Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Dec. 02, 2013 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q/A | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'MVNR | ' |
Entity Registrant Name | 'MAVENIR SYSTEMS INC | ' |
Entity Central Index Key | '0001361470 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 23,274,023 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | |
Cash and cash equivalents | $7,968 | $7,402 | |
Accounts receivable, net of allowance of $670 and $382 at September 30, 2013, and December 31, 2012 respectively | 16,929 | 15,159 | |
Unbilled revenue | 8,728 | 9,782 | |
Inventories | 4,847 | 2,255 | |
Prepaid expenses and other current assets | 6,804 | 6,484 | |
Deferred contract costs | 6,761 | 5,288 | |
Total current assets | 52,037 | 46,370 | |
Non-current assets: | ' | ' | |
Property and equipment, net | 5,297 | 5,919 | |
Intangible assets, net | 5,289 | 5,714 | |
Deposits and other assets | 1,373 | 1,555 | |
Goodwill | 895 | 923 | |
Total assets | 64,891 | 60,481 | |
Current liabilities: | ' | ' | |
Trade accounts payable | 4,221 | 6,087 | |
Accrued liabilities | 14,771 | 14,067 | |
Deferred revenue | 9,360 | 12,927 | |
Income tax payable | 554 | 27 | |
Deferred income tax | ' | 34 | |
Total current liabilities | 28,906 | 33,142 | |
Non-current liabilities: | ' | ' | |
Other long-term liabilities | 626 | 876 | |
Long-term debt | 33,282 | 14,700 | |
Total liabilities | 62,814 | 48,718 | |
Commitments and contingencies | ' | ' | |
Shareholders' deficit: | ' | ' | |
Common stock, $0.001 par value. 22,171,986 shares authorized; 2,106,635 and 2,087,281 shares issued at September 30, 2013, and December 31, 2012, respectively; 1,357,219 and 1,337,906 shares outstanding at September 30, 2013, and December 31, 2012, respectively: 17,809,686 shares outstanding, pro forma | 1 | 1 | |
Additional paid-in capital | 4,027 | 1,215 | |
Accumulated deficit | -108,025 | -95,577 | |
Accumulated other comprehensive income | 1,516 | 1,566 | |
Total shareholders' deficit | -102,481 | -92,795 | |
Total liabilities and shareholders' deficit | 64,891 | 60,481 | |
Series A redeemable convertible preferred stock [Member] | ' | ' | |
Shareholders' deficit: | ' | ' | |
Redeemable convertible preferred stock, $0.001 par value. | 13,005 | 13,005 | |
Series B redeemable convertible preferred stock [Member] | ' | ' | |
Shareholders' deficit: | ' | ' | |
Redeemable convertible preferred stock, $0.001 par value. | 20,500 | 20,500 | |
Series C redeemable convertible preferred stock [Member] | ' | ' | |
Shareholders' deficit: | ' | ' | |
Redeemable convertible preferred stock, $0.001 par value. | 17,478 | 17,478 | |
Series D redeemable convertible preferred stock [Member] | ' | ' | |
Shareholders' deficit: | ' | ' | |
Redeemable convertible preferred stock, $0.001 par value. | 13,575 | 13,575 | |
Series E redeemable convertible preferred stock [Member] | ' | ' | |
Shareholders' deficit: | ' | ' | |
Redeemable convertible preferred stock, $0.001 par value. | 40,000 | 40,000 | |
Pro Forma [Member] | ' | ' | |
Current assets: | ' | ' | |
Cash and cash equivalents | 7,968 | [1] | ' |
Accounts receivable, net of allowance of $670 and $382 at September 30, 2013, and December 31, 2012 respectively | 16,929 | [1] | ' |
Unbilled revenue | 8,728 | [1] | ' |
Inventories | 4,847 | [1] | ' |
Prepaid expenses and other current assets | 6,804 | [1] | ' |
Deferred contract costs | 6,761 | [1] | ' |
Total current assets | 52,037 | [1] | ' |
Non-current assets: | ' | ' | |
Property and equipment, net | 5,297 | [1] | ' |
Intangible assets, net | 5,289 | [1] | ' |
Deposits and other assets | 1,373 | [1] | ' |
Goodwill | 895 | [1] | ' |
Total assets | 64,891 | [1] | ' |
Current liabilities: | ' | ' | |
Trade accounts payable | 4,221 | [1] | ' |
Accrued liabilities | 14,771 | [1] | ' |
Deferred revenue | 9,360 | [1] | ' |
Income tax payable | 554 | [1] | ' |
Total current liabilities | 28,906 | [1] | ' |
Non-current liabilities: | ' | ' | |
Other long-term liabilities | 626 | [1] | ' |
Long-term debt | 33,282 | [1] | ' |
Total liabilities | 62,814 | [1] | ' |
Commitments and contingencies | ' | [1] | ' |
Shareholders' deficit: | ' | ' | |
Common stock, $0.001 par value. 22,171,986 shares authorized; 2,106,635 and 2,087,281 shares issued at September 30, 2013, and December 31, 2012, respectively; 1,357,219 and 1,337,906 shares outstanding at September 30, 2013, and December 31, 2012, respectively: 17,809,686 shares outstanding, pro forma | 18 | [1] | ' |
Additional paid-in capital | 4,010 | [1] | ' |
Accumulated deficit | -3,467 | [1] | ' |
Accumulated other comprehensive income | 1,516 | [1] | ' |
Total shareholders' deficit | 2,077 | [1] | ' |
Total liabilities and shareholders' deficit | $64,891 | [1] | ' |
[1] | The unaudited pro forma balance sheet gives effect to the conversion of all outstanding redeemable convertible preferred stock into 16,452,467 shares of common stock, which conversion occurred upon the completion of our November 2013 initial public offering, as if such conversion were in effect on September 30, 2013. |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | |
In Thousands, except Share data, unless otherwise specified | |||
Accounts receivable, net of allowance | $670 | $382 | |
Common stock, par value | $0.00 | $0.00 | |
Common stock, shares authorized | 22,171,986 | 22,171,986 | |
Common stock, shares issued | 2,106,635 | 2,087,281 | |
Common stock, shares outstanding | 1,357,219 | 1,337,906 | |
Series A redeemable convertible preferred stock [Member] | ' | ' | |
Preferred stock, par value | $0.00 | $0.00 | |
Preferred stock, shares authorized | 3,733,963 | 3,733,963 | |
Preferred stock, shares issued | 3,733,963 | 3,733,963 | |
Preferred stock, shares outstanding | 3,733,963 | 3,733,963 | |
Series B redeemable convertible preferred stock [Member] | ' | ' | |
Preferred stock, par value | $0.00 | $0.00 | |
Preferred stock, shares authorized | 3,818,210 | 3,818,210 | |
Preferred stock, shares issued | 3,818,210 | 3,818,210 | |
Preferred stock, shares outstanding | 3,818,210 | 3,818,210 | |
Series C redeemable convertible preferred stock [Member] | ' | ' | |
Preferred stock, par value | $0.00 | $0.00 | |
Preferred stock, shares authorized | 3,526,218 | 3,526,218 | |
Preferred stock, shares issued | 2,616,704 | 2,616,704 | |
Preferred stock, shares outstanding | 2,616,704 | 2,616,704 | |
Series D redeemable convertible preferred stock [Member] | ' | ' | |
Preferred stock, par value | $0.00 | $0.00 | |
Preferred stock, shares authorized | 1,728,569 | 1,728,569 | |
Preferred stock, shares issued | 1,728,569 | 1,728,569 | |
Preferred stock, shares outstanding | 1,728,569 | 1,728,569 | |
Series E redeemable convertible preferred stock [Member] | ' | ' | |
Preferred stock, par value | $0.00 | $0.00 | |
Preferred stock, shares authorized | 4,590,744 | 4,590,744 | |
Preferred stock, shares issued | 4,555,021 | 4,555,021 | |
Preferred stock, shares outstanding | 4,555,021 | 4,555,021 | |
IPO [Member] | ' | ' | |
Number of outstanding redeemable convertible preferred stock converted into shares of common stock | 16,452,467 | ' | |
Pro Forma [Member] | ' | ' | |
Common stock, shares outstanding | 17,809,686 | [1] | ' |
[1] | The unaudited pro forma balance sheet gives effect to the conversion of all outstanding redeemable convertible preferred stock into 16,452,467 shares of common stock, which conversion occurred upon the completion of our November 2013 initial public offering, as if such conversion were in effect on September 30, 2013. |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues | ' | ' | ' | ' |
Software products | $20,788 | $11,848 | $58,052 | $41,181 |
Maintenance | 5,183 | 5,260 | 16,109 | 15,877 |
Total revenues | 25,971 | 17,108 | 74,161 | 57,058 |
Cost of revenues | ' | ' | ' | ' |
Software products | 10,806 | 6,068 | 28,220 | 17,314 |
Maintenance | 2,716 | 1,900 | 5,543 | 5,744 |
Total cost of revenues | 13,522 | 7,968 | 33,763 | 23,058 |
Gross profit | 12,449 | 9,140 | 40,398 | 34,000 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 5,436 | 5,552 | 16,934 | 18,401 |
Sales and marketing | 4,675 | 4,025 | 14,331 | 12,633 |
General and administrative | 5,745 | 3,995 | 15,106 | 11,942 |
Total operating expenses | 15,856 | 13,572 | 46,371 | 42,976 |
Operating loss | -3,407 | -4,432 | -5,973 | -8,976 |
Other expense (income): | ' | ' | ' | ' |
Interest income | -4 | -6 | -12 | -10 |
Interest expense | 1,072 | 44 | 2,187 | 73 |
Foreign exchange loss (gain) | -316 | -1,095 | 2,328 | -225 |
Total other expense (income), net | 752 | -1,057 | 4,503 | -162 |
Loss before income tax | -4,159 | -3,375 | -10,476 | -8,814 |
Income tax expense | 354 | 43 | 1,972 | 254 |
Net loss | -4,513 | -3,418 | -12,448 | -9,068 |
Other comprehensive income (loss) | ' | ' | ' | ' |
Foreign currency translation adjustments | 52 | 336 | -50 | 1,135 |
Total comprehensive loss | ($4,461) | ($3,082) | ($12,498) | ($7,933) |
Net loss per common share: | ' | ' | ' | ' |
Basic | ($3.35) | ($2.61) | ($9.28) | ($7.14) |
Diluted | ($3.35) | ($2.61) | ($9.28) | ($7.14) |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic and diluted | 1,348 | 1,310 | 1,342 | 1,270 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating activities: | ' | ' |
Net loss | ($12,448) | ($9,068) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation of property and equipment | 1,769 | 1,008 |
Amortization of intangible assets | 1,080 | 964 |
Amortization of debt discount | 216 | ' |
Provision for bad debts and doubtful accounts | 388 | 111 |
Stock-based compensation expense | 1,161 | 203 |
Unrealized foreign currency loss | 662 | 1,696 |
Loss on sale of assets | 1 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -1,686 | 1,259 |
Unbilled revenue | 925 | -3,850 |
Deposits and other current assets | -465 | 44 |
Inventories | -2,592 | -578 |
Prepaid expenses | -527 | -1,728 |
Deferred contract costs | -1,399 | -944 |
Deferred revenue | -3,325 | -6,678 |
Accounts payable and accrued liabilities | -738 | 3,569 |
Net cash used in operating activities | -16,978 | -13,992 |
Investing activities: | ' | ' |
Purchases of property and equipment | -1,962 | -2,465 |
Net cash used in investing activities | -1,962 | -2,465 |
Financing activities: | ' | ' |
Borrowing from long-term debt | 27,000 | ' |
Borrowing from line of credit | ' | 3,000 |
Repayments of long-term debt | -7,000 | ' |
Repayments of line of credit borrowing | ' | -122 |
Exercise of options to purchase common stock | 17 | 61 |
Net cash provided by financing activities | 20,017 | 2,939 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | -511 | -500 |
Net increase (decrease) in cash and cash equivalents | 566 | -14,018 |
Cash and cash equivalents at beginning of period | 7,402 | 19,466 |
Cash and cash equivalents at end of period | 7,968 | 5,448 |
Supplemental cash flow information: | ' | ' |
Cash paid for interest | 1,627 | 72 |
Income tax payments, net | $254 | $256 |
Description_of_the_Business_an
Description of the Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Description of the Business and Basis of Presentation | ' |
1. Description of the Business and Basis of Presentation | |
Throughout these condensed consolidated financial statements, Mavenir Systems, Inc. is referred to as “Mavenir,” the “Company,” “we,” “us” and “our.” | |
Description of Business | |
Mavenir Systems, Inc. (“Mavenir”) was originally formed as a limited liability company on April 26, 2005. Mavenir was then incorporated under the laws of Texas in August 2005, and subsequently incorporated under the laws of the state of Delaware in March 2006. | |
Mavenir is a leading provider of software-based telecommunications networking solutions that enable mobile service providers to deliver internet protocol (“IP”)-based voice, video, rich communication and enhanced messaging services to their subscribers globally. Mavenir’s solutions deliver Rich Communication Suite (“RCS”)-based services, which enable enhanced mobile communications such as group text messaging, multi-party voice or video calling and live video streaming as well as the exchange of files or images, over existing 2G and 3G networks as well as next generation 4G Long Term Evolution (“LTE”) networks. Mavenir’s solutions also deliver voice services over LTE technology and wireless (“Wi-Fi”) networks known respectively as Voice over LTE (“VoLTE”) and Voice over Wi-Fi (“VoWi-Fi”). Mavenir’s mOne® Convergence Platform has enabled a leading mobile service provider to introduce the industry’s first live network deployment of VoLTE and the industry’s first live deployment of next-generation RCS 5. | |
Mavenir is headquartered in Richardson, Texas and has research and development personnel located at its wholly-owned subsidiaries in China and India. Additionally, Mavenir has a sales presence in Hong Kong and Europe. | |
On May 27, 2011, Mavenir acquired Airwide Solutions, Inc. (“Airwide”) (the “Airwide Acquisition”). Airwide’s operations are focused on the provision of messaging and content delivery software to mobile operators. Airwide designs, develops, and supports messaging and content systems. The majority of Airwide’s revenues and expenses are from outside the United States. Prior to the Airwide Acquisition, Airwide’s corporate offices were located in Burlington, Massachusetts. Airwide has significant operations in the United Kingdom, Finland, Australia and Canada. In addition, there are operations in India, Malaysia, Spain and Singapore. | |
Basis of Presentation and Consolidation | |
The unaudited interim condensed consolidated balance sheet as of September 30, 2013, the statements of operations and comprehensive loss for the three and nine months ended September 30, 2013 and 2012 and the statements of cash flows for the nine months ended September 30, 2013 and 2012 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position as of September 30, 2013 and its results of operations for the three and nine months ended September 30, 2013 and 2012 and cash flows for the nine months ended September 30, 2013 and 2012. The financial data and the other financial information disclosed in these notes to the financial statements related to the three and nine month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013 or for any other future annual or interim period. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Prospectus filed with the SEC pursuant to Rule 424(b)(4) on November 7, 2013 (the “Prospectus”). | |
Initial Public Offering, Reverse Stock Split and Pro Forma Presentation | |
On November 13, 2013, we closed an initial public offering (“IPO”) of our common stock, which resulted in the sale of 5,320,292 shares of our common stock at a public offering price of $10.00 per share, before underwriting discounts and commissions. We received net proceeds from the IPO of approximately $44.5 million after deducting underwriting discounts, commissions, and estimated expenses payable by us. | |
In connection with preparing for the IPO, our Board of Directors and stockholders approved a 7-for-1 reverse stock split of our common stock. The reverse stock split became effective on November 1, 2013. All share and per share amounts in the condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. | |
