Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Remark Holdings, Inc. | |
Entity Central Index Key | 1,368,365 | |
Current Fiscal year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Emerging Growth Company | false | |
Entity Small Business | true | |
Amendment Flag | false | |
Entity Common Stock, Outstanding (shares) | 36,668,696 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 9,902 | $ 22,632 |
Restricted cash | 11,655 | 11,670 |
Trade accounts receivable, net | 4,753 | 3,673 |
Prepaid expense and other current assets | 8,710 | 5,518 |
Notes receivable, current | 100 | 290 |
Total current assets | 35,120 | 43,783 |
Notes receivable | 0 | 100 |
Property and equipment, net | 11,630 | 13,387 |
Investment in unconsolidated affiliates | 2,030 | 1,030 |
Intangibles, net | 19,950 | 23,946 |
Goodwill | 20,099 | 20,099 |
Other long-term assets | 1,620 | 1,192 |
Total assets | 90,449 | 103,537 |
Liabilities and Stockholders’ Equity | ||
Accounts payable | 23,956 | 17,857 |
Accrued expense and other current liabilities | 12,034 | 18,795 |
Deferred merchant booking | 8,727 | 9,027 |
Contract liability | 5,049 | 3,691 |
Note payable | 3,000 | 3,000 |
Current maturities of long-term debt, net of unamortized discount and debt issuance cost | 37,319 | 38,085 |
Total current liabilities | 90,085 | 90,455 |
Warrant liability | 7,072 | 89,169 |
Other liabilities | 3,296 | 3,501 |
Total liabilities | 100,453 | 183,125 |
Commitments and contingencies (Note 13) | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,468,696 and 28,406,026 shares issued and outstanding; each at September 30, 2018 and December 31, 2017, respectively | 36 | 28 |
Additional paid-in-capital | 304,006 | 220,117 |
Accumulated other comprehensive income | 48 | 115 |
Accumulated deficit | (314,094) | (299,848) |
Total stockholders’ deficit | (10,004) | (79,588) |
Total liabilities and stockholders’ deficit | $ 90,449 | $ 103,537 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (shares) | 36,468,696 | 28,406,026 |
Common stock, shares outstanding (shares) | 36,468,696 | 28,406,026 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 19,351 | $ 19,449 | $ 56,788 | $ 52,004 |
Cost and expense | ||||
Cost of revenue (excluding depreciation and amortization) | 4,393 | 5,641 | 14,557 | 12,270 |
Sales and marketing | 7,213 | 6,326 | 20,884 | 17,975 |
Technology and development | 842 | 865 | 2,587 | 2,657 |
General and administrative | 10,444 | 9,971 | 44,941 | 26,656 |
Depreciation and amortization | 2,756 | 2,482 | 8,220 | 8,237 |
Impairments | 0 | 28 | 0 | 28 |
Other operating expense | 117 | 66 | 264 | 168 |
Total cost and expense | 25,765 | 25,379 | 91,453 | 67,991 |
Operating loss | (6,414) | (5,930) | (34,665) | (15,987) |
Other income (expense) | ||||
Interest expense | (1,307) | (1,080) | (3,968) | (3,279) |
Other income, net | 1 | 0 | 56 | 20 |
Change in fair value of warrant liability | 3,525 | (5,978) | 22,190 | 2,351 |
Other gain (loss) | (12) | (33) | 511 | (85) |
Total other income (expense), net | 2,207 | (7,091) | 18,789 | (993) |
Loss before income taxes | (4,207) | (13,021) | (15,876) | (16,980) |
Benefit from (provision for) income taxes | 442 | (229) | 1,437 | (603) |
Net loss | (3,765) | (13,250) | (14,439) | (17,583) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments | (82) | 48 | (67) | 20 |
Comprehensive loss | $ (3,847) | $ (13,202) | $ (14,506) | $ (17,563) |
Weighted-average shares outstanding, basic and diluted (in shares) | 35,463 | 22,811 | 33,608 | 22,744 |
Net loss per share, basic and diluted (usd per share) | $ (0.11) | $ (0.58) | $ (0.43) | $ (0.77) |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by (used in) operating activities | $ (18,691) | $ 616 |
Cash flows from investing activities: | ||
Proceeds from disposition of assets | 629 | 0 |
Purchases of property, equipment and software | (2,728) | (2,631) |
Acquisition of unconsolidated affiliate | (480) | (29) |
Net cash used in investing activities | (2,579) | (2,660) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net | 10,951 | 8,315 |
Proceeds from debt issuance | 0 | 3,000 |
Payment of loan fees and debt issuance cost | (1,526) | 0 |
Payment of contingent consideration in business acquisitions | (900) | 0 |
Payments of capital lease obligations | 0 | (179) |
Net cash provided by financing activities | 8,525 | 11,136 |
Net change in cash, cash equivalents and restricted cash | (12,745) | 9,092 |
Cash, cash equivalents and restricted cash: | ||
Beginning of period | 34,302 | 18,548 |
End of period | 21,557 | 27,640 |
Supplemental cash flow information: | ||
Cash paid for interest | 3,426 | 3,031 |
Supplemental schedule of non-cash investing and financing activities: | ||
Issuance of common stock upon warrant exercise | 59,907 | 0 |
Issuance of common stock upon conversion of debt instruments | 0 | 121 |
