Ipass (IPAS) 10-Q 9 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	Apr. 30, 2018
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Entity Registrant Name	IPASS INC
Entity Central Index Key	1,053,374
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		72,745,276

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 2,766	$ 5,159
Accounts receivable, net of allowance for doubtful accounts of $79 and $151, respectively	6,910	8,717
Prepaid expenses	2,110	1,641
Other current assets	587	712
Total current assets	12,373	16,229
Property and equipment, net	1,128	1,334
Other assets	1,295	840
Total assets	14,796	18,403
Current liabilities:
Accounts payable	9,734	9,044
Accrued liabilities	3,841	3,734
Deferred revenue, short-term	3,022	3,723
Total current liabilities	16,597	16,501
Deferred revenue, long-term	40	102
Other long-term liabilities	362	1,009
Total liabilities	16,999	17,612
Stockholders’ equity (deficit):
Common stock	73	71
Additional paid-in capital	227,333	226,490
Accumulated deficit	(229,609)	(225,770)
Total stockholders’ equity (deficit)	(2,203)	791
Total liabilities and stockholders’ equity (deficit)	$ 14,796	$ 18,403

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 113	$ 142

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Statement of Comprehensive Income [Abstract]
Revenue	$ 11,427	$ 14,286
Cost of revenue and operating expenses:
Network access costs	6,844	9,559
Network operations	1,384	1,692
Research and development	1,953	1,974
Sales and marketing	2,469	2,454
General and administrative	2,589	2,772
Total cost of revenue and operating expenses	15,239	18,451
Operating loss	(3,812)	(4,165)
Interest income, net	7	14
Foreign exchange loss, net	(143)	(49)
Loss before provision for income taxes	(3,948)	(4,200)
Provision for income taxes	65	115
Net loss	(4,013)	(4,315)
Comprehensive loss	$ (4,013)	$ (4,315)
Net loss per share - basic and diluted
Total net income (loss) per share (USD per share)	$ (0.06)	$ (0.07)
Weighted average shares outstanding - basic and diluted	69,853,058	65,567,707

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (4,013)	$ (4,315)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	344	350
Depreciation and amortization	198	454
Provision for (recovery of) doubtful accounts	(67)	39
Changes in operating assets and liabilities:
Accounts receivable	1,874	1,388
Prepaid expenses and other current assets	(189)	(232)
Other assets	(344)	(21)
Accounts payable	690	(435)
Accrued liabilities	69	(265)
Deferred revenue	(842)	738
Other liabilities	(647)	(89)
Net cash used in operating activities	(2,927)	(2,388)
Cash flows from investing activities:
Purchases of property and equipment	(5)	(222)
Net cash used in investing activities	(5)	(222)
Cash flows from financing activities:
Net proceeds from issuance of common stock	0	10
Proceeds from common stock purchase agreement	539	0
Net cash provided by financing activities	539	10
Net decrease in cash and cash equivalents	(2,393)	(2,600)
Cash and cash equivalents at beginning of period	5,159	16,072
Cash and cash equivalents at end of period	2,766	13,472
Supplemental disclosures of cash flow information:
Net cash paid for taxes	47	46
Accrued amounts for acquisition of property and equipment	0	73
Accrued issuance cost of common stock purchase agreement	$ 38	$ 0