In connection with the closing of the IPO in November 2013, all of our outstanding preferred stock automatically converted into an aggregate of 16,452,467 shares of our common stock. The significant increase in the number of common shares outstanding in November 2013 is expected to impact the year-over-year comparability of our net loss per share calculations. The unaudited pro forma balance sheet presentation gives effect to the conversion of all of the preferred stock to common stock and additional paid-in capital immediately prior to the closing of our IPO. | |
Reclassifications | |
Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. |
Accounting_Estimates_Summary_o
Accounting Estimates, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Accounting Policies [Abstract] | ' | |||
Accounting Estimates, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ' | |||
Note 2. Accounting Estimates, Summary of Significant Accounting Policies and Recent Accounting Pronouncements | ||||
Use of Estimates | ||||
The preparation of the our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates. | ||||
Significant Accounting Policies | ||||
Business Combination | ||||
We account for business combinations under the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recorded at their respective fair values as of the acquisition date in our condensed consolidated financial statements. The determination of estimated fair value may require management to make significant estimates and assumptions. The purchase price is the fair value of the total consideration conveyed to the seller and the excess of the purchase price over the fair value of the acquired identifiable net assets, where applicable, is recorded as goodwill. The results of operations of an acquired business are included in our condensed consolidated financial statements from the date of acquisition. Costs associated with the acquisition of a business are expensed in the period incurred. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents consist of corporate bank accounts and money market funds with an original maturity of three months or less. For purposes of the statement of cash flows, we consider all highly liquid instruments with original maturities of three months or less to be cash equivalents. Cash balances consisted of U.S. Dollar, Australian Dollar (“AUD”), British Pound (“GBP”), Canadian Dollar (“CAD”), Chinese Yuan Renminbi (“CNY”), Croatian Kuna (“HRK”), European Union (“EURO”), Indian Rupee (“INR”), Malaysian Ringgit (“MYR”), and Singapore Dollar (“SGD”). | ||||
Cash and cash equivalents are maintained at high credit-quality financial institutions. Balances may exceed the limits of government provided insurance, if applicable or available. We have never experienced any losses resulting from a financial institution failure or default. All non-interest bearing cash balances in the United States were fully insured by the FDIC at December 31, 2012 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. Beginning 2013, FDIC insurance coverage will revert to $250 per depositor at each financial institution, and our non-interest bearing cash balances in the United States may again exceed federally insured limits. We maintain some cash and cash equivalents with financial institutions that are in excess of FDIC insurance limits. | ||||
Accounts Receivable | ||||
Our accounts receivable are primarily due from companies in the mobile telecommunications industry. Credit is extended based on evaluation of the customer’s financial condition and generally collateral is not required. Accounts receivable are determined by the payment milestones referenced and agreed to in each of the commercial agreements. Payment milestones vary by contract. Payment terms typically range from 30 to 60 days from invoice date. Accounts outstanding longer than the contractual payment term are considered past due. | ||||
Revenue Recognition | ||||
We generate revenue from the sale of software products and maintenance and support. Professional services consist primarily of software development and implementation services, but also can include training of customer personnel. Our products and services are generally sold as part of a contract, the terms of which are considered as a whole to determine the appropriate revenue recognition. | ||||
We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sale price is fixed or determinable and collectability is reasonably assured. We recognize revenue in accordance with either the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 985-605, Software Revenue Recognition, as amended, or with ASC 605-25 Multiple Element Arrangements (“MEAs”), with consideration to ASC 605-35 Construction-Type and Production-Type Contracts. | ||||
We first determine whether its products consist of tangible products that contain essential software elements and as such, are excluded from the software revenue recognition method of accounting. | ||||
Our products and services are sold through distribution partners and directly through its sales force. We typically do not offer contractual rights of return, stock balancing or price protection to its distribution partners, however, it does offer certain price protection to Cisco under the arrangement. Actual product returns from our customers have been insignificant to date. As a result, we do not currently maintain allowances for product returns and related services. A reserve based on historical experience or specific identification is recorded for estimated reductions to revenue for customer and distributor programs and incentive offerings, including price protections, promotions, other volume-based incentives and expected returns and has historically been insignificant. | ||||
Our software related products MEAs include software, non-essential hardware, professional services, and maintenance and typically involve significant professional services for customization and implementation and various combinations of these products and maintenance. We generally recognize all multiple elements except maintenance using the percentage of completion accounting for its projects. Revenue for hardware is non-essential and not material to the projects and is recognized on a percentage of completion basis along with the software related products. Maintenance is allocated based on vendor-specific objective evidence (“VSOE”). | ||||
Our tangible products containing essential software MEAs include hardware, software essential to the functionality of the hardware, installation, and maintenance and are dependent on final customer acceptance, except maintenance which is recognized over the term of coverage. All multiple elements except maintenance are only recognized upon customer acceptance, and the total transaction price is allocated based on the relative ESP for the accepted product and maintenance. | ||||
Software Related Revenue Recognition | ||||
Certain of our software products are delivered under contracts, which generally require significant integration within a customer’s production and business system environment. As our agreements generally require significant production, modification or customization of the software, we account for these agreements under the percentage-of-completion method on the basis of hours incurred to date compared to total hours expected under the contract. The percentage-of-completion method generally results in the recognition of consistent profit margins over the life of the contract since management has the ability to produce estimates of contract billings and contract costs. We use the level of profit margin that is most likely to occur on a contract. If the most likely profit margin cannot be precisely determined, the lowest probable level of profit in the range of estimates is used until the results can be estimated more precisely. Under the percentage-of-completion accounting, management must also make key judgments in areas such as the percentage-of-completion, estimates of project revenue, costs and margin, estimates of total and remaining project hours and liquidated damages assessments. Changes in job performance, job conditions, estimated profitability, final contract settlements and resolution of claims may result in a revision to job costs and income amount that are different than amounts originally estimated. At the time a loss on a contract is known, the entire amount of the estimated loss is accrued. | ||||
Software contracts that do not qualify for use of the percentage-of-completion method, as reasonable estimates of percentage of completion are not available, are accounted for using the completed contract method. Under the completed-contract method, all billings and related costs, net of anticipated losses, are deferred until completion of the contract. In 2011, all software contracts qualified for use of the percentage-of-completion method. Customers are billed in accordance with specific contract terms, which may differ from the rate at which revenue is earned. Revenue recognized in excess of the amount billed of $9.8 million and $8.7 million at December 31, 2012, and September 30, 2013, respectively, are classified as unbilled revenue. Amounts received from customers pursuant to the terms specified in contracts, but for which revenue has not yet been recognized, are recorded as deferred revenue. We also evaluate our revenue recognition in accordance with FASB Accounting Standards Codification 605-45, Principal Agent Consideration, regarding gross versus net revenue reporting. We believe that we meet the criteria for gross recognition and reports revenue on a gross basis. | ||||
In certain situations, we sell software that does not require significant modification of services considered essential to the software’s functionality. Such software, generally consisting of capacity license upgrades, is recognized upon delivery if the other revenue recognition criteria are met. | ||||
For multiple element software arrangements, each element of the arrangement is analyzed and allocated a portion of the total arrangement fee to the elements based on the fair value of the element using VSOE of fair value, regardless of any separate prices stated within the contract for each element. Fair value is considered the price a customer would be required to pay if the element were sold separately based on our historical experience of stand-alone sales of these elements to third parties. For PCS such as maintenance, we use renewal rates for continued support arrangements to determine fair value. For software services, we use the fair value we charge our customers when those services are sold separately. We monitor our transactions at least annually to ensure we maintain and periodically revise VSOE to reflect fair value. | ||||
Some of our software arrangements include services not considered essential for the customer to use the software for the customer’s purpose, such as training. When software services are not considered essential, the fee allocable to the service element is recognized as revenue as we perform the services. Revenue for hardware is non-essential and not material to the projects and is recognized on a percentage of completion basis along with the software related products. | ||||
Tangible Product Containing Essential Software | ||||
On January 1, 2011, we retroactively adopted, for all periods presented, an accounting update regarding revenue recognition for multiple deliverable arrangements and an accounting update for certain revenue arrangements that consist of tangible products that include essential software elements. | ||||
The amended update for multiple deliverable arrangements changed the units of accounting for our revenue transactions, and these products and services qualify as separate units of accounting. Under the previous guidance for multiple deliverable arrangements with tangible products and software elements, we were unable to determine the fair value of the undelivered element so it deferred its costs and related billings and recognized such amounts over the performance period of the last deliverable, which was generally the PCS or maintenance period. | ||||
MEAs are arrangements with customers which include multiple deliverables, including a combination of equipment and services. The deliverables included in the MEAs are separated into more than one unit of accounting when (i) the delivered equipment has value to the customer on a stand-alone basis, and (ii) delivery of the undelivered service element(s) is probable and substantially in our control. Revenue from arrangements for the sale of tangible products containing both software and non-software components that function together to deliver the product’s essential functionality requires allocation of the arrangement consideration to the separate deliverables using the relative selling price method (“RSP”) of each unit of accounting based first on VSOE if it exists, second on third-party evidence (“TPE”) if it exists, and on ESP if neither VSOE nor TPE exist. | ||||
• | VSOE — For certain elements of an arrangement, VSOE is based upon the pricing in comparable transactions when the element is sold separately. We determine VSOE based on our pricing and discounting practices for the specific product or service when sold separately, considering geographical, customer, and other economic or marketing variables, as well as renewal rates or stand-alone prices for the service element(s). | |||
• | TPE — If we cannot establish VSOE of selling price for a specific product or service included in a multiple-element arrangement, we use third-party evidence of selling price. We determine TPE based on sales of comparable amounts of similar products or services offered by multiple third parties considering the degree of customization and similarity of the product or service sold. | |||
• | ESP — The estimated selling price represents the price at which we would sell a product or service if it were sold on a stand-alone basis. When VSOE or TPE does not exist for an element, we determine ESP for the arrangement element based on sales, cost and margin analysis, pricing practices and potential market constraints. Adjustments for other market and Company-specific factors are made as deemed necessary in determining ESP. | |||
Under the accounting principles retroactively adopted, certain contracts include multiple elements for which we determine whether the various elements meet the applicable criteria to be accounted for as separate elements and make estimates regarding their relative selling price. We use ESP when allocating arrangement consideration to each separate deliverable as we do not have VSOE or TPE of selling price for our various applicable tangible products containing essential software products and services. We allocate the total transaction price of an arrangement based on each separate unit of accounting relative to ESP. Revenue for elements that cannot be separated is recognized once the revenue recognition criteria for the entire arrangement has been met or over the period that our last remaining obligation to perform is fulfilled. Consideration for elements that are deemed separable is allocated to the separate elements at the inception of the arrangement on the basis of their relative selling price and recognized based on meeting authoritative criteria. The adoption of the amended revenue recognition rules significantly changed the timing of revenue recognition and had a material impact on the consolidated financial statements for the years ended December 31, 2012 and for the three and nine months ended September 30, 2013. We cannot reasonably estimate the effect of adopting these standards on future financial periods as the impact will vary depending on the nature and volume of new or materially modified sales arrangements in any given period. We consider the installation and delivery of our software products to be part of a single unit of accounting for software products revenue due to the complexity of the installation and nature of the contracts. | ||||