Common stock subscription payable | $ 520 | $ 0 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | NOTE 1. ORGANIZATION AND BUSINESS Organization and Business Remark Holdings, Inc. and subsidiaries (“Remark”, “we”, “us”, or “our”), which include its consolidated variable-interest entities (“VIEs”), are primarily technology-focused. Our KanKan data intelligence platform serves as the basis for our development and deployment of artificial-intelligence-based solutions for businesses in many industries and geographies. We also own and operate digital media properties across multiple verticals, such as travel and entertainment and young adult lifestyle, that deliver relevant, dynamic content that attracts and engages users on a global scale. Our common stock is listed on the Nasdaq Capital Market under the ticker symbol MARK. Liquidity Considerations During the nine months ended September 30, 2018 , and in each fiscal year since our inception, we have incurred net losses which have resulted in an accumulated deficit of $314.1 million as of September 30, 2018 . Additionally, our operations have historically used more cash than they have provided. As of September 30, 2018 , our cash and cash equivalents balance was $9.9 million , and we had a negative working capital balance of $55.0 million . Our revenue during the nine months ended September 30, 2018 was $56.8 million . On July 2, 2018, we entered into a common stock purchase agreement (the “2018 Aspire Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Aspire Capital to purchase up to an aggregate of $30.0 million of shares of our common stock over the 30 -month term of the 2018 Aspire Purchase Agreement. The 2018 Aspire Purchase Agreement, which we describe in more detail in Note 14 , terminated and replaced the common stock purchase agreement we had entered into with Aspire Capital on November 9, 2016 (the “2016 Aspire Purchase Agreement”). Concurrently with entering into the 2018 Aspire Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file with the Securities and Exchange Commission (the “SEC”) one or more registration statements, as necessary, and to the extent permissible and subject to certain exceptions, to register under the Securities Act of 1933, as amended, the sale of the shares of our common stock that may be issued to Aspire Capital under the 2018 Aspire Purchase Agreement. We have filed with the SEC a prospectus supplement to our effective shelf Registration Statement on Form S-3 (File No. 333-225448) registering all of the shares of common stock that may be offered to Aspire Capital from time to time under the 2018 Aspire Purchase Agreement. As of September 30, 2018 , Aspire Capital has purchased $ 10.0 million of shares of our common stock under the 2018 Aspire Purchase Agreement. During the nine months ended September 30, 2017 , we issued a total of 3,052,897 shares of our common stock to investors in exchange for approximately $8.3 million in cash, including a $5.0 million issuance to Aspire. We did not issue our common stock in private sales during the nine months ended September 30, 2018 , although we did receive cash from the issuances to Aspire Capital and from stock option exercises. We are a party to a financing agreement dated as of September 24, 2015 (as amended, the “Financing Agreement”) with certain of our subsidiaries as borrowers (together with Remark, the “Borrowers”), certain of our subsidiaries as guarantors (the “Guarantors”), the lenders from time to time party thereto (the “Lenders”) and MGG Investment Group LP, in its capacity as collateral agent and administrative agent for the Lenders (“MGG”), pursuant to which the Lenders extended credit to the Borrowers consisting of a term loan in the aggregate principal amount of $35.5 million (the “Loan”). The terms of the Financing Agreement, the amendments thereto, and related documents effective as of September 30, 2018 are described in Note 11 , which also describes our ongoing event of default relating to our failure to make certain required payments under the Financing Agreement as well as certain other ongoing events of default. We cannot provide assurance that revenue generated from our businesses will be sufficient to sustain our operations in the long term (including but not limited to payment of the amounts required under the Financing Agreement); therefore, we are actively evaluating strategic alternatives including the potential sale of certain non-core assets, investment assets and operating businesses. However, we may need to obtain additional capital through equity financing or debt financing. Conditions in the debt and equity markets, as well as the volatility of investor sentiment regarding macroeconomic and microeconomic conditions, will play primary roles in determining whether we can successfully obtain additional capital. Additionally, pursuant to the Financing Agreement, we are subject to certain limitations on our ability and the ability of our subsidiaries to, among other things, incur additional debt and transfer, sell or otherwise dispose of assets, without the consent of the Lenders. We cannot be certain that we will be successful at raising additional capital. A variety of factors, many of which are outside of our control, affect our cash flow; those factors