Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
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 | 7,957,988 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 4,912 | $ 5,159 |
Accounts receivable, net of allowance for doubtful accounts of $63 and $151, respectively | 7,944 | 8,717 |
Prepaid expenses | 1,032 | 1,641 |
Other current assets | 417 | 712 |
Total current assets | 14,305 | 16,229 |
Property and equipment, net | 1,009 | 1,334 |
Other assets | 859 | 840 |
Total assets | 16,173 | 18,403 |
Current liabilities: | ||
Accounts payable | 8,145 | 9,044 |
Accrued liabilities | 3,708 | 3,734 |
Deferred revenue, short-term | 3,541 | 3,723 |
Total current liabilities | 15,394 | 16,501 |
Debt, long-term | 7,098 | 0 |
Deferred revenue, long-term | 25 | 102 |
Other long-term liabilities | 1,194 | 1,009 |
Total liabilities | 23,711 | 17,612 |
Stockholders’ equity (deficit): | ||
Common stock | 82 | 71 |
Additional paid-in capital | 232,144 | 226,490 |
Accumulated deficit | (239,764) | (225,770) |
Total stockholders’ equity (deficit) | (7,538) | 791 |
Total liabilities and stockholders’ equity (deficit) | $ 16,173 | $ 18,403 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance for doubtful accounts of $63 and $151, respectively | $ 63 | $ 151 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenue | $ 9,275 | $ 13,399 | $ 31,237 | $ 41,159 |
Cost of revenue and operating expenses: | ||||
Network access costs | 5,720 | 10,312 | 18,903 | 29,469 |
Network operations | 1,294 | 1,629 | 4,057 | 4,835 |
Research and development | 1,825 | 1,948 | 5,745 | 6,059 |
Sales and marketing | 2,760 | 2,520 | 7,668 | 7,588 |
General and administrative | 2,426 | 3,427 | 7,995 | 8,746 |
Total cost of revenue and operating expenses | 14,025 | 19,836 | 44,368 | 56,697 |
Operating loss | (4,750) | (6,437) | (13,131) | (15,538) |
Other income (expense): | ||||
Interest income (expense), net | (572) | 8 | (608) | 36 |
Foreign exchange gain (loss) | (87) | (173) | (80) | (351) |
Change in fair value of derivative | (179) | 0 | (179) | 0 |
Total other income (expense) | (838) | (165) | (867) | (315) |
Loss before provision for income taxes | (5,588) | (6,602) | (13,998) | (15,853) |
Provision for income taxes | 44 | 56 | 170 | 389 |
Net loss | (5,632) | (6,658) | (14,168) | (16,242) |
Comprehensive loss | $ (5,632) | $ (6,658) | $ (14,168) | $ (16,242) |
Total net income (loss) per share (in dollars per share) | $ (0.71) | $ (1.01) | $ (1.90) | $ (2.47) |
Weighted average shares outstanding - basic and diluted (in shares) | 7,927,663 | 6,587,841 | 7,458,098 | 6,568,324 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (14,168) | $ (16,242) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 969 | 1,041 |
Depreciation and amortization | 502 | 1,144 |
Provision for doubtful accounts | 30 | 146 |
Amortization of debt discount | 254 | 0 |
Change in fair value of derivative | 179 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 743 | 2,639 |
Prepaid expenses and other current assets | 1,059 | (160) |
Other assets | 94 | (20) |
Accounts payable | (899) | 3,033 |
Accrued liabilities | (26) | (362) |
Deferred revenue | (338) | 343 |
Other liabilities | (679) | (104) |
Net cash used in operating activities | (12,280) | (8,542) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (192) | (737) |
Net cash used in investing activities | (192) | (737) |
Cash flows from financing activities: | ||
Proceeds from debt financing | 10,000 | 0 |
Issuance cost of debt financing | (1,628) | 0 |
Net proceeds from issuance of common stock | 0 | 264 |
Proceeds from common stock purchase agreement | 3,891 | 0 |
Issuance cost of common stock purchase agreement | (38) | 0 |
Net cash provided by financing activities | 12,225 | 264 |
Net decrease in cash and cash equivalents | (247) | (9,015) |
Cash and cash equivalents at beginning of period | 5,159 | 16,072 |
Cash and cash equivalents at end of period | 4,912 | 7,057 |
Supplemental Cash Flow Disclosure: | ||
Net cash paid for taxes | 130 | 180 |
Net cash paid for interest | 385 | 2 |
Supplemental Non-cash Disclosure: | ||
Fair value of warrants issued in connection with debt financing | 843 | 0 |
Derivative Liability | $ 864 | $ 0 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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., its wholly owned subsidiaries, and the variable interest entity discussed in detail in Note 6 (all together "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 nine months ended September 30, 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, derivative liabilities, warrants, 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. Reverse Stock Split On August 21, 2018, the Company filed a Certificate of Amendment of Amended and Restated Certificate of Incorporation of iPass Inc. (the “Amendment”) to effect a one-for-ten reverse stock split of its outstanding common stock, effective as of August 23, 2018. A series of alternate amendments to effect a reverse stock split were approved by the Company's stockholders at its Annual Meeting of Stockholders held on June 13, 2018, and the specific one-for-ten ratio was subsequently approved by the board of directors on August 