Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | IPASS INC | ||
Entity Central Index Key | 1,053,374 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 70,345,276 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 85,539,763 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,159 | $ 16,072 |
Accounts receivable, net of allowance for doubtful accounts of $151 and $142, respectively | 8,717 | 12,361 |
Prepaid expenses | 1,641 | 1,344 |
Other current assets | 712 | 225 |
Total current assets | 16,229 | 30,002 |
Property and equipment, net | 1,334 | 2,485 |
Other assets | 840 | 688 |
Total assets | 18,403 | 33,175 |
Current liabilities: | ||
Accounts payable | 9,044 | 7,069 |
Accrued liabilities | 3,734 | 3,874 |
Deferred revenue, short-term | 3,723 | 2,412 |
Total current liabilities | 16,501 | 13,355 |
Deferred revenue, long-term | 102 | 67 |
Other long-term liabilities | 1,009 | 1,123 |
Total liabilities | 17,612 | 14,545 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value (250,000,000 shares authorized; 69,250,276 and 65,776,605 shares issued and outstanding, respectively) | 71 | 68 |
Additional paid-in capital | 226,490 | 223,777 |
Accumulated deficit | (225,770) | (205,215) |
Total stockholders’ equity | 791 | 18,630 |
Total liabilities and stockholders’ equity | $ 18,403 | $ 33,175 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 151 | $ 142 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 250,000,000 | 250,000,000 |
Common stock shares issued | 69,250,276 | 65,776,605 |
Common stock shares outstanding | 69,250,276 | 65,776,605 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues | $ 54,401 | $ 63,222 | $ 62,564 |
Cost of revenues and operating expenses: | |||
Network access costs | 38,548 | 33,150 | 28,472 |
Network operations | 6,235 | 7,411 | 9,788 |
Research and development | 7,953 | 7,276 | 9,987 |
Sales and marketing | 10,245 | 11,154 | 10,334 |
General and administrative | 11,482 | 10,792 | 14,662 |
Restructuring charges and related adjustments | 0 | 788 | 4,232 |
Total cost of revenues and operating expenses | 74,463 | 70,571 | 77,475 |
Operating loss | (20,062) | (7,349) | (14,911) |
Interest income (expense), net | 67 | 36 | (54) |
Foreign exchange losses | (378) | (234) | (87) |
Other income (expenses), net | 12 | 0 | (134) |
Loss from operations before income taxes | (20,361) | (7,547) | (15,186) |
Provision for income taxes | (194) | (223) | (307) |
Net loss | (20,555) | (7,770) | (15,493) |
Comprehensive loss | $ (20,555) | $ (7,770) | $ (15,493) |
Net loss per share - basic and diluted (in usd per share) | $ (0.31) | $ (0.12) | $ (0.25) |
Weighted average shares outstanding - basic and diluted (in shares) | 66,060,470 | 64,344,937 | 62,940,299 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Comprehensive Income (Loss) | Accumulated Deficit |
Beginning Balance at Dec. 31, 2014 | $ 38,481 | $ 65 | $ 220,368 | $ 0 | $ (181,952) |
Beginning Balance, Shares at Dec. 31, 2014 | 64,754,000 | ||||
Exercise of stock options-common stock issued, Shares | 131,780 | 132,000 | |||
Exercise of stock options-common stock issued | $ 116 | $ 0 | 116 | ||
Restricted stock granted, Shares | 140,000 | ||||
Restricted stock cancelled, Shares | (1,720,000) | ||||
Employee stock purchase plan-common stock issued, Shares | 79,009 | 78,000 | |||
Employee stock purchase plan-common stock issued | $ 71 | 71 | |||
Disgorgement of profit | 4 | 4 | |||
Stock-based compensation | (578) | (578) | |||
Net loss | (15,493) | (15,493) | |||
Ending Balance at Dec. 31, 2015 | $ 22,601 | $ 65 | 219,981 | (197,445) | |
Ending Balance, shares at Dec. 31, 2015 | 63,384,000 | ||||
Exercise of stock options-common stock issued, Shares | 2,650,009 | 2,650,000 | |||
Exercise of stock options-common stock issued | $ 3,003 | $ 3 | 3,000 | ||
Restricted stock granted, Shares | 60,000 | ||||
Restricted stock cancelled, Shares | (30,000) | ||||
Employee stock purchase plan-common stock issued, Shares | 51,341 | 52,000 | |||
Employee stock purchase plan-common stock issued | $ 37 | 37 | |||
Repurchased common stock | (345) | $ (339) | (345) | ||
Stock-based compensation | 1,104 | 1,104 | |||
Net loss | (7,770) | (7,770) | |||
Ending Balance at Dec. 31, 2016 | $ 18,630 | $ 68 | 223,777 | 0 | (205,215) |
Ending Balance, shares at Dec. 31, 2016 | 65,776,605 | 65,777,000 | |||
Exercise of stock options-common stock issued, Shares | 175,926 | 176,000 | |||
Exercise of stock options-common stock issued | $ 181 | 181 | |||
Restricted stock granted, Shares | 50,000 | ||||
Employee stock purchase plan-common stock issued, Shares | 139,592 | 139,000 | |||
Employee stock purchase plan-common stock issued | $ 115 | 115 | |||
Proceeds from common stock purchase agreement, net issuance cost of $138 (in shares) | 3,108,000 | ||||
Proceeds from common stock purchase agreement, net issuance cost of $138 | 1,066 | $ 3 | 1,063 | ||
Stock-based compensation | 1,354 | 1,354 | |||
Net loss | (20,555) | (20,555) | |||
Ending Balance at Dec. 31, 2017 | $ 791 | $ 71 | $ 226,490 | $ 0 | $ (225,770) |
Ending Balance, shares at Dec. 31, 2017 | 69,250,276 | 69,250,000 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 138 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net loss | $ (20,555) | $ (7,770) | $ (15,493) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation expense (benefit) | 1,354 | 1,104 | (578) |
Depreciation and amortization | 1,591 | 2,469 | 2,945 |
Deferred income taxes | 0 | 0 | 107 |
Loss on disposal of property and equipment | 0 | 0 | 7 |
Provision for doubtful accounts | 210 | 11 | 83 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 3,434 | (2,626) | 234 |
Prepaid expenses and other current assets | (784) | 1,535 | (529) |
Other assets | (152) | 2 | 243 |
Accounts payable | 2,348 | 414 | (946) |
Accrued liabilities | (224) | (628) | (1,854) |
Deferred revenue | 1,346 | (73) | 2,000 |
Other liabilities | (114) | 80 | 164 |
Net cash used in operating activities | (11,546) | (5,482) | (13,617) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (813) | (581) | (812) |
Change in restricted cash | 0 | 0 | 1,550 |
Net cash (used in) provided by investing activities | (813) | (581) | 738 |
Cash flows from financing activities: | |||
Proceeds from common stock purchase agreement | 1,204 | 0 | 0 |
Issuance cost of common stock purchase agreement | (54) | 0 | 0 |
Net proceeds from issuance of common stock and disgorgement of profit | 296 | 3,040 | 191 |
Principal payments for vendor financed property and equipment | 0 | (854) | (832) |
Stock repurchase | 0 | (345) | 0 |
Net cash provided by (used in) financing activities | 1,446 | 1,841 | (641) |
Net decrease in cash and cash equivalents | (10,913) | (4,222) | (13,520) |
Cash and cash equivalents at beginning of year | 16,072 | 20,294 | 33,814 |
Cash and cash equivalents at end of year | 5,159 | 16,072 | 20,294 |
Supplemental disclosures of cash flow information: | |||
Net cash paid for taxes | 235 | 242 | 233 |
Accrued amounts for acquisition of property and equipment | 0 | 373 | 9 |
Accrued issuance cost of common stock purchase agreement | 84 | 0 | 0 |
Value of commitment shares issued with the common stock purchase agreement | $ 450 | $ 0 | $ 0 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated financial statements include the accounts of iPass Inc. (the “Company”) and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated. The Company reports comprehensive loss in a single continuous financial statement within the Consolidated Statements of Operations and Comprehensive Loss. The Company’s comprehensive loss is equivalent to its net loss because the Company does not have any transactions that are recorded through other comprehensive loss. Going Concern The Company has historically relied on existing cash and cash equivalents for its liquidity needs. As of December 31, 2017, the Company had $5.2 million in cash and cash equivalents. In November 2017, the Company entered into a Common Stock Purchase Agreement ("CSPA") with Aspire Capital Fund, LLC, ("Aspire Capital"). The agreement allows the Company to sell up to $10.0 million worth of common stock to Aspire Capital over a 24 months period. Upon execution of the agreement on November 16, 2017, Aspire Capital purchased from the Company 1,867,692 shares of common stock for a total purchase price of $1.0 million . In addition, the Company issued 840,461 commitment shares to Aspire Capital. Beyond the initial purchase, the Company, at its discretion, has the right to direct Aspire Capital to purchase additional shares up to a daily maximum of 200,000 shares. The Company and Aspire Capital may mutually agree to increase this by an additional 2,000,000 shares in a given business day. However, the total number of shares issued to Aspire Capital cannot exceed 19.99% of the Company's total outstanding shares of common stock. As of December 31, 2017, the Company sold an additional 400,000 shares to Aspire Capital for $0.2 million . The accompanying consolidated financial statements were prepared on a going concern basis in accordance with GAAP. The going concern basis assumes that the Company will continue operations for the next twelve months from the date the consolidated financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects that may result from the Company's inability to continue as a going concern. The Company's history of losses, limited liquidity, and other factors raise substantial doubt about the Company's ability to continue as a going concern. The Company may require additional financing, through either debt or equity arrangements. Equity and debt financing, however, might not be available when needed or, if available, might not be available on terms satisfactory to the Company. If the Company raises additional funds through equity financing, stockholders will experience dilution. Debt financing, if available, may involve covenants restricting operations or the Company's ability to incur additional debt. If the Company is unable to execute its business plan or obtain adequate financing and satisfactory financing terms, its ability to continue to support business growth and to respond to business challenges would be significantly limited as the Company may have to delay, reduce the scope of or eliminate some or all of its initiatives, or reduce expenses which would harm operating results. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. In July 2015, the FASB deferred the effective data for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company will adopt the new guidance as of January 1, 2018. The plan is to adopt using the modified retrospective approach. Currently, the Company's primary source of revenue is derived from a series of monthly usage-based fees that are recognized when the customer's usage occurs and therefore recognition is not significantly different under the new guidance. The Company expects the primary impact of this guidance to be the initial capitalization of incremental commission paid to employees for signing of new customers, which will be amortized over the time period in which the benefit will be received. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . ASU 2016-02 impacts any entity that enters a lease with some specified scope exceptions. The guidance updates and supersedes Topic 840, Leases . For public entities, ASU 2016-02 is effective for fiscal years, and interim periods with those years, beginning after December 15, 2018, and early adoption is permitted. The Company is evaluating the effect that ASU 2014-09 will have on the Company's consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The Company adopted ASU 2016-09 during the year ended December 31, 2017. Under ASU 2016-09, excess tax benefits and deficiencies are required to be recognized prospectively as part of provision for income taxes rather than additional paid-in capital. The Company's cumulative effect of windfall tax attributes are approximately $11.5 million . After applying the valuation allowance, no adjustment is recorded to the beginning retained earnings balance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This update addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows with the objective of reducing existing diversity in practice with respect to these items. Among the types of cash flows addressed are payments for costs related to debt prepayments or extinguishment, payments representing accreted interest on discounted debt, payments of contingent consideration after a business combination, proceeds from insurance claims and company-owned life insurance, and distributions from equity method investees, among others. The update is to be adopted retrospectively and is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect a material impact of adopting this guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Equity Transfers of Assets Other Than Inventory (Topic 740) , which is intended to eliminate diversity in practice and provide a more accurate depiction of the tax consequences on intercompany asset transfers (excluding inventory). This update requires entities to immediately recognize the tax consequences on intercompany asset transfers (excluding inventory) at the transaction date, rather than deferring the tax consequences under current GAAP. The update will be effective for the Company’s first quarter of fiscal year 2019 and requires a modified retrospective method of adoption. Early adoption is permitted, but only in the first quarter of an entity’s annual fiscal year. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . The update requires entities to include in their cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. The standard will be effective for us beginning January 1, 2018 and will require a retrospective approach. Early adoption is permitted. The Company does not expect that the update will have a material impact on its consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of the consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to revenue, the valuation of accounts receivables, other long-lived assets, stock-based compensation, legal contingencies, deferred revenue, network access costs, income taxes, and sales tax liabilities. These estimates and assumptions are based on management’s best estimates and judgment. Actual results could differ from the estimates made by management with respect to these and other items. Foreign Currency Accounting The U.S. dollar is the functional currency for the Company and all of its subsidiaries; therefore, the Company does not have a translation adjustment recorded through accumulated other comprehensive loss. While the Company’s revenue contracts are denominated in U.S. dollars, the Company has foreign operations that incur expenses in various foreign currencies and does purchase some network access costs in currencies other than the U.S. dollar. Monetary assets and liabilities are remeasured using the current exchange rate at the balance sheet date. Non-monetary assets and liabilities and capital accounts are remeasured using historical exchange rates. Foreign currency exchange gains and losses are presented separately in the Consolidated Statements of Operations and Comprehensive Loss. Cash Equivalents The Company considers all highly-liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds. Concentrations of Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. Substantially all of the Company’s cash and cash equivalents are held by two financial institutions. The Company is exposed to risk in the event of default by these financial institutions or the issuers of these securities to the extent the balances are in excess of amounts that are insured by the FDIC. The Company’s receivables are derived from revenue earned from customers located primarily in the United States and EMEA. The Company provides credit to its customers in the normal course of business and requires no collateral to secure accounts receivable. The Company maintains an allowance for potentially uncollectible accounts receivable based on its assessment of the collectability of accounts receivable. The allowance for doubtful accounts is based on customer-specific identification, which encompasses various factors, including: the Company’s review of credit profiles of its customers, age of the accounts receivable balances, contractual terms and conditions, current economic conditions that may affect a customer’s ability to pay and historical payment experience. As of December 31, 2017, accounts receivables from customers in the EMEA region and in the United States represented 66% and 28% of total accounts receivable, respectively. 