Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | GLU MOBILE INC | |
Entity Central Index Key | 1,366,246 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | gluu | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 132,997,621 | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 158,037 | $ 180,542 |
Accounts receivable, net | 14,340 | 17,956 |
Prepaid royalties (including prepaid royalties to a related party of $2,007 and $7,949 as of June 30, 2016 and December 31, 2015, respectively) | 18,403 | 23,715 |
Prepaid expenses and other assets | 18,243 | 14,841 |
Total current assets | 209,023 | 237,054 |
Property and equipment, net | 4,777 | 5,447 |
Restricted cash | 1,162 | 1,498 |
Long-term prepaid royalties (including long-term prepaid royalties to a related party of $7,993 and $2,051 as of June 30, 2016 and December 31, 2015, respectively) | 57,552 | 46,944 |
Other long-term assets | 3,889 | 1,386 |
Intangible assets, net (including intangible assets acquired from a related party of $5,000 and $5,000 as of June 30, 2016 and December 31, 2015, respectively) | 18,106 | 22,767 |
Goodwill | 87,860 | 87,890 |
Total assets | 382,369 | 402,986 |
Current liabilities: | ||
Accounts payable | 9,165 | 9,386 |
Accrued liabilities | 1,589 | 1,654 |
Accrued compensation | 7,998 | 7,100 |
Accrued royalties (including accrued royalties to a related party of $2,007 and $10,449 as of June 30, 2016 and December 31, 2015, respectively) | 8,442 | 21,032 |
Accrued restructuring | 970 | 342 |
Deferred revenue | 33,238 | 31,112 |
Total current liabilities | 61,402 | 70,626 |
Long-term accrued royalties (including long-term accrued royalties to a related party of $7,993 and $2,051 as of June 30, 2016 and December 31, 2015, respectively) | 33,309 | 24,347 |
Other long-term liabilities | 1,357 | 1,585 |
Total liabilities | 96,068 | 96,558 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value; 5,000 shares authorized at June 30, 2016 and December 31, 2015; no shares issued and outstanding at June 30, 2016 and December 31, 2015 | ||
Common stock, $0.0001 par value; 250,000 shares authorized at June 30, 2016 and December 31, 2015; 132,722 and 131,580 shares issued and outstanding at June 30, 2016 and December 31, 2015 | 13 | 13 |
Additional paid-in capital | 564,733 | 557,748 |
Accumulated other comprehensive loss | (699) | (85) |
Accumulated deficit | (277,746) | (251,248) |
Total stockholders' equity | 286,301 | 306,428 |
Total liabilities and stockholders' equity | $ 382,369 | $ 402,986 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Prepaid royalties to a related party | $ 2,007 | $ 7,949 |
Long-term prepaid royalties to a related party | 7,993 | 2,051 |
Intangible assets acquired from a related party | 5,000 | 5,000 |
Accrued royalties and license fees to a related party | 2,007 | 10,449 |
Long-term accrued royalties to a related party | $ 7,993 | $ 2,051 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000 | 250,000 |
Common stock, shares issued | 132,722 | 131,580 |
Common stock, shares outstanding | 132,722 | 131,580 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement | ||||
Revenue | $ 48,363 | $ 56,150 | $ 102,892 | $ 125,620 |
Cost of revenue: | ||||
Platform commissions, royalties and other | 18,639 | 21,320 | 39,002 | 47,630 |
Amortization of intangible assets | 2,336 | 2,434 | 4,660 | 4,868 |
Total cost of revenue | 20,975 | 23,754 | 43,662 | 52,498 |
Gross profit | 27,388 | 32,396 | 59,230 | 73,122 |
Operating expenses: | ||||
Research and development | 20,721 | 18,308 | 41,033 | 36,551 |
Sales and marketing | 10,935 | 12,771 | 23,559 | 25,209 |
General and administrative | 7,096 | 7,429 | 15,081 | 14,835 |
Amortization of intangible assets | 0 | 32 | 0 | 159 |
Restructuring charge | 2,116 | 2,221 | ||
Total operating expenses | 40,868 | 38,540 | 81,894 | 76,754 |
Loss from operations | (13,480) | (6,144) | (22,664) | (3,632) |
Interest and other income (expense), net: | ||||
Interest income | 25 | 12 | 45 | 18 |
Other expense | (4,478) | (186) | (4,030) | (476) |
Interest and other expense, net | (4,453) | (174) | (3,985) | (458) |
Loss before income taxes | (17,933) | (6,318) | (26,649) | (4,090) |
Income tax benefit (provision) | (16) | 809 | 151 | (295) |
Net loss | $ (17,949) | $ (5,509) | $ (26,498) | $ (4,385) |
Net loss per share - basic and diluted | $ (0.14) | $ (0.05) | $ (0.20) | $ (0.04) |
Weighted average common shares outstanding - basic and diluted | 131,198 | 116,169 | 130,185 | 110,019 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (17,949) | $ (5,509) | $ (26,498) | $ (4,385) |
Other comprehensive income/(loss): | ||||
Foreign currency translation adjustments | (420) | 298 | (614) | 19 |
Other comprehensive income/(loss) | (420) | 298 | (614) | 19 |
Comprehensive loss | $ (18,369) | $ (5,211) | $ (27,112) | $ (4,366) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (26,498) | $ (4,385) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,376 | 1,438 |
Amortization of intangible assets | 4,660 | 5,027 |
Change in fair value of long-term investments | 1,820 | |
Non-cash foreign currency remeasurement (gain)/loss | (330) | 416 |
Stock-based compensation | 6,506 | 5,161 |
Non-cash warrant (benefit)/expense | (23) | 228 |
Impairment of prepaid royalties and guarantees | 148 | 89 |
Impairment on investments | 2,540 | |
Changes in allowance for doubtful accounts | (120) | |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | 3,587 | 7,058 |
Prepaid royalties | (4,711) | (10,647) |
Prepaid expenses and other assets | (400) | 783 |
Accounts payable and other accrued liabilities | (40) | (266) |
Accrued liabilities | (63) | (143) |
Accrued compensation | 902 | (783) |
Accrued royalties and license fees | (1,859) | (4,022) |
Deferred revenue | 2,130 | (6,106) |
Accrued restructuring | 628 | |
Other long-term liabilities | (63) | (134) |
Net cash (used in)/provided by operating activities | (9,810) | (6,286) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (906) | (1,005) |
Cash paid for acquisitions, net of cash acquired | (1,634) | |
Decrease in restricted cash | 336 | |
Investments in Plain Vanilla Corp. and Diary Free Games, Inc. (Note 6) | (9,500) | (250) |
Purchase of intangible assets (including purchase of intangible assets from a related party of $2,500 and $0 as of June 30, 2016 and June 30, 2015, respectively) | (2,500) | |
Net cash used in investing activities | (12,570) | (2,889) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and purchases under the ESPP | 1,029 | 4,311 |
Taxes paid related to net share settlement of equity awards | (1,301) | (1,867) |
Excess tax benefit from stock awards | 77 | |
Proceeds from exercise of stock warrants and issuance of common stock | 255 | 375 |
Proceeds from private offering, net of issuance costs | 125,174 | |
Net cash provided by (used in) financing activities | (17) | 128,070 |
Effect of exchange rate changes on cash | (108) | (157) |
Net increase in cash and cash equivalents | (22,505) | 118,738 |
Cash and cash equivalents at beginning of period | 180,542 | 70,912 |
Cash and cash equivalents at end of period | $ 158,037 | $ 189,650 |
CONSOLIDATED STATEMENTS OF CAS7
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Financial Position [Abstract] | ||
Purchase of intangible assets from a related party | $ 2,500 | $ 0 |
The Company, Basis of Presentat
The Company, Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
The Company, Basis of Presentation and Summary of Significant Accounting Policies | |
The Company, Basis of Presentation and Summary of Significant Accounting Policies | Note 1 — The Company, Basis of Presentation and Summary of Significant Accounting Policies Glu Mobile Inc. (the “Company” or “Glu”) was incorporated in Nevada in May 2001 and reincorporated in the state of Delaware in March 2007. The Company develops, publishes, and markets a portfolio of games designed to appeal to a broad cross section of the users of smartphones and tablet devices who download and make purchases within its games through direct-to-consumer digital storefronts, such as the Apple App Store, Google Play Store, Amazon Appstore and others (“Digital Storefronts”). The Company creates games based on its own original brands, as well as games based on celebrities and other well-known brands and properties. Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 4, 2016. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, which the Company believes are necessary for a fair statement of the Company’s financial position as of June 30, 2016 and its unaudited condensed consolidated results of operations for the three and six months ended June 30, 2016 and 2015, respectively. These unaudited condensed consolidated financial statements are not necessarily indicative of the results to be expected for the entire year. The unaudited condensed consolidated balance sheet presented as of December 31, 2015 has been derived from the audited consolidated financial statements as of that date, and the unaudited condensed consolidated balance sheet presented as of June 30, 2016 has been derived from the unaudited condensed consolidated financial statements as of that date. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Variable Interest Entities The Company has interests in other entities that are variable interest entities (“VIEs”). Determining whether to consolidate a VIE requires judgment in assessing (i) whether an entity is a VIE and (ii) if the Company is the entity’s primary beneficiary and thus required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s evaluation includes identification of significant activities and an assessment of its ability to direct those activities based on governance provisions and other applicable agreements and circumstances. The Company’s assessment of whether it is the primary beneficiary of its VIEs requires significant assumptions and judgment. Investments The Company’s investments consist of equity investments and investments in financial instruments of unconsolidated entities. The Company monitors its investments for impairment and makes appropriate reductions in carrying values if it determines that an impairment charge is required based on qualitative and quantitative information. The investments are included in prepaid expenses and o ther assets and other long-term assets in the consolidated balance sheets. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and accounts receivable. The Company derives its accounts receivable from revenue earned from customers or through Digital Storefronts located in the United States and other locations outside of the United States. The Company performs ongoing credit evaluations of its customers’ and the Digital Storefronts’ financial condition and requires no collateral from its customers or the Digital Storefronts. The Company bases its allowance for doubtful accounts on management’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company reviews past due balances over a specified amount individually for collectability on a monthly basis. It reviews all other balances quarterly. The Company charges off accounts receivable balances against the allowance when it determines that the amount will not be recovered. The following table summarizes the revenue from customers or aggregate purchases through Digital Storefronts that accounted for more than 10% of the Company’s revenue for the periods indicated: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Apple % % % % % % % % At June 30, 2016, Apple Inc. (“Apple”) accounted for 40.2%, Google Inc. (“Google”) accounted for 21. 1 %, and Jirbo Inc. (dba AdColony) (“AdColony”) accounted for 19.5% of the Company’s total accounts receivable. At December 31, 2015, Apple accounted for 31.4% , AdColony accounted for 26.2% , and Google accounted for 19.2% of total accounts receivable . No other customer or Digital Storefront represented more than 10% of the Company’s total accounts receivable as of these dates. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718 ): Improvements to Employee Share-Based Payment Accounting . ASU 2016-19 simplifies some aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences, (b) classification of awards as either equity or liabilities, and (c) classification on the statement of cash flows. Early adoption is permitted. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . The new guidance requires lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual and interim periods beginning after December 31, 2018. The updated standard mandates a modified retrospective transition method with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall - Recognition and Measurement of Financial Assets and Financial Liabilities . The new guidance requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for a practicability exception. The updated standard is effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes . The new guidance requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company early adopted this guidance on a prospective basis as of December 31, 2015. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The new guidance requires that adjustments made to provisional amounts recognized in a business combination be recorded in the period such adjustments are determined, rather than retrospectively adjusting previously reported amounts. The new standard has been effective for fiscal years, and interim periods within those fiscal years, since December 15, 2015. The adoption of this standard did not have a material impact on the Company’s financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software . The standard amended the existing accounting standards for intangible assets and provides explicit guidance to customers in determining the accounting for fees paid in a cloud computing arrangement, wherein the arrangements that do not convey a software license to the customer are accounted for as service contracts. The pronouncement has been effective for reporting periods beginning after December 15, 2015. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis . ASU 2015-02 changes the guidance with respect to the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The new standard has been effective for all annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The new standard provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosure. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method with early adoption permitted. The updated standard will be effective for the Company beginning January 1, 2018. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements. There have been three new ASUs issued amending certain aspects of ASU 2014-09. ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross Versus Net) , was issued in March 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, Identifying Performance Obligations and Licensing, was issued in April 2016 and amends other sections of ASU 2014-09, including clarifying guidance related to identifying performance obligations and licensing implementation. Finally, ASU 2016-12, Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients, provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, non-cash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. With its evaluation of the impact of ASU 2014-09, the Company will also consider the impact related to the updated guidance provided by these three new ASUs. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Net Loss Per Share | |
Net Income/(Loss) Per Share | Note 2 — Net Loss Per Share The Company computes basic net loss per share by dividing its net loss for the period by the weighted average number of common shares outstanding during the period less the weighted average common shares subject to restrictions imposed by the Company. Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Net loss $ $ $ $ Shares used to compute net loss per share: Weighted average common shares outstanding Weighted average common shares subject to restrictions Weighted average shares used to compute basic and diluted net loss per share Net loss per share - basic and diluted $ $ $ $ The following weighted average options to purchase common stock, warrants to purchase common stock, unvested shares of common stock subject to restrictions, and restricted stock units (“RSUs”) have been excluded from the computation of net loss per share of common stock for the periods presented because including them would have had an anti-dilutive effect : Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Warrants to purchase common stock Unvested common shares subject to restrictions Options to purchase common stock RSUs |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | Note 3 — Fair Value Measurements Fair Value Measurements The Company accounts for fair value in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). Fair value is defined under ASC 820 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. The inputs to the valuation techniques used to measure fair value are classified into the following categories: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of June 30, 2016, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 June 30, 2016 Financial Assets Cash and cash equivalents $ $ — $ — $ Restricted cash — — Convertible promissory note investment in Plain Vanilla Corp. — — Call option to acquire Plain Vanilla Corp. (1) — — Total Financial Assets $ $ — $ $ (1) This asset is carried on the consolidated balance sheet on a historical cost basis and evaluated for impairment under ASC 325-20 (see “Note 6 - Investments") As of December 31, 2015, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 December 31, 2015 Financial Assets Cash and cash equivalents $ $ — $ — $ Restricted cash — — Total Financial Assets $ $ — $ — $ The Company’s cash and cash equivalents, which were held in operating bank accounts, are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. In addition, the Company’s restricted cash is classified within Level 1 of the fair value hierarchy. The carrying value of accounts receivable and payables approximates fair value due to the short time to expected payment or receipt of cash. The Company engaged third party valuation experts to aid management in its analysis of the fair value of the promissory notes issued to the Company in each of January 2016 and May 2016 by, and the Company’s option to acquire all of the outstanding equity (“call option”) of, Plain Vanilla Corp. (“Plain Vanilla”). See “Note 6 – Investments” below for further information on the promissory notes and call option. The fair value of the promissory notes was estimated using a probability weighted assessment of the expected cash flows discounted to their present value. The discount rate of 88.1% used in the analysis reflects the early stage nature of the entity and the overall gaming industry indices. The assumptions used in the expected cash flows model are Level 3 inputs as defined above. The fair value of the call option was estimated using the probability weighted Black-Scholes valuation model. The Black-Scholes valuation model requires inputs such as the expected term of the call option, expected volatility and risk-free interest rate. Certain of these inputs are subjective and require significant analysis and judgment to develop. The weighted average assumptions used by the Company are Level 3 inputs as defined above and are noted in the following table: Three Months Ended Six Months Ended June 30, June 30, 2016 2016 Dividend yield — % — % Risk-free interest rate 0.40 % 0.44 % Expected volatility 80.00 % 62.5 % Expected term (in years) 0.75 0.85 The following table presents the changes in fair value of the Plain Vanilla promissory notes and the call option: Six months ended June 30, 2016 Asset at the Impairment Increase/ Asset at the beginning of of cost method (decrease) in end of the period Additions investment fair value the period Convertible promissory note investment in Plain Vanilla Corp. $ — $ $ — $ $ Call option to acquire Plain Vanilla Corp. (1) $ — $ $ — $ (1) This asset is carried on the consolidated balance sheet on a historical cost basis and evaluated for impairment under ASC 325-20 (see “Note 6 - Investments"). |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Jun. 30, 2016 | |
Balance Sheet Components | |
Balance Sheet Components | Note 4 — Balance Sheet Components Accounts Receivable June 30, December 31, 2016 2015 Accounts receivable $ $ Less: Allowance for doubtful accounts $ $ Accounts receivable includes amounts billed and unbilled as of the respective balance sheet dates, but net of platform commissions paid to the Digital Storefronts. The Company had no significant bad debts during the three and six months ended June 30, 2016 and 2015. Prepaid expenses and other June 30, December 31, 2016 2015 Deferred platform commission fees $ $ Deferred royalties Taxes receivable Other $ $ Property and Equipment June 30, December 31, 2016 2015 Computer equipment $ $ Furniture and fixtures Software Leasehold improvements Less: Accumulated depreciation and amortization $ $ Depreciation expense for the three months ended June 30, 2016 and 2015 was $720 and $732 , respectively. Depreciation expense for the six months ended June 30, 2016 and 2015 was $ 1,376 and $1,438 , respectively. Other Long-Term Liabilities June 30, December 31, 2016 2015 Deferred rent $ $ Uncertain tax position obligations Other $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 5 — Goodwill and Intangible Assets Intangible Assets The Company’s intangible assets were acquired primarily in various acquisitions as well as in connection with the purchase of certain trademarks, brand assets and licensed content. The carrying amounts and accumulated amortization expense of the acquired intangible assets, including the impact of foreign currency exchange translation, at June 30, 2016 and December 31, 2015 were as follows: June 30, 2016 December 31, 2015 Gross Accumulated Net Gross Accumulated Net Carrying Amortization Carrying Carrying Amortization Carrying Value Expense Value Value Expense Value (Including (Including (Including (Including (Including (Including Estimated Impact of Impact of Impact of Impact of Impact of Impact of Useful Foreign Foreign Foreign Foreign Foreign Foreign Life Exchange) Exchange) Exchange) Exchange) Exchange) Exchange) Intangible assets amortized to cost of revenue: Titles, content and technology 3 yrs $ $ $ $ $ $ Catalogs 1 yr — — ProvisionX Technology 6 yrs — — Carrier contract and related relationships 5 yrs Licensed content 2.5 - 5 yrs Service provider license 9 yrs Trademarks 7 yrs Other intangible assets amortized to operating expenses: Emux Technology 6 yrs — — Non-compete agreements 4 yrs — — — — Total intangibles assets $ $ $ $ $ $ Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are realized. The Company has included amortization of acquired intangible assets directly attributable to revenue-generating activities in cost of revenue and amortization of acquired intangible assets not directly attributable to revenue-generating activities in operating expenses. During the three months ended June 30, 2016 and 2015, the Company recorded amortization expense in the amounts of $2,336 and $2,434, respectively, in cost of revenue. During the six months ended June 30, 2016 and 2015, the Company recorded amortization expense in the amounts of $4,660 and $4,868 respectively, in cost of revenue. During the three months ended June 30, 2016 and 2015, the Company recorded amortization expense in the amounts of $0 and $32 , respectively, in operating expenses. During the six months ended June 30, 2016 and 2015, the Company recorded amortization expense in the amounts of $0 and $159 , respectively, in operating expenses. As of June 30, 2016, total expected future amortization related to intangible assets was as follows: Amortization to Be Included in Cost of Year Ending December 31, Revenue 2016 $ 2017 2018 2019 2020 and thereafter — $ Goodwill Goodwill for the periods indicated was as follows: June 30, 2016 December 31, 2015 Goodwill $ $ Accumulated impairment losses Balance as of January 1 Goodwill acquired during the year — — Effects of foreign currency exchange Balance as of period ended: Goodwill Accumulated impairment losses Balance as of period ended $ $ In accordance with ASC 350, Intangibles – Goodwill and Other – Internal-Use Software , (“ASC 350”), the Company’s goodwill is not amortized but is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The Company performs its annual impairment review of its goodwill balance as of September 30 or more frequently if triggering events occur. The Company evaluates qualitative factors and overall financial performance to determine whether it is necessary to perform the first step of the two-step goodwill test. This step is referred to as “Step 0.” Step 0 involves, among other qualitative factors, weighing the relative impact of factors that are specific to the reporting unit as well as industry and macroeconomic factors. After assessing those various factors, if it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the entity will need to proceed to the first step of the goodwill impairment test. ASC 350 requires a multiple-step approach to testing goodwill for impairment for each reporting unit annually, or whenever events or changes in circumstances indicate the fair value of a reporting unit is below its carrying amount. The first step measures for impairment by applying the fair value-based tests at the reporting unit level. The second step (if necessary) measures the amount of impairment by applying the fair value-based tests to individual assets and liabilities within each reporting unit. The fair value of the reporting units is estimated using a combination of the market approach, which utilizes comparable companies’ data, and/or the income approach, which uses discounted cash flows. Any material impairment of prepaid royalty and license fee assets in the future periods may require the Company to perform a goodwill impairment assessment. Such assessment could result in impairments to the Company’s goodwill, which could adversely impact the Company’s results of operations . |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments | |
Investments | Note 6 — Investments In January 2016, the Company announced an investment of up to $7,500 in promissory notes convertible into a minority equity stake in Plain Vanilla. $5,000 was paid in January 2016 and the remaining $2,500 was paid in May 2016. As part of the investment, the Company also received a call option to acquire all outstanding equity of Plain Vanilla for 15 months from the closing of the initial investment, unless earlier terminated by the Company, at a pre-agreed price. Plain Vanilla is the Icelandic developer of the mobile game QuizUp, and is financed primarily through equity investments. In January 2016, the Company acquired a minority equity stake and entered into a commercial agreement with Dairy Free Games, Inc. (“Dairy Free”). As part of the arrangement, the Company invested $2,000 in Dairy Free’s Series A preferred stock. The Company also agreed to provide up to $1,000 of recoupable and non-refundable development funding for a mobile game under development by Dairy Free. The development funding is payable in installments upon Dairy Free achieving certain milestones. Dairy Free is the developer of mobile video games and is financed primarily through equity investments. Plain Vanilla and Dairy Free are VIEs; however, the Company has determined that it is not the primary beneficiary of these VIEs since the Company currently does not have the power to direct the activities of the VIEs that most significantly impact their economic performance. The Company made this determination based on the following factors: (i) the development stage of the VIEs' products; (ii) the Company's inability to exercise control or decision making power over the VIEs, based on the Company's ownership percentage and voting rights, as well as its lack of involvement in day-to-day operations and management decisions; and (iii) the fact that the call option to acquire Plain Vanilla is currently significantly out of the money. The Company has not accounted for these investments under ASC 323, Investments – Equity Method and Joint Ventures , as the convertible promissory notes issued by Plain Vanilla and the preferred stock of Dairy Free have risk and rewards characteristics that are not substantially similar to the common stock of these entities. For Plain Vanilla, the Company has elected the fair value option to account for its investment in the promissory notes. The call option was recorded at cost. As of the investment dates, the fair values of the promissory notes and the call option were determined to be $5,100 and $2,400 , respectively. As of June 30, 2016, the Company computed the fair value of the promissory notes to be $3,280 and the fair value of the call option to be $60 . Due to the decrease in the fair market value of the promissory notes, the Company recorded a charge of $2,120 and $1,820 in other expense for the three and six months ended June 30, 2016, respectively. Due to a decline in the forecasted revenue and future cash flow outlook of Plain Vanilla, the fair value of the call option as of June 30, 2016 was estimated to be lower than its carrying value, which resulted in the Company recording an impairment charge of $2,340 in other expense for each of the three and six months ended June 30, 2016. The call option and the promissory notes were recorded in prepaid expenses and other assets as of June 30, 2016. For Dairy Free, the preferred stock investment was recorded at cost. As of the investment date and as of June 30, 2016, the preferred stock investment was recorded at $2,000 in other long-term assets. The development funding will be recognized as research and development expense as the development activities are performed. For the three and six months ended June 30, 2016, the Company recorded $340 and $600 , respectively, in research and development expense related to this arrangement. The Company is not obligated to provide any explicit or implicit financial or other support to Plain Vanilla and Dairy Free other than what was contractually agreed to in the respective investment agreements. The Company has no exposure to loss beyond its investments in Plain Vanilla and Dairy Free. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 7 — Commitments and Contingencies Leases The Company leases office space under non-cancelable operating facility leases with various expiration dates through April 2021. Rent expense for the three months ended June 30, 2016 and 2015 was $ 1,291 and $1,147 , respectively. Rent expense for the six months ended June 30, 2016 and 2015 was $2,532 and $2,149 , respectively. The terms of the facility leases provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease period, and has accrued for rent expense incurred but not paid. The deferred rent balance was $700 and $749 at June 30, 2016 and December 31, 2015, respectively, of which $507 and $692 was included within other long-term liabilities at June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016, future minimum lease payments under non-cancelable operating leases were as follows: Minimum Operating Lease Year Ending December 31, Payments 2016 $ 2017 2018 2019 2020 and thereafter $ Minimum Guaranteed Royalties and Developer Commitments The Company has entered into license and publishing agreements with various celebrities, Hollywood studios, athletes, sports organizations, and other well-known brands and properties to develop and publish games for mobile devices. Pursuant to some of these agreements, the Company is required to make minimum guaranteed royalty payments regardless of r evenue generated by the applicable game, which may not be dependent on any deliverables . The significant majority of these minimum guaranteed royalty payments are recoupable against future royalty obligations that would otherwise become payable, or in certain circumstances, where not recoupable, are capitalized and amortized over the lesser of (i) the estimated life of the title incorporating licensed content or (ii) the term of the license agreement. At June 30, 2016, future unpaid minimum guaranteed royalty commitments were as follows: Future Future Minimum Minimum Guarantee Developer Year Ending December 31, Commitments Commitments 2016 $ $ 2017 2018 — $ $ The amounts represented in the table above reflect our minimum cash obligations for the respective calendar years, but do not necessarily represent the periods in which they will be expensed in the Company’s Consolidated Financial Statements. Future developer commitments as of June 30, 2016 were $2,110 . These developer commitments reflect the Company’s minimum cash obligations to external software developers (“third-party developers”) to design and develop its software applications but do not necessarily represent the periods in which they will be expensed. The Company advances funds to these third-party developers, in installments, payable upon the completion of specified development milestones, and expenses third-party developer commitments as services are provided. Licensor commitments include $36,817 of commitments due to licensors that have been recorded in current and long-term liabilities and a corresponding amount in current and long-term assets because payment is not contingent upon performance by the licensor. The classification of commitments between long-term and short-term is determined based on the timing of recoupment of earned royalties calculated on projected revenue for the licensed intellectual property games. The Company may be required to take impairments in future periods if the games it develops that have significant contractual minimum guarantee commitments and/or license fee commitments associated with them are not successful, which may be in part due to the revenue forecasts for these games being lower than what was anticipated at the time the Company entered into such agreements and for arrangements in which the Company has a limited, or singular, opportunity to develop or publish a title, such as the minimum guarantee payment made to Tencent Holdings Limited (“Tencent”) for the right to publish the Company’s Rival Fire title. The Company’s ability to estimate the recovery of minimum guarantee and license fee commitments is based on management’s ability to forecast future revenue, which is heavily dependent upon the market adoption of the applicable games. Income Taxes As of June 30, 2016 , unrecognized tax benefits and potential interest and penalties are classified within “other long-term liabilities” on the Company’s unaudited condensed consolidated balance sheets. As of June 30, 2016 , the settlement of $690 of the Company’s income tax liabilities could not be determined; however, the liabilities are not expected to become due within the next 12 months. Contingencies From time to time, the Company is subject to various claims, complaints and legal actions in the normal course of business. The Company assesses its potential liability by analyzing specific litigation and regulatory matters using available information. The Company’s estimate of losses is developed in consultation with inside and outside counsel, which involves a subjective analysis of potential results and outcomes, assuming various combinations of appropriate litigation and settlement strategies. After taking all of the above factors into account, the Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed reasonably probable and the amount can be reasonably estimated. The Company further determines whether an estimated loss from a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible. Such disclosure will include an estimate of the additional loss or range of loss or will state that an estimate cannot be made. The Company does not believe it is party to any currently pending litigation, the outcome of which is reasonably possible to have a material adverse effect on its operations, financial position or liquidity. However, the ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on the Company because of defense costs, potential negative publicity, diversion of management resources and other factors. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | Note 8 — Stockholders’ Equity Tencent Investment On April 29, 2015, the Company entered into a purchase agreement with a principal stockholder, Tencent and Tencent’s controlled affiliate, Red River Investment Limited (“Red River”). Pursuant to the Purchase Agreement, the Company issued to Red River in a private placement an aggregate of 21,000 shares of the Company’s common stock (the “Shares”) at a purchase price of $6.00 per share, for aggregate net proceeds of $125,15 6 , after offering expenses. The Company issued 12,500 of the Shares to Red River on April 29, 2015 and issued the remaining 8,500 Shares at a second closing on June 3, 2015. Warrants to Purchase Common Stock Celebrity Warrants During 2015, the Company issued warrants to celebrity licensors, and entities affiliated with one of the celebrity licensors, to purchase up to an aggregate of 1,100 shares of the Company’s common stock, subject to adjustments for dividends, reorganizations and other common stock events (collectively, the “Celebrity Warrants”). With respect to Celebrity Warrants covering 1,000 shares, such warrants vest with respect to 50% of the underlying shares upon public announcement of the related license agreement, with the remaining shares vesting in equal monthly installments over 24 months, subject to full acceleration in the event of (i) the Company’s full recoupment of the minimum guarantee payments under the related license agreement, (ii) the termination of the license agreement due to the Company’s material breach of the agreement or (iii) a change of control of the Company. With respect to the remaining Celebrity Warrants covering 100 shares issued in 2015, such warrants vest in equal monthly installments over 60 months, with up to 25% of the shares subject to accelerated vesting in the event the celebrity licensor approves game design documentation by a certain date and the related game commercially launches by a certain date. During the three and six months ended June 30, 2016, and 2015, none of these vesting conditions were met. Each of the Celebrity Warrants may, at the election of the holder, be either exercised for cash or net exercised on a cashless basis. As of June 30, 2016, Celebrity Warrants covering 1,600 shares of the Company’s common stock were outstanding. The fair value of the outstanding Celebrity Warrants is estimated using the Black-Scholes valuation model. The Black-Scholes valuation model requires inputs such as the expected term of the Celebrity Warrants, expected volatility and risk-free interest rate. Certain of these inputs are subjective and require significant analysis and judgment to develop. The Company will estimate and record the fair value of these Celebrity Warrants using a Black-Scholes valuation model when the above vesting conditions have been met. With respect to the Celebrity Warrants covering the 500 shares issued in 2014, during the three months ended June 30, 2016, the Company recorded a benefit of $32 . During the three months ended June 30, 2015, the Company recorded a warrant compensation charge of $ 135 . During the six months ended June 30, 2016, the Company recorded a benefit of $23 . During the six months ended June 30, 2015, the Company recorded a warrant compensation charge of $ 228 . With respect to the Celebrity Warrants covering the 1,000 shares issued in 2015, the Company recorded a prepaid expense of $62 and recorded $310 under other long-term assets, in each case as of June 30, 2016. No amounts were recorded for such Celebrity Warrants as of June 30, 2015. With respect to the Celebrity Warrants covering the 100 shares issued in 2015, no amounts were recorded for such Celebrity Warrants as of June 30, 2016. MGM Warrants In July 2013, the Company and MGM Interactive Inc. (“MGM”) entered into a warrant agreement that provided MGM the right to purchase up to 3,333 shares of the Company’s common stock subject to adjustments for dividends, reorganizations and other common stock events (the “MGM Warrant”). As of June 30, 2016, MGM Warrants covering 2,667 shares of the Company’s common stock were outstanding. These remaining shares vest and become exercisable based on conditions related to the Company releasing mobile games based on mutually agreed upon intellectual property licensed by MGM to the Company. During each of the three and six months ended June 30, 2016, and 2015, none of these vesting conditions were met. The Company estimated the fair value of the Celebrity Warrants using the Black-Scholes valuation model and the weighted average assumptions noted in the following table: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Dividend yield — % — % — % — % Risk-free interest rate % % % % Expected volatility % % % % Expected term (in years) Warrants outstanding at June 30, 2016 were as follows: Number Weighted of Shares Exercise Outstanding Price Average Under per Contractual Warrant Share Term Warrants outstanding, December 31, 2015 $ Granted - - Exercised - - Warrants outstanding, June 30, 2016 $ During the six months ended June 30, 2016 and 2015, warrant holders exercised warrants to purchase 0 and 250 shares of the Company’s common stock, respectively, and the Company received gross proceeds of $0 and $ 375 , respectively, in connection with these exercises. These exercised warrants were issued by the Company in 2010 in connection with a private placement transaction. |
