (70 | )% | $— | $128 | $(128) | (100)% | $— | $128 | $(128) | (100)% |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
In thousands, except percentages | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||
Interest income and other, net | $ | 164 | $ | 124 | $ | 40 | 32 | % | $ | 451 | $ | 383 | $ | 68 | 18 | % | $241 | $164 | $77 | 47% | $676 | $451 | $225 | 50% |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||
In thousands, except percentages | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||
Income tax (benefit) provision | $ | (36 | ) | $ | 44 | $ | (80 | ) | (182 | )% | $ | 57 | $ | 132 | $ | (75 | ) | (57 | )% | ||||||||||||||||||||||
Income tax provision (benefit) | $29 | $(36) | $65 | 181% | $(24) | $57 | $(81) | (142)% |
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31.1 |
Chief Executive Officer Section 302 | |
Statement of the Chief Executive Officer under 18 U.S.C. § | |
Statement of the |
(1) The certifications filed as Exhibits 32.1 and 32.2 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Company under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference. |
SUPPORT.COM, INC. | |||
November 7, 2018 | By: | /s/ Richard A. Bloom | |
Richard A. Bloom | |||
Chief Executive Officer Section 302 | |||
Chief Financial Officer Section 302 | |||
Statement of the Chief Executive Officer under 18 U.S.C. § | |||
Statement of the Chief Financial Officer under 18 U.S.C. § |
(1) The certifications filed as Exhibits 32.1 and 32.2 are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of the Company under the Securities Exchange Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof irrespective of any general incorporation by reference language contained in any such filing, except to the extent that the registrant specifically incorporates it by reference. |