65% of our accounts receivables balance were due within the Company’s standard credit term of 30 days and 98% were aged less than 90 days past due. As of December 31, 2017 and 2016, two customers each represents approximately 10% of total receivables. For the year ended December 31, 2017, two suppliers represented 37% and 10% of total network access costs, respectively. For the year ended December 31, 2016, one suppliers represented 29% of total network access costs. For the year ended December 31, 2015, two suppliers represented 26% and 11% of total network access costs, respectively. Property and Equipment, Net Property and equipment, net are stated at cost, less accumulated depreciation or amortization. Depreciation of property and equipment and amortization of leasehold improvements are computed using the straight-line method over the estimated useful lives of the respective assets as follows: • Equipment: 3 to 5 years • Furniture and fixtures: 5 years • Computer software: 3 to 5 years • Leasehold improvements: the shorter of the useful life of the leasehold improvements or the term of the underlying lease Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to the Consolidated Statements of Operations and Comprehensive Loss. Expenditures for maintenance and repairs are charged to expense as incurred. Construction in progress is related to the construction or development of property and equipment that has not yet been placed in service. Depreciation for equipment and computer software begins once it is placed in service and depreciation for leasehold improvements commences once they are ready for intended use. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, along with net operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company records net deferred tax assets to the extent management believe these assets would more likely than not be realized. In making such determination, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event management was to determine that the Company would be able to realize the deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The Tax Reform Legislation provides for a one-time “deemed repatriation” of accumulated foreign earnings of $5.6 million , offset by the participation exemption of $3.1 million , for the year ended December 31, 2017. The Company does not expect to pay U.S. federal cash taxes on the deemed repatriation due to its current year taxable loss position. The Company does not expect that the future foreign earnings will be subject to U.S. federal income tax since the Company intends to continue reinvesting such earnings outside the U.S. indefinitely. The amount of cash and cash equivalents held by the Company’s foreign subsidiaries as of December 31, 2017 and 2016 was $0.3 million and $0.4 million , respectively. The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Actual results could differ materially from these estimates and could significantly affect the effective tax rate and cash flows in future years. The Company recognizes estimated interest and penalties relating to income tax uncertainties as a component of the provision for income taxes. Stock-Based Compensation Stock-based compensation expense is estimated at the grant date based on the award’s fair value and is recognized as expense over the award’s requisite service period. Awards that vest based on service criteria are expensed on a straight-line basis. Awards having accelerated vesting based on achieving certain performance criteria are expensed on graded vesting basis over the vesting period, after assessing the probability of achieving the requisite performance criteria. The Company’s stock-based payment awards to employees and directors include stock options, restricted stock units and awards, and employee purchase rights granted in connection with the Employee Stock Purchase Plan. Certain restricted stock awards have performance-based goals based on the achievement of various targeted quarterly metrics, any of which require an assessment of the probability and timing of vesting. The Company estimates the fair value of stock options and employee purchase rights on the date of grant using the Black-Scholes option-pricing model that requires the use of assumptions such as expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates and expected dividends. The expected stock price volatility is based on historical volatility and the expected term is based on the historical average expected term. Because stock-based compensation expense is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The expected forfeiture rate is based upon the historical experience of employee turnover and certain other factors. To the extent the actual forfeiture rate is different from the expected rate, stock-based compensation expense is adjusted accordingly. Revenue Recognition Revenue is recognized when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, service has been provided to the customer, the fee is fixed or determinable, and collection is reasonably assured. When the above criteria are not met, revenue is deferred and recognized upon cash collection, upon acceptance of a completion certificate from the customer or when the service is rendered, depending on the type of fee or service arrangement. We report revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. Network Fees The Company recognizes network fees during the period the services are rendered to the end-users based on usage or a flat fee. The Company has two types of flat fee arrangements for its network services. The first is a recurring flat fee that is billed at the same dollar amount each month. The second is a recurring fee calculated based on a flat fee per user per month, of which the dollar amount billed would differ month-to-month depending on the number of users using the Company’s services during a given month. The Company frequently requires customers to commit to minimum network fees associated with monthly, quarterly or annual minimum network usage or over the term of the arrangement. For example, customers that have agreed to a Minimum Monthly Commitment ("MMC"), the customer’s monthly invoice reflects the greater of the customer’s actual usage for the month or the MMC for that month. If the MMC exceeds actual usage (a “Shortfall”), the Company determines whether the Shortfall is fixed or determinable. If the Company concludes that the Shortfall is fixed or determinable, based upon the customer's specific billing history, and other revenue recognition criteria have been met, the Company recognizes as revenue the amount of Shortfall which is invoiced. If the Company concludes that the Shortfall is not fixed or determinable, the Company recognizes revenue when the Shortfall amount is collected. The Company also bills certain network fees upfront and recognizes such fees ratably over the term as services are provided. Platform Services and Other Fees Platform services are any services that allow a user to connect to a network using the iPass application. Fees for this service are typically based upon a monthly rate, and revenue is recognized during the month the services are provided. Revenue related to iPassConnect (“iPC”) fees, including extended support fees as the iPC product reached end-of-life in 2012, and Open Mobile Platform fees are typically based upon a monthly rate (per user rate or a flat fee) and are recognized during the month the services are provided. Start-up support service fees representing charges to new customers, customization services and standard training may be billed up-front in advance and recognized as revenue over the term of the contract or service delivery. Sales of big data analytics, branded as Veri-Fi, is recognized when all four revenue criteria have been met. For evidence of delivery, the Company concludes this criteria is satisfied when the data has been transferred because customers are able to fully benefit upon receipt. In instances when partial data ordered by a customer has been delivered before period end, the Company recognizes in proportional to the number of days of data provided to the customer. Deferred Revenue The Company defers revenue for services that are billed in advance or prepaid as required per customer agreements. Revenue is recognized as the services are being delivered, or ratably over the estimated service period, depending on the nature of the service. Amounts expected to be recognized as revenue within one year are classified as short-term. For services that have been billed but not yet performed and the related receivable has not been collected, for balance sheet presentation purposes, the Company offsets the deferred revenue with the related accounts receivable, despite the receivable representing an enforceable obligation. Network Access Costs Network access costs represent the amounts paid to network access providers for the usage of their networks. The Company has minimum purchase commitments with some network service providers for access that it expects to utilize during the term of the contracts. Costs of minimum purchase contracts are recognized as network access costs at the greater of the minimum commitment or actual usage. Advertising Expenses Advertising costs are expensed as incurred. Advertising expenses for the years ended December 31, 2017, 2016 and 2015 were approximately $18,000 and $45,000 , $ 46,000 , respectively. Internal Use Software Development Costs The Company follows the guidance set forth in ASC 350-40, Internal Use Software , (“ASC 350-40”), in accounting for the development of its application service and other internal use applications. ASC 350-40 requires companies to capitalize qualifying computer software costs, which are incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company did not capitalize any internally developed software in 2017. The Company capitalized $0.3 million and $0.1 million in 2016 and 2015, respectively. Depreciation and amortization expenses related to the Company's internally developed software was approximately $0.8 million , and $0.8 million and $0.9 million in 2017, 2016 and 2015, respectively. Management evaluates the useful lives of the Company’s assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments to long lived assets during the years ended December 31, 2017, 2016, and 2015. |
Financial Instruments and Fair
Financial Instruments and Fair Value | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value | Financial Instruments and Fair Value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction in the principal or most advantageous market between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers assumptions that market participants would use when pricing the asset or liability. Fair Value Hierarchy The three levels of inputs that may be used to measure fair value are as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities; • Level 2—Inputs other than Level 1 either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The recurring fair values of these financial assets (excluding cash) were determined using the following inputs at December 31, 2017 and December 31, 2016 , respectively: As of December 31, 2017 As of December 31, 2016 Fair Value Measured Using Total Balance Fair Value Measured Using Total Balance Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (In thousands) Financial assets Money market funds (1) $ 4,175 $ — $ — $ 4,175 $ 14,083 $ — $ — $ 14,083 Total financial assets $ 4,175 $ — $ — $ 4,175 $ 14,083 $ — $ — $ 14,083 (1) Held in cash and cash equivalents on the Company’s consolidated balance sheets. There were no transfers between Level 1, 2, and 3 between December 31, 2017 and December 31, 201 6. As of December 31, 2017 and December 31, 2016 , the carrying amount of accounts receivable, accounts payable, accrued liabilities and deferred revenue approximates fair value due to their short maturities. (Refer to Note 7 and 8 for discussion related to Accrued Restructuring and Vendor Financed Property and Equipment). |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consisted of the following: As of 2017 2016 (In thousands) Equipment $ 10,698 $ 10,492 Furniture and fixtures 246 378 Computer software 10,723 10,431 Construction in progress 36 303 Leasehold improvements 483 536 22,186 22,140 Less: Accumulated depreciation and amortization (20,852 ) (19,655 ) Property and equipment, net $ 1,334 $ 2,485 Depreciation expense for operations was approximately $1.6 million , $2.5 million , and $2.9 million for the years ended December 31, 2017, 2016, and 2015, respectively. During the year ended December 31, 2017, the Company retired $0.4 million of gross property and equipment and did not incur a material loss on disposal. During the year ended December 31, 2016, the Company retired less than $0.1 million of gross property and equipment. During the year ended December 31, 2015, the Company retired approximately $2.2 million of gross property and equipment related to operations and did not incur a material loss on disposal. During 2013, the Company acquired approximately $2.6 million of enterprise database software and infrastructure hardware. During April 2014, the Company acquired approximately $0.5 million of additional enterprise infrastructure hardware. As of December 31, 2016, the net book value of this enterprise database software and infrastructure hardware in computer software and equipment held by the Company was approximately $0.1 million . During 2016, the Company extended the license related to the previously acquired software for approximately $0.5 million to be paid over one year . As of December 31, 2017, all payments were completed. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets (non-current) consisted of the following: As of 2017 2016 (In thousands) Deposits $ 503 $ 480 Long-term deferred tax asset, net 209 208 Long-term tax receivable 128 — $ 840 $ 688 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following: As of 2017 2016 (In thousands) Tax liabilities $ 886 $ 927 Accrued bonus, commissions and other employee benefits 522 808 Accrued property and equipment — 373 Amounts due to customers 962 869 Legal fee accruals 492 34 Other accrued liabilities 872 863 $ 3,734 $ 3,874 |
Accrued Restructuring (Notes)
Accrued Restructuring (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Accrued Restructuring | Accrued Restructuring During the year ended December 31, 2009, the Company announced restructuring plans (the “2009 Plans”) to reduce operating costs and focus resources on key strategic priorities, which resulted in a workforce reduction of 146 positions across all functional areas and abandonment of certain facilities and termination of a contract obligation. As of December 31, 2014, the Company had remaining lease payments of approximately $0.1 million , which were recorded at fair value at the time of restructuring plan was announced. As of December 31, 2015, the Company completed all the related payments associated with this restructuring plan. During the third quarter of 2014, the Company announced a restructuring plan (the "Q3 2014 Plan") to re-align its cost structure as a result of the divestiture of its Unity business, which resulted in a workforce reduction of approximately 20 employees worldwide and the termination of lease contracts for certain leased facilities. The Company recorded approximately $0.7 million of restructuring charges during fiscal year 2014, and had less than $0.1 million of payments remaining as of December 31, 2014. As of December 31, 2015, the Company completed all the related payments associated with this restructuring plan. During the second quarter of 2015, the Company announced a restructuring plan (the "Q2 2015 Plan") intended to flatten the organization, create a more nimble sales and delivery infrastructure to support a SaaS go to market strategy, and accelerate the cash flow break-even point for the Company. The Q2 2015 Plan reduced headcount globally by approximately 14% and the Company recorded approximately $4.2 million of restructuring charges during fiscal year 2015 and had approximately $0.2 million of payments remaining as of December 31, 2015 for employees termination costs. As of December 31, 2016 the Company completed all the related payments associated with this restructuring plan. During the first quarter of 2016, the Company announced a restructuring plan (the "Q1 2016 Plan") and reduced headcount globally by 57 employees, or 30% of the workforce, and primarily eliminated positions in engineering and network operations groups, including a reduction of personnel in India. This resulted in a charge of approximately $0.8 million in 2016, and as of December 31, 2016 the Company had completed all of the related payments associated this restructuring Plan. The following is a rollforward of restructuring liability for the above Plans: Year Ended December 31, 2017 2016 2015 (In thousands) Beginning balance $ — $ 250 $ 160 Restructuring charges and related adjustments — 788 4,232 Payments and adjustments (1,038 ) (4,142 ) Ending balance $ — $ — $ 250 |
Vendor Financed Property and Eq