Stock Option and Other Benefit
Stock Option and Other Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Stock Option and Other Benefit Plans | |
Stock Option and Other Benefit Plans | Note 9 — Stock Option and Other Benefit Plans 2007 Equity Incentive Plan In 2007, the Company’s Board of Directors adopted, and the Company’s stockholders approved, the 2007 Equity Incentive Plan (the “2007 Plan”). The 2007 Plan permits the Company to grant stock options, RSUs, and other stock-based awards to employees, non-employee directors and consultants. The 2007 Plan was amended and restated in 2013 (the “Amended 2007 Plan”) to, among other things, increase the aggregate number of shares of common stock authorized for issuance under the plan by 7,200 shares. In April 2015, the Company’s Board of Directors approved, and in June 2015, the Company’s stockholders approved, the Second Amended and Restated 2007 Equity Incentive Plan (the “Second Amended 2007 Plan”). The Second Amended 2007 Plan includes an increase of 13,000 shares in the aggregate number of shares of common stock authorized for issuance under the plan. It also includes a fungible share provision, pursuant to which each share that is subject to a stock-based award that is not a “full value award” (restricted stock, RSUs, or other stock-based awards where the price charged to the participant for the award is less than 100% of the fair market value) reduces the number of shares available for issuance by 1.32 shares (previously this fungible ratio was 1.39 shares under the Amended 2007 Plan). The Company may grant options under the 2007 Plan at prices no less than 85% of the estimated fair value of the shares on the date of grant as determined by its Board of Directors, provided, however, that (i) the exercise price of an incentive stock option (“ISO”) or non-qualified stock options (“NSO”) may not be less than 100% or 85% , respectively, of the estimated fair value of the underlying shares of common stock on the grant date, and (ii) the exercise price of an ISO or NSO granted to a 10% stockholder may not be less than 110% of the estimated fair value of the shares on the grant date. The fair value of the Company’s common stock is determined by the last sale price of such stock on the NASDAQ Global Market on the date of determination. The stock options granted to employees generally vest with respect to 25% of the underlying shares one year from the vesting commencement date and with respect to an additional 1/48 th of the underlying shares per month thereafter. Stock options granted before October 25, 2007 and after June 4, 2015 have a contractual term of ten years and stock options granted on or after October 25, 2007 and before June 4, 2015 have a contractual term of six years. As of June 30, 2016, 7, 132 shares were available for future grants under the Second Amended 2007 Plan. 2007 Employee Stock Purchase Plan In 2007, the Company’s Board of Directors adopted, and the Company’s stockholders approved, the 2007 Employee Stock Purchase Plan (the “2007 Purchase Plan”). As of June 30, 2016, 1,61 8 shares were available for issuance under the 2007 Purchase Plan. 2008 Equity Inducement Plan In March 2008, the Company’s Board of Directors adopted the 2008 Equity Inducement Plan (the “Inducement Plan”) to augment the shares available under its existing 2007 Plan. The Company has not sought stockholder approval for the Inducement Plan. As such, awards under the Inducement Plan are granted in accordance with NASDAQ Listing Rule 5635(c)(4) and only to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company. The Inducement Plan initially permitted the Company to grant only nonqualified stock options, but effective November 2013, the Compensation Committee of the Company’s Board amended the Inducement Plan to permit the award of RSUs under the plan. The Company may grant NSOs under the Inducement Plan at prices less than 100% of the fair value of the shares on the date of grant, at the discretion of its Board of Directors. The fair value of the Company’s common stock is determined by the last sale price of such stock on the NASDAQ Global Market on the date of determination. In December 2015, the Company’s Compensation Committee approved an increase in the number of authorized shares of common stock available for grant under the Inducement Plan by 1,000 shares in connection with grants made to Nick Earl upon his hiring as President of Global Studios. As of June 30, 2016, 6 75 shares of common stock were reserved for future grants under the Inducement Plan. Share-Based Awards Available for Grant The calculation of share-based awards available for grant under the Second Amended 2007 Plan and 2008 Equity Inducement Plan for the six months ended June 30, 2016 is as follows: Shares Available Balances at December 31, 2015 Share-based awards granted (1) Share-based awards canceled (2) Balances at June 30, 2016 (1) Under the terms of the Amended 2007 Plan, RSUs granted on or after June 6, 2013 but before June 4, 2015 reduced the number of shares available for grant by 1.39 shares for each share subject to an RSU award. Under the terms of the Second Amended 2007 Plan, RSUs granted on or after June 4, 2015 reduce the number of shares available for grant by 1.32 shares for each share subject to an RSU award. (2) Under the terms of the Amended 2007 Plan, RSUs forfeited and returned to the pool of shares available for grant that were granted on or after June 6, 2013 but before June 4, 2015 increase the pool by 1.39 shares for each share subject to an RSU that is forfeited. RSUs forfeited and returned to the pool of shares available for grant that were granted on or after June 4, 2015 increase the pool by 1.32 shares for each share subject to an RSU that is forfeited. RSU Activity A summary of the Company’s RSU activity for the six months ended June 30, 2016 is as follows: Weighted Number of Average Aggregate Units Grant Date Intrinsic Outstanding Fair Value Value Awarded and unvested, December 31, 2015 $ Granted $ Vested $ Forfeited $ Awarded and unvested, June 30, 2016 $ Restricted stock units vested and expected to vest, June 30, 2016 $ $ Stock Option Activity The following table summarizes the Company’s stock option activity for the six months ended June 30, 2016: Options Outstanding Weighted Weighted Number Average Average Aggregate of Exercise Contractual Intrinsic Shares Price Term (Years) Value Balances at December 31, 2015 $ $ Options granted $ Options canceled $ Options exercised $ Balances at June 30, 2016 $ $ Options vested and expected to vest at June 30, 2016 $ $ Options exercisable at June 30, 2016 $ $ The aggregate intrinsic value in the preceding table is calculated as the difference between the exercise price of the underlying awards and the quoted closing price of the Company’s common stock on The NASDAQ Global Market of $2. 20 per share as of June 30, 2016 (the last trading day in the quarter). Consolidated net cash proceeds from option exercises were $ 254 and $3,605 for the six months ended June 30, 2016 and 2015, respectively. The Company realized $0 and $0 of income tax benefit from stock option exercises during the three and six months ended June 30, 2016, and $63 and $77 income tax benefit from stock option exercises during the three and six months ended June 30, 2015. As required, the Company presents excess tax benefits from the exercise of stock options, if any, as financing cash flows rather than operating cash flows. Stock-Based Compensation The cost of RSUs is determined using the fair value of the Company’s common stock based on the quoted closing price of the Company’s common stock on the date of grant. RSUs typically vest and are settled over approximately a four -year period with 25% of the shares vesting on or around the one-year anniversary of the grant date and the remaining shares vesting quarterly thereafter. Compensation cost is amortized on a straight-line basis over the requisite service period. Under Compensation-Stock Compensation (“ASC 718”), the Company estimated the fair value of each option award on the grant date using the Black-Scholes option valuation model and the weighted average assumptions noted in the following table. Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Dividend yield — % — % — % — % Risk-free interest rate % % % % Expected volatility % % % % Expected term (years) The Company based its expected volatility on its own historical volatility and the historical volatility of a peer group of publicly traded entities. The expected term of options gave consideration to early exercises, post-vesting cancellations and the options’ contractual term ranging from six to ten years. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury Constant Maturity Rate as of the date of grant. The weighted-average fair value of stock options granted during the six months ended June 30, 2016 and 2015 was $1.15 and $2.66 per share, respectively. The Company calculated employee stock-based compensation expense recognized for the three and six months ended June 30, 2016 and 2015 based on awards ultimately expected to vest and reduced it for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The following table summarizes the consolidated stock-based compensation expense by line items in the unaudited condensed consolidated statement of operations: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Research and development $ $ $ $ Sales and marketing General and administrative Total stock-based compensation expense $ $ $ $ As of June 30, 2016 , the Company had $26, 359 of total unrecognized compensation expense related to RSUs, net of estimated forfeitures. As of June 30, 2016, the Company had $3,00 7 of total unrecognized compensation expense related to stock options, net of estimated forfeitures. The unrecognized compensation expense related to RSUs will be recognized over a weighted average period of 3. 00 years. The unrecognized compensation expense related to stock options will be recognized over a weighted average period of 2.61 years . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Income Taxes | Note 10 — Income Taxes The Company recorded an income tax expense of $16 and an income tax benefit of $ 151 for the three and six months ended June 30, 2016, respectively, and an income tax benefit of $809 and an income tax expense of $295 for the three and six months ended June 30, 2015, respectively. The change in income tax provision was due to changes in pre-tax income in the United States and certain foreign entities. The income tax rates vary from the Federal and State statutory rates due to the valuation allowances on the Company’s net operating losses, foreign tax rate differences and withholding taxes. The Company estimates its annual effective tax rate at the end of each quarterly period and records the tax effect of certain discrete items, which are unusual or occur infrequently, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized and jurisdictions where a reliable estimate of ordinary income cannot be made are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter depending on the mix and timing of actual earnings versus annual projections. The Company’s ability to use its net operating loss carryforwards and federal and state tax credit carryforwards to offset future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that result in changes in ownership as defined by Internal Revenue Code Section 382. The Company accounts for uncertain tax positions in accordance with ASC 740. As of June 30, 2016 and December 31, 2015, the total amount of unrecognized tax benefits was $10,077 and $ 9,218 , respectively. As of June 30, 2016 and December 31, 2015, approximately $412 and $540 , respectively, of unrecognized tax benefits, if recognized, would impact the Company’s effective tax rate. The remaining balance, if recognized, would adjust the Company’s deferred tax assets, each of which are subject to a valuation allowance. At June 30, 2016, the liability for uncertain tax positions decreased by approximately $135 due to the expiration of certain statutes of limitation in foreign jurisdictions in which the Company does business. As of June 30, 2016, the Company anticipated that the liability for uncertain tax positions, excluding interest and penalties, could decrease by approximately $148 within the next twelve months due to the expiration of certain statutes of limitation in foreign jurisdictions in which the Company does business. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. The Company recorded an expense of $82 and $99 related to interest on uncertain tax positions during the three and six months ended June 30, 2016 and an expense of $21 and $41 related to interest on uncertain tax positions during the three and six months ended June 30, 2015, respectively. During the second quarter of 2016, the Company released $190 of interest and penalties on uncertain tax positions due to the expiration of certain statutes of limitation in foreign jurisdictions in which the Company does business. As of June 30, 2016 and December 31, 2015, the Company had a liability of $276 and $375 , respectively, related to interest and penalties for uncertain tax positions The Company is subject to taxation in the United States and various foreign jurisdictions. The material jurisdictions subject to examination by tax authorities are primarily the State of California, United States, United Kingdom, Canada, and China. The Company’s federal tax returns are open by statute for tax years 1997 and forward and California tax returns are open by statute for tax years 2003 and forward and could be subject to examination by the tax authorities. The statute of limitations for the Company’s 2014 tax returns for the various entities in the United Kingdom is expected to be closed in 2016. The Company’s China income tax returns are open by statute for tax years 2011 and forward. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting | |
Segment Reporting | Note 11 — Segment Reporting ASC 280, Segment Reporting , establishes standards for reporting information about operating segments. It defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer, who is also the chief operating decision maker, makes decisions and manages the Company’s operations as one reporting unit, rather than as three separate regional territories, which used to be considered as three reporting units. In prior years, the Company’s Chief Executive Officer reviewed selected financial information on a geographic basis; however this information is included within one operating segment for purposes of allocating resources and evaluating financial performance. Accordingly, the Company reports as a single reportable segment—“Mobile Games”. For purposes of enterprise-wide disclosures, the Company attributes revenue to geographic areas based on the country in which the distributor’s, advertising service provider’s or carrier’s principal operations are located. In the case of Digital Storefronts, revenue is attributed to the geographic location where the end-user makes the purchase. The Company generates its revenue in the following geographic regions: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 United States of America $ $ $ $ Americas, excluding the USA EMEA APAC $ $ $ $ The Company attributes its long-lived assets, which primarily consist of property and equipment, to a country primarily based on the physical location of the assets. Property and equipment, net of accumulated depreciation and amortization, summarized by geographic location was as follows: June 30, December 31, 2016 2015 Americas $ $ EMEA APAC $ $ |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 12 — Restructuring During 2015 and the first six months of 2016, the Company’s management approved restructuring plans to improve the effectiveness and efficiency of its operating model and reduce operating expenses Company-wide. During the year ended December 31, 2015, the Company recorded $1,075 of restructuring charges related to employee termination costs in the Company’s Beijing, China and Bellevue, Washington studios. During the six months ended June 30, 2016, the Company recorded $ 2,221 of restructuring charges related to employee termination costs in the Company’s Long Beach, San Francisco, Bellevue, and Beijing, China offices, and lease termination costs for the Company’s Bellevue and Beijing, China offices. Fiscal 2016 and 2015 Restructuring Restructuring Restructuring Restructuring Workforce Facility Other Total Balance as of Jan 1, 2015 $ — $ — $ — $ — Charges to operations — Non-cash charges/adjustments — — — — Charges settled in cash — — Balance as of December 31, 2015 $ $ — $ $ Charges to operations Non-cash charges/adjustments — — Charges settled in cash Balance as of June 30, 2016 $ $ $ — $ |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13 — Related Party Transactions The Company and an affiliate of one of the Company’s principal stockholders entered into an agreement in November 2015 pursuant to which, the Company agreed, subject to certain conditions, to pay in the aggregate, up to $15,000 in recoupable advanced royalties and non-recoupable license fees. As of June 30, 2016, the Company had paid an aggregate of $5,000 of such amount, and the remaining $10,000 is payable upon achievement of certain milestones. |
The Company, Basis of Present21
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
The Company, Basis of Presentation and Summary of Significant Accounting Policies | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 4, 2016. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, which the Company believes are necessary for a fair statement of the Company’s financial position as of June 30, 2016 and its unaudited condensed consolidated results of operations for the three and six months ended June 30, 2016 and 2015, respectively. These unaudited condensed consolidated financial statements are not necessarily indicative of the results to be expected for the entire year. The unaudited condensed consolidated balance sheet presented as of December 31, 2015 has been derived from the audited consolidated financial statements as of that date, and the unaudited condensed consolidated balance sheet presented as of June 30, 2016 has been derived from the unaudited condensed consolidated financial statements as of that date. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. |
Variable Interest Entities | Variable Interest Entities The Company has interests in other entities that are variable interest entities (“VIEs”). Determining whether to consolidate a VIE requires judgment in assessing (i) whether an entity is a VIE and (ii) if the Company is the entity’s primary beneficiary and thus required to consolidate the entity. To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company’s evaluation includes identification of significant activities and an assessment of its ability to direct those activities based on governance provisions and other applicable agreements and circumstances. The Company’s assessment of whether it is the primary beneficiary of its VIEs requires significant assumptions and judgment. |
Investments | Investments The Company’s investments consist of equity investments and investments in financial instruments of unconsolidated entities. The Company monitors its investments for impairment and makes appropriate reductions in carrying values if it determines that an impairment charge is required based on qualitative and quantitative information. The investments are included in prepaid expenses and o ther assets and other long-term assets in the consolidated balance sheets. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and accounts receivable. The Company derives its accounts receivable from revenue earned from customers or through Digital Storefronts located in the United States and other locations outside of the United States. The Company performs ongoing credit evaluations of its customers’ and the Digital Storefronts’ financial condition and requires no collateral from its customers or the Digital Storefronts. The Company bases its allowance for doubtful accounts on management’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company reviews past due balances over a specified amount individually for collectability on a monthly basis. It reviews all other balances quarterly. The Company charges off accounts receivable balances against the allowance when it determines that the amount will not be recovered. The following table summarizes the revenue from customers or aggregate purchases through Digital Storefronts that accounted for more than 10% of the Company’s revenue for the periods indicated: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Apple % % % % % % % % At June 30, 2016, Apple Inc. (“Apple”) accounted for 40.2%, Google Inc. (“Google”) accounted for 21. 1 %, and Jirbo Inc. (dba AdColony) (“AdColony”) accounted for 19.5% of the Company’s total accounts receivable. At December 31, 2015, Apple accounted for 31.4% , AdColony accounted for 26.2% , and Google accounted for 19.2% of total accounts receivable . No other customer or Digital Storefront represented more than 10% of the Company’s total accounts receivable as of these dates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-09, Compensation - Stock Compensation (Topic 718 ): Improvements to Employee Share-Based Payment Accounting . ASU 2016-19 simplifies some aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences, (b) classification of awards as either equity or liabilities, and (c) classification on the statement of cash flows. Early adoption is permitted. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases . The new guidance requires lessees to recognize most leases as assets and liabilities on the balance sheet. Qualitative and quantitative disclosures will be enhanced to better understand the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for annual and interim periods beginning after December 31, 2018. The updated standard mandates a modified retrospective transition method with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments — Overall - Recognition and Measurement of Financial Assets and Financial Liabilities . The new guidance requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for a practicability exception. The updated standard is effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes . The new guidance requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company early adopted this guidance on a prospective basis as of December 31, 2015. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The new guidance requires that adjustments made to provisional amounts recognized in a business combination be recorded in the period such adjustments are determined, rather than retrospectively adjusting previously reported amounts. The new standard has been effective for fiscal years, and interim periods within those fiscal years, since December 15, 2015. The adoption of this standard did not have a material impact on the Company’s financial statements. In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software . The standard amended the existing accounting standards for intangible assets and provides explicit guidance to customers in determining the accounting for fees paid in a cloud computing arrangement, wherein the arrangements that do not convey a software license to the customer are accounted for as service contracts. The pronouncement has been effective for reporting periods beginning after December 15, 2015. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis . ASU 2015-02 changes the guidance with respect to the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The new standard has been effective for all annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The new standard provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosure. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. Under this guidance, revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The updated standard will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method with early adoption permitted. The updated standard will be effective for the Company beginning January 1, 2018. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements. There have been three new ASUs issued amending certain aspects of ASU 2014-09. ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross Versus Net) , was issued in March 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, Identifying Performance Obligations and Licensing, was issued in April 2016 and amends other sections of ASU 2014-09, including clarifying guidance related to identifying performance obligations and licensing implementation. Finally, ASU 2016-12, Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients, provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, non-cash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. With its evaluation of the impact of ASU 2014-09, the Company will also consider the impact related to the updated guidance provided by these three new ASUs. |