include regulatory issues, competition, financial markets and other general business conditions. Based on financial projections, we believe that we will be able to meet our ongoing requirements for at least the next 12 months following this report (including the amounts required under the Financing Agreement, based on the current status of discussions with the Lenders regarding ongoing events of default) with existing cash, cash equivalents and cash resources, and based on the probable success of one or more of the following plans: • monetize existing assets • work with our creditors to modify existing arrangements or refinance our debt • obtain additional capital through equity issuances, including but not limited to equity issuances to Aspire Capital under its existing purchase commitment (which equity issuances may dilute existing stockholders) However, projections are inherently uncertain and we cannot assure you that we will generate sufficient income and cash flow to meet all of our liquidity requirements. Comparability |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES We prepared the accompanying unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 , with the audited Consolidated Balance Sheet amounts as of December 31, 2017 presented for comparative purposes, and the related unaudited Condensed Consolidated Statements of Operations and Statements of Cash Flows in accordance with the instructions for Form 10-Q. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading. Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period. Management believes that we have included all adjustments (including those of a normal, recurring nature) considered necessary to fairly present our unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 , our unaudited Condensed Consolidated Statements of Operations and our unaudited Condensed Consolidated Statements of Cash Flows for all periods presented. You should read our unaudited condensed consolidated interim financial statements and footnotes in conjunction with our consolidated financial statements and footnotes included within the Annual Report on Form 10-K (the “ 2017 Form 10-K”). Consolidation We include all of our subsidiaries, which include the VIEs for which we are the primary beneficiary, in our consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. To comply with China’s laws which restrict foreign ownership of entities that operate within industries deemed sensitive by the Chinese government, we employ what we believe is a commonly-used organizational structure consisting of a wholly-foreign owned enterprise (“WFOE”) and the VIEs to operate our KanKan business. We own 100% of the equity of the WFOE, while the VIEs are companies formed in China under local laws which are owned by members of our management team. We funded the registered capital and operating expenses of the VIEs by extending loans to the VIEs’ owners. We are the primary beneficiary of the VIEs because the relationships between the VIEs and our WFOE are governed by contractual agreements, including in each case an Exclusive Call Option Agreement, an Exclusive Business Cooperation Agreement, a Proxy Agreement and an Equity Pledge Agreement, which give us control over the operations of the VIEs. Use of Estimates We prepare our consolidated financial statements in conformity with GAAP. While preparing our financial statements, we make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes. Accordingly, actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, intangible assets, the useful lives of property and equipment, stock-based compensation, the fair value of the warrant liability, income taxes, inventory reserve and purchase price allocation, among other items. Changes to Significant Accounting Policies - Revenue Recognition On January 1, 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , and all subsequent amendments (collectively “ASC 606”) using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of Accumulated deficit (the amount was not material). We have not retrospectively adjusted the information for the comparative period reported herein, which information we continue to report under the accounting standards in effect for that period. The amounts of revenue, accounts receivable and contract balances that we reported under ASC 606 as of and for the three and nine months ended September 30, 2018 , were not materially different than the amounts we would have reported under the accounting standards previously in effect. We recognize revenue when we transfer control of the promised goods or services to our customers, and we recognize an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation. As a result of our adoption of ASC 606, the line item previously labeled “Deferred revenue” on our condensed consolidated balance sheets is now labeled “Contract liability”; the comparative period balance as reported herein did not change as a result of our application of the modified retrospective transition approach. For our contracts with customers, we only extend