The related costs associated with the delivered product which does not yet meet the criteria to be recognized as revenue are deferred. The cost of such products is charged to cost of revenue on a proportionate basis similar to the manner in which the related revenue is recognized. Deferred cost represents the cost of direct and incremental items purchased for contracts not yet delivered to customers. Costs of revenue principally consist of the costs of payroll-related costs for service personnel, third-party hardware, third-party licenses and shipping and installation costs to any customer. | ||||
In cases where final acceptance has occurred but we have not as yet invoiced the customer, we have accounted for the amount to be invoiced as unbilled revenue. Customers are billed in accordance with specific contract terms, which may differ from the rate at which revenue is earned. Amounts received from customers pursuant to the terms specified in contracts, but for which revenue has not yet been recognized, are recorded as deferred revenue. We also evaluate our revenue recognition in accordance with ASC 605-45, Principal Agent Consideration, regarding gross versus net revenue reporting. We believe that we meet the criteria for the gross recognition and reports revenue on a gross basis. | ||||
Maintenance | ||||
Maintenance consists of PCS agreements and our customers generally enter into PCS agreements when they purchase our products. Our PCS agreements range from one to three years and are typically renewable on an annual basis thereafter at the option of the customer. Revenue allocated to PCS is recognized ratably on a straight-line basis over the period the PCS is provided, assuming all other criteria for revenue recognition has been met. All significant costs and expenses associated with PCS are expensed as incurred. For our software products, we have established VSOE of fair value for the PCS. Rates for maintenance, including subsequent renewal rates, are typically established based upon a specific percentage of the products provided, as set forth in the arrangement with the customer. For our tangible products (which all contain essential software), our customers generally enter into PCS arrangements when they purchase these tangible products. Relative selling price for the maintenance and support obligations for tangible products is based upon the ESP. | ||||
Shipping Costs | ||||
Outbound shipping and handling costs are included in cost of revenues, in the accompanying condensed consolidated statements of operations and comprehensive loss. | ||||
Inventories | ||||
Inventories consist of finished goods and are stated at the lower of cost (first-in, first-out method) or market, net of reserve for obsolete inventory. We maintain a small warranty stock however; substantially all inventories at period end are related to actual or planned customer orders. The reserve for obsolescence at December 31, 2012, and September 30, 2013, was $0.3 million, and $0.2 million respectively. | ||||
Our costs of sales also include overhead costs, including capitalized inventory costs, deferred contract costs, and other direct and allocated support costs related to equipment and installation when sold. | ||||
Inventory shipped to customers is generally covered under a twelve month warranty and returns have historically been nominal. | ||||
Long-lived Assets, Goodwill and Intangible Assets | ||||
Property and Equipment | ||||
Property and equipment are stated at cost and depreciated over their respective estimated useful lives of two to five years, using the straight-line method. Maintenance and repairs are charged to expense when incurred. | ||||
When events or changes in circumstances indicate that the carrying amount of our property and equipment might not be recoverable, the expected future undiscounted cash flows from the assets are estimated and compared with the carrying amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured by comparing the fair value of the assets with their carrying amounts. Fair value is determined based on discounted cash flows or appraised values, as appropriate. We did not record any impairment losses related to our property and equipment during any of the periods presented. | ||||
Intangible Assets | ||||
Our intangible assets are primarily comprised of the intangible assets that we acquired in the Airwide Acquisition. Specifically, we recognized intangible assets for (i) contractual backlog; (ii) customer relationships; and (iii) technology. At December 31, 2011, the contractual backlog intangible assets were fully amortized. | ||||
The intangible asset related to customer relationships is amortized for six years over a method that reflects an appropriate allocation of the costs of these intangible assets to earnings in proportion to the amount of economic benefits obtained in each reporting period. The intangible asset related to technology is amortized on a straight-line basis with estimated useful lives of six years from the date of the Airwide Acquisition. | ||||
Intangible assets are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The impairment loss to be recorded would be the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis or other valuation technique. We have not recorded any impairment charges to our intangible assets through September 30, 2013. | ||||
Goodwill | ||||
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired. Goodwill and other intangible assets with indefinite lives are not amortized to operations, but instead are reviewed for impairment at least annually, or when there is an indicator of impairment. The Company has no intangible assets with indefinite useful lives, other than goodwill. | ||||
The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. An impairment loss shall be recognized to the extent that the carrying amount of goodwill exceeds its implied fair value. | ||||
We determine fair value using widely accepted valuation techniques, including discounted cash flows and market multiple analyses. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgment to estimate industry economic factors and the profitability of future business strategies. It is our policy to conduct impairment testing based on its current business strategy in light of present industry and economic conditions, as well as its future expectations. | ||||
Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance. If these assumptions differ materially from future results, the Company may record impairment charges in the future. | ||||
In connection with our annual goodwill impairment test, we have not recorded any impairment of such assets through September 30, 2013. | ||||
Income Taxes | ||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities related to a change in tax rates is recognized in operations in the period that includes the enactment date. | ||||
We provide a valuation allowance for its deferred tax assets when it is more likely than not that its deferred tax assets will not be realized, based on expectations of generating future taxable income. Due to our historical losses, the net deferred tax assets have been fully reserved with the establishment of a valuation allowance. | ||||
We recognize the effect of an income tax position only if it is more likely than not (a likelihood of greater than 50%) that such position will be sustained upon examination by the relevant taxing authorities. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We recognized an uncertain tax positions liability of $3.1 million as of December 31, 2012 and September 30, 2013, as a result of related party foreign transactions. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. Based on the nature of foreign transactions, we do not believe there are any material interest and penalties due. | ||||
Fair Value Measurements | ||||
We account for financial instruments in accordance with FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | ||||
Level 1 — Quoted prices in active markets for identical assets or liabilities. | ||||
Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable. | ||||
Level 3 — Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. | ||||
Our financial instruments consist primarily of cash and cash equivalents, billed and unbilled accounts receivable, accounts payable and debt. The carrying amounts of financial instruments, other than the debt instruments, are representative of their fair values due to their short maturities. Our debt agreements are considered level 2 instruments and bear interest at market rates and thus management believes their carrying amounts approximate fair value. | ||||
We do not have any other financial or non-financial assets or liabilities that would be characterized as Level 2 or Level 3 instruments. | ||||
Concentration of Credit Risk | ||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains cash and cash equivalent balances in the USA, Australia, Canada, China, Croatia, Finland, India, Malaysia, Singapore, Spain and the UK. The balances in the USA are FDIC insured. The Company maintains cash deposits with financial institutions with balances that often exceed federally insured amounts. We have experienced no losses related to these deposits. | ||||
Foreign Currency Translation | ||||
The functional currency for each of our foreign subsidiaries is the applicable local currency. Assets and liabilities of the foreign subsidiary are translated to U.S. dollars at year-end exchange rates. Income and expense items are translated at the rates of exchange prevailing during the period. Currency translation adjustments are recorded as a component of other comprehensive income (loss). | ||||
Net Income (Loss) Per Common Share | ||||
Basic net income (loss) per common share is computed by dividing the net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing the net income available to common shareholders by the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, warrants, and convertible preferred stock during the period, using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. Note 10 provides additional information regarding loss per common share. | ||||
Research, Development and Engineering Costs | ||||
Costs related to research, design and development of service infrastructure technology are charged to research and development expense as incurred. Financial accounting standards provide for the capitalization of certain software development costs once technological feasibility has been established and for the evaluation of the recoverability of any capitalized costs on a periodic basis. Our software products have historically reached technological feasibility late in the developmental process, and developmental costs incurred after technological feasibility and prior to product release have been insignificant to date. Accordingly, no development costs have been capitalized to date and all research and product development expenditures have been expensed as incurred. | ||||
Stock-based Compensation | ||||
Stock-based compensation represents the cost related to stock-based awards granted to employees. We measure stock-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost as an expense on a straight-line basis over the employee requisite service period. We estimate the fair value of stock options without market-based performance conditions using the Black-Scholes valuation model with the following weighted average assumptions: | ||||
• | Risk-free interest rate — U.S. Federal Reserve treasury constant maturities rate consistent vesting period; | |||
• | Expected dividend yield — measured as the average annualized dividend estimated to be paid by the Company over the expected life of the award as a percentage of the share price at the grant date; | |||
• | Expected term — the average of the vesting period and the expiration period from the date of issue of the award; and | |||
• | Weighted average expected volatility — measured using historical volatility of similar public entities for which share or opinion price information is available. | |||
Recent Accounting Pronouncements | ||||
In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, allowing entities the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the qualitative assessment indicates it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no testing is required. This ASU is effective for the Company in the period beginning January 1, 2013. The adoption of this guidance did not affect our financial position, results of operations or cash flows. | ||||
In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements (“ASU 2012-04”). These amendments are presented in two sections — Technical Corrections and Improvements (Section A) and Conforming Amendments Related to Fair Value Measurements (Section B). The amendments in this update represent changes to clarify the Codification, correct unintended application of guidance or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, the amendments will make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications. This update is not intended to significantly change U.S. GAAP. The Company does not expect the adoption of this update to have a material effect on the condensed consolidated financial statements. | ||||
In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires registrants to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present significant amounts reclassified out of AOCI by the respective line items of net income. ASU 2013-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. As the new standard does not change the current requirements for reporting net income or other comprehensive income in the financial statements, the Company’s financial position, results of operations or cash flows were not impacted. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Measurements | ' |
3. Fair Value Measurements | |
The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, categorizing the inputs used to measure fair value. | |
The hierarchy can be described as follows: | |
Level 1—Observable inputs, such as quoted prices in active markets, | |
Level 2—Inputs other than the quoted prices in active markets that are observable either directly or indirectly, or | |
Level 3—Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. | |
This hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Our investment instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. | |
There have been no changes to the valuation methods during the three or nine months ended September 30, 2013 and 2012 or the year ended December 31, 2012. We evaluate transfers between levels at the end of each reporting period. There were no transfers of assets or liabilities between Level 1 and Level 2 during the three or nine months ended September 30, 2013 and 2012 or the year ended December 31, 2012. | |
Our financial instruments consist primarily of cash and cash equivalents, billed and unbilled accounts receivable, accounts payable and debt. The carrying amounts of financial instruments, other than the debt instruments, are representative of their fair values due to their short maturities. Our debt agreements are considered level 2 instruments and bear interest at market rates and thus management believes their carrying amounts approximate fair value. | |