The Company, Basis of Present22
The Company, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
The Company, Basis of Presentation and Summary of Significant Accounting Policies | |
Revenues from Customers or Aggregate Purchases through Digital Storefronts Accounted for More Than Ten Percent of Revenues | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Apple % % % % % % % % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Net Loss Per Share | |
Computation of Net Income (Loss) Per Share | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Net loss $ $ $ $ Shares used to compute net loss per share: Weighted average common shares outstanding Weighted average common shares subject to restrictions Weighted average shares used to compute basic and diluted net loss per share Net loss per share - basic and diluted $ $ $ $ |
Anti-Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share of Common Stock | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Warrants to purchase common stock Unvested common shares subject to restrictions Options to purchase common stock RSUs |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Measurements | |
Schedule of assets and liabilities presented at fair value | As of June 30, 2016, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 June 30, 2016 Financial Assets Cash and cash equivalents $ $ — $ — $ Restricted cash — — Convertible promissory note investment in Plain Vanilla Corp. — — Call option to acquire Plain Vanilla Corp. (1) — — Total Financial Assets $ $ — $ $ (1) This asset is carried on the consolidated balance sheet on a historical cost basis and evaluated for impairment under ASC 325-20 (see “Note 6 - Investments") As of December 31, 2015, the Company’s financial assets and financial liabilities are presented below at fair value and were classified within the fair value hierarchy as follows (in thousands): Level 1 Level 2 Level 3 December 31, 2015 Financial Assets Cash and cash equivalents $ $ — $ — $ Restricted cash — — Total Financial Assets $ $ — $ — $ |
Schedule of Fair Value Assumptions | Three Months Ended Six Months Ended June 30, June 30, 2016 2016 Dividend yield — % — % Risk-free interest rate 0.40 % 0.44 % Expected volatility 80.00 % 62.5 % Expected term (in years) 0.75 0.85 |
Schedule of changes in fair value | Six months ended June 30, 2016 Asset at the Impairment Increase/ Asset at the beginning of of cost method (decrease) in end of the period Additions investment fair value the period Convertible promissory note investment in Plain Vanilla Corp. $ — $ $ — $ $ Call option to acquire Plain Vanilla Corp. (1) $ — $ $ — $ (1) This asset is carried on the consolidated balance sheet on a historical cost basis and evaluated for impairment under ASC 325-20 (see “Note 6 - Investments"). |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Balance Sheet Components | |
Accounts Receivable | Accounts Receivable June 30, December 31, 2016 2015 Accounts receivable $ $ Less: Allowance for doubtful accounts $ $ |
Prepaid Expenses and Other | Prepaid expenses and other June 30, December 31, 2016 2015 Deferred platform commission fees $ $ Deferred royalties Taxes receivable Other $ $ |
Property and Equipment | Property and Equipment June 30, December 31, 2016 2015 Computer equipment $ $ Furniture and fixtures Software Leasehold improvements Less: Accumulated depreciation and amortization $ $ |
Other Long-Term Liabilities | Other Long-Term Liabilities June 30, December 31, 2016 2015 Deferred rent $ $ Uncertain tax position obligations Other $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets | |
Carrying Amounts and Accumulated Amortization Expense of Acquired Intangible Assets | June 30, 2016 December 31, 2015 Gross Accumulated Net Gross Accumulated Net Carrying Amortization Carrying Carrying Amortization Carrying Value Expense Value Value Expense Value (Including (Including (Including (Including (Including (Including Estimated Impact of Impact of Impact of Impact of Impact of Impact of Useful Foreign Foreign Foreign Foreign Foreign Foreign Life Exchange) Exchange) Exchange) Exchange) Exchange) Exchange) Intangible assets amortized to cost of revenue: Titles, content and technology 3 yrs $ $ $ $ $ $ Catalogs 1 yr — — ProvisionX Technology 6 yrs — — Carrier contract and related relationships 5 yrs Licensed content 2.5 - 5 yrs Service provider license 9 yrs Trademarks 7 yrs Other intangible assets amortized to operating expenses: Emux Technology 6 yrs — — Non-compete agreements 4 yrs — — — — Total intangibles assets $ $ $ $ $ $ |
Total Expected Future Amortization Related to Intangible Assets | Amortization to Be Included in Cost of Year Ending December 31, Revenue 2016 $ 2017 2018 2019 2020 and thereafter — $ |
Goodwill by Reporting Unit | June 30, 2016 December 31, 2015 Goodwill $ $ Accumulated impairment losses Balance as of January 1 Goodwill acquired during the year — — Effects of foreign currency exchange Balance as of period ended: Goodwill Accumulated impairment losses Balance as of period ended $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies | |
Future Minimum Lease Payments under Non-Cancelable Operating Leases | Minimum Operating Lease Year Ending December 31, Payments 2016 $ 2017 2018 2019 2020 and thereafter $ |
Schedule of Future Minimum Guaranteed Royalties | Future Future Minimum Minimum Guarantee Developer Year Ending December 31, Commitments Commitments 2016 $ $ 2017 2018 — $ $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stockholders' Equity | |
Schedule of Assumptions Used in Black-Scholes Valuation Model and Weighted Average Assumptions | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Dividend yield — % — % — % — % Risk-free interest rate % % % % Expected volatility % % % % Expected term (in years) |
Warrants Outstanding | Number Weighted of Shares Exercise Outstanding Price Average Under per Contractual Warrant Share Term Warrants outstanding, December 31, 2015 $ Granted - - Exercised - - Warrants outstanding, June 30, 2016 $ |
Stock Option and Other Benefi29
Stock Option and Other Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stock Option and Other Benefit Plans | |
Calculation of Share-based Awards Available for Grant | Shares Available Balances at December 31, 2015 Share-based awards granted (1) Share-based awards canceled (2) Balances at June 30, 2016 (1) Under the terms of the Amended 2007 Plan, RSUs granted on or after June 6, 2013 but before June 4, 2015 reduced the number of shares available for grant by 1.39 shares for each share subject to an RSU award. Under the terms of the Second Amended 2007 Plan, RSUs granted on or after June 4, 2015 reduce the number of shares available for grant by 1.32 shares for each share subject to an RSU award. (2) Under the terms of the Amended 2007 Plan, RSUs forfeited and returned to the pool of shares available for grant that were granted on or after June 6, 2013 but before June 4, 2015 increase the pool by 1.39 shares for each share subject to an RSU that is forfeited. RSUs forfeited and returned to the pool of shares available for grant that were granted on or after June 4, 2015 increase the pool by 1.32 shares for each share subject to an RSU that is forfeited. |
Summary of Company's RSU Activity | Weighted Number of Average Aggregate Units Grant Date Intrinsic Outstanding Fair Value Value Awarded and unvested, December 31, 2015 $ Granted $ Vested $ Forfeited $ Awarded and unvested, June 30, 2016 $ Restricted stock units vested and expected to vest, June 30, 2016 $ $ |
Stock Option Activity | Options Outstanding Weighted Weighted Number Average Average Aggregate of Exercise Contractual Intrinsic Shares Price Term (Years) Value Balances at December 31, 2015 $ $ Options granted $ Options canceled $ Options exercised $ Balances at June 30, 2016 $ $ Options vested and expected to vest at June 30, 2016 $ $ Options exercisable at June 30, 2016 $ $ |
Schedule of Assumptions Used in Black-Scholes Valuation Model and Weighted Average Assumptions | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Dividend yield — % — % — % — % Risk-free interest rate % % % % Expected volatility % % % % Expected term (years) |
Stock-Based Compensation Expense | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Research and development $ $ $ $ Sales and marketing General and administrative Total stock-based compensation expense $ $ $ $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting | |
Revenues in Geographic Regions | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 United States of America $ $ $ $ Americas, excluding the USA EMEA APAC $ $ $ $ |
Long-Lived Assets by Geographical Area | June 30, December 31, 2016 2015 Americas $ $ EMEA APAC $ $ |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Information | Fiscal 2016 and 2015 Restructuring Restructuring Restructuring Restructuring Workforce Facility Other Total Balance as of Jan 1, 2015 $ — $ — $ — $ — Charges to operations — Non-cash charges/adjustments — — — — Charges settled in cash — — Balance as of December 31, 2015 $ $ — $ $ Charges to operations Non-cash charges/adjustments — — Charges settled in cash Balance as of June 30, 2016 $ $ $ — $ |
The Company, Basis of Present32
The Company, Basis of Presentation and Summary of Significant Accounting Policies - Concentration Risks (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Revenues from customers | Apple | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage from customers | 54.80% | 52.60% | 52.90% | 53.20% | |
Revenues from customers | Google | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage from customers | 26.10% | 25.90% | 26.80% | 26.70% | |
Accounts Receivable | Apple | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage from customers | 40.20% | 31.40% | |||
Accounts Receivable | Google | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage from customers | 21.10% | 19.20% | |||
Accounts Receivable | Ad Colony | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage from customers | 19.50% | 26.20% |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Net loss | $ (17,949) | $ (5,509) | $ (26,498) | $ (4,385) |
Shares used to compute net loss per share:: | ||||
Weighted average common shares outstanding | 132,517 | 119,808 | 132,194 | 113,658 |
Weighted average common shares subject to restrictions | (1,319) | (3,639) | (2,009) | (3,639) |
Weighted average shares used to compute basic and diluted net loss per share | 131,198 | 116,169 | 130,185 | 110,019 |
Net loss per share - basic and diluted | $ (0.14) | $ (0.05) | $ (0.20) | $ (0.04) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti dilutive securities excluded from computation of diluted net loss per share | 20,599 | 19,353 | 20,810 | 19,282 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti dilutive securities excluded from computation of diluted net loss per share | 7,155 | 6,717 | 7,104 | 6,932 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti dilutive securities excluded from computation of diluted net loss per share | 4,267 | 3,589 | 4,267 | 3,601 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti dilutive securities excluded from computation of diluted net loss per share | 7,858 | 5,408 | 7,430 | 5,110 |
Common shares subject to restrictions [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti dilutive securities excluded from computation of diluted net loss per share | 1,319 | 3,639 | 2,009 | 3,639 |
Fair Value Measurements - Key A
Fair Value Measurements - Key Assumptions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2016 | Jan. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | $ 158,037 | $ 158,037 | $ 180,542 | |
Restricted cash | 1,162 | 1,162 | 1,498 | |
Total Financial Assets | $ 162,539 | $ 162,539 | 182,040 | |
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract] | ||||
Risk-free interest rate (as a percent) | 0.40% | 0.44% | ||
Expected volatility (as a percent) | 80.00% | 62.50% | ||
Expected term (in years) | 9 months | 10 months 6 days | ||
Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | $ 158,037 | $ 158,037 | 180,542 | |
Restricted cash | 1,162 | 1,162 | 1,498 | |
Total Financial Assets | 159,199 | 159,199 | $ 182,040 | |
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total Financial Assets | 3,340 | 3,340 | ||
Convertible promissory notes | Plain Vanilla Corp. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment | 3,280 | $ 3,280 | $ 5,100 | |
Discount rate | 88.10% | |||
Convertible promissory notes | Plain Vanilla Corp. | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment | 3,280 | $ 3,280 | ||
Call Option | Plain Vanilla Corp. | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment | 60 | 60 | $ 2,400 | |
Call Option | Plain Vanilla Corp. | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment | $ 60 | $ 60 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value (Details) - Plain Vanilla Corp. - Level 3 $ in Thousands | 5 Months Ended |
Jun. 30, 2016USD ($) | |
Convertible promissory notes | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Additions | $ 5,100 |
