Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 23, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PCO | |
Entity Registrant Name | Pendrell Corp | |
Entity Central Index Key | 1,359,555 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 214,319,590 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 53,660,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 163,617 | $ 168,793 |
Accounts receivable | 173 | 131 |
Other receivables-net of reserve $2,750 in both periods | 1,477 | 69 |
Prepaid expenses and other current assets | 418 | 774 |
Total current assets | 165,685 | 169,767 |
Property in service - net of accumulated depreciation of $720 and $1,227, respectively | 155 | 3,372 |
Other assets | 2,156 | 54 |
Intangible assets - net of accumulated amortization of $53,750 and $43,567, respectively | 99,930 | 109,702 |
Goodwill | 21,209 | 21,209 |
Total | 289,135 | 304,104 |
Current liabilities: | ||
Accounts payable | 274 | 281 |
Accrued expenses | 3,231 | 5,824 |
Other liabilities | 660 | 6,891 |
Total current liabilities | 4,165 | 12,996 |
Deferred tax liability | 1,521 | 1,521 |
Total liabilities | $ 5,686 | $ 14,517 |
Commitments and contingencies (Note 7) | ||
Shareholders' equity and noncontrolling interests: | ||
Preferred stock, $0.01 par value, 75,000,000 shares authorized, no shares issued or outstanding | ||
Additional paid-in capital | $ 1,957,080 | $ 1,952,880 |
Accumulated deficit | (1,679,259) | (1,671,135) |
Total Pendrell shareholders' equity | 280,502 | 284,414 |
Noncontrolling interests | 2,947 | 5,173 |
Total shareholders' equity and noncontrolling interests | 283,449 | 289,587 |
Total | 289,135 | 304,104 |
Class A common stock | ||
Shareholders' equity and noncontrolling interests: | ||
Common stock, value | 2,144 | 2,132 |
Class B common stock | ||
Shareholders' equity and noncontrolling interests: | ||
Common stock, value | $ 537 | $ 537 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Other receivables, reserve | $ 2,750 | $ 2,750 |
Property in service, accumulated depreciation | 720 | 1,227 |
Intangible assets, accumulated amortization | $ 53,750 | $ 43,567 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 75,000,000 | 75,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 271,940,395 | 270,745,381 |
Common stock, shares outstanding | 214,171,503 | 212,976,489 |
Class B common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 84,663,382 | 84,663,382 |
Common stock, shares outstanding | 53,660,000 | 53,660,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Income Statement [Abstract] | |||||
Revenue | $ 15,465 | $ 618 | $ 42,857 | $ 41,688 | |
Operating expenses: | |||||
Cost of revenues | 87 | 10,141 | 13,866 | ||
Patent administration and related costs | 441 | 1,189 | 2,250 | 4,237 | |
Patent litigation | 7,080 | 2,717 | 12,122 | 6,686 | |
General and administrative | 4,573 | 5,394 | 13,383 | 20,228 | |
Stock-based compensation | 1,834 | 1,443 | 3,271 | 5,195 | |
Amortization of intangible assets | 3,579 | 3,971 | 10,764 | 12,001 | |
Total operating expenses | 17,594 | 14,714 | 51,931 | 62,213 | |
Operating loss | (2,129) | (14,096) | (9,074) | (20,525) | |
Interest income | 36 | 24 | 101 | 68 | |
Interest expense | (43) | (42) | (149) | ||
Gain on contingency | 2,226 | 3,974 | |||
Other expense | (6) | (2) | (12) | (14) | |
Income (loss) before income taxes | 127 | (14,117) | (5,053) | (20,620) | |
Income tax expense | (4,125) | (6,270) | |||
Net income (loss) | 127 | (14,117) | (9,178) | (26,890) | |
Net income (loss) attributable to noncontrolling interest | 126 | (855) | (1,062) | (2,763) | |
Net income (loss) attributable to Pendrell | $ 1 | $ (13,262) | $ (8,116) | $ (24,127) | |
Basic and diluted loss per share attributable to Pendrell | [1] | $ (0.05) | $ (0.03) | $ (0.09) | |
Weighted average shares outstanding used to compute basic and diluted loss per share | 265,752,826 | 264,627,862 | 265,556,183 | 264,169,947 | |
[1] | Per share amount for the three months ended September 30, 2015 is less than $0.01. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Basic and diluted loss per share attributable to Pendrell | [1] | $ (0.05) | $ (0.03) | $ (0.09) | |
Maximum | |||||
Basic and diluted loss per share attributable to Pendrell | $ 0.01 | ||||
[1] | Per share amount for the three months ended September 30, 2015 is less than $0.01. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Class A common stock | Class B common stock | Common stock | Common stockClass A common stock | Common stockClass B common stock | Additional paid-in capital | Accumulated deficit | Shareholder's equity | Noncontrolling interests |
Beginning Balance at Dec. 31, 2013 | $ 336,793 | $ 2,663 | $ 1,941,818 | $ (1,619,993) | $ 324,488 | $ 12,305 | ||||
Beginning Balance (in shares) at Dec. 31, 2013 | 212,451,224 | 53,660,000 | ||||||||
Vesting of Class A common stock issued for Ovidian acquisition | 2,229 | 2,229 | 2,229 | |||||||
Issuance of Class A common stock from exercise of stock options | 378 | 4 | 374 | 378 | ||||||
Issuance of Class A common stock from exercise of stock options (in shares) | 448,771 | |||||||||
Class A common stock withheld at vesting to cover statutory tax obligations | (471) | (1) | (359) | (111) | (471) | |||||
Class A common stock withheld at vesting to cover statutory tax obligations (in shares) | (129,534) | |||||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures | 4,921 | 4 | 4,917 | 4,921 | ||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures (in shares) | 302,098 | |||||||||
Net loss | (26,890) | (24,127) | (24,127) | (2,763) | ||||||
Ending Balance at Sep. 30, 2014 | 316,960 | 2,670 | 1,948,979 | (1,644,231) | 307,418 | 9,542 | ||||
Ending Balance (in shares) at Sep. 30, 2014 | 213,072,559 | 53,660,000 | ||||||||
Beginning Balance at Dec. 31, 2014 | 289,587 | 2,669 | 1,952,880 | (1,671,135) | 284,414 | 5,173 | ||||
Beginning Balance (in shares) at Dec. 31, 2014 | 212,976,489 | 53,660,000 | 212,976,489 | 53,660,000 | ||||||
Issuance of Class A common stock from exercise of stock options | 219 | 4 | 215 | 219 | ||||||
Issuance of Class A common stock from exercise of stock options (in shares) | 358,350 | |||||||||
Class A common stock withheld at vesting to cover statutory tax obligations | (140) | (1) | (131) | (8) | (140) | |||||
Class A common stock withheld at vesting to cover statutory tax obligations (in shares) | (38,813) | |||||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures | 3,363 | 11 | 3,352 | 3,363 | ||||||
Stock-based compensation and issuance of restricted stock, net of forfeitures (in shares) | 1,125,477 | |||||||||
Repurchase of restricted stock | (2) | (2) | (2) | |||||||
Repurchase of restricted stock (in shares) | (250,000) | |||||||||
Purchase of noncontrolling interest in Provitro Biosciences LLC | (400) | 764 | 764 | (1,164) | ||||||
Net loss | (9,178) | (8,116) | (8,116) | (1,062) | ||||||
Ending Balance at Sep. 30, 2015 | $ 283,449 | $ 2,681 | $ 1,957,080 | $ (1,679,259) | $ 280,502 | $ 2,947 | ||||
Ending Balance (in shares) at Sep. 30, 2015 | 214,171,503 | 53,660,000 | 214,171,503 | 53,660,000 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities: | ||
Net loss including noncontrolling interests | $ (9,178) | $ (26,890) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation | 3,271 | 5,195 |
Amortization of intangible assets | 10,764 | 12,001 |
Depreciation | 326 | 396 |
Amortization of prepaid compensation from Ovidian acquisition | 1,380 | |
Non-cash cost of patents monetized | 139 | 579 |
Loss associated with the abandonment and/or disposition of patents | 869 | 1,615 |
Loss on the disposition of property | 981 | |
Other | 41 | 150 |
Other changes in certain assets and liabilities: | ||
Accounts receivable | (42) | 194 |