16, 2018. All share and per-share data in our unaudited condensed consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect this reverse stock split. Going Concern The Company has historically relied on existing cash and cash equivalents, sales of equity and debt financing for its liquidity needs. As of September 30, 2018, the Company had $4.9 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 allowed 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 186,769 shares of common stock for a total purchase price of $1.0 million . In addition, the Company issued 84,046 commitment shares to Aspire Capital. Beyond the initial purchase, the Company, at its discretion, had the right to direct Aspire Capital to purchase additional shares up to a daily maximum of 20,000 shares. The Company and Aspire Capital could mutually agree to increase the daily maximum in any given business day. However, the total number of shares issued to Aspire Capital could not exceed 1,334,175 , which represented 19.99% of the Company's total outstanding shares of common stock at the signing of the CSPA. On June 8, 2018, the Company issued 199,179 shares to Aspire Capital, bringing the cumulative total issued to 1,334,175 shares for a gross amount of $5.1 million . The Company cannot currently sell any additional shares under the current agreement. In June 2018, the Company executed a credit agreement with Fortress Credit Corp ("Fortress") to borrow $10.0 million with an option to borrow up to an additional $10.0 million , subject to the discretion of Fortress. See Note 6 for further details. 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 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 will have to delay, reduce the scope of or eliminate some or all of its initiatives, or reduce expenses which would harm operating results. 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. Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) . The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance if effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions to its consolidated financial statements 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 within those years, beginning after December 15, 2018, and early adoption is permitted. For leases longer than twelve months, the Company may be required to recognize a right-of-use ("ROU") asset and a lease liability. The Company is still evaluating the effect ASU 2016-02 will have on the Company's consolidated financial statements and related disclosures but believes it will be required to record a lease liability and corresponding ROU asset. 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 Wi-Fi network footprint. Other sources of revenue include professional services, iPass Network Intelligence big data analytics, software license and support. 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, 3) iPass Network Intelligence big data analytics 4) software licenses and 5) support. 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. In certain situations the transaction price is constrained to avoid the risk of a potential material revenue reversal. 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 and the Company providing support services is recognized over time, such as over a month or quarter, and at a point in time for when professional services, iPass Network Intelligence big data analytics, or software license obligations are satisfied. For the nine months ended September 30, 2018 and 2017, the Company recognized $3.2 million and $2.4 million from amounts included in the deferred revenue beginning balance, respectively. 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 September 30, 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 September 30, 2018. |
Financial Instruments and Fair
Financial Instruments and Fair Value | 9 Months Ended |
Sep. 30, 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 fair value measurements of these financial assets (excluding cash) and liabilities and the related hierarchy level for the fair value measurement at September 30, 2018 , and December 31, 2017 are as follows: As of September 30, 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) $ 4,622 $ — $ — $ 4,622 $ 4,175 $ — $ — $ 4,175 Total financial assets $ 4,622 $ — $ — $ 4,622 $ 4,175 $ — $ — $ 4,175 Financial liabilities Derivative liability (2) $ — $ — $ 864 $ 864 $ — $ — $ — $ — Total financial liabilities $ — $ — $ 864 $ 864 $ — $ — $ — $ — (1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets. (2) Recorded in other long-term liabilities on the Company’s condensed consolidated balance sheets. There were no transfers between Levels 1, 2, and 3 from December 31, 2017 through September 30, 2018 . As of September 30, 2018 and December 31, 2017 , the carrying amounts of accounts receivable, accounts payable, and accrued liabilities approximated fair value due to their short maturities. The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Derivative Liability Balance at December 31, 2017 $ — Initial fair value of derivative liability at June 30, 2018 685 Change in fair value at September 30, 2018 179 Balance at September 30, 2018 $ 864 |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, net Property and equipment, net, consisted of the following: September 30, December 31, 2017 (In thousands) Equipment $ 10,884 $ 10,698 Furniture and fixtures 246 246 Computer software 10,727 10,723 Construction in progress — 36 Leasehold improvements 483 483 22,340 22,186 Less: Accumulated depreciation and amortization (21,331 ) (20,852 ) Property and equipment, net $ 1,009 $ 1,334 Depreciation expense was approximately $0.2 million and $0.5 million for the three and nine months ended September 30, 2018, respectively, compared to approximately $0.3 million and $1.1 million for the three and nine months ended September 30, 2017, respectively. During the three months ended September 30, 2018, the Company did not retire any property and equipment. During the nine months ended September 30, 2018, the Company retired less than $0.1 million gross property and equipment. During the three and nine months ended September 30, 2017, the Company retired less than $0.1 million in gross property and equipment. |
Other Assets Other Assets (Note
Other Assets Other Assets (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets (non-current) consisted of the following: September 30, December 31, 2017 (In thousands) Deposits $ 479 $ 503 Long-term deferred tax asset, net 209 209 Long-term tax receivable 128 128 Deferred commissions, long-term 43 — $ 859 $ 840 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities and Other Long-term Liabilities Accrued liabilities consisted of the following: September 30, December 31, 2017 (In thousands) Accrued tax liabilities $ 862 $ 886 Accrued bonus, commissions and other employee benefits 499 522 Amounts due to customers 820 962 Legal fee accruals 434 492 Sales tax liability 284 — Other accrued liabilities 809 872 $ 3,708 $ 3,734 Other long-term liabilities consisted of the following: September 30, December 31, 2017 (In thousands) Other long-term liabilities $ 330 $ 1,009 Derivative liability 864 — $ 1,194 $ 1,009 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt On June 14, 2018, the Company entered into a loan and security agreement and related transaction documents (together forming the "Credit Agreement") with Fortress for an initial term loan of $10.0 million . From June 14, 2018 through September 14, 2019, the Company may request an additional draw down in $1.0 million increments not to exceed $10.0 million in total (the "Delayed Draw Term Loan"). Each Delayed Draw Term Loan is made at Fortress's sole discretion. The Credit Agreement bears an annual interest at a stated rate of 11.0% plus the greater of the following i) LIBO Rate or ii) 1.0% , with an effective interest rate of 38% after factoring in the issuance costs, debt discount from end of term fee, warrants, and embedded derivative liability. If the non-cash expenses associated with the warrants and the derivative liability are excluded, the adjusted effective interest rate is 22% . Payments are due at the beginning of each month and the first 18 payments are interest-only. The Company may elect that up to 5.5% of interest to be paid in-kind by capitalizing and adding such interest to the unpaid principal amount. Starting in December 2019, the Company shall make thirty monthly principal payments, plus any accrued and unpaid interest, to fully payoff the Credit Agreement. At the end of the term the Company will pay a fee equal to 5.0% of the principal amount. The Company may prepay the Credit Agreement in whole or in part but any prepayment made before the first anniversary of the Credit Agreement is subject to a 5.0% fee of the principal balance being prepaid. Prepayments made between the first and second anniversary of the Credit Agreement are subject to a 2.0% fee, and prepayments made between the second and third anniversary are subject to a 1.0% fee. The Company’s obligations under the Credit Agreement are secured by a first-priority security interest in all of the assets of the Company, including the Company’s intellectual property assets ("IP"). The Credit Agreement calls for the creation of a special-purpose entity ("SPE") to hold the Company’s IP. The Company owns 99.8% of the entity and Fortress owns the remaining 0.2% . The Company holds voting control and manages the day-to-day activities of the SPE with Fortress granted certain protective rights to provide it assurance over the collateral and Fortress's interest. The transfer of IP to the SPE has no material impact on the Company or its operations as it can continue to license and engage in revenue generating activities. The Company considered the guidance under ASC 810, Consolidation , and concludes the SPE is a variable interest entity ("VIE"). Because the Company has power over the VIE and its activities and has the economic risk and rewards related to the VIE, the Company is considered to be the primary beneficiary of the VIE, and it is consolidated within the Company's financial statements. Because the book value of the IP is zero, there is no accounting impact and any potential non-controlling interest is considered immaterial. The Credit Agreement contains certain events of default that, if triggered, grants Fortress the unilateral right