We do not have any other financial or non-financial assets or liabilities that would be characterized as Level 2 or Level 3 instruments. |
Property_Equipment_and_Softwar
Property, Equipment and Software | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||
Property, Equipment and Software | ' | ||||||||||
4. Property, Equipment and Software | |||||||||||
Property, equipment and software consist of the following: | |||||||||||
Estimated | September 30, | December 31, | |||||||||
Useful Life | 2013 | 2012 | |||||||||
Computer software | 3 years | $ | 5,045 | $ | 4,540 | ||||||
Computer and lab equipment | 3 years | 8,417 | 7,770 | ||||||||
Other equipment | 2-5 years | 1,498 | 1,578 | ||||||||
Property and equipment, gross | 14,960 | 13,888 | |||||||||
Less: accumulated depreciation | (9,663 | ) | (7,969 | ) | |||||||
Property and equipment, net | $ | 5,297 | $ | 5,919 | |||||||
Depreciation expense of property, equipment and software totaled $0.7 million and $1.8 million for the three and nine months ended September 30, 2013, respectively; and $0.3 million and $1.0 million for the same periods in 2012. |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Intangible Assets and Goodwill | ' | ||||||||||||||
5. Intangible Assets and Goodwill | |||||||||||||||
Intangible assets primarily include the intangible assets that the Company acquired in the Airwide Acquisition. The intangible assets are being amortized on a straight-line basis. The amortization methods reflect an appropriate allocation of the costs of these intangible assets to earnings in proportion to the amount of economic benefits obtained in reporting periods. | |||||||||||||||
Intangible assets as of September 30, 2013 are as follows: | |||||||||||||||
Description | Weighted Average | Gross Carrying | Accumulated | Net Carrying Amount | |||||||||||
Amortization period (in | Amount | Amortization | |||||||||||||
months) | |||||||||||||||
Contractual backlog | 7 | $ | 1,377 | $ | 1,377 | $ | — | ||||||||
Customer relationships | 72 | 4,946 | 1,924 | 3,022 | |||||||||||
Technology | 72 | 782 | 304 | 478 | |||||||||||
Certification | 36 | 2,571 | 782 | 1,789 | |||||||||||
Total | $ | 9,676 | $ | 4,387 | $ | 5,289 | |||||||||
Intangible assets as of December 31, 2012 are as follows: | |||||||||||||||
Description | Weighted Average | Gross Carrying | Accumulated | Net Carrying Amount | |||||||||||
Amortization period (in | Amount | Amortization | |||||||||||||
months) | |||||||||||||||
Contractual backlog | 7 | $ | 1,462 | $ | 1,462 | $ | — | ||||||||
Customer relationships | 72 | 5,280 | 1,568 | 3,712 | |||||||||||
Technology | 72 | 825 | 249 | 576 | |||||||||||
Certification | 36 | 1,833 | 407 | 1,426 | |||||||||||
Total | $ | 9,400 | $ | 3,686 | $ | 5,714 | |||||||||
Total amortization expense for the three and nine months ended September 30, 2013 was $0.4 million and $1.1 million. Total amortization expense for the three and nine months ended September 30, 2012 was $0 and $1.0 million, respectively. | |||||||||||||||
A summary of changes in the Company’s carrying value of goodwill is as follows: | |||||||||||||||
September 30, | December 31, | ||||||||||||||
2013 | 2012 | ||||||||||||||
Balance, beginning of period | $ | 923 | $ | 901 | |||||||||||
Foreign currency exchange translation | (28 | ) | 22 | ||||||||||||
Balance, end of period | $ | 895 | $ | 923 | |||||||||||
Accrued_Liabilities
Accrued Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables And Accruals [Abstract] | ' | ||||||||
Accrued Liabilities | ' | ||||||||
6. Accrued Liabilities | |||||||||
Accrued liabilities consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued payroll | $ | 5,621 | $ | 4,323 | |||||
Accrued expenses on contracts | 3,240 | 1,996 | |||||||
Uncertain tax positions | 3,053 | 3,053 | |||||||
Accrued professional fees | 262 | 997 | |||||||
Other | 2,595 | 3,698 | |||||||
Total accrued liabilities | $ | 14,771 | $ | 14,067 | |||||
Longterm_Debt
Long-term Debt | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Long-term Debt | ' | ||||||||
7. Long-term Debt | |||||||||
Long-term debt consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Silver Lake Waterman subordinated loan | $ | 15,000 | $ | — | |||||
Silicon Valley Bank subordinated loan | 10,000 | 5,000 | |||||||
Silicon Valley Bank senior loan | 10,000 | 10,000 | |||||||
Discount related to issuance of warrants | (1,718 | ) | (300 | ) | |||||
Long-term debt, less current portion | $ | 33,282 | $ | 14,700 | |||||
The Company had $35.0 million and $15.0 million gross of debt discount of $1.7 million and $0.3 million outstanding under its revolving credit facility and senior and subordinated loans as of September 30, 2013, and December 31, 2012, respectively. | |||||||||
Silicon Valley Bank Subordinated and Senior Loans | |||||||||
On October 18, 2012, the Company entered into loan agreements with Silicon Valley Bank. Under the agreements, the Company obtained two loans totaling $32.5 million (the “SVB Loans”). In February 2013, we amended the SVB Loans to join certain of our subsidiaries, including our non-U.S. subsidiaries, as co-borrowers. We also amended our minimum tangible net worth covenant. The SVB Loans include a $22.5 million Senior Loan secured by substantially all of the assets of the Company, including intellectual property. The Senior Loan has a three-year term at a floating rate of 1% above the U.S. prime rate, subject to a minimum interest rate of 4.25%. Under the terms of the agreement, the Company can draw up to 80% of eligible trade receivables up to $15.0 million, with the remaining $7.5 million generally available for working capital and cash management purposes. The Company also obtained a $10.0 million Subordinated Loan, also secured by substantially all of the assets of the Company, including intellectual property that has a three-year term at a fixed rate of 11%. Both loans require the payment of interest only on the outstanding balance through the term of the loan, with all principal payable in October 2015. Both loans may be prepaid at any time without penalty. | |||||||||
In connection with the SVB Loans, the Company issued warrants to purchase a total of 128,570 shares of the Company’s common stock at a price of $5.11 per share. In accordance with the guidance on accounting for debt issued with a warrant, the Company allocated the total proceeds between the loans and the warrant based on the relative fair value of the two instruments. Out of the total proceeds of $15.0 million, the Company allocated approximately $14.7 million to the loans and approximately $0.3 million to the warrant based on their relative fair values. The fair value of the common stock warrant was recorded to APIC, with a reduction to the loans as a debt discount. See Note 9 for further discussion of the valuation methodology and assumptions. The discount on the debt is being amortized over the terms of the loans and the amortization charge recorded as interest expense in the condensed consolidated statements of operations and comprehensive loss. The unamortized discount on the SVB Loans debt is $0.2 million at September 30, 2013. | |||||||||
The Silicon Valley Bank loan agreements contain certain restrictive covenants, and the Senior Loan requires us to maintain a minimum tangible net worth at all times. At September 30, 2013, we are in compliance all covenants applicable to us under the SVB Loans, as amended. The agreements also contain usual and customary events of default, the occurrence of which may result in all outstanding amounts under the loan agreements becoming due and payable immediately, and they also impose an interest penalty of an additional 5% above the otherwise applicable interest rate at any time when an event of default is continuing. | |||||||||
Silver Lake Waterman Growth Capital Loan | |||||||||
On June 4, 2013, we entered into a growth capital loan agreement with Silver Lake Waterman Fund, L.P. (“Silver Lake Loan”), for a $15.0 million subordinated term loan. The Silver Lake Loan is subordinated to our senior and subordinated loans with Silicon Valley Bank described above, and is secured by substantially all of our assets. The Silver Lake Loan matures on June 30, 2017 and bears interest at 12% annually. The accrued interest on the loan is payable monthly, with the principal amount due and payable on the loan’s maturity on June 30, 2017. The subordinated term loan includes a prepayment penalty of 5% for prepayment in the first year, 4% in the second year, 3% in the third year and 2% thereafter, except that if we choose to repay this subordinated term loan with the proceeds of our IPO, the prepayment penalty will not apply. | |||||||||
The subordinated term loan agreement with Silver Lake Waterman Fund contains restrictive covenants. One such covenant provides that we must use substantially all of the proceeds of the loan for our United States operations and may not use them for non-U.S. operations. Other covenants limit our ability to, among other things, incur liens on our assets, pay dividends, make investments or engage in acquisitions, and prevent dissolution, liquidation, merger or a sale of our assets outside of the ordinary course of business without the prior consent of the lender. The agreement also contains customary events of default, the occurrence of which may result in all outstanding amounts under the loan agreements becoming due and payable immediately, and they also impose an interest penalty of an additional 5% above the otherwise applicable interest rate at any time when an event of default is continuing. | |||||||||
In connection with the Silver Lake Loan, we issued warrants to purchase a total of 194,694 shares of our common stock at an exercise price of $0.007 per share. In accordance with the guidance to account for debt issued with a warrant, the Company allocated total proceeds between the loan and the warrant based on the relative fair value of the two instruments. Out of the total proceeds of $15.0 million, the Company allocated approximately $13.4 million to the loan and $1.6 million to the warrant based on their relative fair values. The fair value of the common stock warrant was recorded to APIC, with a reduction to the loan as a debt discount. See Note 9 for further discussion of the valuation methodology and assumptions. The discount on the debt is being amortized over the terms of the loan and the amortization charge recorded as interest expense in the condensed consolidated statements of operations. For the nine months ended September 30, 2013, we recorded $0.1 million of amortization into interest expense related to these warrants and the unamortized discount on the debt is $1.5 million at September 30, 2013. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
8. Contingencies | |
Legal Proceedings | |
From time to time, we, our customers and our competitors are subject to various litigation and claims arising in the ordinary course of business. The software and communications infrastructure industries are characterized by frequent litigation and claims, including claims regarding patent and other intellectual property rights, claims for damages or indemnification for alleged breach under commercial supply or service contracts and claims regarding alleged improper hiring practices. From time to time we may be involved in various additional legal proceedings or claims. | |
We were one of 16 remaining defendants in Eon Corp. IP Holdings, LLC v. Sensus USA, Inc. et al. The plaintiff Eon Corp. IP Holdings, LLC, or Eon, a non-operating entity, alleges that each of the defendants has infringed, and continues to infringe, Eon’s U.S. Patent No. 5,592,491. The suit was originally filed in October 2010 in the United States District Court for the Eastern District of Texas. In January 2012, the court granted defendants’ motion to transfer the suit to the United States District Court for the Northern District of California. In June 2013, we entered into a settlement agreement with Eon. This had no material impact on our condensed consolidated financial statements. In July 2013, the court dismissed all claims against us. | |
We are not aware of any pending or threatened legal proceeding against us that could have a material adverse effect on our business, operating results or financial condition. |
Stockholders_Equity_Deficit
Stockholders Equity (Deficit) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Stockholders Equity (Deficit) | ' | ||||||||||||||||
9. Stockholders’ Equity (Deficit) | |||||||||||||||||
Stock Option Plan | |||||||||||||||||
The Company has two stock option plans: the Amended and Restated 2005 Stock Plan (the “2005 Plan”), and the 2013 Stock Plan (the “2013 Plan”). In January 2013, the Company terminated the 2005 Plan and provided that no further stock awards were to be granted under the 2005 Plan and adopted the 2013 Plan as a continuation of and successor to the 2005 Plan. In connection with our IPO, all shares that were reserved under the 2005 Plan but not issued were assumed by the 2013 Plan and no further shares will be granted pursuant to the 2005 Plan. All outstanding stock awards under the 2005 Plan will continue to be governed by the existing terms. Under the 2013 Plan, the Company has the ability to issue incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units and/or performance shares. Additionally, the 2013 Plan provides for the grant of performance cash awards to employees, directors and consultants. The ISOs and NSOs will be granted at a price per share not less than the fair value at date of grant. Options granted to date generally vest over a four-year period with 25% vesting at the end of one year and the remaining vest monthly thereafter. Options granted generally are exercisable up to 10 years. Restricted stock awards generally vest over a four-year period with 25% vesting at the end of one year and the remaining vest monthly thereafter. | |||||||||||||||||
To the extent permitted by the application option agreements, unvested options granted under the 2005 Plan can be exercised into shares of restricted stock. Where options granted under the 2005 Plan are immediately exercisable, and the underlying shares are subject to a right of repurchase by the Company (at its option) at the lower of the original exercise price or fair market value for all unvested restricted shares at the termination of service. At September 30, 2013, options that were fully vested amounted to 1,858,663 shares with a weighted average exercise price of $1.28 and weighted average remaining contractual term of 5.8 years and intrinsic value of $17.4 million. At September 30, 2013, there were 1,695,708 common shares available for future grants under the 2013 Plan. | |||||||||||||||||
The fair value of each stock option granted to employees is estimated on the date of grant and for non-employees on each vesting and reporting date using the Black-Scholes option-pricing model. The following table summarizes the weighted average assumptions used in calculating the fair value of the awards during the periods presented: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||
Risk-free interest rate (U.S. Treasury) | 1.7 | % | 2.8 | % | 1.7 | % | 2.8 | % | |||||||||
Expected term | 6.0 years | 6.1 years | 6.0 years | 6.1 years | |||||||||||||