Prepaid expenses and other current/non-current assets | (1,298) | 748 |
Accounts payable | (7) | 104 |
Accrued expenses and other current/non-current liabilities | (4,775) | 1,740 |
Net cash provided by (used in) operating activities | 1,091 | (2,788) |
Investing activities: | ||
Purchases of property and intangible assets | (2,049) | (114) |
Proceeds associated with the disposition of property | 103 | |
Net cash used in investing activities | (1,946) | (114) |
Financing activities: | ||
Proceeds from exercise of stock options | 219 | 378 |
Payment of statutory taxes for stock awards | (140) | (471) |
Payment of accrued obligations for purchased intangible assets | (4,000) | (2,000) |
Purchase of noncontrolling interest in Provitro Biosciences LLC | (400) | |
Net cash used in financing activities | (4,321) | (2,093) |
Net decrease in cash and cash equivalents | (5,176) | (4,995) |
Cash and cash equivalents - beginning of period | 168,793 | 184,567 |
Cash and cash equivalents - end of period | 163,617 | 179,572 |
Supplemental disclosures: | ||
Income taxes paid | 4,125 | $ 6,270 |
Supplemental disclosure of non-cash activities: | ||
Note receivable for disposition of property | $ 1,900 |
Nature of Business
Nature of Business | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Nature of Business | 1. Nature of Business These condensed consolidated financial statements include the accounts of Pendrell Corporation (“Pendrell”) and its consolidated subsidiaries (collectively referred to as the “Company”). The Company’s strategy, through its consolidated subsidiaries, is to invest in, acquire and develop businesses with unique technologies that are often protected by intellectual property (“IP”) rights, and that present the opportunity to address large, global markets. The Company’s subsidiaries focus on licensing the IP rights they hold to third parties and pursuing relevant product opportunities. The Company regularly evaluates its existing investments to determine whether retention or disposition is appropriate, and investigates new investment and business acquisition opportunities. The Company also advises its clients on various IP strategies and transactions. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 2. Basis of Presentation Interim Financial Statements— Principles of Consolidation— In February 2015, the Company acquired the minority partner’s interest in Provitro Biosciences LLC (“Provitro”) for nominal consideration resulting in 100% ownership of Provitro. The Company continues to have a minority partner in its ContentGuard Holdings, Inc. (“ContentGuard”) subsidiary. Segment Information— Use of Estimates— On an ongoing basis, the Company evaluates its estimates, including among others, those related to the fair value of acquired intangible assets and goodwill, the useful lives and potential impairment of intangible assets and property and equipment, the value of stock awards for the purpose of determining stock-based compensation expense, accrued liabilities (including bonus accruals), valuation allowances related to the ability to realize deferred tax assets, allowances for doubtful receivables and certain tax liabilities. Estimates are based on historical experience and other factors, including the current economic environment as deemed appropriate under the circumstances. Estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in estimates used to prepare these financial statements will be reflected in the financial statements in future periods. Accounting Policies— |
Provitro
Provitro | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Provitro | 3. Provitro In February 2013, the Company acquired a 68.75% interest in Provitro, the developer of the Provitro™ proprietary micro-propagation technology that is designed to facilitate the production on a commercial scale of certain plants, particularly timber bamboo. In February 2015, the Company acquired the minority partner’s interest in Provitro for nominal consideration resulting in 100% ownership of Provitro. The assets and liabilities of Provitro were measured at fair value as of the acquisition date. The assets, liabilities and activities of Provitro since the date of acquisition in February 2013 have been included in the Company’s consolidated financial statements. From acquisition through the year ended December 31, 2014, the Company attempted to develop a strategy to commercialize the Provitro™ technology, but did not generate revenue from the technology. In January 2015, the Company suspended further development of the Provitro™ technology due to the Company’s inability to identify near-term opportunities for commercialization. The Company began seeking a buyer for Provitro’s assets and took an $11.0 million impairment charge during the fourth quarter of its year ended December 31, 2014. The impairment charge was equal to the sum of its unamortized investment in the Provitro™ technology and the goodwill associated with its acquisition of Provitro. In September 2015, the Company sold Provitro’s facility and related tangible assets for $2.0 million, resulting in a $0.7 million loss which is included in general and administrative expenses for the three months ended September 30, 2015. The purchase price will be paid in installments of which $0.1 million was paid immediately, $1.3 million will be paid within twelve months and is included in other current receivables and the remaining $0.6 million is due in March 2017 and is included in other non-current assets.The Company retained its rights to Provitro’s micro-propagation technology. However, it does not expect to generate revenue from the technology in the foreseeable future. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 4. Intangible Assets During the three and nine months ended September 30, 2015 and during the nine months ended September 30, 2014, the Company sold certain patents and has included the gross proceeds in revenue. Costs associated with the patents sold, including remaining net book value, obligations to third parties for revenue share and success fees are included in cost of revenues. In future periods, these costs as a percentage of revenues may vary significantly based on the structure and terms under which we acquired the patents that we sell. For the three and nine months ended September 30, 2015, the Company recognized $0.1 million and $0.9 million of losses, respectively, on the abandonment of certain patents that were not part of existing licensing programs or for which the Company chose to no longer allocate resources to their maintenance and enforcement. For the three and nine months ended September 30, 2014, the Company recognized $0.3 million and $1.6 million of losses, respectively. Costs associated with the abandonment of patents including any remaining net book value are included in patent administration and related costs. In February 2015, the Company further enhanced its existing portfolios for an additional $2.0 million. No patents were purchased during the nine months ended September 30, 2014. As of September 30, 2015, the Company, through its subsidiaries, continues to hold approximately 1,200 issued patents worldwide, with additional patent applications pending. It is the Company’s policy to evaluate the carrying value of its intangible assets when events or circumstances indicate that the carrying amounts may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. During the three months ended September 30, 2015, certain developments arose indicating it was reasonably possible that a portion of the Company’s patents were impaired (see litigation discussion in footnote 7). However, despite these developments, the Company’s estimate of undiscounted cash flows continues to indicate that such carrying amounts are expected to be recovered. Further, the Company continues to believe that it is not more likely than not that the carrying amount of its goodwill exceeds its fair value. Nonetheless, it is reasonably possible that the Company’s ability to realize its estimated future cash flows may be impacted by the outcome of its trial scheduled with Apple in November 2015. The Company will therefore continue to evaluate the fair value of its intangible assets and goodwill as the Apple trial progresses. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 5. Accrued Expenses The following table summarizes accrued expenses (in thousands): September 30, 2015 December 31, Accrued payroll and related expenses $ 1,574 $ 2,570 Accrued legal, professional and other expenses 1,657 3,254 $ 3,231 $ 5,824 |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | 6. Other Liabilities The following table summarizes other current liabilities (in thousands): September 30, 2015 December 31, Installment payment obligation $ — $ 4,000 Restricted stock awards — 2,254 Other 660 637 $ 660 $ 6,891 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Purchase and Lease Commitments— Litigation— ContentGuard Enforcement Actions Amazon Settlement DirecTV Settlement. Google and Samsung Verdict Apple Trial Post-Trial Activities IPR and CBM Petitions filed by Apple and Google ZTE IPRs ZTE Enforcement Actions J&J Collection |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | 8. Stock-based Compensation The Company records stock-based compensation on stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock awards issued to employees, directors, consultants and/or advisors based on the estimated fair value on the date of grant and recognizes compensation cost over the requisite service period for awards expected to vest. Stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 was as follows (in thousands): Three months ended Nine months ended 2015 2014 2015 2014 Stock options $ 835 $ 1,180 $ 1,855 $ 3,629 Restricted stock awards (1) 999 263 1,416 1,566 Total stock-based compensation expense $ 1,834 $ 1,443 $ 3,271 $ 5,195 (1) Stock-based compensation expense for the nine months ended September 30, 2015 includes $0.2 million related to 250,000 Class A common stock restricted stock awards that were required to be treated as a liability. The Company settled the related liability with a $2.5 million payment in April 2015 and no further expense will be incurred. Stock-based compensation expense for the three and nine months ended September 30, 2014 includes $0.2 million and $0.6 million, respectively, related to the awards. Stock Options and Stock Appreciation Rights— Number of shares of Weighted average Outstanding – December 31, 2014 25,554,026 $ 1.96 Granted (1) / (2) 6,238,300 $ 1.33 Exercised (1,045,000 ) $ 1.18 Forfeited (1,826,188 ) $ 1.93 Outstanding – September 30, 2015 (3) 28,921,138 $ 1.85 Exercisable – September 30, 2015 (3) 17,597,458 $ 1.77 Vested and expected to vest – September 30, 2015 (3) 28,404,947 $ 1.86 (1) During the nine months ended September 30, 2015, the Company granted 4.0 million stock options to its new Chief Executive Officer (“CEO”) that vest at a rate of 25% per year over four years, with a portion of the annual vesting to occur only to the extent that the Company meets its performance objectives for the preceding calendar year under the Company’s then-applicable incentive plan. Of the 4.0 million options granted, 1.5 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. The remaining 2.5 million options have a grant date fair value of $1.6 million. (2) In July 2015, the Company granted 2.2 million stock options to various employees with a grant date fair value of $1.4 million. The service-based options are 50% vested after one year, 75% vested after two years and 100% vested after three years. (3) In connection with the departure of the Company’s former CEO, Mr. Benjamin G. Wolff, in November 2014, the exercise period for Mr. Wolff’s vested stock options was extended until December 15, 2015. Excluding Mr. Wolff’s 8,277,500 vested options with a weighted average exercise price of $1.45 and a weighted average remaining life of 0.21 years, the weighted average exercise price for all other outstanding, exercisable, and vested and expected to vest options and stock appreciation rights is as follows: Number of Weighted average Outstanding at September 30, 2015 20,643,637 $ 2.02 Exercisable at September 30, 2015 9,319,958 $ 2.05 Vested and expected to vest at September 30, 2015 20,127,447 $ 2.03 Restricted Stock— Number of shares of Weighted average Unvested – December 31, 2014 2,559,514 $ 1.67 Granted 9,496,673 $ 0.79 Vested (700,372 ) $ 2.53 Forfeited (420,316 ) $ 1.55 Unvested – September 30, 2015 10,935,499 $ 0.86 Restricted stock awards granted during the nine months ended September 30, 2015, including 9.0 million restricted stock awards granted to its new CEO, consist of the following: Number of shares of Grant date fair value (in thousands) Service-based (1) 3,748,700 $ 5,016 Performance-based (2) 3,500,000 670 Market-based (3) 2,000,000 1,500 Shares issued as board of director compensation 247,973 335 Total restricted stock granted 9,496,673 $ 7,521 (1) Of the 3.7 million service-based restricted stock awards granted, 3.5 million were granted to the CEO and vest at a rate of 25% per year over four years. The remaining 0.2 million of service-based restricted stock awards were granted to various employees and vest 50% after one year, 75% after two years and 100% after three years. (2) The 3.5 million performance-based restricted stock awards were all granted to the CEO and vest at a maximum rate of 25% per year over four years, but only if and to the extent the Company meets its performance objectives for the preceding calendar year under the Company’s then-applicable incentive plan. Of the awards granted, 3.0 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. (3) The 2.0 million market-based restricted stock awards were all granted to the CEO and fully vest when both of the following have occurred: (i) the average closing price of the Company’s Class A common stock, measured over any period of 60 consecutive calendar days, has reached or exceeded $3.00 per share (the “Price Trigger”) and (ii) the date is January 1, 2017 or later. If the Price Trigger is not achieved by December 31, 2019, then none of the market-based restricted stock awards will vest. |
Gain on Contingency
Gain on Contingency | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Gain on Contingency | 9. Gain on Contingency During 2012, as part of the Company’s exit from the satellite business, the Company sold its partially completed medium earth orbit (“MEO”) satellites, related equipment, and contracts (collectively, the “MEO Assets”). Under the sales agreement, the Company is entitled to a substantial portion of any proceeds that the buyer generates from the resale of the MEO Assets. In January 2015, the buyer resold the MEO Assets and as a result, the Company is entitled to receive up to $6.0 million, contingent upon the buyer’s receipt of payment. On January 14, 2015, the buyer received the first of three scheduled payments for the MEO Assets, resulting in the Company’s receipt of approximately $1.7 million. On July 13, 2015, the buyer received the second payment for the MEO Assets, which resulted in the Company’s receipt of an additional $2.2 million. The funds received have been recorded as a gain on contingency totaling $3.9 million for the nine months ended September 30, 2015. Due to the uncertainty of collection, the Company has not recognized the gain that may be generated if the buyer receives the third scheduled payment for the MEO Assets in early 2016. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company recorded a tax provision of $4.1 million and $6.3 million for the nine months ended September 30, 2015 and 2014, respectively, related to foreign taxes withheld on revenue generated from license agreements executed with third party licensees domiciled in a foreign jurisdiction. In general, foreign taxes withheld may be claimed as a deduction on future U.S. corporate income tax returns, or as a credit against future U.S. income tax liabilities, subject to certain limitations. However, due to uncertainty regarding the Company’s ability to utilize the deduction or credit resulting from the foreign withholding, at September 30, 2015 and 2014, the Company established a full valuation allowance against the related deferred tax asset. The Company anticipates that it will not have a U.S. federal income tax liability for fiscal 2015. In October 2015, the Company filed a refund claim for approximately $10.0 million of taxes previously withheld from payments made to the Company by certain licensees and remitted to the Korean government. The Company filed the refund claim as a result of recent court decisions in Korea. Due to the uncertain nature of the refund claim, the uncertain tax position has not been recorded as an income tax benefit. However, the claim does result in an increase to the Company’s unrecognized tax benefits, which if recognized in the future will impact the Company’s income tax rate. Personal Holding Company Determination Due to the significant number of shares held by the Company’s largest shareholders and the type of income that the Company generates, the Company must continually assess share ownership of Pendrell and its consolidated subsidiary ContentGuard to determine whether or not there is Concentrated Ownership of either corporation. For 2015, the Company determined that Pendrell, the parent company, met the Concentrated Ownership test, but that ContentGuard has not yet met the Concentrated Ownership test due to the interest held by its minority shareholder. If Pendrell generates positive net PHCI, or if ContentGuard meets the Concentrated Ownership test and generates positive net PHCI, and they do not distribute such net PHCI to their shareholders, then the undistributed net PHCI will be subject to the PHC tax. In this regard, any income from ContentGuard’s resolution of the Google Litigation and Apple Litigation will likely be classified as PHCI. |
Loss per Share
Loss per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Loss per Share | 11. Loss per Share Basic loss per share is calculated based on the weighted average number of Class A common stock and Class B common stock (the “Common Shares”) outstanding during the period. Diluted loss per share is calculated by dividing the loss allocable to common shareholders by the weighted average Common Shares outstanding plus potential dilutive Common Shares. Prior to the satisfaction of vesting conditions, unvested restricted stock awards are considered contingently issuable and are excluded from weighted average Common Shares outstanding used for computation of basic loss per share. Potential dilutive Common Shares consist of the incremental Class A common stock issuable upon the exercise of outstanding stock options (both vested and unvested), stock appreciation rights, and unvested restricted stock awards and units, calculated using the treasury stock method. The calculation of dilutive shares outstanding excludes out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market price of the Company’s Class A common shares for the period) because their inclusion would have been anti-dilutive. The following table sets forth the computation of basic and diluted loss per share (in thousands, except share and per share data): Three months ended Nine months ended 2015 2014 2015 2014 Net income (loss) attributable to Pendrell $ 1 $ (13,262 ) $ (8,116 ) $ (24,127 ) Weighted average common shares outstanding 267,572,793 266,520,052 266,861,073 266,200,724 Less: weighted average unvested restricted stock awards (1,819,967 ) (1,892,190 ) (1,304,890 ) (2,030,777 ) Shares used for computation of basic loss per share 265,752,826 264,627,862 265,556,183 264,169,947 Add back: weighted average unvested restricted stock awards and units — — — — Add back: dilutive stock options and stock appreciation rights — — — — Shares used for computation of diluted loss per share (1) 265,752,826 264,627,862 265,556,183 264,169,947 Basic and diluted loss per share attributable to Pendrell (2) $ — $ (0.05 ) $ (0.03 ) $ (0.09 ) (1) Stock options, stock appreciation rights, restricted stock awards and units totaling 39,856,637 for the three and nine months ended September 30, 2015 and 31,031,430 for the three and nine months ended September 30, 2014, were excluded from the calculation of diluted loss per share as their inclusion was anti-dilutive. (2) Per share amount for the three months ended September 30, 2015 is less than $0.01. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | Interim Financial Statements— |
Principles of Consolidation | Principles of Consolidation— In February 2015, the Company acquired the minority partner’s interest in Provitro Biosciences LLC (“Provitro”) for nominal consideration resulting in 100% ownership of Provitro. The Company continues to have a minority partner in its ContentGuard Holdings, Inc. (“ContentGuard”) subsidiary. |
Segment Information | Segment Information— |
Use of Estimates | Use of Estimates— On an ongoing basis, the Company evaluates its estimates, including among others, those related to the fair value of acquired intangible assets and goodwill, the useful lives and potential impairment of intangible assets and property and equipment, the value of stock awards for the purpose of determining stock-based compensation expense, accrued liabilities (including bonus accruals), valuation allowances related to the ability to realize deferred tax assets, allowances for doubtful receivables and certain tax liabilities. Estimates are based on historical experience and other factors, including the current economic environment as deemed appropriate under the circumstances. Estimates and assumptions are adjusted when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in estimates used to prepare these financial statements will be reflected in the financial statements in future periods. |
Accounting Policies | Accounting Policies— |
Evaluation of Intangible Assets and Goodwill | It is the Company’s policy to evaluate the carrying value of its intangible assets when events or circumstances indicate that the carrying amounts may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. During the three months ended September 30, 2015, certain developments arose indicating it was reasonably possible that a portion of the Company’s patents were impaired (see litigation discussion in footnote 7). However, despite these developments, the Company’s estimate of undiscounted cash flows continues to indicate that such carrying amounts are expected to be recovered. Further, the Company continues to believe that it is not more likely than not that the carrying amount of its goodwill exceeds its fair value. Nonetheless, it is reasonably possible that the Company’s ability to realize its estimated future cash flows may be impacted by the outcome of its trial scheduled with Apple in November 2015. The Company will therefore continue to evaluate the fair value of its intangible assets and goodwill as the Apple trial progresses. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses | The following table summarizes accrued expenses (in thousands): September 30, 2015 December 31, Accrued payroll and related expenses $ 1,574 $ 2,570 Accrued legal, professional and other expenses 1,657 3,254 $ 3,231 $ 5,824 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Current Liabilities | The following table summarizes other current liabilities (in thousands): September 30, 2015 December 31, Installment payment obligation $ — $ 4,000 Restricted stock awards — 2,254 Other 660 637 $ 660 $ 6,891 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense Included in Condensed Consolidated Statements of Operations | Stock-based compensation expense included in the condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 was as follows (in thousands): Three months ended Nine months ended 2015 2014 2015 2014 Stock options $ 835 $ 1,180 $ 1,855 $ 3,629 Restricted stock awards (1) 999 263 1,416 1,566 Total stock-based compensation expense $ 1,834 $ 1,443 $ 3,271 $ 5,195 (1) Stock-based compensation expense for the nine months ended September 30, 2015 includes $0.2 million related to 250,000 Class A common stock restricted stock awards that were required to be treated as a liability. The Company settled the related liability with a $2.5 million payment in April 2015 and no further expense will be incurred. Stock-based compensation expense for the three and nine months ended September 30, 2014 includes $0.2 million and $0.6 million, respectively, related to the awards. |
Stock Option and SARs Activity | The Company’s stock option and SARs activity for the nine months ended September 30, 2015 is summarized as follows: Number of shares of Weighted average Outstanding – December 31, 2014 25,554,026 $ 1.96 Granted (1) / (2) 6,238,300 $ 1.33 Exercised (1,045,000 ) $ 1.18 Forfeited (1,826,188 ) $ 1.93 Outstanding – September 30, 2015 (3) 28,921,138 $ 1.85 Exercisable – September 30, 2015 (3) 17,597,458 $ 1.77 Vested and expected to vest – September 30, 2015 (3) 28,404,947 $ 1.86 (1) During the nine months ended September 30, 2015, the Company granted 4.0 million stock options to its new Chief Executive Officer (“CEO”) that vest at a rate of 25% per year over four years, with a portion of the annual vesting to occur only to the extent that the Company meets its performance objectives for the preceding calendar year under the Company’s then-applicable incentive plan. Of the 4.0 million options granted, 1.5 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. The remaining 2.5 million options have a grant date fair value of $1.6 million. (2) In July 2015, the Company granted 2.2 million stock options to various employees with a grant date fair value of $1.4 million. The service-based options are 50% vested after one year, 75% vested after two years and 100% vested after three years. (3) In connection with the departure of the Company’s former CEO, Mr. Benjamin G. Wolff, in November 2014, the exercise period for Mr. Wolff’s vested stock options was extended until December 15, 2015. Excluding Mr. Wolff’s 8,277,500 vested options with a weighted average exercise price of $1.45 and a weighted average remaining life of 0.21 years, the weighted average exercise price for all other outstanding, exercisable, and vested and expected to vest options and stock appreciation rights is as follows: Number of Weighted average Outstanding at September 30, 2015 20,643,637 $ 2.02 Exercisable at September 30, 2015 9,319,958 $ 2.05 Vested and expected to vest at September 30, 2015 20,127,447 $ 2.03 |
Restricted Stock Activity | The Company’s restricted stock activity for the nine months ended September 30, 2015 is summarized as follows: Number of shares of Weighted average Unvested – December 31, 2014 2,559,514 $ 1.67 Granted 9,496,673 $ 0.79 Vested (700,372 ) $ 2.53 Forfeited (420,316 ) $ 1.55 Unvested – September 30, 2015 10,935,499 $ 0.86 |
Restricted Stock Granted | Restricted stock awards granted during the nine months ended September 30, 2015, including 9.0 million restricted stock awards granted to its new CEO, consist of the following: Number of shares of Grant date fair value (in thousands) Service-based (1) 3,748,700 $ 5,016 Performance-based (2) 3,500,000 670 Market-based (3) 2,000,000 1,500 Shares issued as board of director compensation 247,973 335 Total restricted stock granted 9,496,673 $ 7,521 (1) Of the 3.7 million service-based restricted stock awards granted, 3.5 million were granted to the CEO and vest at a rate of 25% per year over four years. The remaining 0.2 million of service-based restricted stock awards were granted to various employees and vest 50% after one year, 75% after two years and 100% after three years. (2) The 3.5 million performance-based restricted stock awards were all granted to the CEO and vest at a maximum rate of 25% per year over four years, but only if and to the extent the Company meets its performance objectives for the preceding calendar year under the Company’s then-applicable incentive plan. Of the awards granted, 3.0 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. (3) The 2.0 million market-based restricted stock awards were all granted to the CEO and fully vest when both of the following have occurred: (i) the average closing price of the Company’s Class A common stock, measured over any period of 60 consecutive calendar days, has reached or exceeded $3.00 per share (the “Price Trigger”) and (ii) the date is January 1, 2017 or later. If the Price Trigger is not achieved by December 31, 2019, then none of the market-based restricted stock awards will vest. |
Loss per Share (Tables)
Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Loss Per Share | The following table sets forth the computation of basic and diluted loss per share (in thousands, except share and per share data): Three months ended Nine months ended 2015 2014 2015 2014 Net income (loss) attributable to Pendrell $ 1 $ (13,262 ) $ (8,116 ) $ (24,127 ) Weighted average common shares outstanding 267,572,793 266,520,052 266,861,073 266,200,724 Less: weighted average unvested restricted stock awards (1,819,967 ) (1,892,190 ) (1,304,890 ) (2,030,777 ) Shares used for computation of basic loss per share 265,752,826 264,627,862 265,556,183 264,169,947 Add back: weighted average unvested restricted stock awards and units — — — — Add back: dilutive stock options and stock appreciation rights — — — — Shares used for computation of diluted loss per share (1) 265,752,826 264,627,862 265,556,183 264,169,947 Basic and diluted loss per share attributable to Pendrell (2) $ — $ (0.05 ) $ (0.03 ) $ (0.09 ) (1) Stock options, stock appreciation rights, restricted stock awards and units totaling 39,856,637 for the three and nine months ended September 30, 2015 and 31,031,430 for the three and nine months ended September 30, 2014, were excluded from the calculation of diluted loss per share as their inclusion was anti-dilutive. (2) Per share amount for the three months ended September 30, 2015 is less than $0.01. |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - Segment | 9 Months Ended | |
Sep. 30, 2015 | Feb. 28, 2015 | |
Significant Accounting Policies [Line Items] | ||
Number of operating and reporting segments | 1 | |
Provitro Biosciences LLC | ||
Significant Accounting Policies [Line Items] | ||
Ownership percentage | 100.00% |
Provitro - Additional Informati
Provitro - Additional Information (Detail) - Provitro Biosciences LLC - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2014 | Feb. 28, 2015 | Feb. 28, 2013 | |
Business Acquisition [Line Items] | |||
Percentage of business acquisition interest | 68.75% | ||
Ownership percentage | 100.00% | ||
Impairment charges | $ 11 |
Provitro - Additional Informa26
Provitro - Additional Information1 (Detail) $ in Thousands | 1 Months Ended | 9 Months Ended |
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds associated with the disposition of property | $ 103 | |
Provitro Biosciences LLC | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds associated with the disposition of property | 100 | |