Decrease in fair value included in earnings | (1,820) |
At the end of the period | 3,280 |
Call Option | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Additions | 2,400 |
Decrease in fair value included in earnings | (2,340) |
At the end of the period | $ 60 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Balance Sheet Components | ||
Accounts receivable | $ 15,176 | $ 18,672 |
Less: Allowance for doubtful accounts | (836) | (716) |
Accounts receivable, net | $ 14,340 | $ 17,956 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid expenses and other (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Deferred platform commission fees | $ 8,540 | $ 7,675 |
Deferred royalties | 2,782 | 2,668 |
Taxes receivable | 63 | 759 |
Other | 6,858 | 3,739 |
Prepaid expenses and other | $ 18,243 | $ 14,841 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 18,998 | $ 18,998 | $ 18,228 | ||
Less: Accumulated depreciation and amortization | (14,221) | (14,221) | (12,781) | ||
Property and equipment, net | 4,777 | 4,777 | 5,447 | ||
Depreciation [Abstract] | |||||
Depreciation | 720 | $ 732 | 1,376 | $ 1,438 | |
Computer equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 6,511 | 6,511 | 6,106 | ||
Furniture and fixtures [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 1,063 | 1,063 | 1,053 | ||
Software [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 7,663 | 7,663 | 7,408 | ||
Leasehold improvements [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 3,761 | $ 3,761 | $ 3,661 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Long Term Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Other Long-Term Liabilities | ||
Deferred rent | $ 507 | $ 692 |
Uncertain tax position obligations | 690 | 567 |
Other | 160 | 326 |
Total other long-term liabilities | $ 1,357 | $ 1,585 |
Goodwill And Intangible Asset41
Goodwill And Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 79,261 | $ 80,448 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (61,155) | (57,681) |
Total intangible assets | 18,106 | 22,767 |
Cost of sales | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | 72,811 | 73,829 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (54,705) | (51,062) |
Total intangible assets | $ 18,106 | $ 22,767 |
Cost of sales | Titles, content and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 3 years | 3 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 34,512 | $ 34,750 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (26,482) | (22,954) |
Total intangible assets | $ 8,030 | $ 11,796 |
Cost of sales | Catalogs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 1 year | 1 year |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 1,042 | $ 1,152 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | $ (1,042) | $ (1,152) |
Cost of sales | ProvisionX Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 6 years | 6 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 172 | $ 190 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | $ (172) | $ (190) |
Cost of sales | Customer contract and related relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 5 years | 5 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 23,860 | $ 24,200 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (20,759) | (20,597) |
Total intangible assets | $ 3,101 | $ 3,603 |
Cost of sales | Customer contract and related relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 2 years 6 months | 2 years 6 months |
Cost of sales | Customer contract and related relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 5 years | 5 years |
Cost of sales | Licensed content | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 7,793 | $ 7,866 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (2,793) | (2,866) |
Total intangible assets | $ 5,000 | $ 5,000 |
Cost of sales | Service provider license | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 9 years | 9 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 222 | $ 454 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (211) | (406) |
Total intangible assets | $ 11 | $ 48 |
Cost of sales | Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 7 years | 7 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 5,210 | $ 5,217 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | (3,246) | (2,897) |
Total intangible assets | 1,964 | 2,320 |
Operating expense | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value (Including Impact of Foreign Exchange) | 6,450 | 6,619 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | $ (6,450) | $ (6,619) |
Operating expense | Emux Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 6 years | 6 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 1,111 | $ 1,228 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | $ (1,111) | $ (1,228) |
Operating expense | Non-compete agreement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Estimated Useful Life | 4 years | 4 years |
Gross Carrying Value (Including Impact of Foreign Exchange) | $ 5,339 | $ 5,391 |
Accumulated Amortization Expense (Including Impact of Foreign Exchange) | $ (5,339) | $ (5,391) |
Goodwill And Intangible Asset42
Goodwill And Intangible Assets - Furture Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Cost of Goods and Services Sold, Depreciation and Amortization [Abstract] | ||||
Amortization expense, cost of revenues | $ 2,336 | $ 2,434 | $ 4,660 | $ 4,868 |
Amortization expense, operating | 0 | $ 32 | 0 | 159 |
Cost of sales | ||||
Cost of Goods and Services Sold, Depreciation and Amortization [Abstract] | ||||
Amortization expense, cost of revenues | 4,868 | |||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2,016 | 5,435 | 5,435 | ||
2,017 | 8,076 | 8,076 | ||
2,018 | 3,814 | 3,814 | ||
2,019 | 781 | 781 | ||
Total intangible assets | $ 18,106 | $ 18,106 | ||
Operating expense | ||||
Cost of Goods and Services Sold, Depreciation and Amortization [Abstract] | ||||
Amortization expense, operating | $ 159 |
Goodwill And Intangible Asset43
Goodwill And Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | |||||
Goodwill, Gross | $ 160,971 | $ 161,001 | $ 161,075 | ||
Accumulated impairment losses | (73,111) | (73,111) | (73,111) | ||
Goodwill, Net, Beginning Balance | $ 87,860 | $ 87,890 | $ 87,860 | $ 87,890 | $ 87,964 |
Effects of foreign currency exchange | (30) | (74) | |||
Goodwill, Net, Ending Balance | $ 87,860 | $ 87,890 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2016 | Jan. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Schedule of Cost-method Investments [Line Items] | ||||||
Payment for investment | $ 9,500 | $ 250 | ||||
Charge resulting from decrease in fair market value | 1,820 | |||||
Impairment charge | 2,540 | |||||
Research and development expense | $ 20,721 | $ 18,308 | 41,033 | $ 36,551 | ||
Plain Vanilla Corp. | Convertible promissory notes | ||||||
Schedule of Cost-method Investments [Line Items] | ||||||
Payment for investment | $ 2,500 | $ 5,000 | ||||
Fair value of investment | 5,100 | 3,280 | 3,280 | |||
Charge resulting from decrease in fair market value | 2,120 | 1,820 | ||||
Plain Vanilla Corp. | Convertible promissory notes | Maximum | ||||||
Schedule of Cost-method Investments [Line Items] | ||||||
Investment amount | $ 7,500 | |||||
Plain Vanilla Corp. | Call Option | ||||||
Schedule of Cost-method Investments [Line Items] | ||||||
Call option, term from closing of initial investment | 15 months | |||||
Fair value of investment | $ 2,400 | 60 | 60 | |||
Impairment charge | 2,340 | 2,340 | ||||
Dairy Free, Inc. | Preferred stock | ||||||
Schedule of Cost-method Investments [Line Items] | ||||||
Investment amount | 2,000 | |||||
Research and development expense | 340 | 600 | ||||
Dairy Free, Inc. | Preferred stock | Other long term assets | ||||||
Schedule of Cost-method Investments [Line Items] | ||||||
Investment amount | $ 2,000 | $ 2,000 | ||||
Dairy Free, Inc. | Advance recoupable development funding | Maximum | ||||||
Schedule of Cost-method Investments [Line Items] | ||||||
Recoupable and non-refundable development funding agreement amount | $ 1,000 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Commitments and Contingencies | |||||
Rent expense | $ 1,291 | $ 1,147 | $ 2,532 | $ 2,149 | |
Deferred rent balance | 700 | 700 | $ 749 | ||
Deferred rent, included in other long-term liabilities | 507 | 507 | $ 692 | ||
Minimum Operating Lease Payments | |||||
2,016 | 2,529 | 2,529 | |||
2,017 | 4,727 | 4,727 | |||
2,018 | 3,042 | 3,042 | |||
2,019 | 2,639 | 2,639 | |||
2020 and thereafter | 1,853 | 1,853 | |||
Total | $ 14,790 | $ 14,790 |
Commitments and Contingencies46
Commitments and Contingencies - Minimum Guranteed Royalties (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Current and long-term liabilities | |
Future Minimum Developer Commitments | |
Licensor commitments | $ 36,817 |
Current and long-term assets | |
Future Minimum Developer Commitments | |
Licensor commitments | 36,817 |
Guaranteed royalty commitments | |
Future Minimum Guarantee Commitments | |
2,016 | 33,607 |
2,017 | 3,367 |
2,018 | 26 |
Total future minimum royalty payments | 37,000 |
Developer Commitments | |
Future Minimum Developer Commitments | |
2,016 | 1,760 |
2,017 | 350 |
Total future minimum developer commitments | $ 2,110 |
Commitments and Contingencies47
Commitments and Contingencies - Other Commitments (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Income Tax Uncertainties [Abstract] | ||
Uncertain tax position obligations | $ 690 | $ 567 |
Income tax liabilities not expected to become due | 12 months |
Stockholders' Equity - Investme
Stockholders' Equity - Investment (Details) - Red River Investment Limited - Common Stock $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 29, 2015USD ($)$ / sharesshares |
Private Placement [Member] | |
Shares issued | 21,000 |
Shares Issued, Price Per Share | $ / shares | $ 6 |
Proceeds from Issuance of Common Stock | $ | $ 125,156 |
Initial Closing [Member] | |
Shares issued | 12,500 |
Second Closing [Member] | |
Shares issued | 8,500 |
Stockholders' Equity - Celebrit
Stockholders' Equity - Celebrity Warrants (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Warrants and Rights Note Disclosure [Abstract] | ||||||
Non-cash warrant (benefit)/expense | $ (23) | $ 228 | ||||
Celebrity Warrants | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of Shares Outstanding Under Warrant | 1,600 | 1,600 | ||||
Celebrity Warrants 2014 | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of warrants issued | 500 | |||||
Non-cash warrant (benefit)/expense | $ (32) | $ 135 | $ (23) | 228 | ||
Celebrity Warrants August 2015 | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of warrants issued | 1,000 | |||||
Percent of shares that vest upon public announcement of license agreement | 50.00% | |||||
Warrant vesting period | 24 months | |||||
Non-cash warrant (benefit)/expense | $ 0 | |||||
Celebrity Warrants August 2015 | Prepaid expenses | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Non-cash warrant (benefit)/expense | 62 | |||||
Celebrity Warrants August 2015 | Other long term assets | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Non-cash warrant (benefit)/expense | 310 | |||||
Celebrity Warrants September 2015 | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of warrants issued | 100 | |||||
Warrant vesting period | 60 months | |||||
Percent of shares subject to accelerated vesting | 25.00% | |||||
Non-cash warrant (benefit)/expense | $ 0 | |||||
Common Stock | Celebrity Warrants | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of shares, if warrants exercised | 1,100 | |||||
Common Stock | Celebrity Warrants August 2015 | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of shares, if warrants exercised | 1,000 | |||||
Common Stock | Celebrity Warrants September 2015 | ||||||
Warrants and Rights Note Disclosure [Abstract] | ||||||
Number of shares, if warrants exercised | 100 |
Stockholders' Equity - MGM Warr
Stockholders' Equity - MGM Warrant (Details) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jul. 31, 2013 | |
Warrants and Rights Note Disclosure [Abstract] | |||
Non-cash warrant (benefit)/expense | $ (23) | $ 228 | |
MGM Warrant | |||
Warrants and Rights Note Disclosure [Abstract] | |||
Number of Shares Outstanding Under Warrant | 2,667 | ||
Common Stock | MGM Warrant | |||
Warrants and Rights Note Disclosure [Abstract] | |||
Number of shares, if warrants exercised | 3,333 |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions of Warrants (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Black-Sholes Valuation Assumptions | ||||
Risk-free interest rate | 1.08% | 1.29% | 1.14% | 1.29% |
Expected volatility | 55.30% | 55.60% | 55.70% | 55.60% |
Expected term (years) | 4 years | 4 years | 4 years | 4 years |
Warrants | ||||
Black-Sholes Valuation Assumptions | ||||
Risk-free interest rate | 1.49% | 1.99% | 1.50% | 1.99% |
Expected volatility | 59.20% | 61.05% | 59.30% | 61.05% |
Expected term (years) | 5 years 6 months 4 days | 5 years 2 months 1 day | 5 years 3 months 18 days | 5 years 3 months 7 days |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants Outstanding Roll Forward (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
MGM Warrant | ||
Number of Shares Outstanding Under Warrants | ||