Expected volatility | 57 | % | 47 | % | 57 | % | 47 | % | |||||||||
The fair value of all the awards granted is amortized to expense on a straight-line basis over the requisite service periods, which are generally the vesting periods. We granted stock options with a weighted-average grant date fair value during the nine months ended September 30, 2013 of $4.61. | |||||||||||||||||
The following table summarizes the stock option activity for the nine months ended September 30, 2013: | |||||||||||||||||
Shares | Weighted Average | Weighted | Aggregate | ||||||||||||||
Exercise Price | Average | Intrinsic Value | |||||||||||||||
Remaining | |||||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
Outstanding as of January 1, 2013 | 2,696,795 | $ | 1.8 | ||||||||||||||
Granted | 256,186 | 8.12 | |||||||||||||||
Exercised | (19,309 | ) | 0.86 | ||||||||||||||
Forfeited or expired | (72,783 | ) | 4.05 | ||||||||||||||
Outstanding as of September 30, 2013 | 2,860,889 | $ | 2.31 | 6.6 | $ | 23,825 | |||||||||||
The following table presents our share-based compensation resulting from equity awards that we recorded in our condensed consolidated statements of operations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cost of revenues | $ | 131 | $ | — | $ | 131 | $ | — | |||||||||
Research and development | 209 | — | 209 | — | |||||||||||||
Sales and marketing | 400 | — | 400 | — | |||||||||||||
General and administrative | 120 | 87 | 421 | 203 | |||||||||||||
Total | $ | 860 | $ | 87 | $ | 1,161 | $ | 203 | |||||||||
Warrants | |||||||||||||||||
Communities Foundation of Texas | |||||||||||||||||
On November 1, 2006, the Company issued a warrant to the Communities Foundation of Texas to purchase 2,857 shares of its common stock at a price of $0.42 per share. The warrant was to expire in November 2011. On September 11, 2012, the Company reissued the warrant at a price of $5.11 per share. The reissued warrant had a term of five years, and was deemed exercised upon the closing of our initial public offering. | |||||||||||||||||
Silicon Valley Bank and Silver Lake Waterman Fund | |||||||||||||||||
In connection with the SVB Loans entered into on October 28, 2012, the Company issued warrants to Silicon Valley Bank and WestRiver Mezzanine Loans, LLC exercisable for a total of 128,570 shares of common stock at a price of $5.11 per share. After giving effect to the completion of our IPO, the warrants expire in November 2016. The Company will provide the holders of the warrants with written notice of at least seven business days prior to the closing of a cash/public acquisition. Upon the closing of other than a cash/public acquisition, the acquiring, surviving or successor entity assumes the obligation of the warrants. The fair value of the warrants of $0.3 million was determined using the Black-Scholes pricing model. The Company used a risk-free interest rate of 1.72%, stock price volatility of 62%, a term of four years and expected dividends of 0%. The average remaining life of the Common Stock warrants as of September 30, 2013 was 9.1 years. | |||||||||||||||||
In connection with the Silver Lake Loan, we issued a warrant to purchase a total of 194,694 shares of our common stock at an exercise price of $0.007 per share. After giving effect to the completion of our IPO, the warrant has a term expiring on the earlier of November 5, 2016 or the consummation of an acquisition of the Company. The fair value of the warrants of $1.6 million was determined using the Black-Scholes pricing model. The Company used a risk-free interest rate of 1.99%, stock price volatility of 58%, a term of three years and expected dividends of 0%. The average remaining life of the common stock warrants as of September 30, 2013 was 6.7 years. | |||||||||||||||||
Investor and Former Lender | |||||||||||||||||
At September 30, 2013, the Company had 909,512 warrants outstanding to acquire shares of its common stock at $6.6794 per share. These warrants were originally exercisable for the Company’s Series C Redeemable Convertible Preferred and were issued in connection with debt financing and to an investor. The warrants were issued in October 2008 and have a term of seven years. The fair value on the date of issuance of all these warrants was insignificant. None of these warrants were exercised for the nine months ended September 30, 2013. The average remaining life of these warrants, as of September 30, 2013, was 2.1 years. |
Net_Loss_Per_Share
Net Loss Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Loss Per Share | ' | ||||||||||||||||
10. Net Loss Per Share | |||||||||||||||||
We calculate basic net income (loss) per share by dividing net income (loss) attributable to Mavenir for the period by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share attributable to Mavenir is computed giving effect to all potential weighted average diluted common stock, including options and warrants, using the treasury stock method. | |||||||||||||||||
The computation of basic and diluted net income (loss) per share is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Net loss | $ | (4,513 | ) | $ | (3,418 | ) | $ | (12,448 | ) | $ | (9,068 | ) | |||||
Basic common shares: | |||||||||||||||||
Weighted average number of shares outstanding | 1,348 | 1,310 | 1,342 | 1,270 | |||||||||||||
Diluted common shares: | |||||||||||||||||
Weighted average shares used to compute diluted net loss per share | 1,348 | 1,310 | 1,342 | 1,270 | |||||||||||||
Net loss per share attributable to common stockholders: | |||||||||||||||||
Basic | $ | (3.35 | ) | $ | (2.61 | ) | $ | (9.28 | ) | $ | (7.14 | ) | |||||
Diluted | $ | (3.35 | ) | $ | (2.61 | ) | $ | (9.28 | ) | $ | (7.14 | ) | |||||
The convertible preferred stock numbers shown in the table below are on a common stock equivalent basis as a result of the reverse stock split described in Note 1, Description of the Business and Basis of Presentation. | |||||||||||||||||
The following weighted-average common stock equivalents were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented due to the net loss for all periods presented: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Convertible preferred stock | 16,452,467 | 16,452,467 | 16,452,467 | 16,452,467 | |||||||||||||
Stock options | 2,042,036 | 1,443,148 | 1,919,410 | 1,292,141 | |||||||||||||
Warrants | 1,235,633 | — | 1,235,633 | — |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
11. Income Taxes | |
We base the provision for income taxes in our interim condensed consolidated financial statements on estimated annual effective tax rates in the tax jurisdictions where we operate. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual effective income tax rate, future income tax expense could be materially affected. For the three and nine months ended September 30, 2013, our effective tax rate of (8.5)% and (18.8)%, respectively, differs from the U.S. federal statutory rate primarily due to losses in tax jurisdictions where we are not able to record a tax benefit, losses in tax jurisdictions where we have recorded a valuation allowance on deferred tax assets, revaluation of the contingent consideration, which does not impact taxable income, and expenses not deductible for tax purposes, partially offset by the recognition of a tax benefit resulting from legislation enacted January 2, 2013 retroactively reinstating the research and development tax credit and earnings in lower-tax jurisdictions for which no U.S. taxes have been provided because such earnings are planned to be reinvested indefinitely outside the United States, measured against a pretax loss for the year. | |
For the three and nine months ended September 30, 2012, our effective tax rate of (1.2%) and (2.9%), respectively, varied from the U.S. federal statutory rate primarily due to the relative mix of earnings or losses within the tax jurisdictions in which we operate, losses in tax jurisdictions where we were not able to record a tax benefit, as well as various book expenses that were not deductible for tax purposes. | |
We are subject to income taxes in the United States and numerous foreign jurisdictions. The overall effective tax rate will continue to be dependent upon the geographic distribution of our earnings or losses and changes in tax laws or interpretations of these laws in these operating jurisdictions. We monitor the assumptions used in estimating the annual effective tax rate and make adjustments, if required, throughout the year. If actual results differ from the assumptions used in estimating our annual income tax rates, future income tax expense could be materially affected. | |
We measure and recognize uncertain tax positions. To recognize such positions, we first determine if it is more likely than not that the position will be sustained on audit. We then measure the benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. We do not believe that it is reasonably possible that the estimates of unrecognized tax benefits will change significantly in the next twelve months. Tax positions for Mavenir and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. An adverse resolution of one or more uncertain tax positions in any period could have a material impact on the results of operations for that period. | |
Our net deferred tax asset is offset by a valuation allowance since such amounts are not considered realizable on a more-likely-than-not basis. We have not accrued a provision for income taxes on undistributed earnings of approximately $10.2 million of certain non-U.S. subsidiaries, as of September 30, 2013 since such earnings are likely to be reinvested indefinitely. If the earnings were distributed, we would be subject to U.S. federal income and foreign withholding taxes. Determination of an unrecognized deferred income tax liability with respect to such earnings is not practicable. |
Segment_and_Geographic_Informa
Segment and Geographic Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment and Geographic Information | ' | ||||||||||||||||
12. Segment and Geographic Information | |||||||||||||||||
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision makers, in deciding how to allocate resources and in assessing performance. Our chief operating decision-makers (i.e., our chief executive officer and his direct reports) review financial information presented on a condensed consolidated basis, accompanied by disaggregated information about revenues by geographic region for purposes of allocating resources and evaluating financial performance. The Company has concluded that it operates in one segment and has provided the required enterprise-wide disclosures. | |||||||||||||||||
For the three and nine months ended September 30, 2013, four of our customers (AT&T, Deutsche Telekom, T-Mobile and Vodafone) together accounted for 67% and 65% of our total revenue. For the three and nine months ended September 30, 2012, four of our customers (AT&T, Deutsche Telekom, T-Mobile and Vodafone) together accounted for 49% and 53% of our total revenue. No other customer accounted for more than 10% of our total revenues for the three and nine months ended September 30, 2013 and 2012. Revenues by geographic area are based on the deployment site location of the end customers. The following tables present our revenues and long-lived assets by geographic region: | |||||||||||||||||
Net revenue | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
North America | $ | 15,678 | $ | 8,666 | $ | 37,041 | $ | 28,952 | |||||||||
EMEA (or Europe, Middle East and Africa) | 7,325 | 4,177 | 24,994 | 16,661 | |||||||||||||
APAC (or Asia-Pacific) | 2,968 | 4,265 | 12,126 | 11,445 | |||||||||||||
Consolidated Total | $ | 25,971 | $ | 17,108 | $ | 74,161 | $ | 57,058 | |||||||||
Long-Lived Assets | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
North America | $ | 8,810 | $ | 9,627 | |||||||||||||
EMEA (or Europe, Middle East and Africa) | 1,986 | 2,314 | |||||||||||||||
APAC (or Asia-Pacific) | 685 | 615 | |||||||||||||||
Consolidated Total | $ | 11,481 | $ | 12,556 | |||||||||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
13. Subsequent Events | |
In November 2013, we closed our IPO, which resulted in the sale of 5,320,292 shares of our common stock at a public offering price of $10.00 per share, before underwriting discounts and commissions, and sales of 129,708 shares by certain selling stockholders. We received net proceeds from the IPO of approximately $44.5 million after deducting underwriting discounts, commissions, and estimated expenses payable by us. | |
In connection with preparing for the IPO, our Board of Directors and stockholders approved a 7-for-1 reverse stock split of our common stock. The reverse stock split became effective on November 1, 2013. All share and per share amounts in the condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. | |
In connection with the closing of the IPO, all of our outstanding preferred stock automatically converted into an aggregate of 16,452,467 shares of our common stock. | |
On October 23, 2013, our Board of Directors approved the grant of options to purchase 400,000 shares of our common stock with an exercise price of $10.00 per share. | |
On November 19, 2013, we repaid our Silicon Valley Bank senior loan of $10.0 million, using proceeds from our IPO. |
Description_of_the_Business_an1
Description of the Business and Basis of Presentation (Policies) | 9 Months Ended | |||
Sep. 30, 2013 | ||||
Accounting Policies [Abstract] | ' | |||
Basis of Presentation and Consolidation | ' | |||
Basis of Presentation and Consolidation | ||||
The unaudited interim condensed consolidated balance sheet as of September 30, 2013, the statements of operations and comprehensive loss for the three and nine months ended September 30, 2013 and 2012 and the statements of cash flows for the nine months ended September 30, 2013 and 2012 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position as of September 30, 2013 and its results of operations for the three and nine months ended September 30, 2013 and 2012 and cash flows for the nine months ended September 30, 2013 and 2012. The financial data and the other financial information disclosed in these notes to the financial statements related to the three and nine month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013 or for any other future annual or interim period. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Prospectus filed with the SEC pursuant to Rule 424(b)(4) on November 7, 2013 (the “Prospectus”). | ||||
Reclassifications | ' | |||
Reclassifications | ||||
Certain amounts previously presented for prior periods have been reclassified to conform to the current presentation. | ||||
Use of Estimates | ' | |||
Use of Estimates | ||||
The preparation of the our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management’s estimates. | ||||
Business Combination | ' | |||
Business Combination | ||||
We account for business combinations under the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recorded at their respective fair values as of the acquisition date in our condensed consolidated financial statements. The determination of estimated fair value may require management to make significant estimates and assumptions. The purchase price is the fair value of the total consideration conveyed to the seller and the excess of the purchase price over the fair value of the acquired identifiable net assets, where applicable, is recorded as goodwill. The results of operations of an acquired business are included in our condensed consolidated financial statements from the date of acquisition. Costs associated with the acquisition of a business are expensed in the period incurred. | ||||