to manage any potential disposition of the IP owned by the SPE. All of the proceeds are allocated to Fortress until the outstanding loan principal is fully covered and then the remaining proceeds are allocated between Fortress and the Company based on terms stipulated in the Credit Agreement. Until such event of default happens, control over the operations of the SPE remains with the Company. At the time of potential default, the VIE conclusion would be reconsidered and could change from the Company being the primary beneficiary. The Credit Agreement contains customary representations, warranties and indemnification provisions. The Credit Agreement also contains affirmative and negative covenants with respect to operations of the business and properties of the Company as well as financial performance, including requirements to maintain a minimum of $1.5 million of unrestricted cash; limits on network access cost, operating expenses and gross revenue levels on a trailing four-quarter basis to be within a stated percentage of budgeted amounts; changes in senior management not otherwise approved by Fortress; limits on undisputed trade payables to 90 days or less; prohibitions on incurring additional indebtedness or making guarantees, making investments, loans and acquisitions; prohibitions on consolidating or merging, altering the business of the Company; requirements for a December 31, 2018 audit report without a going concern emphasis of a matter paragraph; and prohibitions on paying dividends or making distributions. The Credit Agreement further provides customary events of default and cure periods for certain specified events of default, and in the event of uncured default, the acceleration of the maturity date, an increase in the applicable interest rate with respect to amounts outstanding, and an additional fee based on the outstanding principal balance. The Company is in compliance with all required covenants and representations. The Company analyzed Fortress's option to require full repayment and charge an additional fee based on the outstanding principal balance and concludes this to be a put option that is an embedded derivative under ASC 815, Derivatives and Hedging. This embedded derivative should be bifurcated and measured at fair value at each reporting period. The Company assessed the fair value of the embedded derivative using a probability assessment on the event of default. As of September 30, 2018, the fair value of the embedded derivative was deemed to be $0.9 million , an increase of $0.2 million from initial assessment. The change in fair value of the derivative was recorded in other expense in the consolidated statements of operations and comprehensive loss. The Company incurred transaction costs of $1.6 million which included fees from the Company's general counsel, financial advisers, a 3.0% structuring fee paid to Fortress, and the reimbursement to Fortress of certain expenses related to the execution of the Credit Agreement. Concurrently with the execution of the Credit Agreement, the Company issued to entities related to Fortress 278,493 common stock warrants at a per share exercise price of $3.022 with a seven year life (after adjusted for the reverse stock split effected on August 23, 2018). The Company considered the guidance in ASC 480, Distinguishing Liabilities from Equity , and ASC 815, Derivatives and Hedging, and concluded the warrants should be classified as equity. Factors that support this conclusion include the ability to settle in a fixed number of unregistered shares and cashless exercise. The fair value of $0.8 million was calculated using the Black-Scholes model. A reconciliation of the proceeds from the Credit Agreement to its carrying value is as follows: (In thousands) Principal $ 10,000 End of term fee 500 Total debt 10,500 Debt discount (3,402 ) Debt, short-term — Debt, long-term $ 7,098 The debt discount is presented net of amortization and includes the following: (In thousands) Issuance Costs $ 1,628 Debt discount from end of term fee 500 Warrants - equity 843 Derivative - liability 685 Debt discount 3,656 Accumulated amortization (254 ) Debt discount, net of amortization $ 3,402 The debt discount is amortized to interest expense over the life of the loan using the effective interest method. Amortization during the quarter ended September 30, 2018 was approximately $0.3 million . The expected timing of principal payments are as follows as of September 30, 2018: Year ended December 31, (In thousands) Remainder of 2018 (three months) $ — 2019 333 2020 4,000 2021 4,000 2022 2,167 Future principal payments $ 10,500 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 September 30, 2018, are as follows: Year Operating Leases (In thousands) Remainder of 2018 (three months) $ 412 2019 1,216 2020 926 $ 2,554 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 September 30, 2018, are as follows: Year Minimum Purchase Commitments (In thousands) Remainder of 2018 (three months) $ 3,291 2019 1,672 $ 4,963 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 | 9 Months Ended |