short-term credit policies to our customers, generally of 90 days or less. We record the incremental costs of obtaining contracts as an expense when incurred, because such costs would otherwise be amortized over a period of less than one year if capitalized. Transaction Services Our Travel & Entertainment segment generates our transaction services revenue, most of which results from the use of the merchant model under which we remain the merchant of record, but various service providers with whom we maintain relationships are ultimately responsible for delivering the underlying services for which our customers transact, such as lodging, air travel, entertainment, or tours. Our obligation to our customers is to arrange for these service providers to provide the underlying services, and we satisfy our obligation at the point in time that these service providers begin to provide the underlying service (e.g., upon the check-in date for lodging stays, upon the show/performance date for entertainment transactions, etc.). Though we are the merchant of record for transactions in which other entities provide the ultimate service, under current accounting guidance we are an agent in such transactions; therefore, we recognize revenue from transactions under the merchant model on a net basis (i.e., the amount we bill to our customers less the amounts we pay to the service providers). To a lesser extent, we provide tour services directly to our customers. Our obligation to provide such services is satisfied at the point in time that we finish providing the tour, and we recognize the resulting revenue on a gross basis when our obligation is satisfied. Our customers pay at the time the original transaction occurs via our sales channels, primarily the Vegas.com website and mobile application. Because the original transaction date almost always precedes the date that our performance obligation is satisfied, we record a Contract liability for the amount of consideration received (net of amounts owed to suppliers). In general, we satisfy most of our performance obligations within approximately three to four months from the original transaction date, and substantially all performance obligations are satisfied within one year from the original transaction date. Data Platform Services Our KanKan business generates our data platform services revenue. One of the business’s product offerings involves utilizing our proprietary data intelligence software to provide high-quality loan candidates to our customers, which are companies that help to market the loan products of banks and other lending institutions in China to potential loan candidates. We earn a commission for this service, which is deemed earned and is recognized at the point in time at which the related loan is issued to the candidate by a lending institution supporting the loan product being promoted by our customer. The amount of commission we recognize is determined by multiplying the commission rate specified in the applicable contract by the amount of the loan issued to the candidate. Under contracts with two of our customers, we are required to reimburse those customers for as much as 10% of the commissions paid under the contract if the total amount of the defaults across all of the loans issued and outstanding with respect to such contract exceeds an established threshold (the “Reimbursement Obligation”). Such contracts also require us to maintain a cash deposit with those customers to support the Reimbursement Obligation, and they permit the customer to deduct the required amount of any reimbursement from such deposit. We no longer provide new candidates to those customers under those particular contracts, and none of our remaining contracts related to providing loan candidates to customers include the Reimbursement Obligation or similar terms, so the maximum amount of our liability with respect to the Reimbursement Obligation as of September 30, 2018 and going forward is $0.5 million , Further, as of September 30, 2018, the amount we have on deposit with the customers under those contracts to support the Reimbursement Obligation exceeds such maximum liability with respect to the Reimbursement Obligation, and we have not reimbursed any customer any amount of commissions paid under these contracts, nor are we required to do so because the total amount of the defaults has not exceeded the established threshold. We have determined that the Reimbursement Obligation does not fall within the scope of ASC 606 and that we should account for it as a guarantee for accounting purposes using other GAAP. We recorded an initial liability, reported in Accrued expense and other current liabilities in our consolidated balance sheet, equal to our maximum potential Reimbursement Obligation, an amount which approximated fair value. As we are released from an amount of the Reimbursement Obligation, we record the amount of reduction in the Reimbursement Obligation as data platform services revenue. We have not recorded material amounts of revenue resulting from being released