Cash and Cash Equivalents | ' | |||
Cash and Cash Equivalents | ||||
Cash and cash equivalents consist of corporate bank accounts and money market funds with an original maturity of three months or less. For purposes of the statement of cash flows, we consider all highly liquid instruments with original maturities of three months or less to be cash equivalents. Cash balances consisted of U.S. Dollar, Australian Dollar (“AUD”), British Pound (“GBP”), Canadian Dollar (“CAD”), Chinese Yuan Renminbi (“CNY”), Croatian Kuna (“HRK”), European Union (“EURO”), Indian Rupee (“INR”), Malaysian Ringgit (“MYR”), and Singapore Dollar (“SGD”). | ||||
Cash and cash equivalents are maintained at high credit-quality financial institutions. Balances may exceed the limits of government provided insurance, if applicable or available. We have never experienced any losses resulting from a financial institution failure or default. All non-interest bearing cash balances in the United States were fully insured by the FDIC at December 31, 2012 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. Beginning 2013, FDIC insurance coverage will revert to $250 per depositor at each financial institution, and our non-interest bearing cash balances in the United States may again exceed federally insured limits. We maintain some cash and cash equivalents with financial institutions that are in excess of FDIC insurance limits. | ||||
Accounts Receivable | ' | |||
Accounts Receivable | ||||
Our accounts receivable are primarily due from companies in the mobile telecommunications industry. Credit is extended based on evaluation of the customer’s financial condition and generally collateral is not required. Accounts receivable are determined by the payment milestones referenced and agreed to in each of the commercial agreements. Payment milestones vary by contract. Payment terms typically range from 30 to 60 days from invoice date. Accounts outstanding longer than the contractual payment term are considered past due. | ||||
Revenue Recognition | ' | |||
Revenue Recognition | ||||
We generate revenue from the sale of software products and maintenance and support. Professional services consist primarily of software development and implementation services, but also can include training of customer personnel. Our products and services are generally sold as part of a contract, the terms of which are considered as a whole to determine the appropriate revenue recognition. | ||||
We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sale price is fixed or determinable and collectability is reasonably assured. We recognize revenue in accordance with either the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 985-605, Software Revenue Recognition, as amended, or with ASC 605-25 Multiple Element Arrangements (“MEAs”), with consideration to ASC 605-35 Construction-Type and Production-Type Contracts. | ||||
We first determine whether its products consist of tangible products that contain essential software elements and as such, are excluded from the software revenue recognition method of accounting. | ||||
Our products and services are sold through distribution partners and directly through its sales force. We typically do not offer contractual rights of return, stock balancing or price protection to its distribution partners, however, it does offer certain price protection to Cisco under the arrangement. Actual product returns from our customers have been insignificant to date. As a result, we do not currently maintain allowances for product returns and related services. A reserve based on historical experience or specific identification is recorded for estimated reductions to revenue for customer and distributor programs and incentive offerings, including price protections, promotions, other volume-based incentives and expected returns and has historically been insignificant. | ||||
Our software related products MEAs include software, non-essential hardware, professional services, and maintenance and typically involve significant professional services for customization and implementation and various combinations of these products and maintenance. We generally recognize all multiple elements except maintenance using the percentage of completion accounting for its projects. Revenue for hardware is non-essential and not material to the projects and is recognized on a percentage of completion basis along with the software related products. Maintenance is allocated based on vendor-specific objective evidence (“VSOE”). | ||||
Our tangible products containing essential software MEAs include hardware, software essential to the functionality of the hardware, installation, and maintenance and are dependent on final customer acceptance, except maintenance which is recognized over the term of coverage. All multiple elements except maintenance are only recognized upon customer acceptance, and the total transaction price is allocated based on the relative ESP for the accepted product and maintenance. | ||||
Maintenance | ' | |||
Maintenance | ||||
Maintenance consists of PCS agreements and our customers generally enter into PCS agreements when they purchase our products. Our PCS agreements range from one to three years and are typically renewable on an annual basis thereafter at the option of the customer. Revenue allocated to PCS is recognized ratably on a straight-line basis over the period the PCS is provided, assuming all other criteria for revenue recognition has been met. All significant costs and expenses associated with PCS are expensed as incurred. For our software products, we have established VSOE of fair value for the PCS. Rates for maintenance, including subsequent renewal rates, are typically established based upon a specific percentage of the products provided, as set forth in the arrangement with the customer. For our tangible products (which all contain essential software), our customers generally enter into PCS arrangements when they purchase these tangible products. Relative selling price for the maintenance and support obligations for tangible products is based upon the ESP. | ||||
Shipping Costs | ' | |||
Shipping Costs | ||||
Outbound shipping and handling costs are included in cost of revenues, in the accompanying condensed consolidated statements of operations and comprehensive loss. | ||||
Inventories | ' | |||
Inventories | ||||
Inventories consist of finished goods and are stated at the lower of cost (first-in, first-out method) or market, net of reserve for obsolete inventory. We maintain a small warranty stock however; substantially all inventories at period end are related to actual or planned customer orders. The reserve for obsolescence at December 31, 2012, and September 30, 2013, was $0.3 million, and $0.2 million respectively. | ||||
Our costs of sales also include overhead costs, including capitalized inventory costs, deferred contract costs, and other direct and allocated support costs related to equipment and installation when sold. | ||||
Inventory shipped to customers is generally covered under a twelve month warranty and returns have historically been nominal. | ||||
Long-lived Assets, Goodwill and Intangible Assets | ' | |||
Long-lived Assets, Goodwill and Intangible Assets | ||||
Property and Equipment | ||||
Property and equipment are stated at cost and depreciated over their respective estimated useful lives of two to five years, using the straight-line method. Maintenance and repairs are charged to expense when incurred. | ||||
When events or changes in circumstances indicate that the carrying amount of our property and equipment might not be recoverable, the expected future undiscounted cash flows from the assets are estimated and compared with the carrying amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured by comparing the fair value of the assets with their carrying amounts. Fair value is determined based on discounted cash flows or appraised values, as appropriate. We did not record any impairment losses related to our property and equipment during any of the periods presented. | ||||
Intangible Assets | ||||
Our intangible assets are primarily comprised of the intangible assets that we acquired in the Airwide Acquisition. Specifically, we recognized intangible assets for (i) contractual backlog; (ii) customer relationships; and (iii) technology. At December 31, 2011, the contractual backlog intangible assets were fully amortized. | ||||
The intangible asset related to customer relationships is amortized for six years over a method that reflects an appropriate allocation of the costs of these intangible assets to earnings in proportion to the amount of economic benefits obtained in each reporting period. The intangible asset related to technology is amortized on a straight-line basis with estimated useful lives of six years from the date of the Airwide Acquisition. | ||||
Intangible assets are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The impairment loss to be recorded would be the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis or other valuation technique. We have not recorded any impairment charges to our intangible assets through September 30, 2013. | ||||
Goodwill | ||||
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired. Goodwill and other intangible assets with indefinite lives are not amortized to operations, but instead are reviewed for impairment at least annually, or when there is an indicator of impairment. The Company has no intangible assets with indefinite useful lives, other than goodwill. | ||||
The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the entity must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Fair value of the reporting unit is determined using a discounted cash flow analysis. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. An impairment loss shall be recognized to the extent that the carrying amount of goodwill exceeds its implied fair value. | ||||
We determine fair value using widely accepted valuation techniques, including discounted cash flows and market multiple analyses. These types of analyses contain uncertainties because they require management to make assumptions and to apply judgment to estimate industry economic factors and the profitability of future business strategies. It is our policy to conduct impairment testing based on its current business strategy in light of present industry and economic conditions, as well as its future expectations. | ||||
Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance. If these assumptions differ materially from future results, the Company may record impairment charges in the future. | ||||
In connection with our annual goodwill impairment test, we have not recorded any impairment of such assets through September 30, 2013. | ||||
Income Taxes | ' | |||
Income Taxes | ||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities related to a change in tax rates is recognized in operations in the period that includes the enactment date. | ||||
We provide a valuation allowance for its deferred tax assets when it is more likely than not that its deferred tax assets will not be realized, based on expectations of generating future taxable income. Due to our historical losses, the net deferred tax assets have been fully reserved with the establishment of a valuation allowance. | ||||
We recognize the effect of an income tax position only if it is more likely than not (a likelihood of greater than 50%) that such position will be sustained upon examination by the relevant taxing authorities. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We recognized an uncertain tax positions liability of $3.1 million as of December 31, 2012 and September 30, 2013, as a result of related party foreign transactions. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. Based on the nature of foreign transactions, we do not believe there are any material interest and penalties due. | ||||
Fair Value Measurements | ' | |||
Fair Value Measurements | ||||
We account for financial instruments in accordance with FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides a framework for measuring fair value and expands required disclosure about fair value measurements of assets and liabilities. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | ||||
Level 1 — Quoted prices in active markets for identical assets or liabilities. | ||||
Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable. | ||||
Level 3 — Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. | ||||
Our financial instruments consist primarily of cash and cash equivalents, billed and unbilled accounts receivable, accounts payable and debt. The carrying amounts of financial instruments, other than the debt instruments, are representative of their fair values due to their short maturities. Our debt agreements are considered level 2 instruments and bear interest at market rates and thus management believes their carrying amounts approximate fair value. | ||||
We do not have any other financial or non-financial assets or liabilities that would be characterized as Level 2 or Level 3 instruments. | ||||
Concentration of Credit Risk | ' | |||
Concentration of Credit Risk | ||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains cash and cash equivalent balances in the USA, Australia, Canada, China, Croatia, Finland, India, Malaysia, Singapore, Spain and the UK. The balances in the USA are FDIC insured. The Company maintains cash deposits with financial institutions with balances that often exceed federally insured amounts. We have experienced no losses related to these deposits. | ||||
Foreign Currency Translation | ' | |||
Foreign Currency Translation | ||||
The functional currency for each of our foreign subsidiaries is the applicable local currency. Assets and liabilities of the foreign subsidiary are translated to U.S. dollars at year-end exchange rates. Income and expense items are translated at the rates of exchange prevailing during the period. Currency translation adjustments are recorded as a component of other comprehensive income (loss). | ||||
Net Income (Loss) Per Common Share | ' | |||
Net Income (Loss) Per Common Share | ||||
Basic net income (loss) per common share is computed by dividing the net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing the net income available to common shareholders by the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, warrants, and convertible preferred stock during the period, using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. Note 10 provides additional information regarding loss per common share. | ||||
Research, Development and Engineering Costs | ' | |||
Research, Development and Engineering Costs | ||||
Costs related to research, design and development of service infrastructure technology are charged to research and development expense as incurred. Financial accounting standards provide for the capitalization of certain software development costs once technological feasibility has been established and for the evaluation of the recoverability of any capitalized costs on a periodic basis. Our software products have historically reached technological feasibility late in the developmental process, and developmental costs incurred after technological feasibility and prior to product release have been insignificant to date. Accordingly, no development costs have been capitalized to date and all research and product development expenditures have been expensed as incurred. | ||||