Sep. 30, 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 stockholders 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 stockholders 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, shares issuable under the employee stock purchase plan, and warrants 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 Nine Months Ended 2018 2017 2018 2017 Options to purchase common stock 937,690 925,462 930,853 629,998 Warrants to purchase common stock 278,493 — 278,493 — Restricted stock awards, including participating securities 32,094 20,250 19,905 21,583 Total 1,248,277 945,712 1,229,251 651,581 |
Segment and Geographical Inform
Segment and Geographical Information | 9 Months Ended |
Sep. 30, 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 cloud-based service gives the Company's customers and their users access to the Company's global Wi-Fi network and mobile connectivity solutions. The following table presents total Company revenue by country or by geographical region: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 United States 54 % 48 % 51 % 46 % Europe, Middle East and Africa 38 % 44 % 41 % 44 % Asia Pacific 4 % 4 % 4 % 6 % Rest of the World 4 % 4 % 4 % 4 % No individual country, except for the United States, accounted for 10% or more of total revenue for the three months ended September 30, 2018. No individual country, except for the United States and Germany, accounted for 10% or more of total revenue for the nine months ended September 30, 2018. One customer represented 10% of total revenue for the three months ended September 30, 2018. No customers represented 10% or more of total revenue for the nine months ended September 30, 2018. No individual country, except for the United States and Germany, accounted for 10% or more of total revenue for the three and nine months ended September 30, 2017. For those periods, revenue in Germany accounted for 16% and 15% of total revenue, respectively. One channel reseller represented 10% of total revenues for the three and nine months ended September 30, 2017. Substantially all of the Company's long-lived assets are located in the United States. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions In the normal course of business, the Company entered into a service agreement with Tech Data, a related party due to a family relationship between executives of both companies which constituted a related party as defined by SEC rules. Tech Data provided services for approximately $0.2 million and received payments of approximately $0.2 million during the nine months ended September 30, 2018. Transactions involving related parties cannot be presumed to be carried out at arm’s length. |
Subsequent Events
Subsequent Events | Nov. 12, 2018 | Sep. 30, 2018 |
Subsequent Events [Abstract] | ||
Subsequent Events | Subsequent Events On November 12, 2018 , the Company signed a definitive agreement to be acquired by Pareteum Corporation in an all-stock deal whereby shareholders of the Company will receive 1.17 shares of Pareteum common stock for each share of the Company’s common stock. Management has evaluated events subsequent to September 30, 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. | |
Subsequent Event, Date | Nov. 12, 2018 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | 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 Wi-Fi network footprint. Other sources of revenue include professional services, iPass Network Intelligence big data analytics, software license and support. 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, 3) iPass Network Intelligence big data analytics 4) software licenses and 5) support. 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. In certain situations the transaction price is constrained to avoid the risk of a potential material revenue reversal. 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 and the Company providing support services is recognized over time, such as over a month or quarter, and at a point in time for when professional services, iPass Network Intelligence big data analytics, or software license obligations are satisfied. For the nine months ended September 30, 2018 and 2017, the Company recognized $3.2 million and $2.4 million from amounts included in the deferred revenue beginning balance, respectively. 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 September 30, 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 September 30, 2018. |
Financial Instruments and Fai_2
Financial Instruments and Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets (Excluding Cash) and Financial Liabilities | The fair value measurements of these financial assets (excluding cash) and liabilities and the related hierarchy level for the fair value measurement at September 30, 2018 , and December 31, 2017 are as follows: As of September 30, 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) $ 4,622 $ — $ — $ 4,622 $ 4,175 $ — $ — $ 4,175 Total financial assets $ 4,622 $ — $ — $ 4,622 $ 4,175 $ — $ — $ 4,175 Financial liabilities Derivative liability (2) $ — $ — $ 864 $ 864 $ — $ — $ — $ — Total financial liabilities $ — $ — $ 864 $ 864 $ — $ — $ — $ — (1) Held in cash and cash equivalents on the Company’s condensed consolidated balance sheets. (2) Recorded in other long-term liabilities on the Company’s condensed consolidated balance sheets. |
