Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2014 |
Description of Business and Summary of Significant Accounting Policies [Abstract] | ' |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | ' |
Description of Business and Summary of Significant Accounting Policies |
|
Description of Business |
|
Borderfree, Inc. (the “Company” or “Borderfree”), formerly known as FiftyOne, Inc., was incorporated on November 3, 1999 and commenced operations on January 1, 2000. The Company is a market leader in international cross-border ecommerce, operating a proprietary technology and services platform to enable U.S. retailers to transact with international shoppers, which the Company refers to as consumers, in more than 100 countries and territories worldwide. The retailers and brands, which the Company refers to as their customers, that integrate the Company’s solution use the highly scalable Borderfree platform to develop a seamless global ecommerce business across web, mobile and in-store channels. Borderfree manages all aspects of the international shopping experience, including site localization, multi-currency pricing, payment processing, fraud management, landed cost calculation, customs clearance and brokerage, and global logistics services while maintaining the integrity of the Company’s customers’ brand and consumer experience. |
|
Initial Public Offering |
|
In March 2014, the Company closed its initial public offering, or IPO, of 5,750,000 shares of common stock, which included 750,000 shares sold pursuant to the underwriters' option to purchase additional shares, at an offering price of $16.00 per share. All outstanding shares of the Company's convertible preferred stock converted to 20,872,628 shares of common stock at the closing of the IPO. The Company's shares are traded on NASDAQ under the symbol "BRDR". The Company received proceeds from the IPO of $85.6 million, net of underwriting discounts and commissions, but before offering expenses of $3.1 million. Offering expenses at December 31, 2013 of $1.8 million were recorded as current assets. These offering expenses, and additional expenses incurred from January 2014 through the closing of the IPO of approximately $1.3 million, have been reclassified as additional paid-in capital. |
|
Basis of Presentation and Significant Accounting Policies |
|
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") applicable to interim periods, under the rules and regulations of the United States Securities and Exchange Commissions ("SEC"), and on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the year ended December 31, 2013. There have been no material changes in the Company's significant accounting policies from December 31, 2013. In the opinion of management, all adjustments, all of which are of a normal recurring nature and necessary for a fair statement of the results of operations for the interim periods presented, have been reflected therein. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, for any other interim period or for any other future year. |
|
The consolidated balance sheet at December 31, 2013 has been derived from the audited financial statements at that date, but does not include all of the disclosures required by GAAP. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's prospectus filed with the SEC on March 21, 2014 pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act"). |
|
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries which include Borderfree Canada, Inc., FiftyOne China, Co., Ltd., Borderfree Research and Development Ltd. (organized in Israel), Borderfree Limited (organized in Ireland), Borderfree Australia Pty Ltd. and BoxHop LLC (organized in the United States). Intercompany accounts and transactions have been eliminated on consolidation. |
|
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions made by management include the determination of the receivable related to the sale of the Global Settlements Services (“GSS”) business (see Note 14), fair value of stock options, valuation of goodwill and intangible assets, useful lives associated with depreciation and amortization of intangible assets, warrant liability valuation, certain components of the income tax provisions, including valuation allowances on the Company’s deferred tax assets, and accruals for fulfillment costs, refunds and chargebacks. The Company bases estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results could vary from those estimates. |
|
The consolidated balance sheet at December 31, 2013 includes a revision to classify $0.3 million of other assets related to the non-current portion of prepaid expenses and $0.1 million of other long term liabilities related to the long term portion of deferred revenue. These amounts had previously been classified as other current assets and deferred revenue, respectively. The Company concluded that the correction was not material to the consolidated financial statements for the year ended December 31, 2013. |
|
Revenue |
|
Global ecommerce services revenue includes a fee paid to the Company by its customers based on a percentage of each customer's total gross international sales revenue processed through the Company's platform, as well as a fee paid by the consumer related to foreign exchange and other transactional services, including parcel protection. |