Provitro Biosciences LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Considerations paid and payable under the sale of assets | $ 2,000 | 2,000 |
Provitro Biosciences LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | General and Administrative Expenses [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss related to tangible assets | 700 | |
Provitro Biosciences LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Other Current Receivables [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Considerations paid and payable under the sale of assets | 1,300 | $ 1,300 |
Period over which balance payable under sale of assets | 12 months | |
Provitro Biosciences LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] | Other Noncurrent Assets [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Considerations paid and payable under the sale of assets | $ 600 | $ 600 |
Installment period for the sale of assets | 2017-03 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015USD ($) | Sep. 30, 2015USD ($)Patent | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)Patent | Sep. 30, 2014USD ($)Patent | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Losses on abandonment of certain patents | $ | $ (100) | $ (300) | $ (869) | $ (1,615) | |
Number of patents purchased | 0 | ||||
Increases portfolios, Intangible assets patents | $ | $ 2,000 | ||||
Number of issued patents held | 1,200 | 1,200 |
Summary of Accrued Expenses (De
Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 1,574 | $ 2,570 |
Accrued legal, professional and other expenses | 1,657 | 3,254 |
Accrued expenses | $ 3,231 | $ 5,824 |
Other liabilities - Summary of
Other liabilities - Summary of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Other Liabilities Disclosure [Abstract] | ||
Installment payment obligation | $ 4,000 | |
Restricted stock awards | 2,254 | |
Other | $ 660 | 637 |
Other liabilities | $ 660 | $ 6,891 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Jan. 31, 2014Patent | Dec. 18, 2013Patent | Jul. 31, 2015Patent | Sep. 30, 2015USD ($) | Dec. 31, 2014Patent | Oct. 26, 2015USD ($) | Nov. 30, 2012USD ($) |
Apple Inc [Member] | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of inter partes review petitions | 4 | ||||||
Google And Samsung Verdict [Member] | Android Defendants [Member] | Unfavorable Regulatory Action [Member] | Subsequent Event | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Additional contingent litigation expenses associated with trial | $ | $ 900,000 | ||||||
ZTE Enforcement Actions | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 3 | ||||||
Number of patents against nullity action filed | 2 | ||||||
Number of revocation of patent | 1 | ||||||
Number of patents with opposition | 1 | ||||||
Apple Litigation | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 9 | ||||||
IPR and CBM Petitions by Apple | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 9 | ||||||
Number of inter partes review petitions | 29 | ||||||
Number of challenging validity | 3 | ||||||
IPR and CBM Petitions by Google | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 3 | ||||||
Number of challenging validity | 1 | 3 | |||||
Number of patents terminated or withdrawn | 1 | ||||||
IPR and CBM Petitions by Google | Maximum | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 9 | ||||||
ZTE IPRs | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 6 | ||||||
Number of patents terminated or withdrawn | 2 | ||||||
Number of patents remaining | 4 | ||||||
J&J Arbitration | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Amount obtained from arbitration judgment | $ | $ 4,000,000 | ||||||
Gain from collection | $ | $ 0 | ||||||
Google Litigation | |||||||
Gain And Loss Contingencies [Line Items] | |||||||
Number of alleged patents infringed | 9 |
Stock-Based Compensation Expens
Stock-Based Compensation Expense Included in Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation | $ 1,834 | $ 1,443 | $ 3,271 | $ 5,195 | |
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation | 835 | 1,180 | 1,855 | 3,629 | |
Restricted stock awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation | [1] | $ 999 | $ 263 | $ 1,416 | $ 1,566 |
[1] | Stock-based compensation expense for the nine months ended September 30, 2015 includes $0.2 million related to 250,000 Class A common stock restricted stock awards that were required to be treated as a liability. The Company settled the related liability with a $2.5 million payment in April 2015 and no further expense will be incurred. Stock-based compensation expense for the three and nine months ended September 30, 2014 includes $0.2 million and $0.6 million, respectively, related to the awards. |
Stock-Based Compensation Expe32
Stock-Based Compensation Expense Included in Condensed Consolidated Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Apr. 15, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Stock-based compensation | $ 1,834 | $ 1,443 | $ 3,271 | $ 5,195 | ||
Restricted stock awards liability | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Stock-based compensation | $ 200 | $ 200 | $ 600 | |||
Payment to settle related liability | $ 2,500 | |||||
Restricted stock awards accounted for liability awards | 250,000 |
Stock Option and SARs Activity
Stock Option and SARs Activity (Detail) - Stock Options and Stock Appreciation Rights | 9 Months Ended | |
Sep. 30, 2015$ / sharesshares | ||
Number of shares of Class A common stock underlying options and SARs | ||
Outstanding at beginning of period | 25,554,026 | |
Granted | 6,238,300 | [1],[2] |
Exercised | (1,045,000) | |
Forfeited | (1,826,188) | |
Outstanding at end of period | 28,921,138 | [3] |
Exercisable at end of period | 17,597,458 | [3] |
Vested and expected to vest at end of period | 28,404,947 | [3] |
Weighted average exercise price | ||
Outstanding at beginning of period | $ / shares | $ 1.96 | |
Granted | $ / shares | 1.33 | [1],[2] |
Exercised | $ / shares | 1.18 | |
Forfeited | $ / shares | 1.93 | |
Outstanding at end of period | $ / shares | 1.85 | [3] |
Exercisable at end of period | $ / shares | 1.77 | [3] |
Vested and expected to vest at end of period | $ / shares | $ 1.86 | [3] |
[1] | During the nine months ended September 30, 2015, the Company granted 4.0 million stock options to its new Chief Executive Officer ("CEO") that vest at a rate of 25% per year over four years, with a portion of the annual vesting to occur only to the extent that the Company meets its performance objectives for the preceding calendar year under the Company's then-applicable incentive plan. Of the 4.0 million options granted, 1.5 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. The remaining 2.5 million options have a grant date fair value of $1.6 million. | |
[2] | In July 2015, the Company granted 2.2 million stock options to various employees with a grant date fair value of $1.4 million. The service based options are 50% vested at one year, 75% vested after two years and 100% vested after three years. | |
[3] | In connection with the departure of the Company's former CEO, Mr. Benjamin G. Wolff, in November 2014, the exercise period for Mr. Wolff's vested stock options was extended until December 15, 2015. Excluding Mr. Wolff's 8,277,500 vested options with a weighted average exercise price of $1.45 and a weighted average remaining life of 0.21 years, the weighted average exercise price for all other outstanding, exercisable, and vested and expected to vest options and stock appreciation rights is as follows: |
Stock Option and SARs Activit34
Stock Option and SARs Activity (Parenthetical) (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |||
Stock Options and Stock Appreciation Rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted | [1],[2] | 6,238,300 | |||