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	Basis of Presentation The condensed consolidated financial statements include the accounts of iPass Inc. and its wholly owned subsidiaries ("iPass" and the “Company”). The condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The interim financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair presentation for the interim periods presented. The condensed consolidated financial statements as of and for the year ended December 31, 2017, were derived from audited financial statements. This interim financial information should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for the three months ended March 31, 2018 , are not necessarily indicative of the operating results for the full fiscal year or any future periods. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results that the Company experiences may differ materially from those estimates. Estimates are used for, but not limited to, the valuation of accounts receivables, other long-lived assets, deferred commissions, recognition of revenue and deferred revenue, network access costs, stock-based compensation, legal contingencies, and income taxes. The Company reports total comprehensive net loss in a single continuous financial statement within its condensed consolidated statements of operations and comprehensive loss. The Company’s comprehensive net loss is equivalent to its total 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 and sales of equity financing for its liquidity needs. As of March 31, 2018, the Company had $2.8 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 month 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 13,341,750 , which represents 19.99% of the Company's total outstanding shares of common stock at the signing of the CSPA. As of March 31, 2018, the Company has issued a total of 4,308,153 shares to Aspire Capital for a gross amount of $1.7 million . The Company cannot sell its common stock under this agreement if the closing price is $0.25 per share or lower. The accompanying condensed 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 condensed 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 condensed 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 December 2017, the SEC issued Staff Accounting Bulletin (“SAB”) 118 to address the application of GAAP in situations in which a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (the “Act”) which was signed into law on December 22, 2017. In March 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2018-05, which amended Accounting Standards Codification ("ASC") 740 to incorporate the requirements of SAB 118. The Company recognized the provisional tax impacts of the Act in the fourth quarter of 2017. During first quarter of 2018, the Company did not receive any additional information regarding these provisional calculations. As a result, the Company continues to anticipate finalizing its analysis in connection with the completion of the Company's tax return for 2017 to be filed in 2018. In February 2016, the FASB issued ASU 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. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("Topic 606"). Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and 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. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605. The Company recorded a net decrease to opening accumulated deficit of $0.2 million as of January 1, 2018, due to the cumulative impact of adopting Topic 606. The impact primarily related to the capitalization of costs to obtain customer contracts of $0.3 million, specifically commissions, offset by $0.1 million from the deferral of revenue from certain arrangements. There was no impact to other items on the condensed consolidated balance sheets. The adoption of Topic 606 had a less than $0.1 million impact on the Company’s condensed consolidated statements of operations and comprehensive loss and to each of the line items therein. The costs associated with obtaining a customer contract were previously expensed in the period they were incurred. Under Topic 606, these payments have been deferred on our condensed consolidated balance sheets as other current assets and other assets and amortized over the expected life of the customer contract. Previously, the revenue from certain arrangements was recognized on a straight-line basis on an estimated period of time it was expected end users would activate the service to begin their twelve month trial period. Under Topic 606, the Company will recognize revenue in proportion to end user activation of the twelve month trial period based on expected or historical experience. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of the Company's revenue is derived from monthly recurring arrangements that provide the Company's customers access to the Company's WiFi network footprint. Other sources of revenue include professional services and Veri-Fi TM big data analytics. The Company applies the following five steps to recognize revenue: 1. Identify the contract with a customer: The terms and conditions of the Company's contracts are considered to identify contracts under Topic 606. The Company identifies a contract with a customer once the contract is approved, details each party's rights regarding the services to be transferred, specifies the payment terms for the services, the Company has determined the customer has the ability and intent to pay, and the contract has commercial substance. Typically, the terms of contracts with customers is twelve months. Payment terms less than 90 days are not considered a significant financing component. 2. Identify the performance obligations in the contract: Performance obligations in contracts are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The most significant performance obligations identified by the Company consist of 1) access to the Company's Wi-Fi network footprint via the iPass SmartConnect TM application (which forms a monthly series of performance obligations together with technical support and unspecified upgrades), 2) professional services and 3) Veri-Fi big data analytics. As the Company's product offerings continue to evolve, the Company could identify further performance obligations based on the terms of the contract. 3. Determine the transaction price: The transaction price is based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. The Company concludes that because fees are consistently priced throughout the contract on a monthly basis, there is no need to allocate potential variable consideration. None of the Company's contracts contain a significant financing component. 4. Allocate the transaction price to performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to that performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price ("SSP"). 5. Recognize revenue when the performance obligation is satisfied: Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised services to a customer. The Company recognizes revenue when the Company transfers control of the services to the customers for an amount that reflects the consideration that the Company expects to receive in exchange for those services. Typically, access to the Company's Wi-Fi network footprint is recognized over time, such as over a month or quarter, and at a point in time for when professional services or Veri-Fi big data analytics obligations are satisfied. Costs to Obtain a Customer Contract The Company capitalizes sales commissions that are incremental to the acquisition of contracts with customers. These costs are recorded as other current assets and other assets on our condensed consolidated balance sheets. The Company determines whether costs should be deferred based on sales compensation plans and agreements when the costs are in fact incremental and would not have occurred absent the customer contract. The deferred commission amounts are deemed recoverable through future revenue streams and positive margins. Deferred commissions are amortized on a straight-line basis over the expected customer contract life and included in sales and marketing expense in the condensed consolidated statements of operations and comprehensive loss. As of March 31, 2018, the estimated customer contract life is deemed to approximate three years. The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred sales commissions. There were no material impairment losses for deferred sales commissions through March 31, 2018.