Creditworthiness Derivative Liability | The following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3): Derivative Liability Balance at December 31, 2017 $ — Initial fair value of derivative liability at June 30, 2018 685 Change in fair value at September 30, 2018 179 Balance at September 30, 2018 $ 864 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net, consisted of the following: September 30, December 31, 2017 (In thousands) Equipment $ 10,884 $ 10,698 Furniture and fixtures 246 246 Computer software 10,727 10,723 Construction in progress — 36 Leasehold improvements 483 483 22,340 22,186 Less: Accumulated depreciation and amortization (21,331 ) (20,852 ) Property and equipment, net $ 1,009 $ 1,334 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Assets [Abstract] | |
Components of other assets | Other assets (non-current) consisted of the following: September 30, December 31, 2017 (In thousands) Deposits $ 479 $ 503 Long-term deferred tax asset, net 209 209 Long-term tax receivable 128 128 Deferred commissions, long-term 43 — $ 859 $ 840 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following: September 30, December 31, 2017 (In thousands) Accrued tax liabilities $ 862 $ 886 Accrued bonus, commissions and other employee benefits 499 522 Amounts due to customers 820 962 Legal fee accruals 434 492 Sales tax liability 284 — Other accrued liabilities 809 872 $ 3,708 $ 3,734 Other long-term liabilities consisted of the following: September 30, December 31, 2017 (In thousands) Other long-term liabilities $ 330 $ 1,009 Derivative liability 864 — $ 1,194 $ 1,009 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A reconciliation of the proceeds from the Credit Agreement to its carrying value is as follows: (In thousands) Principal $ 10,000 End of term fee 500 Total debt 10,500 Debt discount (3,402 ) Debt, short-term — Debt, long-term $ 7,098 The debt discount is presented net of amortization and includes the following: (In thousands) Issuance Costs $ 1,628 Debt discount from end of term fee 500 Warrants - equity 843 Derivative - liability 685 Debt discount 3,656 Accumulated amortization (254 ) Debt discount, net of amortization $ 3,402 |
Schedule of Maturities of Debt | The expected timing of principal payments are as follows as of September 30, 2018: Year ended December 31, (In thousands) Remainder of 2018 (three months) $ — 2019 333 2020 4,000 2021 4,000 2022 2,167 Future principal payments $ 10,500 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2018, are as follows: Year Operating Leases (In thousands) Remainder of 2018 (three months) $ 412 2019 1,216 2020 926 $ 2,554 |
Schedule of Future Minimum Purchase Commitments | Future minimum purchase commitments under these agreements as of September 30, 2018, are as follows: Year Minimum Purchase Commitments (In thousands) Remainder of 2018 (three months) $ 3,291 2019 1,672 $ 4,963 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 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 Nine Months Ended 2018 2017 2018 2017 Options to purchase common stock 937,690 925,462 930,853 629,998 Warrants to purchase common stock 278,493 — 278,493 — Restricted stock awards, including participating securities 32,094 20,250 19,905 21,583 Total 1,248,277 945,712 1,229,251 651,581 |
Segment and Geographical Info_2
Segment and Geographical Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Geographical Region | The following table presents total Company revenue by country or by geographical region: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 United States 54 % 48 % 51 % 46 % Europe, Middle East and Africa 38 % 44 % 41 % 44 % Asia Pacific 4 % 4 % 4 % 6 % Rest of the World 4 % 4 % 4 % 4 % |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) - USD ($) | Jun. 08, 2018 | Jan. 01, 2018 | Nov. 17, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 14, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Cash and cash equivalents | $ 4,912,000 | $ 7,057,000 | $ 4,912,000 | $ 7,057,000 | $ 5,159,000 | $ 16,072,000 | ||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Sale of stock, maximum number of shares to be sold | 1,334,175 | |||||||||
Accumulated deficit | (239,764,000) | (239,764,000) | $ (225,770,000) | |||||||
Impact on operations (less than) | (5,632,000) | (6,658,000) | (14,168,000) | (16,242,000) | ||||||
Impact on comprehensive loss (less than) | 5,632,000 | $ 6,658,000 | $ 14,168,000 | 16,242,000 | ||||||
Estimated customer contract life | 3 years | |||||||||
Deferred revenue impaired | $ 0 | |||||||||
Revenue recognized | $ 3,200,000 | $ 2,400,000 | ||||||||
CSPA | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Authorized transaction amount | $ 10,000,000 | |||||||||
Transaction term | 24 months | |||||||||
Shares sold (in shares) | 186,769 | |||||||||
Proceeds from transaction | $ 1,000,000 | |||||||||
Commitments | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Shares sold (in shares) | 199,179 | 84,046 | ||||||||
Additional Shares | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Shares sold (in shares) | 1,334,175 | |||||||||
Proceeds from transaction | $ 5,100,000 | |||||||||