Stock-based Compensation | ' | |||
Stock-based Compensation | ||||
Stock-based compensation represents the cost related to stock-based awards granted to employees. We measure stock-based compensation cost at the grant date, based on the estimated fair value of the award and recognizes the cost as an expense on a straight-line basis over the employee requisite service period. We estimate the fair value of stock options without market-based performance conditions using the Black-Scholes valuation model with the following weighted average assumptions: | ||||
• | Risk-free interest rate — U.S. Federal Reserve treasury constant maturities rate consistent vesting period; | |||
• | Expected dividend yield — measured as the average annualized dividend estimated to be paid by the Company over the expected life of the award as a percentage of the share price at the grant date; | |||
• | Expected term — the average of the vesting period and the expiration period from the date of issue of the award; and | |||
• | Weighted average expected volatility — measured using historical volatility of similar public entities for which share or opinion price information is available. | |||
Recent Accounting Pronouncements | ' | |||
Recent Accounting Pronouncements | ||||
In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, allowing entities the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the qualitative assessment indicates it is more-likely-than-not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no testing is required. This ASU is effective for the Company in the period beginning January 1, 2013. The adoption of this guidance did not affect our financial position, results of operations or cash flows. | ||||
In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements (“ASU 2012-04”). These amendments are presented in two sections — Technical Corrections and Improvements (Section A) and Conforming Amendments Related to Fair Value Measurements (Section B). The amendments in this update represent changes to clarify the Codification, correct unintended application of guidance or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, the amendments will make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications. This update is not intended to significantly change U.S. GAAP. The Company does not expect the adoption of this update to have a material effect on the condensed consolidated financial statements. | ||||
In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). ASU 2013-02 requires registrants to provide information about the amounts reclassified out of AOCI by component. In addition, an entity is required to present significant amounts reclassified out of AOCI by the respective line items of net income. ASU 2013-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. As the new standard does not change the current requirements for reporting net income or other comprehensive income in the financial statements, the Company’s financial position, results of operations or cash flows were not impacted. |
Property_Equipment_and_Softwar1
Property, Equipment and Software (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Property Plant And Equipment [Abstract] | ' | ||||||||||
Schedule of Property Equipment and Software | ' | ||||||||||
Property, equipment and software consist of the following: | |||||||||||
Estimated | September 30, | December 31, | |||||||||
Useful Life | 2013 | 2012 | |||||||||
Computer software | 3 years | $ | 5,045 | $ | 4,540 | ||||||
Computer and lab equipment | 3 years | 8,417 | 7,770 | ||||||||
Other equipment | 2-5 years | 1,498 | 1,578 | ||||||||
Property and equipment, gross | 14,960 | 13,888 | |||||||||
Less: accumulated depreciation | (9,663 | ) | (7,969 | ) | |||||||
Property and equipment, net | $ | 5,297 | $ | 5,919 | |||||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 9 Months Ended | ||||||||||||||
Sep. 30, 2013 | |||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | ' | ||||||||||||||
Summary of Intangible Assets | ' | ||||||||||||||
Intangible assets as of September 30, 2013 are as follows: | |||||||||||||||
Description | Weighted Average | Gross Carrying | Accumulated | Net Carrying Amount | |||||||||||
Amortization period (in | Amount | Amortization | |||||||||||||
months) | |||||||||||||||
Contractual backlog | 7 | $ | 1,377 | $ | 1,377 | $ | — | ||||||||
Customer relationships | 72 | 4,946 | 1,924 | 3,022 | |||||||||||
Technology | 72 | 782 | 304 | 478 | |||||||||||
Certification | 36 | 2,571 | 782 | 1,789 | |||||||||||
Total | $ | 9,676 | $ | 4,387 | $ | 5,289 | |||||||||
Intangible assets as of December 31, 2012 are as follows: | |||||||||||||||
Description | Weighted Average | Gross Carrying | Accumulated | Net Carrying Amount | |||||||||||
Amortization period (in | Amount | Amortization | |||||||||||||
months) | |||||||||||||||
Contractual backlog | 7 | $ | 1,462 | $ | 1,462 | $ | — | ||||||||
Customer relationships | 72 | 5,280 | 1,568 | 3,712 | |||||||||||
Technology | 72 | 825 | 249 | 576 | |||||||||||
Certification | 36 | 1,833 | 407 | 1,426 | |||||||||||
Total | $ | 9,400 | $ | 3,686 | $ | 5,714 | |||||||||
Summary of Changes in Carrying Value of Goodwill | ' | ||||||||||||||
A summary of changes in the Company’s carrying value of goodwill is as follows: | |||||||||||||||
September 30, | December 31, | ||||||||||||||
2013 | 2012 | ||||||||||||||
Balance, beginning of period | $ | 923 | $ | 901 | |||||||||||
Foreign currency exchange translation | (28 | ) | 22 | ||||||||||||
Balance, end of period | $ | 895 | $ | 923 | |||||||||||
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Payables And Accruals [Abstract] | ' | ||||||||
Schedule of Accrued Liabilities | ' | ||||||||
Accrued liabilities consist of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Accrued payroll | $ | 5,621 | $ | 4,323 | |||||
Accrued expenses on contracts | 3,240 | 1,996 | |||||||
Uncertain tax positions | 3,053 | 3,053 | |||||||
Accrued professional fees | 262 | 997 | |||||||
Other | 2,595 | 3,698 | |||||||
Total accrued liabilities | $ | 14,771 | $ | 14,067 | |||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Long Term Debt | ' | ||||||||
Long-term debt consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Silver Lake Waterman subordinated loan | $ | 15,000 | $ | — | |||||
Silicon Valley Bank subordinated loan | 10,000 | 5,000 | |||||||
Silicon Valley Bank senior loan | 10,000 | 10,000 | |||||||
Discount related to issuance of warrants | (1,718 | ) | (300 | ) | |||||
Long-term debt, less current portion | $ | 33,282 | $ | 14,700 | |||||
Stockholders_Equity_Deficit_Ta
Stockholders Equity (Deficit) (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Summary of Weighted Average Assumptions Used in Calculating Fair Value of Awards | ' | ||||||||||||||||
The following table summarizes the weighted average assumptions used in calculating the fair value of the awards during the periods presented: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||
Risk-free interest rate (U.S. Treasury) | 1.7 | % | 2.8 | % | 1.7 | % | 2.8 | % | |||||||||
Expected term | 6.0 years | 6.1 years | 6.0 years | 6.1 years | |||||||||||||
Expected volatility | 57 | % | 47 | % | 57 | % | 47 | % | |||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
The following table summarizes the stock option activity for the nine months ended September 30, 2013: | |||||||||||||||||
Shares | Weighted Average | Weighted | Aggregate | ||||||||||||||
Exercise Price | Average | Intrinsic Value | |||||||||||||||
Remaining | |||||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
Outstanding as of January 1, 2013 | 2,696,795 | $ | 1.8 | ||||||||||||||
Granted | 256,186 | 8.12 | |||||||||||||||
Exercised | (19,309 | ) | 0.86 | ||||||||||||||
Forfeited or expired | (72,783 | ) | 4.05 | ||||||||||||||
Outstanding as of September 30, 2013 | 2,860,889 | $ | 2.31 | 6.6 | $ | 23,825 | |||||||||||
Summary of Share Based Compensation Resulting from Equity Awards | ' | ||||||||||||||||
The following table presents our share-based compensation resulting from equity awards that we recorded in our condensed consolidated statements of operations: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cost of revenues | $ | 131 | $ | — | $ | 131 | $ | — | |||||||||
Research and development | 209 | — | 209 | — | |||||||||||||
Sales and marketing | 400 | — | 400 | — | |||||||||||||
General and administrative | 120 | 87 | 421 | 203 | |||||||||||||
Total | $ | 860 | $ | 87 | $ | 1,161 | $ | 203 | |||||||||
Net_Loss_Per_Share_Tables
Net Loss Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Summary of Computation of Basic and Diluted Net Income (Loss) Per Share | ' | ||||||||||||||||
The computation of basic and diluted net income (loss) per share is as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Net loss | $ | (4,513 | ) | $ | (3,418 | ) | $ | (12,448 | ) | $ | (9,068 | ) | |||||
Basic common shares: | |||||||||||||||||
Weighted average number of shares outstanding | 1,348 | 1,310 | 1,342 | 1,270 | |||||||||||||
Diluted common shares: | |||||||||||||||||
Weighted average shares used to compute diluted net loss per share | 1,348 | 1,310 | 1,342 | 1,270 | |||||||||||||
Net loss per share attributable to common stockholders: | |||||||||||||||||
Basic | $ | (3.35 | ) | $ | (2.61 | ) | $ | (9.28 | ) | $ | (7.14 | ) | |||||
Diluted | $ | (3.35 | ) | $ | (2.61 | ) | $ | (9.28 | ) | $ | (7.14 | ) | |||||
Summary of Anti-dilutive Securities not Included in Calculation of Diluted Net Income (Loss) Per Share | ' | ||||||||||||||||
The following weighted-average common stock equivalents were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented due to the net loss for all periods presented: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Convertible preferred stock | 16,452,467 | 16,452,467 | 16,452,467 | 16,452,467 | |||||||||||||
Stock options | 2,042,036 | 1,443,148 | 1,919,410 | 1,292,141 | |||||||||||||
Warrants | 1,235,633 | — | 1,235,633 | — |
Segment_and_Geographic_Informa1
Segment and Geographic Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Revenues and Long-Lived Assets by Geographic Region | ' | ||||||||||||||||
The following tables present our revenues and long-lived assets by geographic region: | |||||||||||||||||
Net revenue | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
North America | $ | 15,678 | $ | 8,666 | $ | 37,041 | $ | 28,952 | |||||||||
EMEA (or Europe, Middle East and Africa) | 7,325 | 4,177 | 24,994 | 16,661 | |||||||||||||
APAC (or Asia-Pacific) | 2,968 | 4,265 | 12,126 | 11,445 | |||||||||||||
Consolidated Total | $ | 25,971 | $ | 17,108 | $ | 74,161 | $ | 57,058 | |||||||||
Long-Lived Assets | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
North America | $ | 8,810 | $ | 9,627 | |||||||||||||
EMEA (or Europe, Middle East and Africa) | 1,986 | 2,314 | |||||||||||||||
APAC (or Asia-Pacific) | 685 | 615 | |||||||||||||||
Consolidated Total | $ | 11,481 | $ | 12,556 | |||||||||||||
Description_of_the_Business_an2
Description of the Business and Basis of Presentation - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Nov. 13, 2013 |
IPO [Member] | IPO [Member] | ||
Subsequent Event [Member] | |||
Entity Information [Line Items] | ' | ' | ' |
Entity formation date | 26-Apr-05 | ' | ' |
Entity incorporated state name | 'Delaware | ' | ' |
Number of common stock shares sold | ' | ' | 5,320,292 |
Common stock, public offering price | ' | ' | $10 |
Net proceeds from common stock | ' | ' | $44.50 |
Closing date of IPO for common stock | ' | 7-Nov-13 | ' |
Common stock, shares outstanding | ' | ' | 16,452,467 |
Reverse stock split conversion ratio | ' | ' | 7 |
Reverse stock split description | ' | ' | '7-for-1 reverse stock split of our common stock |
Accounting_Estimates_Summary_o1
Accounting Estimates, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 |
Minimum [Member] | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
FDIC insurance coverage refundable amount per depositor | $250,000 | ' | ' | ' |
Account receivables payment term | ' | ' | '30 days | '60 days |
Unbilled receivables | 8,728,000 | 9,782,000 | ' | ' |
Inventory reserve for obsolescence | 200,000 | 300,000 | ' | ' |
Liability for uncertain tax positions | $3,053,000 | $3,053,000 | ' | ' |
Property_Equipment_and_Softwar2
Property, Equipment and Software - Schedule of Property Equipment and Software (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $14,960 | $13,888 |
Less: accumulated depreciation | -9,663 | -7,969 |
Property and equipment, net | 5,297 | 5,919 |
Computer software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, Estimated Useful Life | '3 years | ' |
Property and equipment, gross | 5,045 | 4,540 |
Computer and lab equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, Estimated Useful Life | '3 years | ' |
Property and equipment, gross | 8,417 | 7,770 |
Other equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $1,498 | $1,578 |
Other equipment [Member] | Minimum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, Estimated Useful Life | '2 years | ' |
Other equipment [Member] | Maximum [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, Estimated Useful Life | '5 years | ' |
Property_Equipment_and_Softwar3
Property, Equipment and Software - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Property Plant And Equipment [Abstract] | ' | ' | ' | ' |
Depreciation expense | $700 | $300 | $1,769 | $1,008 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill - Summary of Intangible Assets (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross Carrying Amount | $9,676 | $9,400 |
Accumulated Amortization | 4,387 | 3,686 |
Net Carrying Amount | 5,289 | 5,714 |
Contractual backlog [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization period | '7 months | '7 months |
Gross Carrying Amount | 1,377 | 1,462 |
Accumulated Amortization | 1,377 | 1,462 |
Net Carrying Amount | ' | ' |
Customer relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization period | '72 months | '72 months |
Gross Carrying Amount | 4,946 | 5,280 |
Accumulated Amortization | 1,924 | 1,568 |
Net Carrying Amount | 3,022 | 3,712 |
Technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization period | '72 months | '72 months |
Gross Carrying Amount | 782 | 825 |
Accumulated Amortization | 304 | 249 |
Net Carrying Amount | 478 | 576 |
Certification [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Weighted Average Amortization period | '36 months | '36 months |
Gross Carrying Amount | 2,571 | 1,833 |
Accumulated Amortization | 782 | 407 |
Net Carrying Amount | $1,789 | $1,426 |
Intangible_Assets_and_Goodwill3
Intangible Assets and Goodwill - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Finite Lived Intangible Asset [Abstract] | ' | ' | ' | ' |
Amortization expense | $400 | $0 | $1,080 | $964 |
Intangible_Assets_and_Goodwill4
Intangible Assets and Goodwill - Summary of Changes in Carrying Value of Goodwill (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Goodwill [Roll Forward] | ' | ' |
Balance, beginning of period | $923 | $901 |
Foreign currency exchange translation | -28 | 22 |
Balance, end of period | $895 | $923 |
Accrued_Liabilities_Schedule_o
Accrued Liabilities - Schedule of Accrued Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities Current [Abstract] | ' | ' |