Financial Instruments and Fair

Financial Instruments and Fair Value	3 Months Ended
	Mar. 31, 2018
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 that are observable, 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 value measurements of these financial assets (excluding cash) were determined using the following inputs at March 31, 2018 , and December 31, 2017 , respectively: As of March 31, 2018 As of December 31, 2017 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) $ 2,035 $ — $ — $ 2,035 $ 4,175 $ — $ — $ 4,175 Total financial assets $ 2,035 $ — $ — $ 2,035 $ 4,175 $ — $ — $ 4,175 (1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets. There were no transfers between Levels 1, 2, and 3 from December 31, 2017 through March 31, 2018 . As of March 31, 2018 and December 31, 2017 , the carrying amounts of accounts receivable, accounts payable, and accrued liabilities approximated fair value due to their short maturities.

Property and Equipment, Net

Property and Equipment, Net	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Property and Equipment, Net	Property and Equipment, net Property and equipment, net, consisted of the following: March 31, December 31, 2017 (In thousands) Equipment $ 10,701 $ 10,698 Furniture and fixtures 246 246 Computer software 10,724 10,723 Construction in progress — 36 Leasehold improvements 483 483 22,154 22,186 Less: Accumulated depreciation and amortization (21,026 ) (20,852 ) Property and equipment, net $ 1,128 $ 1,334 Depreciation expense was approximately $0.2 million and $0.5 million for the three months ended March 31, 2018 and 2017, respectively. During each of the three months ended March 31, 2018 and 2017, the Company retired less than $0.1 million in gross property and equipment.

Other Assets Other Assets (Note

Other Assets Other Assets (Notes)	3 Months Ended
	Mar. 31, 2018
Other Assets [Abstract]
Other Assets	Note 4. Other Assets Other assets (non-current) consisted of the following: March 31, December 31, 2017 (In thousands) Deposits $ 501 $ 503 Deferred financing 370 — Long-term deferred tax asset, net 209 209 Long-term tax receivable 128 128 Deferred commissions, long-term 87 — $ 1,295 $ 840

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities Accrued liabilities consisted of the following: March 31, December 31, 2017 (In thousands) Accrued tax liabilities $ 876 $ 886 Accrued bonus, commissions and other employee benefits 575 522 Amounts due to customers 788 962 Legal fee accruals 281 492 Sales tax liability 289 — Other accrued liabilities 1,032 872 $ 3,841 $ 3,734

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Lease and Purchase Commitments The Company leases facilities under operating leases that expire at various dates through October 2020. Future minimum lease payments under these operating leases as of March 31, 2018, are as follows: Year Operating Leases (In thousands) Remainder of 2018 $ 1,280 2019 1,248 2020 926 $ 3,454 The Company has contracts with certain network service and other infrastructure providers which have minimum purchase commitments that expire on various dates through December 2019 . Future minimum purchase commitments under these agreements as of March 31, 2018, are as follows: Year Minimum Purchase Commitments (In thousands) Remainder of 2018 $ 9,142 2019 1,225 $ 10,367 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. While the Company is not able to estimate the possible payment, if any, it continues to work through this matter with the states and their appointed agents. 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 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.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share Basic net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding plus dilutive potential common shares as determined using the treasury stock method for outstanding stock options, restricted stock-based awards and shares issuable under the employee stock purchase plan, unless the result of adding such shares would be anti-dilutive. The following weighted average potential shares of common stock have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive: Three Months Ended 2018 2017 Options to purchase common stock 9,204,473 4,455,596 Restricted stock awards, including participating securities 199,165 215,831 Total 9,403,638 4,671,427

Segment and Geographical Inform

Segment and Geographical Information	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Segment and Geographical Information	Segment and Geographical 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 presents total Company revenue by country or by geographical region: Three Months Ended March 31, 2018 2017 United States 48 % 43 % Europe, Middle East and Africa 45 % 47 % Asia Pacific 4 % 8 % Rest of the World 3 % 2 % No individual country, except for the United States and Germany accounted for 10% or more of total revenues for the three months ended March 31, 2018 and 2017. Revenues in Germany accounted for 15% of total revenue, for both 2018 and 2017. One customer, a channel reseller, represented 11% of total revenues for the three months ended March 31, 2018 and 2017.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events From March 31, 2018, to the date of the filing of this Form 10-Q, the Company sold to Aspire Capital a total of 2,400,000 shares of common stock for a total of $0.8 million for an average per share purchase price of $0.33 . Management has evaluated events subsequent to March 31, 2018, through the date the filing of this Form 10-Q for other transactions and events that may require adjustment of and/or disclosure in such financial statements and noted no additional significant subsequent events that require disclosure.