Vested and expected to vest at end of period | [3] | 28,404,947 | |||
Vested and expected to vest at end of period | [3] | $ 1.86 | |||
Outstanding at end of period | 28,921,138 | [3] | 25,554,026 | ||
Exercisable at end of period | [3] | 17,597,458 | |||
Outstanding at end of period | $ 1.85 | [3] | $ 1.96 | ||
Exercisable at end of period | [3] | $ 1.77 | |||
Stock Options and Stock Appreciation Rights | Excluding Benjamin G- Wolff | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested and expected to vest at end of period | 20,127,447 | ||||
Vested and expected to vest at end of period | $ 2.03 | ||||
Outstanding at end of period | 20,643,637 | ||||
Exercisable at end of period | 9,319,958 | ||||
Outstanding at end of period | $ 2.02 | ||||
Exercisable at end of period | $ 2.05 | ||||
Stock Options and Stock Appreciation Rights | Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vested and expected to vest at end of period | 8,277,500 | ||||
Vested and expected to vest at end of period | $ 1.45 | ||||
Weighted average remaining contractual term, Vested and expected to vest | 2 months 16 days | ||||
Stock options | Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted | 4,000,000 | ||||
Stock options award vesting period | 4 years | ||||
Compensation expense related to shares | $ 0 | ||||
Stock options | Chief Executive Officer | One Year from the Date of Grant | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 25.00% | ||||
Stock options | Chief Executive Officer | Second Year from the Date of Grant | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 25.00% | ||||
Stock options | Chief Executive Officer | Third Year from the Date of Grant | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 25.00% | ||||
Stock options | Chief Executive Officer | Fourth Year from the Date of Grant | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 25.00% | ||||
Stock options | Chief Executive Officer | Performance- based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options, Vest upon achievement of performance milestones | 1,500,000 | ||||
Number of non-vested stock options remaining | 2,500,000 | ||||
Stock options grant date fair value | $ 1,600,000 | ||||
Service Based Options | Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options granted | 2,200,000 | ||||
Stock options grant date fair value | $ 1,400,000 | ||||
Service Based Options | Employees | Vest After One Year [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 50.00% | ||||
Service Based Options | Employees | Vest After Two Years [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 75.00% | ||||
Service Based Options | Employees | Vest After Three Years [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting percentage | 100.00% | ||||
[1] | During the nine months ended September 30, 2015, the Company granted 4.0 million stock options to its new Chief Executive Officer ("CEO") that vest at a rate of 25% per year over four years, with a portion of the annual vesting to occur only to the extent that the Company meets its performance objectives for the preceding calendar year under the Company's then-applicable incentive plan. Of the 4.0 million options granted, 1.5 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. The remaining 2.5 million options have a grant date fair value of $1.6 million. | ||||
[2] | In July 2015, the Company granted 2.2 million stock options to various employees with a grant date fair value of $1.4 million. The service based options are 50% vested at one year, 75% vested after two years and 100% vested after three years. | ||||
[3] | In connection with the departure of the Company's former CEO, Mr. Benjamin G. Wolff, in November 2014, the exercise period for Mr. Wolff's vested stock options was extended until December 15, 2015. Excluding Mr. Wolff's 8,277,500 vested options with a weighted average exercise price of $1.45 and a weighted average remaining life of 0.21 years, the weighted average exercise price for all other outstanding, exercisable, and vested and expected to vest options and stock appreciation rights is as follows: |
Restricted Stock Activity (Deta
Restricted Stock Activity (Detail) - Restricted Stock And Units Equity And Liability Awards | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number of shares of Class A common stock underlying restricted stock awards | |
Unvested Beginning Balance | 2,559,514 |
Granted | 9,496,673 |
Vested | (700,372) |
Forfeited | (420,316) |
Unvested Ending Balance | 10,935,499 |
Weighted average fair value per share | |
Unvested Beginning Balance | $ / shares | $ 1.67 |
Granted | $ / shares | 0.79 |
Vested | $ / shares | 2.53 |
Forfeited | $ / shares | 1.55 |
Unvested Ending Balance | $ / shares | $ 0.86 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Detail) shares in Millions | 9 Months Ended |
Sep. 30, 2015shares | |
Chief Executive Officer | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock awards granted | 9 |
Restricted Stock Granted (Detai
Restricted Stock Granted (Detail) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015USD ($)shares | ||
Service Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares of Class A common stock underlying restricted stock awards granted | shares | 3,748,700 | [1] |
Restricted stock awards granted, Grant date fair value | $ 5,016 | [1] |
Performance Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares of Class A common stock underlying restricted stock awards granted | shares | 3,500,000 | [2] |
Restricted stock awards granted, Grant date fair value | $ 670 | [2] |
Market Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares of Class A common stock underlying restricted stock awards granted | shares | 2,000,000 | [3] |
Restricted stock awards granted, Grant date fair value | $ 1,500 | [3] |
Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares of Class A common stock underlying restricted stock awards granted | shares | 9,496,673 | |
Restricted stock awards granted, Grant date fair value | $ 7,521 | |
Stock options issued as Board of Director compensation | Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares of Class A common stock underlying restricted stock awards granted | shares | 247,973 | |
Restricted stock awards granted, Grant date fair value | $ 335 | |
[1] | Of the 3.7 million of service-based restricted stock awards granted, 3.5 million were granted to the CEO and vest at a rate of 25% per year over four years. The remaining 0.2 million of service-based restricted stock awards were granted to various employees and vest 50% at one year, 75% after two years and 100% after three years. | |
[2] | The 3.5 million of performance-based restricted stock awards were all granted to the CEO and vest at a maximum rate of 25% per year over four years, but only if and to the extent the Company meets its performance objectives for the preceding calendar year under the Company's then-applicable incentive plan. Of the awards granted, 3.0 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. | |
[3] | The 2.0 million of market-based restricted stock awards were all granted to the CEO and fully vest when both of the following have occurred: (i) the average closing price of the Company's Class A common stock, measured over any period of 60 consecutive calendar days, has reached or exceeded $3.00 per share, (the "Price Trigger") and (ii) the date is January 1, 2017 or later. If the Price Trigger is not achieved by December 31, 2019, then none of the market-based restricted stock awards will vest. |
Restricted Stock Granted (Paren
Restricted Stock Granted (Parenthetical) (Detail) | 9 Months Ended | |
Sep. 30, 2015$ / sharesshares | ||
Chief Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 9,000,000 | |