Accrued payroll | $5,621 | $4,323 |
Accrued expenses on contracts | 3,240 | 1,996 |
Uncertain tax positions | 3,053 | 3,053 |
Accrued professional fees | 262 | 997 |
Other | 2,595 | 3,698 |
Total accrued liabilities | $14,771 | $14,067 |
Long_Term_Debt_Schedule_of_Lon
Long Term Debt - Schedule of Long Term Debt (Detail) (USD $) | Sep. 30, 2013 | Jun. 04, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | ' | ' | ' |
Long-term debt, less current portion | $33,282 | ' | $14,700 |
Warrants [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Discount related to issuance of warrants | -1,718 | ' | -300 |
Silver Lake Waterman [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Subordinated loan | 15,000 | 15,000 | ' |
Silver Lake Waterman [Member] | Warrants [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Discount related to issuance of warrants | -1,500 | ' | ' |
Silicon Valley Bank [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Subordinated loan | 10,000 | ' | 5,000 |
Senior loan | 10,000 | ' | 10,000 |
Silicon Valley Bank [Member] | Warrants [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Discount related to issuance of warrants | ($200) | ' | ' |
Long_Term_Debt_LongTerm_Debt_A
Long Term Debt - Long-Term Debt - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | ' | ' |
Credit facility and subordinated loans, outstanding | $35,000,000 | $15,000,000 |
Warrants [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt discount | $1,718,000 | $300,000 |
Long_Term_Debt_Silicon_Valley_
Long Term Debt - Silicon Valley Bank - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 18, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 18, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Oct. 18, 2012 | Sep. 30, 2013 | Oct. 28, 2012 | Oct. 18, 2012 |
Warrants [Member] | Warrants [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | ||
Instruments | Senior Loan [Member] | Senior Loan [Member] | Subordinated Debt [Member] | Subordinated Debt [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | ||||||
Agreement | |||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of loan agreements | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity | ' | ' | ' | $32,500,000 | ' | ' | $22,500,000 | ' | ' | ' | ' | ' | ' |
Debt instrument term | ' | ' | ' | ' | ' | ' | ' | '3 years | '3 years | ' | ' | ' | ' |
Floating rate | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' |
Debt instrument description | ' | ' | ' | ' | ' | ' | ' | 'U.S. prime rate | ' | ' | ' | ' | ' |
Minimum interest rate | ' | ' | ' | ' | ' | ' | 4.25% | ' | ' | ' | ' | ' | ' |
Percentage of eligible trade receivables | ' | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' |
Amount of eligible trade receivables | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' |
Credit facility available for specific purpose other than for trade purchase | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | ' | ' | ' | ' |
Subordinated debt | ' | ' | ' | ' | 10,000,000 | 5,000,000 | ' | ' | ' | 10,000,000 | ' | ' | ' |
Debt instrument interest rate state percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | ' | ' | ' |
Debt instrument maturity date | ' | ' | ' | ' | ' | ' | ' | 31-Oct-15 | 31-Oct-15 | ' | ' | ' | ' |
Total shares of company's common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 128,570 | 128,570 |
Common stock purchase price per share | $6.68 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5.11 | $5.11 |
Number of financial instrument | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceed from issuance of secured debt | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument fair value | ' | ' | ' | 14,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 300,000 |
Debt instrument unamortized discount | ' | $1,718,000 | $300,000 | ' | ' | ' | ' | ' | ' | ' | $200,000 | ' | ' |
Additional interest imposed in event of default | ' | ' | ' | ' | ' | ' | ' | 5.00% | 5.00% | ' | ' | ' | ' |
Long_Term_Debt_Silver_Lake_Wat
Long Term Debt - Silver Lake Waterman - Additional Information (Detail) (USD $) | 0 Months Ended | 9 Months Ended | |
Jun. 04, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Instruments | |||
Debt Instrument [Line Items] | ' | ' | ' |
Class of warrants or right exercise price of warrants or rights | ' | $6.68 | ' |
Amortization of debt discount premium | ' | $216,000 | ' |
Warrants [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Unamortized discount on debt | ' | 1,718,000 | 300,000 |
Silver Lake Waterman [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Subordinated term loan | 15,000,000 | 15,000,000 | ' |
Debt instrument maturity date | ' | 30-Jun-17 | ' |
Debt instrument interest rate stated percentage | 12.00% | ' | ' |
Additional interest imposed in event of default | 5.00% | ' | ' |
Class of Warrant or right number of securities called by warrants or rights | 194,694 | ' | ' |
Class of warrants or right exercise price of warrants or rights | $0.01 | ' | ' |
Number of financial instrument | 2 | ' | ' |
Proceeds from issuance of subordinated long term debt | 15,000,000 | ' | ' |
Debt instrument fair value | 13,400,000 | ' | ' |
Silver Lake Waterman [Member] | First Year [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Prepayment penalty percentage | 5.00% | ' | ' |
Silver Lake Waterman [Member] | Second Year [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Prepayment penalty percentage | 4.00% | ' | ' |
Silver Lake Waterman [Member] | Third Year [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Prepayment penalty percentage | 3.00% | ' | ' |
Silver Lake Waterman [Member] | Thereafter [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Prepayment penalty percentage | 2.00% | ' | ' |
Silver Lake Waterman [Member] | Warrants [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Class of Warrant or right number of securities called by warrants or rights | ' | 194,694 | ' |
Class of warrants or right exercise price of warrants or rights | ' | $0.01 | ' |
Fair value of warrants | 1,600,000 | 1,600,000 | ' |
Amortization of debt discount premium | ' | 100,000 | ' |
Unamortized discount on debt | ' | $1,500,000 | ' |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (Patent Infringement Claim [Member]) | 1 Months Ended |
Oct. 31, 2010 | |
Defendant | |
Patent Infringement Claim [Member] | ' |
Loss Contingencies [Line Items] | ' |
Number of remaining defendants in lawsuit | 16 |
Stockholders_Equity_Deficit_Ad
Stockholders Equity (Deficit) - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | ||||||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 11, 2012 | Nov. 01, 2006 | Oct. 28, 2012 | Sep. 30, 2013 | Oct. 18, 2012 | Oct. 28, 2012 | Sep. 30, 2013 | Jun. 04, 2013 | Sep. 30, 2013 | Jun. 04, 2013 | Sep. 30, 2013 |
Stock_Plan | Options [Member] | Restricted stock awards [Member] | Communities Foundation Of Texas [Member] | Communities Foundation Of Texas [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silicon Valley Bank [Member] | Silver Lake Waterman [Member] | Silver Lake Waterman [Member] | Silver Lake Waterman [Member] | Silver Lake Waterman [Member] | |
Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | Warrants [Member] | |||||
IPO [Member] | IPO [Member] | IPO [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of stock option plan | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting period | ' | '4 years | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage vested at the end of year one | ' | 25.00% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise period | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options fully vested | 1,858,663 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price of options fully vested | $1.28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining contractual terms of options fully vested | '5 years 9 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of options fully vested | $17.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares available for future grants | 1,695,708 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant date fair value | $4.61 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants issued | ' | ' | ' | 2,857 | 2,857 | 128,570 | ' | 128,570 | ' | ' | 194,694 | 194,694 | ' | ' |
Common stock purchase price per share | $6.68 | ' | ' | $5.11 | $0.42 | $5.11 | ' | $5.11 | ' | ' | $0.01 | $0.01 | ' | ' |
Contractual term of warrants | '7 years | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | ' | ' | ' | ' | ' | $0.30 | ' | $0.30 | ' | ' | ' | $1.60 | $1.60 | ' |
Required written notice period | ' | ' | ' | ' | ' | ' | ' | ' | '7 days | ' | ' | ' | ' | ' |
Warrant expiration date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30-Nov-16 | ' | ' | ' | 5-Nov-16 |
Risk free interest rate | ' | ' | ' | ' | ' | 1.72% | ' | ' | ' | ' | ' | 1.99% | ' | ' |
Stock price volatility rate | ' | ' | ' | ' | ' | 62.00% | ' | ' | ' | ' | ' | 58.00% | ' | ' |
Warrant term | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | '3 years | ' | ' |
Expected dividend yield | ' | ' | ' | ' | ' | 0.00% | ' | ' | ' | ' | ' | 0.00% | ' | ' |
Average remaining life of common stock warrants | '2 years 1 month 6 days | ' | ' | ' | ' | ' | '9 years 1 month 6 days | ' | ' | ' | ' | '6 years 8 months 12 days | ' | ' |
Warrants outstanding | 909,512 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant exercised | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Deficit_Su
Stockholders Equity (Deficit) - Summary of Weighted Average Assumptions Used in Calculating Fair Value of Awards (Detail) (Options [Member]) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Options [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (U.S. Treasury) | 1.70% | 2.80% | 1.70% | 2.80% |
Expected term | '6 years | '6 years 1 month 6 days | '6 years | '6 years 1 month 6 days |
Expected volatility | 57.00% | 47.00% | 57.00% | 47.00% |
Stockholders_Equity_Deficit_Su1
Stockholders Equity (Deficit) - Summary of Stock Option Activity (Detail) (USD $) | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 |
Equity [Abstract] | ' |
Outstanding - beginning balance, Shares | 2,696,795 |
Granted, Shares | 256,186 |
Exercised, Shares | -19,309 |
Forfeited or expired, Shares | -72,783 |
Outstanding - ending balance, Shares | 2,860,889 |
Outstanding - beginning balance, Weighted Average Exercise Price | $1.80 |
Granted, Weighted Average Exercise Price | $8.12 |
Exercised, Weighted Average Exercise Price | $0.86 |
Forfeited or expired, Weighted Average Exercise Price | $4.05 |
Outstanding - ending balance, Weighted Average Exercise Price | $2.31 |
Outstanding - ending balance, Weighted Average Remaining Contractual Term | '6 years 7 months 6 days |
Outstanding - ending balance, Aggregate Intrinsic Value | $23,825 |
Stockholders_Equity_Deficit_Su2
Stockholders Equity (Deficit) - Summary of Share Based Compensation Resulting from Equity Awards (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation | $860 | $87 | $1,161 | $203 |
Cost of revenues related to software products [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation | 131 | ' | 131 | ' |
Research and development [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation | 209 | ' | 209 | ' |
Sales and marketing [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation | 400 | ' | 400 | ' |
General and administrative [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation | $120 | $87 | $421 | $203 |
Net_Loss_Per_Share_Summary_of_
Net Loss Per Share - Summary of Computation of Basic and Diluted Net Income (Loss) Per Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Net loss | ($4,513) | ($3,418) | ($12,448) | ($9,068) |
Basic common shares: | ' | ' | ' | ' |
Weighted average number of shares outstanding | 1,348 | 1,310 | 1,342 | 1,270 |
Diluted common shares: | ' | ' | ' | ' |
Weighted average shares used to compute diluted net loss per share | 1,348 | 1,310 | 1,342 | 1,270 |
Net loss per share attributable to common stockholders: | ' | ' | ' | ' |
Basic | ($3.35) | ($2.61) | ($9.28) | ($7.14) |
Diluted | ($3.35) | ($2.61) | ($9.28) | ($7.14) |
Net_Loss_Per_Share_Summary_of_1
Net Loss Per Share - Summary of Anti-dilutive Securities not Included in Calculation of Diluted Net Income (Loss) Per Share (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Convertible preferred stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share | 16,452,467 | 16,452,467 | 16,452,467 | 16,452,467 |
Stock options [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share | 2,042,036 | 1,443,148 | 1,919,410 | 1,292,141 |
Warrants [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Anti-dilutive securities excluded from computation of earnings per share | 1,235,633 | ' | 1,235,633 | ' |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Effective tax rate | -8.50% | -1.20% | -18.80% | -2.90% |
Undistributed earnings indefinitely reinvested | $10.20 | ' | $10.20 | ' |
Segment_and_Geographic_Informa2
Segment and Geographic Information - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Customer | Customer | Customer | Customer | |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Number of operating segments | ' | ' | 1 | ' |
Revenues [Member] | ' | ' | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' | ' | ' |
Threshold percentage for determining concentration risk, description | '67% of our total revenue | '49% of our total revenue | '65% of our total revenue | '53% of our total revenue |
Threshold percentage for determining concentration risk | 67.00% | 49.00% | 65.00% | 53.00% |
Number of customers that accounted for majority of revenue | 4 | 4 | 4 | 4 |
Segment_and_Geographic_Informa3
Segment and Geographic Information - Schedule of Revenues and Long-Lived Assets by Geographic Region (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Net revenue | $25,971 | $17,108 | $74,161 | $57,058 | ' |
Long-Lived Assets | 11,481 | ' | 11,481 | ' | 12,556 |
North America [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Net revenue | 15,678 | 8,666 | 37,041 | 28,952 | ' |
Long-Lived Assets | 8,810 | ' | 8,810 | ' | 9,627 |
EMEA (or Europe, Middle East and Africa) [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Net revenue | 7,325 | 4,177 | 24,994 | 16,661 | ' |
Long-Lived Assets | 1,986 | ' | 1,986 | ' | 2,314 |
APAC (or Asia-Pacific) [Member] | ' | ' | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' |
Net revenue | 2,968 | 4,265 | 12,126 | 11,445 | ' |
Long-Lived Assets | $685 | ' | $685 | ' | $615 |
Subsequent_Events_Additional_i
Subsequent Events - Additional information (Detail) (USD $) | Sep. 30, 2013 | Oct. 23, 2013 | Nov. 13, 2013 | Nov. 13, 2013 | Nov. 19, 2013 |
In Millions, except Share data, unless otherwise specified | IPO [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] |
IPO [Member] | IPO [Member] | IPO [Member] | |||
Stockholders [Member] | Silicon Valley Bank [Member] | ||||
Subordinated Debt [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Common stock issued | ' | ' | 5,320,292 | 129,708 | ' |
Common stock offering price | ' | ' | $10 | ' | ' |
Net proceeds from IPO | ' | ' | $44.50 | ' | ' |
Number of preferred stock converted into common stock | 16,452,467 | ' | 16,452,467 | ' | ' |
Reverse stock split description | ' | ' | '7-for-1 reverse stock split of our common stock | ' | ' |
Common Stock Shares purchased | ' | 400,000 | ' | ' | ' |
Common stock exercised price | ' | $10 | ' | ' | ' |
Repayment of senior loan | ' | ' | ' | ' | $10 |