from the Reimbursement Obligation. We also generate revenue by creating and delivering integrated artificial-intelligence-based solutions for clients. Under this type of contract, we provide a single, continuous service to clients who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Advertising and Other Our Travel & Entertainment segment generates the majority of our advertising revenue, and we report the remaining amount of advertising revenue in Corporate Entity and Other in our segment information. We primarily generate advertising revenue from the use of sponsored links and display advertising placed directly on our website pages. Substantially all of our advertising contracts with customers are completed within one year or less. In click-through advertising contracts with customers, our obligation is to place our customers’ interactive ads on our websites for a specified period of time. We recognize revenue from click-through advertising at the point in time at which visitors to our websites click through the ads to our advertising customers’ websites. Any variability regarding contract consideration is resolved within the reporting period. Some of our advertising contracts with customers require us to place our advertising customers’ static display ads on our websites for a specified period of time or in a specific location on our websites, or both. We recognize revenue from such advertising placement arrangements either over time (ratably over the contract term) or based upon the delivery of advertising impressions, depending upon the terms of the contract. We also generate revenue from other sources, such as from e-commerce activity in which we sell goods to our customers, or media production which involves us producing video or Internet-based content for our customers. We recognize the revenue from these contracts at the point in time when we transfer control of the good sold to the customer or when we deliver the promised media content. Other than as noted above, we have made no changes to our significant accounting policies as reported in our 2017 Form 10-K. Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, Leases (Topic 842), which changes GAAP primarily by requiring lessees to recognize, at lease commencement, a lease liability representing the present value of the lessee’s obligation to make lease payments, and a right-of-use asset representing the lessee’s right to use (or control the use of) a specified asset during the lease term, for leases classified as operating leases. For us, the amendments in ASU 2016-02 will become effective on January 1, 2019. We are designing appropriate internal controls and modifying key processes to allow for the implementation of ASU 2016-02, which we anticipate will have a material impact on our balance sheet, as we will be recording right-of-use assets and lease liabilities related to our operating leases, including our leases for office space. We do not anticipate that application of ASU 2016-02 will have a material impact on our statement of operations or cash flows. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 3. REVENUE We are not required to include disclosures related to remaining performance obligations because substantially all of our contracts with customers have an original expected duration of one year or less. Disaggregation of Revenue The following table presents a disaggregation of our revenue by major category for the three and nine months ended September 30, 2018 (in thousands): Revenue category Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Transaction services $ 16,619 $ 46,272 Data platform services 1,039 5,591 Advertising and other 1,693 4,925 Revenue $ 19,351 $ 56,788 Significant Judgments When accounting for revenue in accordance with ASC 606, we make certain judgments, such as whether we act as a principal or as an agent in transactions or whether our contracts with customers fall within the scope of ASC 606, that affect the determination of the amount and timing of our revenue from contracts with customers. Based on the current facts and circumstances related to our contracts with customers, none of the judgments we make involve an elevated degree of qualitative significance or complexity such that further disclosure is warranted in terms of their potential impact on the amount and timing of our revenue. Contract Assets and Contract Liabilities We do not currently generate material contract assets. Other than changes resulting from routine business activity, the balance of our Contract liability did not change significantly during the nine months ended September 30, 2018 . We recognized revenue of $3.1 million during the nine months ended September 30, 2018 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 4. FAIR VALUE MEASUREMENTS Liabilities Related to Warrants to Purchase Common Stock At the end of each reporting period, we use the Monte Carlo Simulation model to estimate and report the fair value of liabilities related to certain outstanding warrants to purchase our common stock that are subject to