Vendor Financed Property and Equipment (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Vendor Financed Property and Equipment [Text Block] | Vendor Financed Property and Equipment In October 2013, the Company acquired enterprise database software and infrastructure hardware. This purchase was financed through a vendor and was to be paid over three years . In April 2014, the Company acquired additional enterprise infrastructure hardware which was financed through the vendor and is to be paid over two years . The total purchase financed by a vendor was approximately $3.1 million . Since October 2013, the Company made approximately $3.1 million of principal payments, and as of December 31, 2016 the Company had completed all remaining principal payments. In October 2016, the Company extended the license related to the previously acquired software for approximately $0.5 million to be paid over one year . Since October 2016, the Company made approximately $0.5 million of payments, and as of December 31, 2017, all payments were completed. |
Income Taxes (Notes)
Income Taxes (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes is based on loss from operations for 2017, 2016 and 2015 before taxes as follows: Year Ended December 31, 2017 2016 2015 (In thousands) U.S source loss $ (21,336 ) $ (8,167 ) $ (16,251 ) Foreign source income 975 620 1,065 Loss before income taxes $ (20,361 ) $ (7,547 ) $ (15,186 ) The provision for income taxes consisted of the following: Year Ended December 31, 2017 2016 2015 (In thousands) Current: U.S. federal $ (238 ) $ — $ — State 7 9 (7 ) Foreign 426 200 207 $ 195 $ 209 $ 200 Deferred: U.S. federal — — — State — — — Foreign (1 ) 14 107 (1 ) 14 107 Provision for income taxes $ 194 $ 223 $ 307 Income tax expense was recorded for the year ended December 31, 2017, 2016, and 2015, of approximately $0.2 million, $0.2 million, and $0.3 million, respectively. The income tax expense recorded in the twelve months ended December 31, 2017, 2016, and 2015, primarily relates to foreign taxes on expected profits in the foreign jurisdictions. Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes as well as net operating loss and tax credit carry forwards. As of December 31, 2017 and 2016, the Company provided a full valuation allowance on its net deferred tax assets in the United States, United Kingdom, Israel, Singapore, Australia and Japan. The components of deferred tax assets (liabilities) consisted of the following: Year Ended December 31, 2017 2016 (In thousands) Deferred tax assets: Net operating loss carry forwards $ 25,309 $ 30,243 Reserves and accruals 1,392 1,507 Research and other tax credits 7,099 6,255 Share based compensation 1,687 2,456 Property and equipment 1,336 2,493 Total deferred tax assets $ 36,823 $ 42,954 Valuation allowance (36,177 ) (41,788 ) Net deferred tax assets 646 1,166 Deferred tax liabilities: Property and equipment (437 ) (958 ) Total net deferred tax assets $ 209 $ 208 The provision for income taxes for operations differed from the amounts computed by applying the U.S. federal income tax rate to pretax loss before income taxes as a result of the following: Year Ended December 31, 2017 2016 2015 Federal statutory rate (35 )% (35 )% (35 )% State taxes, net of federal benefit (1 ) (1 ) (1 ) Amortization of stock-based compensation 1 6 1 Research and development benefit (2 ) (2 ) (3 ) Deemed repatriated foreign earnings 1 1 6 Tax Cuts and Jobs Act of 2017 4 — — Other — 1 — Rate differential impact on Tax Cuts and Jobs Act 74 — — Valuation allowance (41 ) 33 34 Provision for income taxes 1 % 3 % 2 % On December 22, 2017, the Tax Cuts and Jobs Act (P.L. 115-97, the "Act") was signed into law. Among other changes is a permanent reduction in the federal corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. As a result of the reduction in the corporate income tax rate, the Company revalued its net deferred tax assets at December 31, 2017. The Company measured a reduction in the value of the gross deferred tax assets of approximately $15.0 million , which was fully offset by the change in valuation allowance of $15.0 million . Because of the complexity of the provision for the one-time deemed repatriation of accumulated foreign earnings for the year ended December 31, 2017, under the guidance of Staff Accounting Bulletin 118 the Company has reported a provisional amount of $5.6 million for the income inclusion and $3.1 million for the participation exemption under the Act, for which the accounting is incomplete but a reasonable estimate can be determined. The Company required additional time to gather the complete information and finalize the analysis. The analysis will be finalized upon the tax return filing. Provisional amounts or adjustments to provisional amounts identified in the measurement period, as defined, would be included as an adjustment to tax expense or benefit from operations in the period the amounts are determined. The Company has determined a reasonable estimate of $2.5 million one-time deemed repatriation of foreign earnings inclusion after the participation exemption for the tax reform effects, and reported the estimates as a provisional amount in its financial statements for which the accounting under ASC Topic 740 is completed. The Company will finalize the calculation in 2018 before filing the 2017 tax return. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provision of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or to treat any taxes on GILTI inclusions as period costs are both acceptable methods subject to an accounting policy election. Effective January 1, 2018, the Company will elect to treat any potential GILTI inclusions as a period cost as the Company is not projecting any material impact from the GILTI inclusions and any deferred taxes related to any inclusion would be immaterial. As of December 31, 2017, the Company had gross cumulative net operating loss carry forwards for federal and state tax reporting purposes of approximately $103.5 million and $49.4 million , respectively, which expire in various periods between 2018 and 2037. Included in the valuation allowance as of December 31, 2017, is approximately $8.4 million related to net operating loss carry forwards in Israel. Utilization of the net operating loss and tax credit carryforwards are subject to annual limitations due to certain ownership change rules provided by the Internal Revenue Service Code of 1986, as amended and similar state provisions. As of December 31, 2017, the Company also has research and development tax credit carry forwards of approximately $3.3 million and $4.8 million for federal and state income tax purposes, respectively. If not utilized, the federal carry forwards will expire in various amounts through 2037. The state credit can be carried forward indefinitely. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits (in thousands): Balance at January 1, 2015 $ 6,674 Increases for positions taken in prior years 483 Increases for positions related to the current year 320 FX impact (11 ) Decreases for statutes lapsing (20 ) Settlements with taxing authorities — Balance at December 31, 2015 7,446 Increases for positions taken in prior years — Increases for positions related to the current year 149 Decreases for positions taken in prior years (1,359 ) Decreases for statutes lapsing (21 ) FX impact (7 ) Balance at December 31, 2016 6,208 Increases for positions taken in prior years — Increases for positions related to the current year 170 Decreases for positions taken in prior years (608 ) Decreases for statutes lapsing (23 ) FX impact 18 Balance at December 31, 2017 $ 5,765 The change in unrecognized tax benefits primarily relates to prior year operating losses, certain research and development tax credits, and transfer pricing. As of December 31, 2017 and 2016, the company had $0.8 million and $0.7 million , respectively, of unrecognized tax benefits that, if recognized, will have an impact on the Company's effective tax rate. It is reasonably possible that the total amount of unrecognized tax benefits will change in 2018. Decreases in the unrecognized tax benefits will result from the lapsing of statutes of limitations and the possible completion of tax audits in various jurisdictions. Increases will primarily result from tax positions expected to be taken on tax returns for 2018 or unanticipated findings on tax audits of open years in various jurisdictions. In accordance with its accounting policy, the Company recognizes interest and penalties related to income tax matters in the provision for income taxes; which were not considered material during 2017, 2016, and 2015. The Company’s major taxing jurisdictions are U.S. Federal, California, the U.K. and India. In the normal course of the Company’s business, the Company is subject to income tax audits in various jurisdictions. Years 2007 to 2017 remain open to examination by certain of these major taxing jurisdictions. The Company currently has income tax audits in progress in India and has accrued approximately $0.7 million in connection with these audits. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock On November 17, 2017, the Company entered into a CSPA with Aspire Capital that allows the Company to sell up to $10.0 million worth of common stock to Aspire Capital over a 24 month period. Upon execution of the agreement, Aspire Capital purchased from the Company 1,867,692 shares of common stock at a per share price of $0.5354 for a total purchase price of $1.0 million . The Company also issued to Aspire Capital 840,461 commitment shares. The Company incurred approximately $0.1 million in related issuance costs. Beyond the initial purchase, the Company, at its discretion, has the right to direct Aspire Capital to purchase additional shares up to a daily maximum of 200,000 shares. As of December 31, 2017, the Company sold an additional 400,000 shares to Aspire Capital for $0.2 million , resulting in a total of 3,108,153 shares issued to Aspire Capital. Equity Incentive Plans The Company has two stock plans that permit it to grant stock options, restricted stock awards and restricted stock units to employees (“Employee Plan”) and to directors (“Director Plan”). Stock options granted to employees generally vest 25% on the first anniversary of the grant date with the remainder vesting ratably over the remaining 36 months ; stock options generally expire 10 years after the date of grant. Restricted stock awards give the recipient the right to receive shares upon the lapse of the instruments’ time and/or performance-based restrictions. The restricted stock awards with time-based restrictions are considered outstanding at the time of grant, as the holders are entitled to dividends and voting rights. Employees may surrender a portion of their award shares to satisfy minimum statutory tax withholding obligations with respect to the vesting of restricted stock awards. Restricted stock awards with only performance-based restrictions are not considered outstanding until the performance criteria have been met and therefore are not entitled to dividends or voting rights at the time of grant. The performance-based restricted stock awards vest upon the achievement of pre-defined financial performance goals. During 2015, the Company granted a total of 1,200,000 shares of performance-based restricted stock awards, which vest on different dates, based on targeted trailing four quarters revenue of Open Mobile. In 2016, 600,000 shares of those performance-based restricted stock awards were canceled. In 2017, 600,000 shares of those performance-based restricted stock awards were canceled. As of December 31, 2017, there were no outstanding awards solely based on performance. During 2014, the Company granted a total of 420,000 shares of performance-based restricted stock awards that vest based on targeted quarterly revenue of Open Mobile which carry a service-condition to vest in full if performance has not been met at December 31, 2017; however, vesting will be accelerated upon the achievement of performance goals. None of the performance goals were met as of December 31, 2017 and 287,500 shares were canceled due to terminations while the remaining 132,500 shares were earned in full as of December 31, 2017. The following table summarizes the stock option and restricted stock activity under the Plans for the indicated periods: Shares Available for Future Grant Number of Options Outstanding Weighted Average Exercise Price per Share Weighted Average Grant Date Fair Value per Share Number of Restricted Stock Awards and Units Outstanding Weighted Average Grant Date Fair Value per Share Balance at December 31, 2014 25,526,755 6,820,892 $ 1.64 2,661,425 $ 1.65 Authorized 3,246,685 Granted (1) (5,373,000 ) 4,033,000 $ 0.97 $ 0.45 1,340,000 $ 0.92 Options Exercised (131,780 ) $ 0.88 Restricted Stock Vested (43,334 ) $ 1.25 Terminated/canceled/forfeited 4,083,092 (1,604,167 ) $ 1.99 (2,478,925 ) $ 1.66 Balance at December 31, 2015 27,483,532 9,117,945 $ 1.29 1,479,166 $ 0.98 Authorized 3,229,224 Granted (4,197,000 ) 4,137,000 $ 1.24 $ 0.62 60,000 $ 1.21 Options Exercised (2,650,009 ) $ 1.13 Restricted Stock Vested (93,335 ) $ 1.08 Terminated/canceled/forfeited 2,554,651 (1,924,651 ) $ 1.91 (630,000 ) $ 0.92 Reduce Evergreen Shares (2) (15,000,000 ) Balance at December 31, 2016 14,070,407 8,680,285 $ 1.18 815,831 $ 1.03 Authorized Granted (1,696,000 ) 1,646,000 $ 1.22 $ 0.63 50,000 $ 1.40 Options Exercised (175,926 ) $ 1.03 Restricted Stock Vested (66,666 ) $ 1.20 Terminated/cancelled/forfeited 1,675,877 (1,075,877 ) $ 1.43 (600,000 ) 0.90 Balance at December 31, 2017 14,050,284 9,074,482 $ 1.16 199,165 $ 1.04 (1) Restricted stock granted during 2015 included 140,000 awards with time-based vesting criteria which have been included as shares outstanding on the consolidated statement of stockholders’ equity. The remaining 1,200,000 shares of restricted stock with performance-based vesting criteria are not considered outstanding until the performance criterion has been met and as such, are excluded from shares outstanding . (2) On July 5, 2016, the Board of Directors of Company resolved to reduce the share reserve under the iPass Inc. 2003 Equity Incentive Plan ("Plan") by 15,000,000 shares, and eliminate the "evergreen" provision in the Plan. The aggregate intrinsic value of options exercised was approximately $0.1 million for the years ended December 31, 2017. The aggregate intrinsic value of options exercised were $0.8 million , and $0.1 million for the years ended December 31, 2016, and 2015, respectively. The following table summarizes the stock options outstanding and exercisable by range of exercise prices as of December 31, 2017: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted-Average $0.62— $0.94 3,135,880 7.47 $ 0.88 1,875,703 $ 0.90 0.95 — 1.18 3,053,290 7.62 1.14 1,643,158 1.12 1.19— 2.48 2,885,312 8.13 1.50 1,099,598 1.64 Total 9,074,482 7.73 1.16 4,618,459 1.15 Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Options outstanding at December 31, 2017 9,074,482 $ 1.16 7.73 $ — Options vested and expected to vest at December 31, 2017 8,521,198 $ 1.16 7.73 $ — Options exercisable at December 31, 2017 4,618,459 $ 1.15 7.02 $ — Stock-Based Compensation The following table sets forth the total stock-based compensation expense from operations included in the Company’s Consolidated Statements of Operations and Comprehensive Loss: Year Ended December 31, 2017 2016 2015 (In thousands) Network operations $ 53 $ 33 $ (186 ) Research and development 183 131 (92 ) Sales and marketing 212 153 (80 ) General and administrative 906 787 (220 ) Total $ 1,354 $ 1,104 $ (578 ) The following table sets forth the total stock-based compensation expense by award-type: Year Ended December 31, 2017 2016 2015 (In thousands) Stock options $ 1,169 $ 906 $ 484 Restricted stock 122 136 (1,138 ) Employee stock purchase plan 63 62 76 Total $ 1,354 $ 1,104 $ (578 ) As of December 31, 2017, there was $2.1 million of total unrecognized stock-based compensation expense related to stock options, net of expected forfeitures that will be recognized over the weighted average period of 2.4 years. As of December 31, 2017, there was less than $0.1 million of total unrecognized compensation cost related to the unvested restricted stock awards granted, net of expected forfeitures which is expected to be recognized over the remaining weighted average vesting period of 0.2 years. Valuation Assumptions The weighted average estimated fair value of stock options granted during the years ended December 31, 2017, 2016, and 2015 were calculated under the Black-Scholes option-pricing model, using the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Risk-free rate 1.97 % 1.45 % 1.35 % Expected dividend yield — % — % — % Expected volatility 56 % 55 % 53 % Expected term 5.7 years 5.8 years 4.6 years Expected volatility is based on the historical volatility of the Company’s common stock. The expected term of stock options granted is based on the historical average expected term. The risk-free rate for periods within the expected term of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. During the year ended December 31, 2017, 2016 and 2015, the Company did not pay any cash dividends on its common stock and does not expect to pay cash dividends in the future. Employee Stock Purchase Plan Under the Company’s Employee Stock Purchase Plan (“ESPP”), the Company can grant stock purchase rights to all eligible employees during a one-year offering period with purchase dates at the end of each six-month purchase period (each April and October). As of December 31, 2017, the Company reserved 7.5 million shares of common stock for issuance under the ESPP plan and approximately 4.4 million shares remain available for future issuance. The ESPP plan permits employees to purchase common stock through payroll deductions of up to 15% on an employee’s compensation, including commissions, overtime, bonuses and other incentive compensation. The purchase price per share is equal to the lower of 85% of the fair market value per share at the beginning of the offering period, or 85% of the fair market value per share on the semi-annual purchase date. No participant may purchase more than 2,500 shares per offering or $25,000 worth of common stock in any one calendar year. During the years ended December 31, 2017, 2016 and 2015, 139,592 , 51,341 , and 79,009 shares were purchased at average per share prices of $0.83 , $0.72 , and $0.91 , respectively. Compensation cost related to the Company’s employee stock purchase plan is calculated using the fair value of the employees’ purchase rights granted. The estimated fair value of employee purchase rights granted during the years ended December 31, 2017, 2016, and 2015 was calculated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Risk-free rate 1.38 % 0.58 % 0.32 % Expected dividend yield — % — % — % Expected volatility 92 % 44 % 62 % Expected term 0.5 to 1 year 0.5 to 1 year 0.5 to 1 year Stock Repurchase Program On November 3, 2015, the Board authorized a share repurchase program of up to $3.0 million of the Company’s Common Stock beginning in the fourth quarter of 2015. Under the repurchase program, the Company was authorized to repurchase shares through open market purchases, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Securities and Exchange Act of 1934. The repurchase program ran through December 31, 2016. The number of shares repurchased and the timing of purchases were based on general business and market conditions, and other factors, including legal requirements. During 2015, no shares had been repurchased under this program. During 2016, the Company repurchased 339,228 shares for $ 345,296 under the repurchase program, for an average price of $1.02 per share. As of December 31, 2016 the repurchase program terminated. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Leases and Purchase Commitments The Company leases facilities under operating leases that expire at various dates through October 2020. Certain leases are cancellable prior to lease expiration dates. The terms of certain operating leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the respective lease periods and has accrued for rent expense incurred but not paid. Future minimum lease payments under these operating leases, as of December 31, 2017, are as follows: Operating Leases (In thousands) Year ending December 31: 2018 $ 1,346 2019 1,190 2020 926 $ 3,462 Rent expense for operating leases, excluding leases accounted for under the Company’s restructuring plan for the years ended December 31, 2017, 2016, and 2015 was $1.7 million , $1.7 million , and $1.9 million , respectively. The Company has contracts with certain network service providers which have minimum purchase commitments that expire on various dates through 2019. Future minimum purchase commitments under all agreements are as follows: Year ending December 31: Minimum Purchase Commitments (In thousands) 2018 $ 11,542 2019 636 $ 12,178 Sales Tax Liabilities The Company’s sales and use tax filings are subject to customary audits by authorities in the jurisdictions where it conducts business in the United States, which may result in assessments of additional taxes. During fiscal year 2009, the Company determined that additional sales taxes were probable of being assessed for multiple states as a result of the preliminary findings specific to a sales and use tax audit that had been initiated in the same year. As a result, in the third quarter of 2009, the Company estimated an incremental sales tax liability of approximately $5.0 million , including interest and penalties of approximately $1.5 million . During subsequent years, this liability was reduced through sales tax payments, settlements with certain state tax authorities and revised estimates of the sales tax liability to $0.9 million in 2017 and $1.0 million in 2016, which is included in other long-term liabilities. Unclaimed Property Compliance The Company has received notices from several states stating that they have appointed an agent to conduct an examination of the books and records of the Company to determine whether it has complied with state unclaimed property laws. In addition to seeking the turnover of unclaimed property subject to escheat laws, the states may seek interest, penalties, costs of examinations, and other relief. If the potential loss from any payment claim is considered probable and the amount or the range of the loss can be estimated, the Company accrues a liability for the estimated loss. To date, the Company is not able to estimate the possible payment, if any, due to the early state of this matter. Legal Proceedings The Company is involved in legal proceedings and claims arising in the ordinary course of business. While there can be no assurances as to the ultimate outcome of any litigation involving the Company, management does not believe any such pending legal proceeding or claim will result in a judgment or settlement that would have a material adverse effect on the Company’s financial position, results of operations or cash flows. In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third-parties. Certain indemnification agreements may not be subject to maximum loss clauses. If the potential loss from any indemnification claim is considered probable and the amount or the range of the loss can be estimated, the Company accrues a liability for the estimated loss. To date, claims under such indemnification provisions have not been significant. |
Employee 401(k) Plan (Notes)
Employee 401(k) Plan (Notes) | 12 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee 401(k) Plan | Employee 401(k) Plan The Company sponsors a 401(k) plan covering all employees. Matching contributions to the plan are at the discretion of the Company. During the years ended December 31, 2017, 2016 and 2015, there have been no employer contributions under this plan. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Note 13. Net Loss Per Common Share Basic net income (loss) per share is computed by dividing net income (loss) available to shareholders by the weighted average number of shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) available to shareholders by the weighted average number of diluted shares outstanding. Unvested participating securities that vest based on service are included in the weighted daily average number of shares outstanding used in the calculation of basic net income per share and excluded in the calculation of basic net loss per share. When an entity has a loss from operations, including potential shares in the denominator of diluted per share computations will generally be anti-dilutive, even if the entity has net income after adjusting for discontinued operations. That is, including potential shares in the denominator of the earnings per share calculation for a loss-making entity will generally decrease the loss per share and, therefore those shares should be excluded from calculations of diluted earnings per share. Accordingly, for all periods presented, basic weighted-average shares outstanding were used in calculating the diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31, 2017 2016 2015 (In thousands, except per share amounts) Net loss $ (20,555 ) $ (7,770 ) $ (15,493 ) Weighted average shares outstanding - basic and diluted 66,060,470 64,344,937 62,940,299 Net loss per share $ (0.31 ) $ (0.12 ) $ (0.25 ) The following items have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive: Year Ended December 31, 2017 2016 2015 Options to purchase common stock 8,928,340 5,340,915 5,628,172 Restricted stock awards, including participating securities 199,165 265,832 1,907,500 Total 9,127,505 5,606,747 7,535,672 The weighted-average exercise price of options to purchase common stock excluded from the computation was $1.20 , $1.35 , and $1.50 , for the years ended December 31, 2017, 2016, and 2015, respectively. |
Segment and Geographical Inform
Segment and Geographical Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographical Information | Note 14. Segment and Geographic Information The Company has one reportable operating segment, Mobile Connectivity Services. The Company's Mobile Connectivity Services offer a standard cloud-based solution allowing the Company's customers and their users access to the Company's global Wi-Fi network. The following table summarizes total Company revenue from operations by country or by geographical region: For the Year Ended December 31, 2017 2016 2015 United States 47 % 41 % 35 % Europe, Middle East and Africa 45 % 49 % 48 % Asia Pacific 5 % 9 % 15 % Rest of the world 3 % 1 % 2 % No individual country, except for the United States and Germany, accounted for 10% or more of total revenues for the years ended December 31, 2017 and 2016. No individual country, except for the United States, Germany, and the United Kingdom, accounted for 10% or more of total revenues for the year ended December 31, 2015. Revenues in Germany accounted for 16% , 14% , and 15% of total revenues in 2017, 2016, and 2015, respectively. Revenues in the United Kingdom accounted for 10% of total revenues in 2015. One customer accounted for 11% of total revenue as of December 31, 2017 and 10% of total revenues for the years ended December 31, 2016 and 2015, respectively. |
Stock Repurchase Program
Stock Repurchase Program | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stock Repurchase Program | Stockholders’ Equity Common Stock On November 17, 2017, the Company entered into a CSPA with Aspire Capital that allows the Company to sell up to $10.0 million worth of common stock to Aspire Capital over a 24 month period. Upon execution of the agreement, Aspire Capital purchased from the Company 1,867,692 shares of common stock at a per share price of $0.5354 for a total purchase price of $1.0 million . The Company also issued to Aspire Capital 840,461 commitment shares. The Company incurred approximately $0.1 million in related issuance costs. Beyond the initial purchase, the Company, at its discretion, has the right to direct Aspire Capital to purchase additional shares up to a daily maximum of 200,000 shares. As of December 31, 2017, the Company sold an additional 400,000 shares to Aspire Capital for $0.2 million , resulting in a total of 3,108,153 shares issued to Aspire Capital. Equity Incentive Plans The Company has two stock plans that permit it to grant stock options, restricted stock awards and restricted stock units to employees (“Employee Plan”) and to directors (“Director Plan”). Stock options granted to employees generally vest 25% on the first anniversary of the grant date with the remainder vesting ratably over the remaining 36 months ; stock options generally expire 10 years after the date of grant. Restricted stock awards give the recipient the right to receive shares upon the lapse of the instruments’ time and/or performance-based restrictions. The restricted stock awards with time-based restrictions are considered outstanding at the time of grant, as the holders are entitled to dividends and voting rights. Employees may surrender a portion of their award shares to satisfy minimum statutory tax withholding obligations with respect to the vesting of restricted stock awards. Restricted stock awards with only performance-based restrictions are not considered outstanding until the performance criteria have been met and therefore are not entitled to dividends or voting rights at the time of grant. The performance-based restricted stock awards vest upon the achievement of pre-defined financial performance goals. During 2015, the Company granted a total of 1,200,000 shares of performance-based restricted stock awards, which vest on different dates, based on targeted trailing four quarters revenue of Open Mobile. In 2016, 600,000 shares of those performance-based restricted stock awards were canceled. In 2017, 600,000 shares of those performance-based restricted stock awards were canceled. As of December 31, 2017, there were no outstanding awards solely based on performance. During 2014, the Company granted a total of 420,000 shares of performance-based restricted stock awards that vest based on targeted quarterly revenue of Open Mobile which carry a service-condition to vest in full if performance has not been met at December 31, 2017; however, vesting will be accelerated upon the achievement of performance goals. None of the performance goals were met as of December 31, 2017 and 287,500 shares were canceled due to terminations while the remaining 132,500 shares were earned in full as of December 31, 2017. The following table summarizes the stock option and restricted stock activity under the Plans for the indicated periods: Shares Available for Future Grant Number of Options Outstanding Weighted Average Exercise Price per Share Weighted Average Grant Date Fair Value per Share Number of Restricted Stock Awards and Units Outstanding Weighted Average Grant Date Fair Value per Share Balance at December 31, 2014 25,526,755 6,820,892 $ 1.64 2,661,425 $ 1.65 Authorized 3,246,685 Granted (1) (5,373,000 ) 4,033,000 $ 0.97 $ 0.45 1,340,000 $ 0.92 Options Exercised (131,780 ) $ 0.88 Restricted Stock Vested (43,334 ) $ 1.25 Terminated/canceled/forfeited 4,083,092 (1,604,167 ) $ 1.99 (2,478,925 ) $ 1.66 Balance at December 31, 2015 27,483,532 9,117,945 $ 1.29 1,479,166 $ 0.98 Authorized 3,229,224 Granted (4,197,000 ) 4,137,000 $ 1.24 $ 0.62 60,000 $ 1.21 Options Exercised (2,650,009 ) $ 1.13 Restricted Stock Vested (93,335 ) $ 1.08 Terminated/canceled/forfeited 2,554,651 (1,924,651 ) $ 1.91 (630,000 ) $ 0.92 Reduce Evergreen Shares (2) (15,000,000 ) Balance at December 31, 2016 14,070,407 8,680,285 $ 1.18 815,831 $ 1.03 Authorized Granted (1,696,000 ) 1,646,000 $ 1.22 $ 0.63 50,000 $ 1.40 Options Exercised (175,926 ) $ 1.03 Restricted Stock Vested (66,666 ) $ 1.20 Terminated/cancelled/forfeited 1,675,877 (1,075,877 ) $ 1.43 (600,000 ) 0.90 Balance at December 31, 2017 14,050,284 9,074,482 $ 1.16 199,165 $ 1.04 (1) Restricted stock granted during 2015 included 140,000 awards with time-based vesting criteria which have been included as shares outstanding on the consolidated statement of stockholders’ equity. The remaining 1,200,000 shares of restricted stock with performance-based vesting criteria are not considered outstanding until the performance criterion has been met and as such, are excluded from shares outstanding . (2) On July 5, 2016, the Board of Directors of Company resolved to reduce the share reserve under the iPass Inc. 2003 Equity Incentive Plan ("Plan") by 15,000,000 shares, and eliminate the "evergreen" provision in the Plan. The aggregate intrinsic value of options exercised was approximately $0.1 million for the years ended December 31, 2017. The aggregate intrinsic value of options exercised were $0.8 million , and $0.1 million for the years ended December 31, 2016, and 2015, respectively. The following table summarizes the stock options outstanding and exercisable by range of exercise prices as of December 31, 2017: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted-Average $0.62— $0.94 3,135,880 7.47 $ 0.88 1,875,703 $ 0.90 0.95 — 1.18 3,053,290 7.62 1.14 1,643,158 1.12 1.19— 2.48 2,885,312 8.13 1.50 1,099,598 1.64 Total 9,074,482 7.73 1.16 4,618,459 1.15 Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Options outstanding at December 31, 2017 9,074,482 $ 1.16 7.73 $ — Options vested and expected to vest at December 31, 2017 8,521,198 $ 1.16 7.73 $ — Options exercisable at December 31, 2017 4,618,459 $ 1.15 7.02 $ — Stock-Based Compensation The following table sets forth the total stock-based compensation expense from operations included in the Company’s Consolidated Statements of Operations and Comprehensive Loss: Year Ended December 31, 2017 2016 2015 (In thousands) Network operations $ 53 $ 33 $ (186 ) Research and development 183 131 (92 ) Sales and marketing 212 153 (80 ) General and administrative 906 787 (220 ) Total $ 1,354 $ 1,104 $ (578 ) The following table sets forth the total stock-based compensation expense by award-type: Year Ended December 31, 2017 2016 2015 (In thousands) Stock options $ 1,169 $ 906 $ 484 Restricted stock 122 136 (1,138 ) Employee stock purchase plan 63 62 76 Total $ 1,354 $ 1,104 $ (578 ) As of December 31, 2017, there was $2.1 million of total unrecognized stock-based compensation expense related to stock options, net of expected forfeitures that will be recognized over the weighted average period of 2.4 years. As of December 31, 2017, there was less than $0.1 million of total unrecognized