Shares authorized on daily basis (in shares) | 20,000 | |||||||||
Percentage of total outstanding shares | 19.99% | |||||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Accumulated deficit | $ 200,000 | |||||||||
Capitalization of costs to obtain customer contracts, commissions | (300,000) | |||||||||
Deferral of revenue from certain arrangements | (100,000) | |||||||||
Impact on operations (less than) | 100,000 | |||||||||
Impact on comprehensive loss (less than) | $ 100,000 | |||||||||
Term Loan | Credit Agreement | ||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||
Initial term loan | 10,000,000 | 10,000,000 | $ 10,000,000 | |||||||
Additional draw down, limit | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value - Fair Value of Financial Assets (Excluding Cash) and Financial Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Financial liabilities | |||
Derivative liability(2) | $ 864 | $ 0 | |
Fair Value Measurements Recurring | |||
Financial assets | |||
Total financial assets | 4,622 | $ 4,175 | |
Financial liabilities | |||
Derivative liability(2) | 864 | 0 | |
Total financial liabilities | 864 | 0 | |
Fair Value Measurements Recurring | Level 1 | |||
Financial assets | |||
Total financial assets | 4,622 | 4,175 | |
Financial liabilities | |||
Derivative liability(2) | 0 | 0 | |
Total financial liabilities | 0 | 0 | |
Fair Value Measurements Recurring | Level 2 | |||
Financial assets | |||
Total financial assets | 0 | 0 | |
Financial liabilities | |||
Derivative liability(2) | 0 | 0 | |
Total financial liabilities | 0 | 0 | |
Fair Value Measurements Recurring | Level 3 | |||
Financial assets | |||
Total financial assets | 0 | 0 | |
Financial liabilities | |||
Derivative liability(2) | 864 | 0 | |
Total financial liabilities | 864 | 0 | |
Money market funds | Fair Value Measurements Recurring | |||
Financial assets | |||
Money market funds | 4,622 | 4,175 | |
Money market funds | Fair Value Measurements Recurring | Level 1 | |||
Financial assets | |||
Money market funds | 4,622 | 4,175 | |
Money market funds | Fair Value Measurements Recurring | Level 2 | |||
Financial assets | |||
Money market funds | 0 | 0 | |
Money market funds | Fair Value Measurements Recurring | Level 3 | |||
Financial assets | |||
Money market funds | $ 0 | $ 0 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value - Narrative (Detail) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair Value Disclosures [Abstract] | |
Transfers between Levels 1, 2, and 3 | $ 0 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value - Creditworthiness Derivative Liability (Details) - Creditworthiness Derivative Liability - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at December 31, 2017 | $ 0 | |
Initial fair value of derivative liability at June 30, 2018 | $ 685 | |
Change in fair value at September 30, 2018 | 179 | |
Balance at September 30, 2018 | $ 864 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Equipment | $ 10,884 | $ 10,698 |
Furniture and fixtures | 246 | 246 |
Computer software | 10,727 | 10,723 |
Construction in progress | 0 | 36 |
Leasehold improvements | 483 | 483 |
Property plant and equipment, gross | 22,340 | 22,186 |
Less: Accumulated depreciation and amortization | (21,331) | (20,852) |
Property and equipment, net | $ 1,009 | $ 1,334 |
Property and Equipment, Net - N
Property and Equipment, Net - Narrative (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, wrote-off (less than 0.1 million) | $ 0 | $ 0.1 | $ 0.1 | $ 0.1 |
Continuing Operations | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 0.2 | $ 0.3 | $ 0.5 | $ 1.1 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Components of other assets | ||
Deposits | $ 479 | $ 503 |
Long-term deferred tax assets, net | 209 | 209 |
Long-term tax receivable | 128 | 128 |
Deferred Sales Commission | 43 | 0 |
Other Assets, Noncurrent | $ 859 | $ 840 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued tax liabilities | $ 862 | $ 886 |
Accrued bonus, commissions and other employee benefits | 499 | 522 |
Amounts due to customers | 820 | 962 |
Legal fee accruals | 434 | 492 |
Sales tax liability | 284 | 0 |
Other accrued liabilities | 809 | 872 |
Accrued liabilities | 3,708 | 3,734 |
Other long-term liabilities | 330 | 1,009 |
Derivative liability | 864 | 0 |
Accrued Liabilities, Long-term | $ 1,194 | $ 1,009 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Jun. 14, 2018USD ($)payment$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) |
Debt Instrument [Line Items] | |||
Fair value of warrants issued in connection with debt financing | $ 843,000 | $ 0 | |
Amortization of debt discount | 254,000 | $ 0 | |
Term Loan | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Initial term loan | $ 10,000,000 | 10,000,000 | |
Additional draw down | 1,000,000 | ||
Additional draw down, limit | $ 10,000,000 | 10,000,000 | |
Stated interest rate | 11.00% | ||
Effective interest rate | 38.00% | ||
Interest rate that may be paid in-kind | 5.50% | ||
Number of monthly payments | payment | 30 | ||
End of term fee | 5.00% | ||
Unrestricted cash requirement | $ 1,500,000 | ||
Fair value of embedded derivative | 900,000 | ||
Gain on fair value of embedded derivative | 0 | ||