Basis of Presentation and Sum15

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("Topic 606"). Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and 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. On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018, are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under ASC Topic 605. The Company recorded a net decrease to opening accumulated deficit of $0.2 million as of January 1, 2018, due to the cumulative impact of adopting Topic 606. The impact primarily related to the capitalization of costs to obtain customer contracts of $0.3 million, specifically commissions, offset by $0.1 million from the deferral of revenue from certain arrangements. There was no impact to other items on the condensed consolidated balance sheets. The adoption of Topic 606 had a less than $0.1 million impact on the Company’s condensed consolidated statements of operations and comprehensive loss and to each of the line items therein. The costs associated with obtaining a customer contract were previously expensed in the period they were incurred. Under Topic 606, these payments have been deferred on our condensed consolidated balance sheets as other current assets and other assets and amortized over the expected life of the customer contract. Previously, the revenue from certain arrangements was recognized on a straight-line basis on an estimated period of time it was expected end users would activate the service to begin their twelve month trial period. Under Topic 606, the Company will recognize revenue in proportion to end user activation of the twelve month trial period based on expected or historical experience. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The majority of the Company's revenue is derived from monthly recurring arrangements that provide the Company's customers access to the Company's WiFi network footprint. Other sources of revenue include professional services and Veri-Fi TM big data analytics. The Company applies the following five steps to recognize revenue: 1. Identify the contract with a customer: The terms and conditions of the Company's contracts are considered to identify contracts under Topic 606. The Company identifies a contract with a customer once the contract is approved, details each party's rights regarding the services to be transferred, specifies the payment terms for the services, the Company has determined the customer has the ability and intent to pay, and the contract has commercial substance. Typically, the terms of contracts with customers is twelve months. Payment terms less than 90 days are not considered a significant financing component. 2. Identify the performance obligations in the contract: Performance obligations in contracts are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. The most significant performance obligations identified by the Company consist of 1) access to the Company's Wi-Fi network footprint via the iPass SmartConnect TM application (which forms a monthly series of performance obligations together with technical support and unspecified upgrades), 2) professional services and 3) Veri-Fi big data analytics. As the Company's product offerings continue to evolve, the Company could identify further performance obligations based on the terms of the contract. 3. Determine the transaction price: The transaction price is based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. The Company concludes that because fees are consistently priced throughout the contract on a monthly basis, there is no need to allocate potential variable consideration. None of the Company's contracts contain a significant financing component. 4. Allocate the transaction price to performance obligations in the contract: If the contract contains a single performance obligation, the entire transaction price is allocated to that performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price ("SSP"). 5. Recognize revenue when the performance obligation is satisfied: Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised services to a customer. The Company recognizes revenue when the Company transfers control of the services to the customers for an amount that reflects the consideration that the Company expects to receive in exchange for those services. Typically, access to the Company's Wi-Fi network footprint is recognized over time, such as over a month or quarter, and at a point in time for when professional services or Veri-Fi big data analytics obligations are satisfied. Costs to Obtain a Customer Contract The Company capitalizes sales commissions that are incremental to the acquisition of contracts with customers. These costs are recorded as other current assets and other assets on our condensed consolidated balance sheets. The Company determines whether costs should be deferred based on sales compensation plans and agreements when the costs are in fact incremental and would not have occurred absent the customer contract. The deferred commission amounts are deemed recoverable through future revenue streams and positive margins. Deferred commissions are amortized on a straight-line basis over the expected customer contract life and included in sales and marketing expense in the condensed consolidated statements of operations and comprehensive loss. As of March 31, 2018, the estimated customer contract life is deemed to approximate three years. The Company periodically reviews these deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit of these deferred sales commissions. There were no material impairment losses for deferred sales commissions through March 31, 2018.