potential anti-dilution adjustments or that contain put options or call options. Our outstanding liability-classified warrants include the warrants we issued or that we are obligated to issue as part of the consideration for our acquisition (the “CBG Acquisition”) of assets of China Branding Group Limited (“CBG”) in September 2016 (the “CBG Acquisition Warrants”) and warrants we issued as a result of an amendment to the Financing Agreement related to the acquisition (the “CBG Financing Warrants”). The following table presents the quantitative inputs, which we classify in Level 3 of the fair value hierarchy, used in estimating the fair value of the warrants: September 30, December 31, 2018 2017 CBG Financing Warrants Expected volatility 60.00 % 60.00 % Risk-free interest rate 2.81 % 1.96 % Expected remaining term (years) 1.98 2.73 CBG Acquisition Warrants Expected volatility 60.00 % 60.00 % Risk-free interest rate 2.94 % 2.25 % Expected remaining term (years) 4.97 5.72 In addition to the quantitative assumptions above, we also consider whether we would issue additional equity and, if so, the price per share of such equity. At September 30, 2018 , we estimated that one future equity financing event would potentially occur within the subsequent twelve months. Our estimate of expected volatility and our stock price tend to have the most significant impact on the estimated fair value of the CBG Financing Warrants and the CBG Acquisition Warrants. If we added or subtracted five percentage points with regard to our estimate of expected volatility, or if our stock price increased or decreased by five percent, our estimates of fair value would change approximately as follows (in thousands): Change in volatility Increase Decrease CBG Financing Warrants $ 275 $ 275 CBG Acquisition Warrants 805 865 Change in stock price CBG Financing Warrants $ 245 $ 245 CBG Acquisition Warrants 345 405 The following table presents the change in the liability balance associated with our liability-classified warrants (in thousands): Nine Months Ended September 30, Year Ended December 31, 2018 2017 Balance at beginning of period $ 89,169 $ 25,030 Warrant exercises (59,907 ) — Increase (decrease) in fair value (22,190 ) 64,139 Balance at end of period $ 7,072 $ 89,169 At January 1, 2018, our outstanding liability-classified warrants included warrants we issued in connection with our acquisition of all of the outstanding equity interests in Vegas.com, LLC in September 2015 (the “VDC Acquisition”) and the financing related thereto (the “VDC Acquisition Warrants” and the “VDC Financing Warrants”, respectively). On January 8, 2018, holders of VDC Acquisition Warrants with respect to 2,416,996 shares of our common stock exercised such warrants. Because the VDC Acquisition Warrants provided that such warrants were exercisable on a cashless basis only, we issued a total of 750,102 shares of common stock in settlement of such warrants without receiving any proceeds from the exercise thereof. On January 10, 2018, we exercised our right to exercise all remaining VDC Acquisition Warrants and VDC Financing Warrants (which right became effective when the closing price of our common stock reached $14.00 ), exercising VDC Acquisition Warrants with respect to 6,184,414 shares of our common stock and VDC Financing Warrants with respect to 3,117,148 shares of our common stock. Because the VDC Acquisition Warrants and VDC Financing Warrants provided that such warrants were exercisable on a cashless basis only, we issued a total of 2,236,915 and 1,385,396 shares of common stock to the holders of the VDC Acquisition Warrants and the VDC Financing Warrants, respectively, in settlement of such warrants without receiving any proceeds from the exercise thereof. Contingent Consideration Issued in Business Acquisition We used the discounted cash flow valuation technique to estimate the fair value of the liability related to certain cash payments stipulated in the VDC Acquisition that were contingent upon the performance of Vegas.com in the years ended December 31, 2016 and 2017, and are contingent upon the performance of Vegas.com in the year ending December 31, 2018 (the “Earnout Payments”). The significant unobservable inputs that we used, which we classify in Level 3 of the fair value hierarchy, were projected earnings before interest, taxes, depreciation and amortization (“EBITDA”), the probability of achieving certain amounts of EBITDA, and the rate used to discount the liability. The following table presents the change during the nine months ended September 30, 2018 in the balance of the liability associated with the Earnout Payments (in thousands): Balance at beginning of period $ 1,930 Payments (1,000 ) Change in fair value of contingent consideration (included in Other loss) 50 Balance at end of period $ 980 |
RESTRICTED CASH