|
Fulfillment services revenue is paid by the consumer for international shipping, handling and other global logistics services. |
|
The following table summarizes revenue by type of service (in thousands): |
|
| | | | | | | |
| Three Months Ended March 31, |
| 2014 | | 2013 |
Global ecommerce services | $ | 13,456 | | | $ | 11,293 | |
|
Fulfillment services | 13,058 | | | 14,479 | |
|
Revenue | $ | 26,514 | | | $ | 25,772 | |
|
|
Functional Currency and Translation |
|
The functional currency of the Company and its subsidiaries is the U.S. dollar (“dollar”). |
|
Transactions and balances originally denominated in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions reflected in the statements of operations, the average exchange rates during the period are used. Depreciation, amortization and other changes deriving from non-monetary items are based on historical exchange rates. The resulting transaction gains or losses are recorded within interest and other income, net, on the consolidated statements of operations. |
|
The transaction gains and losses for the three months ended March 31, 2014 and 2013, respectively, were not significant. |
|
Comprehensive Income (Loss) |
|
Comprehensive income (loss) includes certain changes in stockholders’ equity (deficit) that are excluded from net income (loss) such as cumulative foreign currency translation adjustments and unrealized gains or losses on marketable securities. The Company’s net income (loss) equals comprehensive income (loss) for the three months ended March 31, 2014 and 2013, respectively. |
|
Reverse Stock Split |
|
In March 2014, the Company’s board of directors and stockholders approved an amendment to the Company's then-current Certificate of Incorporation (the "Prior Charter"), which effected a 1-for-1.67 reverse stock split of the Company’s common stock. The reverse stock split became effective upon filing the amendment to the Prior Charter on March 10, 2014. Upon the effectiveness of the reverse stock split, (i) every 1.67 shares of outstanding common stock was decreased to one share of common stock, (ii) the number of shares of common stock into which each outstanding warrant or option to purchase common stock is exercisable was proportionally decreased, (iii) the exercise price of each outstanding warrant or option to purchase common stock was proportionately increased, and (iv) the conversion ratio for each share of preferred stock outstanding was proportionately reduced. Unless otherwise indicated, all of the share numbers, share prices and exercise prices in these financial statements have been adjusted, on a retroactive basis, to reflect this 1-for-1.67 reverse stock split. |
|
Recently Issued Accounting Pronouncements |
|
Under the Jumpstart our Business Startups Act ("JOBS Act"), the Company meets the definition of an emerging growth company. The Company has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. |
|
In July 2012, the FASB issued accounting guidance on the testing of indefinite-lived intangible assets for impairment. The guidance allows entities to first perform a qualitative assessment to determine the likelihood of impairment for an indefinite-lived intangible asset and whether it is necessary to perform the quantitative impairment assessment currently required. The new accounting rules were effective for the Company on January 1, 2013 and did not have a material effect on the Company’s financial condition or results of operations. |
|
In February 2013, the FASB issued accounting guidance on the reporting of reclassification out of accumulated other comprehensive income. The guidance requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount is reclassified to net income in its entirety in the same reporting period. For other amounts not required to be reclassified in their entirety to net income in the same reporting period, a cross reference to other disclosures that provide additional detail about the reclassification amount is required. The new accounting rules were effective for the Company on January 1, 2013 and did not have a material effect on the Company’s financial condition or results of operations. |
|
In April 2014, the FASB issued accounting guidance which changes the criteria for determining which disposal transactions can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The guidance states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. Although major is not defined, the guidance provides examples of when a disposal qualifies as a discontinued operation. A business activity that upon acquisition qualifies as held for sale will also be a discontinued operation. The guidance no longer precludes presentation as a discontinued operation if (i) there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations, or (ii) there is significant continuing involvement with a component after its disposal. The guidance also introduces new disclosure requirements. The new accounting rules will be effective for the Company on January 1, 2015 and are not expected to have a material effect on the Company’s financial condition or results of operations unless there is a future disposal transaction within the scope of the guidance. |
|
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. |