Transaction costs | $ 1,600,000 | 1,628,000 | |
Structuring fee | 3.00% | ||
Number of warrants issued (in shares) | shares | 278,493 | ||
Exercise price of warrants (in USD per share) | $ / shares | $ 3.022 | ||
Warrant life | 7 years | ||
Fair value of warrants issued in connection with debt financing | $ 800,000 | ||
Adjusted effective interest rate | 22.00% | ||
Warrants - equity | 843,000 | ||
Derivative - liability | 685,000 | ||
Amortization of debt discount | $ 254,000 | ||
Term Loan | Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on stated rate | 1.00% | ||
Term Loan | Credit Agreement | First Anniversary of Credit Agreement | |||
Debt Instrument [Line Items] | |||
Prepayment fee | 5.00% | ||
Term Loan | Credit Agreement | First Anniversary to Second Anniversary | |||
Debt Instrument [Line Items] | |||
Prepayment fee | 2.00% | ||
Term Loan | Credit Agreement | Second and Third Anniversary | |||
Debt Instrument [Line Items] | |||
Prepayment fee | 1.00% | ||
Variable Interest Entity, Primary Beneficiary | Term Loan | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Ownership of special purpose entity | 99.80% | ||
Fortress | Variable Interest Entity, Not Primary Beneficiary | Term Loan | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Ownership of special purpose entity | 0.20% |
Debt - Reconciliation of Credit
Debt - Reconciliation of Credit Agreement (Details) - Term Loan - Credit Agreement $ in Thousands | Sep. 30, 2018USD ($) |
Debt Instrument [Line Items] | |
Principal | $ 10,000 |
End of term fee | 500 |
Total debt | 10,500 |
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 3,402 |
Debt, short-term | 0 |
Debt, long-term | $ 7,098 |
Debt - Debt Discount (Details)
Debt - Debt Discount (Details) - Term Loan - Credit Agreement - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 14, 2018 |
Debt Instrument [Line Items] | ||
Issuance Costs | $ 1,628 | $ 1,600 |
Debt discount from end of term fee | 500 | |
Warrants - equity | 843 | |
Derivative - liability | 685 | |
Debt discount | 3,656 | |
Accumulated amortization | 254 | |
Debt discount, net of amortization | $ 3,402 |
Debt - Expected Timing of Princ
Debt - Expected Timing of Principal Payments (Details) - Term Loan - Credit Agreement $ in Thousands | Sep. 30, 2018USD ($) |
Debt Instrument [Line Items] | |
2,018 | $ 0 |
2,019 | 333 |
2,020 | 4,000 |
2,021 | 4,000 |
2,022 | 2,167 |
Total debt | $ 10,500 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Detail) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitments expiration period | expire on various dates through December 2019 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2018 (three months) | $ 412 |
2,019 | 1,216 |
2,020 | 926 |
Operating leases, future minimum payments | $ 2,554 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Purchase Commitments (Detail) $ in Thousands | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2018 (three months) | $ 3,291 |
2,019 | 1,672 |
Future minimum purchase commitments | $ 4,963 |
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 1,248,277 | 945,712 | 1,229,251 | 651,581 |
Options to Purchase Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 937,690 | 925,462 | 930,853 | 629,998 |
Warrants to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 278,493 | 0 | 278,493 | 0 |
Restricted Stock Awards, Including Participating Securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 32,094 | 20,250 | 19,905 | 21,583 |
Segment and Geographical Info_3
Segment and Geographical Information - Summary of Revenue by Geographical Region (Detail) - Revenue - Geographic Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Percentage of revenue by geographical region | 54.00% | 48.00% | 51.00% | 46.00% |
EMEA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Percentage of revenue by geographical region | 38.00% | 44.00% | 41.00% | 44.00% |
Asia Pacific | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Percentage of revenue by geographical region | 4.00% | 4.00% | 4.00% | 6.00% |
Rest of the World | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Percentage of revenue by geographical region | 4.00% | 4.00% | 4.00% | 4.00% |
Segment and Geographical Info_4
Segment and Geographical Information - Narrative (Detail) - Segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Number of reportable segments | 1 | |||
United States | Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk (more than) | 54.00% | 48.00% | 51.00% | 46.00% |
Germany | Revenue | Geographic Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk (more than) | 16.00% | 10.00% | 15.00% | |
Customer A | Revenue | Customer Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk (more than) | 10.00% | |||
No Customer | Revenue | Customer Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk (more than) | 10.00% | |||
Channel Reseller A | Revenue | Customer Concentration Risk | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Concentration risk (more than) | 10.00% | 10.00% |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Affiliated Entity | Tech Data | Service Agreement | |
Related Party Transaction [Line Items] | |
Amount of transaction with related party | $ 0.2 |