RESTRICTED CASH | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | NOTE 5. RESTRICTED CASH Regarding our restricted cash, $2.25 million relates to the Financing Agreement and secures our obligations under that agreement (see Note 17 for more information regarding this amount). The restriction on the cash related to the Financing Agreement will not be released until we have repaid all of our obligations under the Financing Agreement, unless we obtain the written authorization of the Lenders. The remaining amount of our restricted cash relates to the Letter of Credit Facility Agreement we have in place to satisfy the requirements of several of the vendors for whom we sell products (hotel rooms, air travel, show tickets, et cetera) through our online outlets. By contract, certain vendors require letters of credit as a means of securing our payment to them of amounts related to the sales we make on their behalf. We renew the letter of credit facility annually in May, and the restrictions on the cash related to the letters of credit will remain to the extent we continue to enter into contracts requiring the security of letters of credit. The following table provides a reconciliation of the amounts separately reported as Cash and cash equivalents and Restricted cash on our consolidated balance sheets with the single line item reported on our consolidated statements of cash flows as Cash, cash equivalents and restricted cash (in thousands): September 30, December 31, 2017 Cash and cash equivalents $ 9,902 $ 22,632 Restricted cash reported in current assets 11,655 11,670 Total cash, cash equivalents and restricted cash $ 21,557 $ 34,302 |
INVESTMENT IN UNCONSOLIDATED AF
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 9 Months Ended |
Sep. 30, 2018 | |
Noncontrolling Interest [Abstract] | |
INVESTMENT IN UNCONSOLIDATED AFFILIATES | NOTE 6. INVESTMENT IN UNCONSOLIDATED AFFILIATES In 2009, we co-founded a U.S.-based venture, Sharecare, to build a web-based platform that simplifies the search for health and wellness information. The other co-founders of Sharecare were Dr. Mehmet Oz, HARPO Productions, Discovery Communications, Jeff Arnold and Sony Pictures Television. As of September 30, 2018 , we owned approximately five percent of Sharecare’s issued stock and maintained representation on its Board of Directors. During June 2018, one of our consolidated VIEs acquired a 20% interest in Beijing All-in-one Cloud Net Technology, Co. Ltd. (“AIO”), a Chinese technology company which provides consulting and data services to the Chinese film industry, in exchange for $1.0 million , a portion of which was paid by September 30, 2018, and a license to use our proprietary KanKan data intelligence platform in China. Based on our evaluation of the facts and circumstances related to the transaction, we determined that we will account for such transaction using the equity method of accounting. We will recognize our equity in the net earnings or losses relating to AIO on a one-quarter reporting lag in our Consolidated Statements of Operations and Comprehensive Income (Loss). For the three months ended September 30, 2018 |
PREPAID EXPENSE AND OTHER CURRE
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | NOTE 7. PREPAID EXPENSE AND OTHER CURRENT ASSETS The following table presents the components of prepaid expense and other current assets (in thousands): September 30, 2018 December 31, 2017 Prepaid expense $ 2,918 $ 2,036 Deposits 3,487 1,960 Inventory, net 744 234 Other current assets 1,561 1,288 Total $ 8,710 $ 5,518 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 8. PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands, except estimated lives): Estimated Life (Years) September 30, December 31, 2017 Vehicles 5 $ 1,350 $ 447 Computers and equipment 2 - 12 1,978 1,635 Furniture and fixtures 2 - 9 221 220 Software 3 - 5 21,719 20,773 Software development in progress 2,010 1,935 Leasehold improvements 1 - 10 569 328 Total property, equipment and software $ 27,847 $ 25,338 Less accumulated depreciation (16,217 ) (11,951 ) Total property, equipment and software, net $ 11,630 $ 13,387 For the nine months ended September 30, 2018 and 2017 , depreciation (and amortization of software) expense was $4.4 million and $4.1 million |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 9. GOODWILL AND OTHER INTANGIBLE ASSETS The following table summarizes intangible assets by category (in thousands): September 30, 2018 December 31, 2017 Gross Amount Accumulated Net Amount Gross Amount Accumulated Net Amount Finite-lived intangible assets Domain names $ 2,000 $ (1,358 ) $ 642 $ 2,591 $ (1,663 ) $ 928 Customer relationships 23,186 (13,509 ) 9,677 23,486 (10,539 ) 12,947 Media content and broadcast rights 2,485 (1,309 ) 1,176 2,485 (936 ) 1,549 Acquired technology 578 (527 ) 51 578 (461 ) 117 Other intangible assets 68 (68 ) — 68 (68 ) — $ 28,317 $ (16,771 ) $ 11,546 $ 29,208 $ (13,667 ) $ 15,541 Indefinite-lived intangible assets Trademarks and trade names $ 8,276 $ 8,276 $ 8,276 $ 8,276 License to operate in China 128 128 129 129 Total intangible assets $ 36,721 $ 19,950 $ 37,613 $ 23,946 Total amortization expense was $3.8 million and $4.1 million for the nine months ended September 30, 2018 and 2017 , respectively. The following table summarizes the changes in goodwill during the nine months ended September 30, 2018 and the year ended December 31, 2017 (in thousands): Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Travel & Entertainment Segment Corporate Entity and Other Business Units Total Travel & Entertainment Segment Corporate Entity and Other Business Units Total Balance at beginning of period $ 18,514 $ 1,585 $ 20,099 $ 18,514 $ 8,249 $ 26,763 Business acquisitions — — — — 2,116 2,116 Impairment of goodwill — — — — (8,796 ) (8,796 ) Other — — — — 16 16 Balance at end of period $ 18,514 $ 1,585 $ 20,099 $ 18,514 $ 1,585 $ 20,099 |