Warrants outstanding, ending balance | 2,667 | |
Warrants | ||
Number of Shares Outstanding Under Warrants | ||
Warrants outstanding, beginning balance | 4,267 | |
Granted | ||
Shares issued, warrants exercised | 0 | 250 |
Warrants outstanding, ending balance | 4,267 | |
Weighted Average Exercise Price | ||
Weighted average exercise price, beginning balance | $ 3.61 | |
Granted | ||
Exercised | ||
Weighted average exercise price, ending balance | $ 3.61 | |
Average Contractual Term | ||
Average contractual term | 5 years 6 months | |
Proceeds from exercise of warrants | $ 0 | $ 375 |
Stock Option And Other Benefi53
Stock Option And Other Benefit Plans (Details) shares in Thousands | 1 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | 24 Months Ended | 91 Months Ended | |||
Dec. 31, 2015shares | Jun. 30, 2015 | Jun. 30, 2015shares | Jun. 30, 2016shares | Mar. 31, 2016 | Oct. 24, 2007 | Dec. 31, 2013shares | Jun. 03, 2015 | Jun. 03, 2015 | |
Stock Options [Member] | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Contractual term | 6 years | ||||||||
Stock Options [Member] | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Contractual term | 10 years | ||||||||
2007 Equity Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock authorized for issuance, increased | 13,000 | 7,200 | |||||||
Pool share reduced for each share granted | 1.32 | 1.39 | |||||||
Exercise price, percentage of fair market value of common stock on grant date | 100.00% | ||||||||
Number of shares available for grant | 7,132 | ||||||||
2007 Equity Incentive Plan | Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Employee options, vesting percentage, after first year | 25.00% | ||||||||
Employee options, vesting percentage, monthly after first year | 2.0833% | ||||||||
Contractual term | 10 years | 10 years | 6 years | ||||||
2007 Equity Incentive Plan | Stock Options [Member] | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percentage of fair market value of common stock on grant date | 85.00% | ||||||||
2007 Equity Incentive Plan | Incentive Stock Option [Member] | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percentage of fair market value of common stock on grant date | 100.00% | ||||||||
2007 Equity Incentive Plan | Incentive Stock Option [Member] | Minimum | 10% Stockholder [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percentage of fair market value of common stock on grant date | 110.00% | ||||||||
2007 Equity Incentive Plan | Non Qualified Stock Option [Member] | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percentage of fair market value of common stock on grant date | 85.00% | ||||||||
2007 Equity Incentive Plan | Non Qualified Stock Option [Member] | Minimum | 10% Stockholder [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percentage of fair market value of common stock on grant date | 110.00% | ||||||||
2008 Equity Inducement Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock authorized for issuance, increased | 1,000 | ||||||||
Number of shares available for grant | 675 | ||||||||
2008 Equity Inducement Plan | Non Qualified Stock Option [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Exercise price, percentage of fair market value of common stock on grant date | 100.00% | ||||||||
2007 Employee Stock Purchase Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares available for grant | 1,618 | ||||||||
2007 Equity Incentive and 2008 Equity Inducement Plans | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Pool share reduced for each share granted | 1.32 | 1.39 | |||||||
Pool share increased for each share canceled | 1.32 | 1.39 | |||||||
Number of shares available for grant | 9,684 | 7,807 |
Stock Option And Other Benefi54
Stock Option And Other Benefit Plans - Share-Based Awards Available for Grant (Details) shares in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | 24 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2016shares | Dec. 31, 2013 | Jun. 03, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based awards granted | (848) | ||||
Share-based awards canceled | 624 | ||||
2007 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available, ending balances | 7,132 | ||||
Pool share reduced for each share granted | 1.32 | 1.39 | |||
2007 Equity Incentive and 2008 Equity Inducement Plans | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available, beginning balances | 9,684 | ||||
Share-based awards granted | (4,265) | ||||
Share-based awards canceled | 2,388 | ||||
Shares available, ending balances | 7,807 | ||||
Pool share reduced for each share granted | 1.32 | 1.39 | |||
Pool share increased for each share canceled | 1.32 | 1.39 |
Stock Option And Other Benefi55
Stock Option And Other Benefit Plans - RSU Activity (Details) - RSUs $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awarded and unvested, Number of Units Outstanding, beginning balance | shares | 7,344 |
Granted, Number of Units Outstanding | shares | 2,589 |
Vested, Number of Units Outstanding | shares | (1,165) |
Forfeited, Number of Units Outstanding | shares | (981) |
Awarded and unvested, Number of Units Outstanding, ending balance | shares | 7,787 |
Vested and expected to vest, number of units | shares | 6,499 |
Awarded and unvested, Weighted Average Grant Date Fair Value, beginning balance | $ / shares | $ 4.40 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 2.91 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 5 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 4.39 |
Awarded and unvested, Weighted Average Grant Date Fair Value, ending balance | $ / shares | 3.82 |
Vested and expected to vest, Weighted Average Grant Date Fair Value | $ / shares | $ 3.83 |
Aggregate Intrinsic Value | $ | $ 14,298 |
Stock Option And Other Benefi56
Stock Option And Other Benefit Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Stock Option and Other Benefit Plans | |||||
Number of shares, beginning balances | 7,164 | ||||
Options granted, number of shares | 848 | ||||
Options canceled, number of shares | (624) | ||||
Options exercised, number of shares | (165) | ||||
Number of shares, ending balances | 7,223 | 7,223 | 7,164 | ||
Options vested and expected to vest, number of shares | 6,884 | 6,884 | |||
Options exercisable, number of shares | 4,713 | 4,713 | |||
Weighted average exercise price, beginning balances | $ 3.73 | ||||
Options granted, weighted average exercise price | 2.67 | ||||
Options canceled, weighted average exercise price | 4.44 | ||||
Options exercised, weighted average exercise price | 1.54 | ||||
Weighted average exercise price, ending balances | $ 3.60 | 3.60 | $ 3.73 | ||
Options vested and expected to vest, weighted average exercise price | 3.61 | 3.61 | |||
Options exercisable, weighted average exercise price | $ 3.74 | $ 3.74 | |||
Weighted average contractual term, options outstanding | 4 years 2 months 16 days | 4 years 18 days | |||
Weighted average contractual term, options vested and expected | 4 years 4 days | ||||
Weighted average contractual term, Options exercisable | 2 years 6 months 18 days | ||||
Aggregate intrinsic value, options outstanding | $ 169 | $ 169 | $ 389 | ||
Aggregate intrinsic value, Options vested and expected to vest | 169 | 169 | |||
Aggregate intrinsic value, options exercisable | $ 169 | $ 169 | |||
Quoted closing price of Company's common stock | $ 2.20 | $ 2.20 | |||
Cash proceed from option exercise, net | $ 254 | $ 3,605 | |||
Income tax benefit from stock option exercises | $ 0 | $ 63 | $ 0 | $ 77 |
Stock Option And Other Benefi57
Stock Option And Other Benefit Plans - Stock-Based Compensation (Details) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 55.30% | 55.60% | 55.70% | 55.60% |
Risk-free interest rate | 1.08% | 1.29% | 1.14% | 1.29% |
Weighted-average fair value of stock options granted | $ 1.15 | $ 2.66 | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Vesting percentage | 25.00% | |||
Number of shares granted | 2,589 |
Stock Option And Other Benefi58
Stock Option And Other Benefit Plans - Weighted Average Assumptions (Details) | 3 Months Ended | 6 Months Ended | 10 Months Ended | 91 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 | Oct. 24, 2007 | Jun. 03, 2015 | |
Black-Sholes Valuation Assumptions | |||||||
Risk-free interest rate | 1.08% | 1.29% | 1.14% | 1.29% | |||
Expected volatility | 55.30% | 55.60% | 55.70% | 55.60% | |||
Expected term (years) | 4 years | 4 years | 4 years | 4 years | |||
Stock Options [Member] | Minimum | |||||||
Stock Based Compensation Additional Details | |||||||
Contractual term | 6 years | ||||||
Stock Options [Member] | Maximum | |||||||
Stock Based Compensation Additional Details | |||||||
Contractual term | 10 years | ||||||
Stock Options [Member] | 2007 Equity Incentive Plan | |||||||
Stock Based Compensation Additional Details | |||||||
Contractual term | 10 years | 10 years | 6 years |
Stock Option And Other Benefi59
Stock Option And Other Benefit Plans -Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 2,961 | $ 3,032 | $ 6,506 | $ 5,161 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 837 | 836 | 2,031 | 1,596 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 191 | 282 | 483 | 500 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 1,933 | $ 1,914 | 3,992 | $ 3,065 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Unrecognized compensation expense | 26,359 | $ 26,359 | ||
Unrecognized compensation expense recognized over weighted average period | 3 years | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Unrecognized compensation expense | $ 3,007 | $ 3,007 | ||
Unrecognized compensation expense recognized over weighted average period | 2 years 7 months 10 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Income Taxes | |||||
Income tax expense (benefit) | $ 16 | $ (809) | $ (151) | $ 295 | |
Unrecognized tax benefits | 10,077 | 10,077 | $ 9,218 | ||
Unrecognized tax benefits, if recognized, would impact effective tax rate | 412 | 412 | 540 | ||
Decrease of tax liability | 135 | ||||
Release of provision on uncertain tax positions due to the expiration of certain statutes of limitation in foreign jurisdictions | 190 | ||||
Anticipated decrease of liability for uncertain tax positions due to expiration of certain statutes of limitation in foreign jurisdictions | 148 | 148 | |||
Interest on uncertain tax position expense | 82 | $ 21 | 99 | $ 41 | |
Liability related to interest and penalties for uncertain tax positions | $ 276 | $ 276 | $ 375 |
Segment Reporting - Revenues (D
Segment Reporting - Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 48,363 | $ 56,150 | $ 102,892 | $ 125,620 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 35,620 | 37,346 | 75,245 | 81,686 |
Americas, excluding the United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 2,069 | 2,752 | 4,407 | 6,618 |
EMEA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | 6,191 | 8,131 | 13,545 | 19,863 |
APAC | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 4,483 | $ 7,921 | $ 9,695 | $ 17,453 |
Segment Reporting - PPE (Detail
Segment Reporting - PPE (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | $ 4,777 | $ 5,447 |
Americas | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | 4,394 | 4,938 |
EMEA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | 308 | 408 |
APAC | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net of accumulated depreciation and amortization | $ 75 | $ 101 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge | $ 2,116 | $ 2,221 | $ 1,075 |
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 342 | ||
Charges to operations | 2,116 | 2,221 | 1,075 |
Non-cash charges/adjustments | 123 | ||
Charges settled in cash | (1,716) | (733) | |
Ending Balance | 970 | 970 | 342 |
China and Washington [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge | 1,075 | ||
Restructuring Reserve [Roll Forward] | |||
Charges to operations | 1,075 | ||
Long Beach | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge | 2,221 | ||
Restructuring Reserve [Roll Forward] | |||
Charges to operations | 2,221 | ||
Workforce | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge | 1,480 | 1,044 | |
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 311 | ||
Charges to operations | 1,480 | 1,044 | |
Charges settled in cash | (1,607) | (733) | |
Ending Balance | 184 | 184 | 311 |
Facility | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge | 694 | ||
Restructuring Reserve [Roll Forward] | |||
Charges to operations | 694 | ||
Non-cash charges/adjustments | 123 | ||
Charges settled in cash | (31) | ||
Ending Balance | $ 786 | 786 | |
Other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charge | 47 | 31 | |
Restructuring Reserve [Roll Forward] | |||
Beginning Balance | 31 | ||
Charges to operations | 47 | 31 | |
Charges settled in cash | $ (78) | ||
Ending Balance | $ 31 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Nov. 30, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Prepaid royalties to a related party | $ 2,007 | $ 7,949 | |
An affiliate of one of the Company's principal stockholders | Recoupable Advanced Royalties And Non-recoupable License Fees Agreement | |||
Related Party Transaction [Line Items] | |||
Related party transaction amount | $ 15,000 | ||
Prepaid royalties to a related party | 5,000 | ||
Payable to related parties | $ 10,000 |