Financial Instruments and Fai16

Financial Instruments and Fair Value (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Fair Value of Financial Assets (Excluding Cash) and Financial Liabilities	The recurring fair value measurements of these financial assets (excluding cash) were determined using the following inputs at March 31, 2018 , and December 31, 2017 , respectively: As of March 31, 2018 As of December 31, 2017 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) $ 2,035 $ — $ — $ 2,035 $ 4,175 $ — $ — $ 4,175 Total financial assets $ 2,035 $ — $ — $ 2,035 $ 4,175 $ — $ — $ 4,175 (1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets.

Property and Equipment, Net (Ta

Property and Equipment, Net (Tables)	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Components of Property and Equipment, Net	Property and equipment, net, consisted of the following: March 31, December 31, 2017 (In thousands) Equipment $ 10,701 $ 10,698 Furniture and fixtures 246 246 Computer software 10,724 10,723 Construction in progress — 36 Leasehold improvements 483 483 22,154 22,186 Less: Accumulated depreciation and amortization (21,026 ) (20,852 ) Property and equipment, net $ 1,128 $ 1,334

Other Assets (Tables)

Other Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Other Assets [Abstract]
Components of other assets	Note 4. Other Assets Other assets (non-current) consisted of the following: March 31, December 31, 2017 (In thousands) Deposits $ 501 $ 503 Deferred financing 370 — Long-term deferred tax asset, net 209 209 Long-term tax receivable 128 128 Deferred commissions, long-term 87 — $ 1,295 $ 840

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consisted of the following: March 31, December 31, 2017 (In thousands) Accrued tax liabilities $ 876 $ 886 Accrued bonus, commissions and other employee benefits 575 522 Amounts due to customers 788 962 Legal fee accruals 281 492 Sales tax liability 289 — Other accrued liabilities 1,032 872 $ 3,841 $ 3,734

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payments	The Company leases facilities under operating leases that expire at various dates through October 2020. Future minimum lease payments under these operating leases as of March 31, 2018, are as follows: Year Operating Leases (In thousands) Remainder of 2018 $ 1,280 2019 1,248 2020 926 $ 3,454
Schedule of Future Minimum Purchase Commitments	Future minimum purchase commitments under these agreements as of March 31, 2018, are as follows: Year Minimum Purchase Commitments (In thousands) Remainder of 2018 $ 9,142 2019 1,225 $ 10,367

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Schedule of Anti-dilutive Shares Excluded from Computation of Diluted Net Loss Per Share	The following weighted average potential shares of common stock have been excluded from the computation of diluted net loss per share because the effect of including these shares would have been anti-dilutive: Three Months Ended 2018 2017 Options to purchase common stock 9,204,473 4,455,596 Restricted stock awards, including participating securities 199,165 215,831 Total 9,403,638 4,671,427

Segment and Geographical Info22

Segment and Geographical Information (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Reporting [Abstract]
Summary of Revenue by Geographical Region	Three Months Ended March 31, 2018 2017 United States 48 % 43 % Europe, Middle East and Africa 45 % 47 % Asia Pacific 4 % 8 % Rest of the World 3 % 2 %

Basis of Presentation and Sum23

Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	Nov. 17, 2017	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents		$ 2,766	$ 5,159	$ 13,472	$ 16,072
Subsidiary, Sale of Stock [Line Items]
Minimum stock price for shares to be sold under agreement (in usd per share)		$ 0.25
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
Commitments [Member]
Subsidiary, Sale of Stock [Line Items]
Shares sold (in shares)	840,461
Commitment Shares
Subsidiary, Sale of Stock [Line Items]
Sale of stock, maximum number of shares to be sold	13,341,750
Additional Shares
Subsidiary, Sale of Stock [Line Items]
Shares sold (in shares)		4,308,153
Proceeds from transaction		$ 1,700
Shares authorized on daily basis (in shares)	200,000
Additional shares authorized on daily basis (in shares)	2,000,000
Percentage of total outstanding shares	19.99%

Financial Instruments and Fai24

Financial Instruments and Fair Value - Fair Value of Financial Assets (Excluding Cash) and Financial Liabilities (Detail) - USD ($) $ in Thousands		Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets		$ 2,035	$ 4,175
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	[1]	2,035	4,175
Fair Value Measurements Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets		2,035	4,175
Fair Value Measurements Recurring | Level 1 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	[1]	2,035	4,175
Fair Value Measurements Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets		0	0
Fair Value Measurements Recurring | Level 2 | Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets	[1]	0	0
Fair Value Measurements Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total financial assets		0	0
Fair Value Measurements Recurring | Level 3 | Money market funds
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 condensed consolidated balance sheets.