compensation cost related to the unvested restricted stock awards granted, net of expected forfeitures which is expected to be recognized over the remaining weighted average vesting period of 0.2 years. Valuation Assumptions The weighted average estimated fair value of stock options granted during the years ended December 31, 2017, 2016, and 2015 were calculated under the Black-Scholes option-pricing model, using the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Risk-free rate 1.97 % 1.45 % 1.35 % Expected dividend yield — % — % — % Expected volatility 56 % 55 % 53 % Expected term 5.7 years 5.8 years 4.6 years Expected volatility is based on the historical volatility of the Company’s common stock. The expected term of stock options granted is based on the historical average expected term. The risk-free rate for periods within the expected term of the stock option is based on the U.S. Treasury yield curve in effect at the time of grant. During the year ended December 31, 2017, 2016 and 2015, the Company did not pay any cash dividends on its common stock and does not expect to pay cash dividends in the future. Employee Stock Purchase Plan Under the Company’s Employee Stock Purchase Plan (“ESPP”), the Company can grant stock purchase rights to all eligible employees during a one-year offering period with purchase dates at the end of each six-month purchase period (each April and October). As of December 31, 2017, the Company reserved 7.5 million shares of common stock for issuance under the ESPP plan and approximately 4.4 million shares remain available for future issuance. The ESPP plan permits employees to purchase common stock through payroll deductions of up to 15% on an employee’s compensation, including commissions, overtime, bonuses and other incentive compensation. The purchase price per share is equal to the lower of 85% of the fair market value per share at the beginning of the offering period, or 85% of the fair market value per share on the semi-annual purchase date. No participant may purchase more than 2,500 shares per offering or $25,000 worth of common stock in any one calendar year. During the years ended December 31, 2017, 2016 and 2015, 139,592 , 51,341 , and 79,009 shares were purchased at average per share prices of $0.83 , $0.72 , and $0.91 , respectively. Compensation cost related to the Company’s employee stock purchase plan is calculated using the fair value of the employees’ purchase rights granted. The estimated fair value of employee purchase rights granted during the years ended December 31, 2017, 2016, and 2015 was calculated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Risk-free rate 1.38 % 0.58 % 0.32 % Expected dividend yield — % — % — % Expected volatility 92 % 44 % 62 % Expected term 0.5 to 1 year 0.5 to 1 year 0.5 to 1 year Stock Repurchase Program On November 3, 2015, the Board authorized a share repurchase program of up to $3.0 million of the Company’s Common Stock beginning in the fourth quarter of 2015. Under the repurchase program, the Company was authorized to repurchase shares through open market purchases, in accordance with applicable federal securities laws, including through trading plans under Rule 10b5-1 of the Securities and Exchange Act of 1934. The repurchase program ran through December 31, 2016. The number of shares repurchased and the timing of purchases were based on general business and market conditions, and other factors, including legal requirements. During 2015, no shares had been repurchased under this program. During 2016, the Company repurchased 339,228 shares for $ 345,296 under the repurchase program, for an average price of $1.02 per share. As of December 31, 2016 the repurchase program terminated. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events From January 1, 2018 to the date of the filing of this Form 10-K, the Company sold to Aspire Capital a total of 1,200,000 shares of common stock for a total of $0.5 million for an average per share purchase price of $0.45 . |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
VALUATION AND QUALIFYING ACCOUNTS RECEIVABLE | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS RECEIVABLE Classification Balance at Additions Deductions Balance at (In thousands) Allowance for doubtful accounts: Year ended December 31 2017 $ 142 $ 210 $ 201 $ 151 2016 241 11 110 142 2015 172 83 14 241 |
Significant Accounting Polici25
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company's consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated financial statements include the accounts of iPass Inc. (the “Company”) and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated. The Company reports comprehensive loss in a single continuous financial statement within the Consolidated Statements of Operations and Comprehensive Loss. The Company’s comprehensive loss is equivalent to its net loss because the Company does not have any transactions that are recorded through other comprehensive loss. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. In July 2015, the FASB deferred the effective data for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. The Company will adopt the new guidance as of January 1, 2018. The plan is to adopt using the modified retrospective approach. Currently, the Company's primary source of revenue is derived from a series of monthly usage-based fees that are recognized when the customer's usage occurs and therefore recognition is not significantly different under the new guidance. The Company expects the primary impact of this guidance to be the initial capitalization of incremental commission paid to employees for signing of new customers, which will be amortized over the time period in which the benefit will be received. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . ASU 2016-02 impacts any entity that enters a lease with some specified scope exceptions. The guidance updates and supersedes Topic 840, Leases . For public entities, ASU 2016-02 is effective for fiscal years, and interim periods with those years, beginning after December 15, 2018, and early adoption is permitted. The Company is evaluating the effect that ASU 2014-09 will have on the Company's consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . This ASU affects entities that issue share-based payment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions which include the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and forfeiture rate calculations. The Company adopted ASU 2016-09 during the year ended December 31, 2017. Under ASU 2016-09, excess tax benefits and deficiencies are required to be recognized prospectively as part of provision for income taxes rather than additional paid-in capital. The Company's cumulative effect of windfall tax attributes are approximately $11.5 million . After applying the valuation allowance, no adjustment is recorded to the beginning retained earnings balance. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This update addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows with the objective of reducing existing diversity in practice with respect to these items. Among the types of cash flows addressed are payments for costs related to debt prepayments or extinguishment, payments representing accreted interest on discounted debt, payments of contingent consideration after a business combination, proceeds from insurance claims and company-owned life insurance, and distributions from equity method investees, among others. The update is to be adopted retrospectively and is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The Company does not expect a material impact of adopting this guidance on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Intra-Equity Transfers of Assets Other Than Inventory (Topic 740) , which is intended to eliminate diversity in practice and provide a more accurate depiction of the tax consequences on intercompany asset transfers (excluding inventory). This update requires entities to immediately recognize the tax consequences on intercompany asset transfers (excluding inventory) at the transaction date, rather than deferring the tax consequences under current GAAP. The update will be effective for the Company’s first quarter of fiscal year 2019 and requires a modified retrospective method of adoption. Early adoption is permitted, but only in the first quarter of an entity’s annual fiscal year. The Company is currently evaluating the effect that this guidance will have on its consolidated financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . The update requires entities to include in their cash and cash-equivalent balances in the statement of cash flows those amounts that are deemed to be restricted cash and restricted cash equivalents. The standard will be effective for us beginning January 1, 2018 and will require a retrospective approach. Early adoption is permitted. The Company does not expect that the update will have a material impact on its consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to revenue, the valuation of accounts receivables, other long-lived assets, stock-based compensation, legal contingencies, deferred revenue, network access costs, income taxes, and sales tax liabilities. These estimates and assumptions are based on management’s best estimates and judgment. Actual results could differ from the estimates made by management with respect to these and other items. |
Foreign Currency Accounting | Foreign Currency Accounting The U.S. dollar is the functional currency for the Company and all of its subsidiaries; therefore, the Company does not have a translation adjustment recorded through accumulated other comprehensive loss. While the Company’s revenue contracts are denominated in U.S. dollars, the Company has foreign operations that incur expenses in various foreign currencies and does purchase some network access costs in currencies other than the U.S. dollar. Monetary assets and liabilities are remeasured using the current exchange rate at the balance sheet date. Non-monetary assets and liabilities and capital accounts are remeasured using historical exchange rates. Foreign currency exchange gains and losses are presented separately in the Consolidated Statements of Operations and Comprehensive Loss. |
Cash Equivalents | Cash Equivalents The Company considers all highly-liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. Substantially all of the Company’s cash and cash equivalents are held by two financial institutions. The Company is exposed to risk in the event of default by these financial institutions or the issuers of these securities to the extent the balances are in excess of amounts that are insured by the FDIC. The Company’s receivables are derived from revenue earned from customers located primarily in the United States and EMEA. The Company provides credit to its customers in the normal course of business and requires no collateral to secure accounts receivable. The Company maintains an allowance for potentially uncollectible accounts receivable based on its assessment of the collectability of accounts receivable. The allowance for doubtful accounts is based on customer-specific identification, which encompasses various factors, including: the Company’s review of credit profiles of its customers, age of the accounts receivable balances, contractual terms and conditions, current economic conditions that may affect a customer’s ability to pay and historical payment experience. As of December 31, 2017, accounts receivables from customers in the EMEA region and in the United States represented 66% and 28% of total accounts receivable, respectively. 65% of our accounts receivables balance were due within the Company’s standard credit term of 30 days and 98% were aged less than 90 days past due. As of December 31, 2017 and 2016, two customers each represents approximately 10% of total receivables. For the year ended December 31, 2017, two suppliers represented 37% and 10% of total network access costs, respectively. For the year ended December 31, 2016, one suppliers represented 29% of total network access costs. For the year ended December 31, 2015, two suppliers represented 26% and 11% of total network access costs, respectively. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net are stated at cost, less accumulated depreciation or amortization. Depreciation of property and equipment and amortization of leasehold improvements are computed using the straight-line method over the estimated useful lives of the respective assets as follows: • Equipment: 3 to 5 years • Furniture and fixtures: 5 years • Computer software: 3 to 5 years • Leasehold improvements: the shorter of the useful life of the leasehold improvements or the term of the underlying lease Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to the Consolidated Statements of Operations and Comprehensive Loss. Expenditures for maintenance and repairs are charged to expense as incurred. Construction in progress is related to the construction or development of property and equipment that has not yet been placed in service. Depreciation for equipment and computer software begins once it is placed in service and depreciation for leasehold improvements commences once they are ready for intended use. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, along with net operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company records net deferred tax assets to the extent management believe these assets would more likely than not be realized. In making such determination, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In the event management was to determine that the Company would be able to realize the deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The Tax Reform Legislation provides for a one-time “deemed repatriation” of accumulated foreign earnings of $5.6 million , offset by the participation exemption of $3.1 million , for the year ended December 31, 2017. The Company does not expect to pay U.S. federal cash taxes on the deemed repatriation due to its current year taxable loss position. The Company does not expect that the future foreign earnings will be subject to U.S. federal income tax since the Company intends to continue reinvesting such earnings outside the U.S. indefinitely. The amount of cash and cash equivalents held by the Company’s foreign subsidiaries as of December 31, 2017 and 2016 was $0.3 million and $0.4 million , respectively. The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company classifies the liability for unrecognized tax benefits as current to the extent that the Company anticipates payment (or receipt) of cash within one year. Actual results could differ materially from these estimates and could significantly affect the effective tax rate and cash flows in future years. The Company recognizes estimated interest and penalties relating to income tax uncertainties as a component of the provision for income taxes. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is estimated at the grant date based on the award’s fair value and is recognized as expense over the award’s requisite service period. Awards that vest based on service criteria are expensed on a straight-line basis. Awards having accelerated vesting based on achieving certain performance criteria are expensed on graded vesting basis over the vesting period, after assessing the probability of achieving the requisite performance criteria. The Company’s stock-based payment awards to employees and directors include stock options, restricted stock units and awards, and employee purchase rights granted in connection with the Employee Stock Purchase Plan. Certain restricted stock awards have performance-based goals based on the achievement of various targeted quarterly metrics, any of which require an assessment of the probability and timing of vesting. The Company estimates the fair value of stock options and employee purchase rights on the date of grant using the Black-Scholes option-pricing model that requires the use of assumptions such as expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates and expected dividends. The expected stock price volatility is based on historical volatility and the expected term is based on the historical average expected term. Because stock-based compensation expense is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The expected forfeiture rate is based upon the historical experience of employee turnover and certain other factors. To the extent the actual forfeiture rate is different from the expected rate, stock-based compensation expense is adjusted accordingly. |