Service Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 3,748,700 | [1] |
Service Based Restricted Stock Awards | Chief Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 3,500,000 | |
Restricted stock awards vesting period | 4 years | |
Service Based Restricted Stock Awards | Chief Executive Officer | One Year from the Date of Grant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 25.00% | |
Service Based Restricted Stock Awards | Chief Executive Officer | Second Year from the Date of Grant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 25.00% | |
Service Based Restricted Stock Awards | Chief Executive Officer | Third Year from the Date of Grant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 25.00% | |
Service Based Restricted Stock Awards | Chief Executive Officer | Fourth Year from the Date of Grant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 25.00% | |
Service Based Restricted Stock Awards | Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 200,000 | |
Service Based Restricted Stock Awards | Employees | Vest After One Year [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 50.00% | |
Service Based Restricted Stock Awards | Employees | Vest After Two Years [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 75.00% | |
Service Based Restricted Stock Awards | Employees | Vest After Three Years [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 100.00% | |
Performance Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 3,500,000 | [2] |
Performance Based Restricted Stock Awards | Chief Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock awards, Vest upon achievement of performance milestones | 3,000,000 | |
Service-based restricted stock awards granted | 3,500,000 | |
Restricted stock awards vesting period | 4 years | |
Performance Based Restricted Stock Awards | Chief Executive Officer | One Year from the Date of Grant | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock award vesting percentage | 25.00% | |
Market Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 2,000,000 | [3] |
Market Based Restricted Stock Awards | Chief Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Service-based restricted stock awards granted | 2,000,000 | |
Average closing price | $ / shares | $ 3 | |
Stock award, period consecutive trading days | 60 days | |
Restricted stock awards vesting rights | The CEO's 2.0 million of market-based restricted stock awards fully vest when both of the following have occurred (i) the average closing price of the Company's Class A common stock, measured over any period of 60 consecutive calendar days, has reached or exceeded $3.00 per share, (the "Price Trigger") and (ii) the date is January 1, 2017 or later. If the Price Trigger is not achieved by December 31, 2019, then none of the market-based restricted stock awards will vest. | |
[1] | Of the 3.7 million of service-based restricted stock awards granted, 3.5 million were granted to the CEO and vest at a rate of 25% per year over four years. The remaining 0.2 million of service-based restricted stock awards were granted to various employees and vest 50% at one year, 75% after two years and 100% after three years. | |
[2] | The 3.5 million of performance-based restricted stock awards were all granted to the CEO and vest at a maximum rate of 25% per year over four years, but only if and to the extent the Company meets its performance objectives for the preceding calendar year under the Company's then-applicable incentive plan. Of the awards granted, 3.0 million vest upon the achievement of certain performance milestones for which the related performance targets have yet to be established. Accordingly, no compensation expense related to those shares has been recorded. | |
[3] | The 2.0 million of market-based restricted stock awards were all granted to the CEO and fully vest when both of the following have occurred: (i) the average closing price of the Company's Class A common stock, measured over any period of 60 consecutive calendar days, has reached or exceeded $3.00 per share, (the "Price Trigger") and (ii) the date is January 1, 2017 or later. If the Price Trigger is not achieved by December 31, 2019, then none of the market-based restricted stock awards will vest. |
Gain on Contingency - Additiona
Gain on Contingency - Additional Information (Detail) | Jul. 13, 2015USD ($) | Jan. 14, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($)Payment | Jan. 31, 2015USD ($) |
Gain Contingencies [Line Items] | |||||
Contingent Proceeds from the Sale of Non Productive Assets | $ 6,000,000 | ||||
Number of contingent scheduled payments | Payment | 3 | ||||
Gain on contingency | $ 2,226,000 | $ 3,974,000 | |||
First scheduled payments | |||||
Gain Contingencies [Line Items] | |||||
Gain on contingency | $ 1,700,000 | ||||
Second scheduled payments | |||||
Gain Contingencies [Line Items] | |||||
Gain on contingency | $ 2,200,000 | ||||
Third Scheduled Payments Due In Early 2016 | |||||
Gain Contingencies [Line Items] | |||||
Gain on contingency, unrecognized amount | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015USD ($)Shareholder | Sep. 30, 2014USD ($) | Oct. 31, 2015USD ($) | |
Income Tax Contingency [Line Items] | |||
Income tax provision | $ 4,125 | $ 6,270 | |
Personal holding company determination, number of shareholders limit | Shareholder | 5 | ||
Ownership percentage of individual shareholders in a personal holding company | 50.00% | ||
Percentage of adjusted ordinary gross income pertaining to individual shareholders | 60.00% | ||
Personal holding company tax rate on net personal holding company income | 20.00% | ||
Subsequent Event | |||
Income Tax Contingency [Line Items] | |||
Income tax refunds claims | $ 10,000 |
Computation of Basic and Dilute
Computation of Basic and Diluted Loss Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Earnings Per Share [Abstract] | |||||
Net income (loss) attributable to Pendrell | $ 1 | $ (13,262) | $ (8,116) | $ (24,127) | |
Weighted average common shares outstanding | 267,572,793 | 266,520,052 | 266,861,073 | 266,200,724 | |
Less: weighted average unvested restricted stock awards | (1,819,967) | (1,892,190) | (1,304,890) | (2,030,777) | |
Shares used for computation of basic loss per share | 265,752,826 | 264,627,862 | 265,556,183 | 264,169,947 | |
Add back: weighted average unvested restricted stock awards and units | 0 | 0 | 0 | 0 | |
Add back: dilutive stock options and stock appreciation rights | 0 | 0 | 0 | 0 | |
Shares used for computation of diluted loss per share | [1] | 265,752,826 | 264,627,862 | 265,556,183 | 264,169,947 |
Basic and diluted loss per share attributable to Pendrell | [2] | $ (0.05) | $ (0.03) | $ (0.09) | |
[1] | Stock options, stock appreciation rights, restricted stock awards and units totaling 39,856,637 for the three and nine months ended September 30, 2015 and 31,031,430 for the three and nine months ended September 30, 2014, were excluded from the calculation of diluted loss per share as their inclusion was anti-dilutive. | ||||
[2] | Per share amount for the three months ended September 30, 2015 is less than $0.01. |
Computation of Basic and Dilu42
Computation of Basic and Diluted Loss Per Share (Parenthetical) (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Earnings Per Share Basic And Diluted [Line Items] | |||||
Securities excluded from calculation of diluted loss per share | 39,856,637 | 31,031,430 | 39,856,637 | 31,031,430 | |
Basic and diluted loss per share attributable to Pendrell | [1] | $ (0.05) | $ (0.03) | $ (0.09) | |
Maximum | |||||
Earnings Per Share Basic And Diluted [Line Items] | |||||
Basic and diluted loss per share attributable to Pendrell | $ 0.01 | ||||
[1] | Per share amount for the three months ended September 30, 2015 is less than $0.01. |