Financial Instruments and Fai25

Financial Instruments and Fair Value - Narrative (Detail)	3 Months Ended
	Mar. 31, 2018USD ($)
Fair Value Disclosures [Abstract]
Transfers between Levels 1, 2, and 3	$ 0

Property and Equipment, Net - C

Property and Equipment, Net - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Equipment	$ 10,701	$ 10,698
Furniture and fixtures	246	246
Computer software	10,724	10,723
Construction in progress	0	36
Leasehold improvements	483	483
Property plant and equipment, gross	22,154	22,186
Less: Accumulated depreciation and amortization	(21,026)	(20,852)
Property and equipment, net	$ 1,128	$ 1,334

Property and Equipment, Net - N

Property and Equipment, Net - Narrative (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, wrote-off (less than 0.1 million)	$ 0.1	$ 0.1
Continuing Operations
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 0.2	$ 0.5

Other Assets (Details)

Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Components of other assets
Deposits	$ 501	$ 503
Other Deferred Costs, Net	370
Long-term deferred tax assets, net	209	209
Long-term tax receivable	128	128
Deferred Sales Commission	87	0
Other Assets, Noncurrent	$ 1,295	$ 840

Accrued Liabilities - Schedule

Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued tax liabilities	$ 876	$ 886
Accrued bonus, commissions and other employee benefits	575	522
Amounts due to customers	788	962
Legal fee accruals	281	492
Sales tax liability	289	0
Other accrued liabilities	1,032	872
Accrued liabilities	$ 3,841	$ 3,734

Commitments and Contingencies -

Commitments and Contingencies - Narrative (Detail)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Purchase commitments expiration period	expire on various dates through December 2019

Commitments and Contingencies31

Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Detail) $ in Thousands	Mar. 31, 2018USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2018	$ 1,280
2,019	1,248
2,020	926
Operating leases, future minimum payments	$ 3,454

Commitments and Contingencies32

Commitments and Contingencies - Schedule of Future Minimum Purchase Commitments (Detail) $ in Thousands	Mar. 31, 2018USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2018	$ 9,142
2,019	1,225
Future minimum purchase commitments	$ 10,367

Net Loss Per Share - Schedule o

Net Loss Per Share - Schedule of Anti-Dilutive Shares Excluded from Computation of Diluted Net Loss Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	9,403,638	4,671,427
Options to Purchase Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	9,204,473	4,455,596
Restricted Stock Awards, Including Participating Securities
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	199,165	215,831

Segment and Geographical Info34

Segment and Geographical Information - Narrative (Detail)	3 Months Ended
	Mar. 31, 2018Customer	Mar. 31, 2017Segment
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of reportable segments | Segment		1
United States | Revenue | Geographic Concentration Risk
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage	48.00%	43.00%
Germany | Revenue | Geographic Concentration Risk
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage	15.00%	15.00%
Germany | Revenue | Customer Concentration Risk
Revenues from External Customers and Long-Lived Assets [Line Items]
Concentration risk, percentage	11.00%	11.00%
Customer A | Revenue | Customer Concentration Risk
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of individual customer | Customer	1

Segment and Geographical Info35

Segment and Geographical Information - Summary of Revenue by Geographical Region (Detail) - Revenue - Geographic Concentration Risk	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	48.00%	43.00%
EMEA
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	45.00%	47.00%
Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	4.00%	8.00%
Rest of the World
Revenues from External Customers and Long-Lived Assets [Line Items]
Percentage of revenue by geographical region	3.00%	2.00%

Subsequent Events - Narrative (

Subsequent Events - Narrative (Details) - Subsequent Event $ / shares in Units, $ in Millions	1 Months Ended
	May 08, 2018USD ($)$ / sharesshares
Subsequent Event [Line Items]
Shares sold (in shares) | shares	2,400,000
Proceeds from transaction | $	$ 0.8
Sale price of stock (in usd per share) | $ / shares	$ 0.33