Revenue Recognition | Revenue Recognition Revenue is recognized when all four revenue recognition criteria have been met: persuasive evidence of an arrangement exists, service has been provided to the customer, the fee is fixed or determinable, and collection is reasonably assured. When the above criteria are not met, revenue is deferred and recognized upon cash collection, upon acceptance of a completion certificate from the customer or when the service is rendered, depending on the type of fee or service arrangement. We report revenue net of sales taxes collected from customers and remitted to governmental taxing authorities. Network Fees The Company recognizes network fees during the period the services are rendered to the end-users based on usage or a flat fee. The Company has two types of flat fee arrangements for its network services. The first is a recurring flat fee that is billed at the same dollar amount each month. The second is a recurring fee calculated based on a flat fee per user per month, of which the dollar amount billed would differ month-to-month depending on the number of users using the Company’s services during a given month. The Company frequently requires customers to commit to minimum network fees associated with monthly, quarterly or annual minimum network usage or over the term of the arrangement. For example, customers that have agreed to a Minimum Monthly Commitment ("MMC"), the customer’s monthly invoice reflects the greater of the customer’s actual usage for the month or the MMC for that month. If the MMC exceeds actual usage (a “Shortfall”), the Company determines whether the Shortfall is fixed or determinable. If the Company concludes that the Shortfall is fixed or determinable, based upon the customer's specific billing history, and other revenue recognition criteria have been met, the Company recognizes as revenue the amount of Shortfall which is invoiced. If the Company concludes that the Shortfall is not fixed or determinable, the Company recognizes revenue when the Shortfall amount is collected. The Company also bills certain network fees upfront and recognizes such fees ratably over the term as services are provided. Platform Services and Other Fees Platform services are any services that allow a user to connect to a network using the iPass application. Fees for this service are typically based upon a monthly rate, and revenue is recognized during the month the services are provided. Revenue related to iPassConnect (“iPC”) fees, including extended support fees as the iPC product reached end-of-life in 2012, and Open Mobile Platform fees are typically based upon a monthly rate (per user rate or a flat fee) and are recognized during the month the services are provided. Start-up support service fees representing charges to new customers, customization services and standard training may be billed up-front in advance and recognized as revenue over the term of the contract or service delivery. Sales of big data analytics, branded as Veri-Fi, is recognized when all four revenue criteria have been met. For evidence of delivery, the Company concludes this criteria is satisfied when the data has been transferred because customers are able to fully benefit upon receipt. In instances when partial data ordered by a customer has been delivered before period end, the Company recognizes in proportional to the number of days of data provided to the customer. Deferred Revenue The Company defers revenue for services that are billed in advance or prepaid as required per customer agreements. Revenue is recognized as the services are being delivered, or ratably over the estimated service period, depending on the nature of the service. Amounts expected to be recognized as revenue within one year are classified as short-term. For services that have been billed but not yet performed and the related receivable has not been collected, for balance sheet presentation purposes, the Company offsets the deferred revenue with the related accounts receivable, despite the receivable representing an enforceable obligation. |
Network Access Costs | Network Access Costs Network access costs represent the amounts paid to network access providers for the usage of their networks. The Company has minimum purchase commitments with some network service providers for access that it expects to utilize during the term of the contracts. Costs of minimum purchase contracts are recognized as network access costs at the greater of the minimum commitment or actual usage. |
Advertising Expenses | Advertising Expenses Advertising costs are expensed as incurred. |
Internal Use Software Development Costs | Internal Use Software Development Costs The Company follows the guidance set forth in ASC 350-40, Internal Use Software , (“ASC 350-40”), in accounting for the development of its application service and other internal use applications. ASC 350-40 requires companies to capitalize qualifying computer software costs, which are incurred during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. The Company did not capitalize any internally developed software in 2017. The Company capitalized $0.3 million and $0.1 million in 2016 and 2015, respectively. Depreciation and amortization expenses related to the Company's internally developed software was approximately $0.8 million , and $0.8 million and $0.9 million in 2017, 2016 and 2015, respectively. Management evaluates the useful lives of the Company’s assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments to long lived assets during the years ended December 31, 2017, 2016, and 2015. |
Financial Instruments and Fai26
Financial Instruments and Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair values of assets (excluding cash) and financial liabilities | The recurring fair values of these financial assets (excluding cash) were determined using the following inputs at December 31, 2017 and December 31, 2016 , respectively: As of December 31, 2017 As of December 31, 2016 Fair Value Measured Using Total Balance Fair Value Measured Using Total Balance Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 (In thousands) Financial assets Money market funds (1) $ 4,175 $ — $ — $ 4,175 $ 14,083 $ — $ — $ 14,083 Total financial assets $ 4,175 $ — $ — $ 4,175 $ 14,083 $ — $ — $ 14,083 (1) Held in cash and cash equivalents on the Company’s consolidated balance sheets. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Components of property and equipment, net | Property and equipment, net consisted of the following: As of 2017 2016 (In thousands) Equipment $ 10,698 $ 10,492 Furniture and fixtures 246 378 Computer software 10,723 10,431 Construction in progress 36 303 Leasehold improvements 483 536 22,186 22,140 Less: Accumulated depreciation and amortization (20,852 ) (19,655 ) Property and equipment, net $ 1,334 $ 2,485 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Components of other assets | Other assets (non-current) consisted of the following: As of 2017 2016 (In thousands) Deposits $ 503 $ 480 Long-term deferred tax asset, net 209 208 Long-term tax receivable 128 — $ 840 $ 688 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: As of 2017 2016 (In thousands) Tax liabilities $ 886 $ 927 Accrued bonus, commissions and other employee benefits 522 808 Accrued property and equipment — 373 Amounts due to customers 962 869 Legal fee accruals 492 34 Other accrued liabilities 872 863 $ 3,734 $ 3,874 |
Accrued Restructuring (Tables)
Accrued Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of accrued restructuring | The following is a rollforward of restructuring liability for the above Plans: Year Ended December 31, 2017 2016 2015 (In thousands) Beginning balance $ — $ 250 $ 160 Restructuring charges and related adjustments — 788 4,232 Payments and adjustments (1,038 ) (4,142 ) Ending balance $ — $ — $ 250 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | Year Ended December 31, 2017 2016 2015 (In thousands) U.S source loss $ (21,336 ) $ (8,167 ) $ (16,251 ) Foreign source income 975 620 1,065 Loss before income taxes $ (20,361 ) $ (7,547 ) $ (15,186 ) |
Provision for (benefit from) income taxes | The provision for income taxes consisted of the following: Year Ended December 31, 2017 2016 2015 (In thousands) Current: U.S. federal $ (238 ) $ — $ — State 7 9 (7 ) Foreign 426 200 207 $ 195 $ 209 $ 200 Deferred: U.S. federal — — — State — — — Foreign (1 ) 14 107 (1 ) 14 107 Provision for income taxes $ 194 $ 223 $ 307 |
Components of deferred tax assets (liabilities) | Year Ended December 31, 2017 2016 (In thousands) Deferred tax assets: Net operating loss carry forwards $ 25,309 $ 30,243 Reserves and accruals 1,392 1,507 Research and other tax credits 7,099 6,255 Share based compensation 1,687 2,456 Property and equipment 1,336 2,493 Total deferred tax assets $ 36,823 $ 42,954 Valuation allowance (36,177 ) (41,788 ) Net deferred tax assets 646 1,166 Deferred tax liabilities: Property and equipment (437 ) (958 ) Total net deferred tax assets $ 209 $ 208 |
Provision for (benefit from) income taxes differed from the amounts computed by applying the U.S. federal income tax rate to pretax loss before income taxes | The provision for income taxes for operations differed from the amounts computed by applying the U.S. federal income tax rate to pretax loss before income taxes as a result of the following: Year Ended December 31, 2017 2016 2015 Federal statutory rate (35 )% (35 )% (35 )% State taxes, net of federal benefit (1 ) (1 ) (1 ) Amortization of stock-based compensation 1 6 1 Research and development benefit (2 ) (2 ) (3 ) Deemed repatriated foreign earnings 1 1 6 Tax Cuts and Jobs Act of 2017 4 — — Other — 1 — Rate differential impact on Tax Cuts and Jobs Act 74 — — Valuation allowance (41 ) 33 34 Provision for income taxes 1 % 3 % 2 % |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits (in thousands): Balance at January 1, 2015 $ 6,674 Increases for positions taken in prior years 483 Increases for positions related to the current year 320 FX impact (11 ) Decreases for statutes lapsing (20 ) Settlements with taxing authorities — Balance at December 31, 2015 7,446 Increases for positions taken in prior years — Increases for positions related to the current year 149 Decreases for positions taken in prior years (1,359 ) Decreases for statutes lapsing (21 ) FX impact (7 ) Balance at December 31, 2016 6,208 Increases for positions taken in prior years — Increases for positions related to the current year 170 Decreases for positions taken in prior years (608 ) Decreases for statutes lapsing (23 ) FX impact 18 Balance at December 31, 2017 $ 5,765 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Summary of the stock option and restricted stock activity | The following table summarizes the stock option and restricted stock activity under the Plans for the indicated periods: Shares Available for Future Grant Number of Options Outstanding Weighted Average Exercise Price per Share Weighted Average Grant Date Fair Value per Share Number of Restricted Stock Awards and Units Outstanding Weighted Average Grant Date Fair Value per Share Balance at December 31, 2014 25,526,755 6,820,892 $ 1.64 2,661,425 $ 1.65 Authorized 3,246,685 Granted (1) (5,373,000 ) 4,033,000 $ 0.97 $ 0.45 1,340,000 $ 0.92 Options Exercised (131,780 ) $ 0.88 Restricted Stock Vested (43,334 ) $ 1.25 Terminated/canceled/forfeited 4,083,092 (1,604,167 ) $ 1.99 (2,478,925 ) $ 1.66 Balance at December 31, 2015 27,483,532 9,117,945 $ 1.29 1,479,166 $ 0.98 Authorized 3,229,224 Granted (4,197,000 ) 4,137,000 $ 1.24 $ 0.62 60,000 $ 1.21 Options Exercised (2,650,009 ) $ 1.13 Restricted Stock Vested (93,335 ) $ 1.08 Terminated/canceled/forfeited 2,554,651 (1,924,651 ) $ 1.91 (630,000 ) $ 0.92 Reduce Evergreen Shares (2) (15,000,000 ) Balance at December 31, 2016 14,070,407 8,680,285 $ 1.18 815,831 $ 1.03 Authorized Granted (1,696,000 ) 1,646,000 $ 1.22 $ 0.63 50,000 $ 1.40 Options Exercised (175,926 ) $ 1.03 Restricted Stock Vested (66,666 ) $ 1.20 Terminated/cancelled/forfeited 1,675,877 (1,075,877 ) $ 1.43 (600,000 ) 0.90 Balance at December 31, 2017 14,050,284 9,074,482 $ 1.16 199,165 $ 1.04 (1) Restricted stock granted during 2015 included 140,000 awards with time-based vesting criteria which have been included as shares outstanding on the consolidated statement of stockholders’ equity. The remaining 1,200,000 shares of restricted stock with performance-based vesting criteria are not considered outstanding until the performance criterion has been met and as such, are excluded from shares outstanding . |
Summary of stock options outstanding and exercisable by range of exercise prices | The following table summarizes the stock options outstanding and exercisable by range of exercise prices as of December 31, 2017: Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted-Average $0.62— $0.94 3,135,880 7.47 $ 0.88 1,875,703 $ 0.90 0.95 — 1.18 3,053,290 7.62 1.14 1,643,158 1.12 1.19— 2.48 2,885,312 8.13 1.50 1,099,598 1.64 Total 9,074,482 7.73 1.16 4,618,459 1.15 Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Options outstanding at December 31, 2017 9,074,482 $ 1.16 7.73 $ — Options vested and expected to vest at December 31, 2017 8,521,198 $ 1.16 7.73 $ — Options exercisable at December 31, 2017 4,618,459 $ 1.15 7.02 $ — |
Summary of company's stock option activity | The following table sets forth the total stock-based compensation expense from operations included in the Company’s Consolidated Statements of Operations and Comprehensive Loss: Year Ended December 31, 2017 2016 2015 (In thousands) Network operations $ 53 $ 33 $ (186 ) Research and development 183 131 (92 ) Sales and marketing 212 153 (80 ) General and administrative 906 787 (220 ) Total $ 1,354 $ 1,104 $ (578 ) |
Stock-based compensation expense in consolidated statements of operations | The following table sets forth the total stock-based compensation expense by award-type: Year Ended December 31, 2017 2016 2015 (In thousands) Stock options $ 1,169 $ 906 $ 484 Restricted stock 122 136 (1,138 ) Employee stock purchase plan 63 62 76 Total $ 1,354 $ 1,104 $ (578 ) |
Stock-based compensation expense by award-type | The weighted average estimated fair value of stock options granted during the years ended December 31, 2017, 2016, and 2015 were calculated under the Black-Scholes option-pricing model, using the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Risk-free rate 1.97 % 1.45 % 1.35 % Expected dividend yield — % — % — % Expected volatility 56 % 55 % 53 % Expected term 5.7 years 5.8 years 4.6 years |
Weighted-average assumptions used in calculating fair value | Compensation cost related to the Company’s employee stock purchase plan is calculated using the fair value of the employees’ purchase rights granted. The estimated fair value of employee purchase rights granted during the years ended December 31, 2017, 2016, and 2015 was calculated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Year Ended December 31, 2017 2016 2015 Risk-free rate 1.38 % 0.58 % 0.32 % Expected dividend yield — % — % — % Expected volatility 92 % 44 % 62 % Expected term 0.5 to 1 year 0.5 to 1 year 0.5 to 1 year |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Future minimum lease payments under these operating leases, as of December 31, 2017, are as follows: Operating Leases (In thousands) Year ending December 31: 2018 $ 1,346 2019 1,190 2020 926 $ 3,462 |
Schedule of future minimum purchase commitments | The Company has contracts with certain network service providers which have minimum purchase commitments that expire on various dates through 2019. Future minimum purchase commitments under all agreements are as follows: Year ending December 31: Minimum Purchase Commitments (In thousands) 2018 $ 11,542 2019 636 $ 12,178 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31, 2017 2016 2015 (In thousands, except per share amounts) Net loss $ (20,555 ) $ (7,770 ) $ (15,493 ) Weighted average shares outstanding - basic and diluted 66,060,470 64,344,937 62,940,299 Net loss per share $ (0.31 ) $ (0.12 ) $ (0.25 ) |
Schedule of anti-dilutive shares excluded from computation of diluted net loss per share | The following items have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive: Year Ended December 31, 2017 2016 2015 Options to purchase common stock 8,928,340 5,340,915 5,628,172 Restricted stock awards, including participating securities 199,165 265,832 1,907,500 Total 9,127,505 5,606,747 7,535,672 |
Segment and Geographical Info35
Segment and Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summary of revenue by geographical region | he following table summarizes total Company revenue from operations by country or by geographical region: For the Year Ended December 31, 2017 2016 2015 United States 47 % 41 % 35 % Europe, Middle East and Africa 45 % 49 % 48 % Asia Pacific 5 % 9 % 15 % Rest of the world 3 % 1 % 2 % |
Basis of Presentation (Details
Basis of Presentation (Details Textual) - USD ($) $ in Thousands | Nov. 17, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Cash and cash equivalents | $ 5,159 | $ 16,072 | $ 20,294 | $ 33,814 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Shares sold (in shares) | 3,108,153 | ||||
Cumulative effect of the windfall tax attributes | $ 11,500 | ||||
CSPA | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Authorized transaction amount | $ 10,000 | ||||
Transaction term | 24 months | ||||
Shares sold (in shares) | 1,867,692 | ||||
Proceeds from transaction | $ 1,000 | ||||
Commitment Shares | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares sold (in shares) | 840,461 | ||||
Additional Shares | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares sold (in shares) | 400,000 | ||||
Shares authorized on daily basis (in shares) | 200,000 | ||||
Additional shares authorized on daily basis (in shares) | 2,000,000 | ||||
Maximum percentage of total outstanding shares | 19.99% | ||||
Proceeds from transaction | $ 200 |
Significant Accounting Polici37
Significant Accounting Policies (Details Textual) | 12 Months Ended | |||
Dec. 31, 2017USD ($)SupplierArrangementCustomerFinancial_Institution | Dec. 31, 2016USD ($)SupplierCustomer | Dec. 31, 2015USD ($)Supplier | Dec. 31, 2014USD ($) | |
Significant Accounting Policies (Textual) [Abstract] | ||||
Maturity period of highly liquid investment | 3 months | |||
Number of financial institutions | Financial_Institution | 2 | |||
Percentage of accounts receivable aged within company under condition one | 65.00% | |||
Standard credit terms for accounts receivable under condition one | 30 days | |||
Percentage of accounts receivable aged within company under condition two | 98.00% | |||
Standard credit terms for accounts receivable under condition two | 90 days | |||
Number of customer represent 10% or more of accounts receivable | Customer | 2 | 2 | ||
Number of supplier accounted for a specific percentage of total network access costs | Supplier | 2 | |||
Entity wide revenue major customer percentage | 10.00% | |||
Tax Cuts and Jobs Act of 2017 - One-time repatriation expense | $ 5,600,000 | |||
Tax Cuts and Jobs Act of 2017 - Change in tax rate provisional benefit | 3,100,000 | |||
Cash And Cash equivalents held by companies foreign subsidiary | $ 5,159,000 | $ 16,072,000 | $ 20,294,000 | $ 33,814,000 |
Types of flat fee arrangements for network services | Arrangement | 2 | |||
Advertising expenses | $ 18,000 | 45,000 | 46,000 | |
Amortization expense | 800,000 | 800,000 | 900,000 | |
Impairment to internal use of software | 0 | 0 | 0 | |
Foreign Subsidiaries | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Cash And Cash equivalents held by companies foreign subsidiary | $ 300,000 | 400,000 | ||
Minimum | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Percentage of tax benefit likely of being realized upon settlement | 50.00% | |||
Equipment | Minimum | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Estimated useful lives of the Assets | 3 years | |||
Equipment | Maximum | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Estimated useful lives of the Assets | 5 years | |||
Furniture and fixtures | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Estimated useful lives of the Assets | 5 years | |||
Computer software | Minimum | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Estimated useful lives of the Assets | 3 years | |||
Computer software | Maximum | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Estimated useful lives of the Assets | 5 years | |||
ERP System | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Software Development Costs | $ 300,000 | $ 100,000 | ||
Supplier Concentration Risk | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Number of Individual supplier represented more than 10% of total network access costs | Supplier | 1 | 2 | ||
Supplier One | Supplier Concentration Risk | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Entity wide revenue major customer percentage | 37.00% | 29.00% | 26.00% | |
Supplier Two | Supplier Concentration Risk | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Entity wide revenue major customer percentage | 10.00% | 11.00% | ||
EMEA | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Percentage of accounts receivable from European customers | 66.00% | |||
United States | ||||
Significant Accounting Policies (Textual) [Abstract] | ||||
Percentage of accounts receivable from European customers | 28.00% |
Financial Instruments and Fai38
Financial Instruments and Fair Value (Details Table) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | $ 4,175 | $ 14,083 | |
Fair Value Measured Using Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | 4,175 | 14,083 | |
Fair Value Measured Using Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | 0 | 0 | |
Fair Value Measured Using Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | 0 | 0 | |
Money Market Funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | [1] | 4,175 | 14,083 |
Money Market Funds | Fair Value Measured Using Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | [1] | 4,175 | 14,083 |
Money Market Funds | Fair Value Measured Using Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | [1] | 0 | 0 |
Money Market Funds | Fair Value Measured Using Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets | [1] | $ 0 | $ 0 |
[1] | Held in cash and cash equivalents on the Company’s consolidated balance sheets. |
Financial Instruments and Fai39
Financial Instruments and Fair Value (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Financial Instruments and Fair Value (Textual) [Abstract] | ||
Transfers between Levels 1, 2, and 3 | $ 0 | $ 0 |
Property and Equipment - Compon
Property and Equipment - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Components of property and equipment, net | ||
Equipment | $ 10,698 | $ 10,492 |
Furniture and fixtures | 246 | 378 |
Computer software | 10,723 | 10,431 |
Construction in progress | 36 | 303 |
Leasehold improvements | 483 | 536 |
Property plant and equipment, gross | 22,186 | 22,140 |
Less: Accumulated depreciation and amortization | (20,852) | (19,655) |
Property and equipment, net | $ 1,334 | $ 2,485 |
Property and Equipment (Details
Property and Equipment (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Oct. 31, 2016 | Apr. 30, 2014 | Oct. 31, 2013 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||||||||
Depreciation expense | $ 1,600 | $ 2,500 | $ 2,900 | |||||
Property and equipment, wrote-off | 400 | 100 | $ 2,200 | |||||
Capitalized Computer Software, Gross | $ 10,723 | 10,723 | 10,431 | |||||
Construction in Progress, Gross | 36 | 36 | $ 303 | |||||
Vendor Financed Property and Equipment Repayment Period | 1 year | 2 years | 3 years | 1 year | ||||
Computer Equipment | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Vendor financing of property and equipment | $ 500 | $ 500 | $ 3,100 | $ 500 | $ 2,600 | |||
Capitalized Computer Software, Gross | $ 100 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Components of other assets | ||
Deposits | $ 503 | $ 480 |
Long-term deferred tax assets, net | 209 | 208 |
Long-term tax receivable | 128 | 0 |
Other Assets | $ 840 | $ 688 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2009 |
Schedule of accrued liabilities | |||
Tax liabilities | $ 886 | $ 927 | $ 5,000 |
Accrued bonus, commissions and other employee benefits | 522 | 808 | |
Accrued property and equipment | 0 | 373 | |
Amounts due to customers | 962 | 869 | |
Legal fee accruals | 492 | 34 | |
Other accrued liabilities | 872 | 863 | |
Accrued liabilities | $ 3,734 | $ 3,874 |
Accrued Restructuring - Schedul
Accrued Restructuring - Schedule of Accrued Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of accrued restructuring | |||
Beginning balance | $ 0 | $ 250 | $ 160 |
Restructuring charges and related adjustments | 0 | 788 | 4,232 |
Payments | (1,038) | (4,142) | |
Ending Balance | $ 0 | $ 0 | $ 250 |
Accrued Restructuring (Details
Accrued Restructuring (Details Textual) | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016Employee | Sep. 30, 2015USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)Employees | Dec. 31, 2009Employees | |
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring Reserve | $ 0 | $ 0 | $ 250,000 | $ 160,000 | |||
Restructuring Charges | $ 0 | $ 788,000 | $ 4,232,000 | ||||
Two Thousand Nine Plan [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring plan, number of positions | Employees | 146 | ||||||
Restructuring Reserve | $ 100,000 | ||||||
Two Thousand Fourteen Q3 Restructuring Plan [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring plan, number of positions | Employees | 20 | ||||||
Restructuring Charges | $ 700,000 | $ 100,000 | |||||
Two Thousand Fifteen Q2 Restructuring Plan [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and Related Cost, Reduction in Workforce, Percent | 14.00% | ||||||
Accrued restructuring liabilities- current | $ 200,000 | ||||||
Two Thousand Sixteen Q1 Restructuring Plan [Member] | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring plan, number of positions | Employee | 57 | ||||||
Restructuring and Related Cost, Reduction in Workforce, Percent | 30.00% |
Vendor Financed Property and 46
Vendor Financed Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2016 | Apr. 30, 2014 | Oct. 31, 2013 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||||||||
Vendor Financed Property and Equipment Repayment Period | 1 year | 2 years | 3 years | 1 year | ||||
Computer Equipment | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Vendor financing of property and equipment | $ 0.5 | $ 0.5 | $ 3.1 | $ 0.5 | $ 2.6 | |||
Repayments of Long-term Loans from Vendors | $ 0.5 | $ 3.1 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S source loss | $ (21,336) | $ (8,167) | $ (16,251) |
Foreign source income | 975 | 620 | 1,065 |
Loss from operations before income taxes | $ (20,361) | $ (7,547) | $ (15,186) |
Income Taxes - Income Tax Prov
Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
U.S. federal | $ (238) | $ 0 | |
State | 7 | 9 | |
Foreign | 426 | 200 | |
Total | 195 | 209 | |
Deferred: | |||
U.S. federal | 0 | 0 | |
State | 0 | 0 | |
Foreign | (1) | 14 | |
Total | (1) | 14 | |
Provision for (benefit from) income taxes | 194 | 223 | $ 307 |
Scenario, Previously Reported | |||
Current: | |||
U.S. federal | 0 | ||
State | (7) | ||
Foreign | 207 | ||
Total | 200 | ||
Deferred: | |||
U.S. federal | 0 | ||
State | 0 | ||
Foreign | 107 | ||
Total | 107 | ||
Provision for (benefit from) income taxes | $ 194 | $ 223 | $ 307 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 25,309 | $ 30,243 |
Reserves and accruals | 1,392 | 1,507 |
Research and other tax credits | 7,099 | 6,255 |
Share based compensation | 1,687 | 2,456 |
Property and equipment | 1,336 | 2,493 |
Total deferred tax assets | 36,823 | 42,954 |
Valuation allowance | (36,177) | (41,788) |
Net deferred tax assets | 646 | 1,166 |
Deferred tax liabilities: | ||
Property and equipment | (437) | (958) |
Total net deferred tax assets | $ 209 | $ 208 |
Income Taxes - Reconciliation
Income Taxes - Reconciliation to Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Provision for (benefit from) income taxes differed from the amounts computed by applying the U.S. federal income tax rate to pretax loss before income taxes | |||
Federal statutory rate | (35.00%) | (35.00%) | (35.00%) |
State taxes, net of federal benefit | (1.00%) | (1.00%) | (1.00%) |
Amortization of stock-based compensation | 1.00% | 6.00% | 1.00% |
Research and development benefit | (2.00%) | (2.00%) | (3.00%) |
Deemed repatriated foreign earnings | 1.00% | 1.00% | 6.00% |
Tax Cuts and Jobs Act of 2017 | 4.00% | 0.00% | 0.00% |
Other | 0.00% | 1.00% | 0.00% |
Rate differential impact on Tax Cuts and Jobs Act | 74.00% | 0.00% | 0.00% |
Valuation Allowance | (41.00%) | 33.00% | 34.00% |
Provision for (benefit from) income taxes | 1.00% | 3.00% | 2.00% |
Income Taxes - Summary of Chan
Income Taxes - Summary of Changes to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending amounts of unrecognized tax benefits | |||
Unrecognized Tax Benefits, Beginning Balance | $ 6,208 | $ 7,446 | $ 6,674 |
FX impact | (18) | (7) | (11) |
Increases for positions taken in prior years | 0 | 0 | 483 |
Increases for positions related to the current year | 170 | 149 | 320 |
Decreases for positions taken in prior years | (608) | (1,359) | |
Decreases for statutes lapsing | (23) | (21) | (20) |
Settlements with taxing authorities | 0 | ||
Unrecognized Tax Benefits, Ending Balance | $ 5,765 | $ 6,208 | $ 7,446 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Change In Tax Rate Deferred Tax Liability Provisional Income Tax Benefit | $ 15,000 | ||
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings Provisional Income Tax Expense | 2,500 | ||
Tax Cuts and Jobs Act of 2017 - One-time repatriation expense | 5,600 | ||
Tax Cuts and Jobs Act of 2017 - Change in tax rate provisional benefit | 3,100 | ||
Recognizable tax benefits | 800 | $ 700 | |
Unrecognized tax benefits, decreases resulting from settlements with taxing authorities | $ 0 | ||
Amount accrued in connection with income tax audit | $ 700 | ||
Maximum | |||
Operating Loss Carryforwards [Line Items] | |||
Years remain open to examination | 2,017 | ||
Minimum | |||
Operating Loss Carryforwards [Line Items] | |||
Years remain open to examination | 2,007 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | $ 103,500 | ||
Federal | Research | |||
Operating Loss Carryforwards [Line Items] | |||
Research and development tax credit carry forwards | 3,300 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | 49,400 | ||
State | Research | |||
Operating Loss Carryforwards [Line Items] | |||
Research and development tax credit carry forwards | 4,800 | ||
iPass Unity | |||
Operating Loss Carryforwards [Line Items] | |||
Discontinued Operation, Tax Effect of Recognition of Operating Loss Carryforward from Disposal of Discontinued Operation | 200 | $ 200 | $ 300 |
ISRAEL | State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | $ 8,400 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option and Restricted Stock Activity (Details) - $ / shares | Jul. 05, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Shares available for future grant | |||||||
Shares available for future grant beginning balance | 14,070,407 | 27,483,532 | 25,526,755 | ||||
Shares available for future grant Authorized | 3,229,224 | 3,246,685 | |||||
Shares available for future grant | (1,696,000) | (4,197,000) | (5,373,000) | [1] | |||
Shares available for future grant Terminated/cancelled/forfeited | 1,675,877 | 2,554,651 | 4,083,092 | ||||
Shares available for future grant ending balance | 14,050,284 | 14,070,407 | 27,483,532 | 25,526,755 | |||
Number of options Outstanding | |||||||
Stock Number of Outstanding Options, Beginning Balance | 8,680,285 | 9,117,945 | 6,820,892 | ||||
Number of Options Granted | (1,646,000) | (4,137,000) | (4,033,000) | ||||
Number of options Outstanding exercised | (175,926) | (2,650,009) | (131,780) | ||||
Number of options Outstanding terminated/cancelled/forfeited | (1,075,877) | (1,924,651) | (1,604,167) | ||||
Stock Number of Outstanding Options, Ending Balance | 9,074,482 | 8,680,285 | 9,117,945 | 6,820,892 | |||
Weighted Average Exercise Price Per share, options | |||||||
Weighted Average Exercise Price Per share, Beginning Balance | $ 1.18 | $ 1.29 | $ 1.64 | ||||
Weighted Average Exercise Price Per share, Granted | 1.22 | 1.24 | 0.97 | ||||
Weighted Average Exercise Price Per share, Exercised | (1.03) | (1.13) | (0.88) | ||||
Weighted Average Exercise Price Per share, Terminated/cancelled/forfeited | 1.43 | 1.91 | 1.99 | ||||
Weighted Average Grant Date Fair Value, Options | 0.63 | 0.62 | 0.45 | ||||
Weighted Average Exercise Price Per share, Ending Balance | $ 1.16 | $ 1.18 | $ 1.29 | $ 1.64 | |||
Weighted Average Grant Date Fair Value Per Share, Restricted Stock Awards and Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Other Share Increase (Decrease) | (15,000,000) | (15,000,000) | [2] | ||||
Performance Based Restricted Stock Awards, Revenue Benchmark | |||||||
Number of Restricted Stock Awards and Units Outstanding | |||||||
Number of Restricted Stock Awards and Units Outstanding, Granted | 0 | 1,200,000 | 420,000 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 600,000 | 600,000 | |||||
Number of Restricted Stock Awards and Units Outstanding, Vested | (132,500) | ||||||
Number of Restricted Stock Awards and Units Outstanding, Terminated/cancelled/forfeited | (287,500) | ||||||
Restricted stock | |||||||
Number of Restricted Stock Awards and Units Outstanding | |||||||
Number of Restricted Stock Awards and Units Outstanding, Beginning Balance | 815,831 | 1,479,166 | 2,661,425 | ||||
Number of Restricted Stock Awards and Units Outstanding, Granted | 50,000 | 60,000 | 1,340,000 | ||||
Number of Restricted Stock Awards and Units Outstanding, Vested | (66,666) | (93,335) | (43,334) | [1] | |||
Number of Restricted Stock Awards and Units Outstanding, Terminated/cancelled/forfeited | (600,000) | (630,000) | (2,478,925) | ||||
Number of Restricted Stock Awards and Units Outstanding, Ending Balance | 199,165 | 815,831 | 1,479,166 | 2,661,425 | |||
Weighted Average Grant Date Fair Value Per Share, Restricted Stock Awards and Units | |||||||
Weighted Average Grant Date Fair Value, Beginning Balance | $ 1.03 | $ 0.98 | $ 1.65 | ||||
Weighted Average Grant Date Fair Value, Granted | 1.40 | 1.21 | 0.92 | ||||
Weighted Average Grant Date Fair Value, Vested | 1.20 | 1.08 | 1.25 | ||||
Weighted Average Grant Date Fair Value, Terminated/cancelled/forfeited | 0.90 | 0.92 | 1.66 | ||||
Weighted Average Grant Date Fair Value, Ending Balance | $ 1.04 | $ 1.03 | $ 0.98 | $ 1.65 | |||
Restricted Stock, Time-based Vesting [Member] | |||||||
Number of Restricted Stock Awards and Units Outstanding | |||||||
Number of Restricted Stock Awards and Units Outstanding, Granted | 140,000 | ||||||
Performance Based Restricted Stock Awards, EBITDA Benchmark | |||||||
Number of Restricted Stock Awards and Units Outstanding | |||||||
Number of Restricted Stock Awards and Units Outstanding, Granted | 1,200,000 | ||||||
[1] | Restricted stock granted during 2015 included 140,000 awards with time-based vesting criteria which have been included as shares outstanding on the consolidated statement of stockholders’ equity. The remaining 1,200,000 shares of restricted stock with performance-based vesting criteria are not considered outstanding until the performance criterion has been met and as such, are excluded from shares outstanding. | ||||||
[2] | (2)On July 5, 2016, the Board of Directors of Company resolved to reduce the share reserve under the iPass Inc. 2003 Equity Incentive Plan ("Plan") by 15,000,000 shares, and eliminate the "evergreen" provision in the Plan. |
Stockholders' Equity - Stock O
Stockholders' Equity - Stock Options Outstanding by Exercise Price (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Summary of stock options outstanding and exercisable by range of exercise prices | |
Number Outstanding | shares | 9,074,482 |
Weighted-Average Remaining Contractual Life (in Years) | 7 years 8 months 23 days |
Weighted-Average Exercise Price per Share | $ 1.16 |
Number Exercisable | shares | 4,618,459 |
Weighted-Average Exercise Price per Share | $ 1.15 |
$0.62 - $0.94 | |
Summary of stock options outstanding and exercisable by range of exercise prices | |
Range of Exercise Prices, Lower Limit | 0.62 |
Range of Exercise Prices, Upper Limit | $ 0.94 |
Number Outstanding | shares | 3,135,880 |
Weighted-Average Remaining Contractual Life (in Years) | 7 years 5 months 20 days |
Weighted-Average Exercise Price per Share | $ 0.88 |
Number Exercisable | shares | 1,875,703 |
Weighted-Average Exercise Price per Share | $ 0.90 |
$0.95 - $1.18 | |
Summary of stock options outstanding and exercisable by range of exercise prices | |
Range of Exercise Prices, Lower Limit | 0.95 |
Range of Exercise Prices, Upper Limit | $ 1.18 |
Number Outstanding | shares | 3,053,290 |
Weighted-Average Remaining Contractual Life (in Years) | 7 years 7 months 13 days |
Weighted-Average Exercise Price per Share | $ 1.14 |
Number Exercisable | shares | 1,643,158 |
Weighted-Average Exercise Price per Share | $ 1.12 |
$1.19 - $2.48 | |
Summary of stock options outstanding and exercisable by range of exercise prices | |
Range of Exercise Prices, Lower Limit | 1.19 |
Range of Exercise Prices, Upper Limit | $ 2.48 |
Number Outstanding | shares | 2,885,312 |
Weighted-Average Remaining Contractual Life (in Years) | 8 years 1 month 16 days |
Weighted-Average Exercise Price per Share | $ 1.50 |
Number Exercisable | shares | 1,099,598 |
Weighted-Average Exercise Price per Share | $ 1.64 |
Stockholders' Equity - Stock55
Stockholders' Equity - Stock Options Outstanding, Vested, and Exercisable (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of company's stock option activity | ||||
Options outstanding, Shares | 9,074,482 | 8,680,285 | 9,117,945 | 6,820,892 |
Weighted-average exercise price of options | $ 1.16 | $ 1.18 | $ 1.29 | $ 1.64 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 7 years 8 months 24 days | |||
Aggregate Intrinsic Value, Option Outstanding | $ 0 | |||
Options vested and expected to vest, Shares | 8,521,198 | |||
Weighted Average Exercise Price Per share, options vested and expected to vest | $ 1.16 | |||
Weighted-Average Remaining Contractual Life (in Years), Options vested and expected to vest | 7 years 8 months 24 days | |||
Aggregate Intrinsic Value, Options vested and expected to vest | $ 0 | |||
Options exercisable, Shares | 4,618,459 | |||
Weighted Average Exercise Price Per share, Options exercisable | $ 1.15 | |||
Weighted-Average Remaining Contractual Life (in Years), Options Exercisable | 7 years 9 days | |||
Aggregate Intrinsic Value, Options exercisable | $ 0 |
Stockholders' Equity - Total S
Stockholders' Equity - Total Stock Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense in consolidated statements of operations | |||
Total | $ 1,354 | $ 1,104 | $ (578) |
Network Operations | |||
Stock-based compensation expense in consolidated statements of operations | |||
Total | 53 | 33 | (186) |
Research and development | |||
Stock-based compensation expense in consolidated statements of operations | |||
Total | 183 | 131 | (92) |
Sales and marketing | |||
Stock-based compensation expense in consolidated statements of operations | |||
Total | 212 | 153 | (80) |
General and administrative | |||
Stock-based compensation expense in consolidated statements of operations | |||
Total | $ 906 | $ 787 | $ (220) |
Stockholders' Equity - Stock B
Stockholders' Equity - Stock Based Compensation by Award Type (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-based compensation expense by award-type | |||
Total | $ 1,354 | $ 1,104 | $ (578) |
Employee Stock Purchase Plans | |||
Stock-based compensation expense by award-type | |||
Total | 63 | 62 | 76 |
Stock options | |||
Stock-based compensation expense by award-type | |||
Total | 1,169 | 906 | 484 |
Restricted stock | |||
Stock-based compensation expense by award-type | |||
Total | $ 122 | $ 136 | $ (1,138) |
Stockholders' Equity - Stock58
Stockholders' Equity - Stock Base Compensation Assumptions (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Performance Based Restricted Stock Awards, Revenue Benchmark | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 600,000 | 600,000 | |
Stock options | |||
Weighted-average assumptions used in calculating fair value | |||
Risk-free rate | 1.97% | 1.45% | 1.35% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 56.00% | 55.00% | 53.00% |
Expected term | 5 years 8 months 26 days | 5 years 9 months 18 days | 4 years 7 months 6 days |
Stock options | |||
Weighted-average assumptions used in calculating fair value | |||
Risk-free rate | 1.38% | 0.58% | 0.32% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility | 92.00% | 44.00% | 62.00% |
Stock options | Minimum | |||
Weighted-average assumptions used in calculating fair value | |||
Expected term | 6 months | 6 months | 6 months |
Stock options | Maximum | |||
Weighted-average assumptions used in calculating fair value | |||
Expected term | 1 year | 1 year | 1 year |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) | Nov. 17, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)OptionPlan$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares sold (in shares) | 3,108,153 | |||||
Stock issuance costs | $ | $ 138,000 | |||||
Stockholders' Equity (Textual) [Abstract] | ||||||
Period over which remaining stock options are vested | 36 months | |||||
Weighted average vesting period over which the compensation cost is expected to be recognized | 2 years 4 months 7 days | |||||
Shares of common stock reserved for issuance under the ESPP | 14,050,284 | 14,070,407 | 27,483,532 | 25,526,755 | ||
Stockholders' Equity (Additional Textual) [Abstract] | ||||||
Number of stock plans that permit to grant stock options | OptionPlan | 2 | |||||
Percentage of stock options granted to employees generally vest on first anniversary of grant date | 25.00% | |||||
Share based compensation arrangement by share based payment award expiration period | 10 years | |||||
Share based compensation arrangement by share based payment award restricted stock with time based vesting criteria | 229,832 | |||||
Aggregate intrinsic value of options exercised | $ | $ 100,000 | $ 800,000 | $ 100,000 | |||
Unrecognized stock-based compensation expense related to stock options | $ | $ 2,100,000 | |||||
Percentage of employee's compensation up to which employees permit to purchase common stock through payroll deductions | 15.00% | |||||
Purchase price per share as a percentage of fair market value | 85.00% | |||||
Maximum number of shares that can be purchased by participant per offering | 2,500 | |||||
Share based compensation arrangement by share based payment award maximum amount per employee | $ | $ 25,000 | |||||
Shares purchased | 139,592 | 51,341 | 79,009 | |||
Weighted average per share prices | $ / shares | $ 0.83 | $ 0.72 | $ 0.91 | |||
Employee Stock Purchase Plans | ||||||
Stockholders' Equity (Textual) [Abstract] | ||||||
Shares of common stock reserved for issuance under the ESPP | 7,500,000 | |||||
Shares under common stock available for issuance | 4,400,000 | |||||
Performance Based Restricted Stock Awards, Revenue Benchmark | ||||||
Stockholders' Equity (Textual) [Abstract] | ||||||
Number of Restricted Stock Outstanding, Granted | 0 | 1,200,000 | 420,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 132,500 | |||||
Revenue measurement period | 1 year | |||||
Performance Based Restricted Stock Awards, EBITDA Benchmark | ||||||
Stockholders' Equity (Textual) [Abstract] | ||||||
Number of Restricted Stock Outstanding, Granted | 1,200,000 | |||||
Restricted Stock, Time-based Vesting [Member] | ||||||
Stockholders' Equity (Textual) [Abstract] | ||||||
Number of Restricted Stock Outstanding, Granted | 140,000 | |||||
Restricted stock | ||||||
Stockholders' Equity (Textual) [Abstract] | ||||||
Number of Restricted Stock Outstanding, Granted | 50,000 | 60,000 | 1,340,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 66,666 | 93,335 | 43,334 | [1] | ||
Weighted average vesting period over which the compensation cost is expected to be recognized | 1 month 28 days | |||||
Stockholders' Equity (Additional Textual) [Abstract] | ||||||
Unrecognized compensation cost related to the unvested restricted stock awards granted | $ | $ 100,000 | |||||
CSPA | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Authorized transaction amount | $ | $ 10,000,000 | |||||
Transaction term | 24 months | |||||
Shares sold (in shares) | 1,867,692 | |||||
Stock issuance costs | $ | $ 100,000 | |||||
Proceeds from transaction | $ | $ 1,000,000 | |||||
Sale price of stock (in usd per share) | $ / shares | $ 0.5354 | |||||
Commitment Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares sold (in shares) | 840,461 | |||||
Additional Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares sold (in shares) | 400,000 | |||||
Shares authorized on daily basis (in shares) | 200,000 | |||||
Proceeds from transaction | $ | $ 200,000 | |||||
[1] | Restricted stock granted during 2015 included 140,000 awards with time-based vesting criteria which have been included as shares outstanding on the consolidated statement of stockholders’ equity. The remaining 1,200,000 shares of restricted stock with performance-based vesting criteria are not considered outstanding until the performance criterion has been met and as such, are excluded from shares outstanding. |
Commitments and Contingencies
Commitments and Contingencies - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Schedule of future minimum lease payments | |
2,018 | $ 1,346 |
2,019 | 1,190 |
2,020 | 926 |
Total | $ 3,462 |
Commitments and Contingencies61
Commitments and Contingencies - Purchase Commitments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Schedule of future minimum purchase commitments | |
2,018 | $ 11,542 |
2,019 | 636 |
Total | $ 12,178 |
Commitments and Contingencies62
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2009 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Hardware Purchase Obligation | $ 12,178 | |||
Rent expenses for operating leases excluding leases accounted for under the company 's restructuring plan | 1,700 | $ 1,700 | $ 1,900 | |
Incremental sales tax liability | 886 | 927 | $ 5,000 | |
Interest and penalties | $ 1,500 | |||
Sales tax liability | $ 900 | $ 1,000 |
Employee 401(k) Plan (Details)
Employee 401(k) Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee 401(k) Plan (Textual) [Abstract] | |||
Employer contributions under 401(k) plan | $ 0 | $ 0 | $ 0 |
Net Loss Per Common Share - Ba
Net Loss Per Common Share - Basic and Diltuted Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (20,555) | $ (7,770) | $ (15,493) |
Denominator for basic and diluted net loss per common share - weighted average shares outstanding | 66,060,470 | 64,344,937 | 62,940,299 |
Net loss per share | $ (0.31) | $ (0.12) | $ (0.25) |
Net Loss Per Common Share - Av
Net Loss Per Common Share - Average Weighted Shares (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of anti-dilutive shares excluded from computation of diluted net loss per share | |||
Total | 9,127,505 | 5,606,747 | 7,535,672 |
Options to purchase common stock | |||
Schedule of anti-dilutive shares excluded from computation of diluted net loss per share | |||
Total | 8,928,340 | 5,340,915 | 5,628,172 |
Restricted stock awards, considered participating securities [Member] | |||
Schedule of anti-dilutive shares excluded from computation of diluted net loss per share | |||
Total | 199,165 | 265,832 | 1,907,500 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details Textual) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Net Loss Per Common Share (Textual) [Abstract] | ||||
Weighted-average exercise price of options | $ 1.16 | $ 1.18 | $ 1.29 | $ 1.64 |
Options to purchase common stock | ||||
Net Loss Per Common Share (Textual) [Abstract] | ||||
Weighted-average exercise price of options | $ 1.20 | $ 1.35 | $ 1.50 |
Segment and Geographical Info67
Segment and Geographical Information - Summary of Revenue by Geographical Region (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary of revenue by geographical region | |||
Percentage of revenue by geographical region | 10.00% | ||
Revenue | Geographic Concentration Risk | United States | |||
Summary of revenue by geographical region | |||
Percentage of revenue by geographical region | 47.00% | 41.00% | 35.00% |
Revenue | Geographic Concentration Risk | EMEA | |||
Summary of revenue by geographical region | |||
Percentage of revenue by geographical region | 45.00% | 49.00% | 48.00% |
Revenue | Geographic Concentration Risk | Asia Pacific | |||
Summary of revenue by geographical region | |||
Percentage of revenue by geographical region | 5.00% | 9.00% | 15.00% |
Revenue | Geographic Concentration Risk | Rest of the world | |||
Summary of revenue by geographical region | |||
Percentage of revenue by geographical region | 3.00% | 1.00% | 2.00% |
Segment and Geographical Info68
Segment and Geographical Information - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2017CustomerSegment | Dec. 31, 2016Customer | Dec. 31, 2015Customer | |
Segment and Geographical Information (Textual) [Abstract] | |||
Percentage of total revenue by individual customer | 10.00% | ||
Segment and Geographical Information (Additional Textual) [Abstract] | |||
Number of reportable operating Segments | Segment | 1 | ||
Geographic Concentration Risk | Revenue | United States | |||
Segment and Geographical Information (Textual) [Abstract] | |||
Percentage of total revenue by individual customer | 47.00% | 41.00% | 35.00% |
Geographic Concentration Risk | Revenue | GERMANY | |||
Segment and Geographical Information (Textual) [Abstract] | |||
Percentage of total revenue by individual customer | 16.00% | 14.00% | 15.00% |
Geographic Concentration Risk | Revenue | United Kingdom | |||
Segment and Geographical Information (Textual) [Abstract] | |||
Percentage of total revenue by individual customer | 10.00% | ||
Customer Concentration risk | Revenue | |||
Segment and Geographical Information (Textual) [Abstract] | |||
Percentage of total revenue by individual customer | 11.00% | 11.00% | 11.00% |
Segment and Geographical Information (Additional Textual) [Abstract] | |||
Number of individual customer | Customer | 1 | 1 | 1,000 |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Nov. 03, 2015 | |
Share Repurchase Program, November 2015 [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Authorized share repurchase program amount | $ 3,000,000 | |
November 2015 Share Repurchase Program [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares repurchased (in shares) | 339,228 | |
Shares repurchased, value | $ 345,296 | |
Share repurchase price (in usd per share) | $ 1.02 |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 12 Months Ended |
Mar. 08, 2018 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | ||
Shares sold (in shares) | 3,108,153 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Shares sold (in shares) | 1,200,000 | |
Proceeds from transaction | $ 0.5 | |
Sale price of stock (in usd per share) | $ 0.45 |
Schedule II - Valuation and Q71
Schedule II - Valuation and Qualifying Accounts Receivable (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
VALUATION AND QUALIFYING ACCOUNTS RECEIVABLE | |||
Balance at Beginning of Year | $ 142 | $ 241 | $ 172 |
Additions Charged to (recovered from) Costs and Expenses | 210 | 11 | 83 |
Deductions | 201 | 110 | 14 |
Balance at End of Year | $ 151 | $ 142 | $ 241 |