INCOME TAX
INCOME TAX | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 10. INCOME TAX Our effective tax rate (“ETR”) from continuing operations was 9.1% for the nine months ended September 30, 2018 . The quarterly ETR has not significantly differed from our historical annual ETR. The ETR primarily results from recording a benefit associated with a partial valuation allowance release during 2018. The release was affected by the Tax Act, as described below, which changed the carryforward period of net operating losses for U.S. federal tax purposes from 20 years to an indefinite period. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), which makes broad and complex changes to the U.S. tax code that will affect the 2018 tax year. We have not completed our accounting for the Tax Act. As noted in our 2017 Form 10-K: • We were able to reasonably estimate certain effects and, therefore, recorded provisional adjustments associated with the impact on deferred tax assets and deferred tax liabilities from reduction of the U.S. federal corporate tax rate. • |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 11. DEBT Short-Term Debt On April 12, 2017, we issued a short-term note payable in the principal amount of $3.0 million to a private lender in exchange for cash in the same amount. The agreement, which does not have a stated interest rate, required us to repay the note plus a fee of $115 thousand on the maturity date of June 30, 2017. The note is accruing interest at $500 per day on the unpaid principal until we repay the note in full. Other Debt The following table presents long-term debt (in thousands) as of: September 30, 2018 December 31, 2017 Loan due September 2020 $ 35,500 $ 35,500 Unamortized original issue discount (1,660 ) (836 ) Unamortized debt issuance cost (21 ) (79 ) Carrying value of Loan 33,819 34,585 Exit fee payable in relation to Loan 3,500 3,500 Total long-term debt $ 37,319 $ 38,085 Less: current portion (37,319 ) (38,085 ) Long-term debt, less current portion and net of debt issuance cost $ — $ — On September 24, 2015, we entered into the Financing Agreement, pursuant to which the Lenders provided us with the $27.5 million Loan. We entered into Amendment No. 1 to Financing Agreement on September 20, 2016 which, among other changes, increased the Loan by $8.0 million to a total aggregate principal amount of $35.5 million . As of September 30, 2018 , after amendments and other events described below, the Loan bore interest at three-month LIBOR (with a floor of 1% ) plus 11% per annum, payable monthly, and had a maturity date of September 30, 2020. As of September 30, 2018 , the applicable interest rate on the Loan was approximately 13% per annum. In connection with the Financing Agreement, we also entered into a security agreement dated as of September 24, 2015 (the “Security Agreement”) with the other Borrowers and the Guarantors for the benefit of MGG, as collateral agent for the Secured Parties referred to therein, to secure the obligations of the Borrowers and the Guarantors under the Financing Agreement. The Security Agreement provides for a first-priority lien on, and security interest in, all assets of Remark and our subsidiaries, subject to certain exceptions. On October 25, 2017, we entered into Amendment No. 2 and Waiver and Consent to Financing Agreement, pursuant to which the Lenders waived specified events of default under the Financing Agreement occurring prior to January 1, 2018, including but not limited to events of default resulting from our non-compliance with covenants requiring minimum consolidated EBITDA of Remark and its subsidiaries and value of our assets. The Lenders also waived the covenant related to restricted cash balance through September 19, 2017. On December 5, 2017, we entered into Amendment No. 3 to Financing Agreement pursuant to which the Lenders agreed, among other things, to modify certain of our covenants under the Financing Agreement, including (i) replacing the covenant regarding consolidated EBITDA of Remark and our subsidiaries with a covenant regarding consolidated gross revenue of our subsidiaries engaged in the operation of our KanKan business, (ii) modifying the covenants regarding consolidated EBITDA of Vegas.com and its subsidiaries and the value of certain of our assets, and (iii) increasing the amount we are permitted to invest in our non-U.S. subsidiaries operating our KanKan business, subject to certain conditions. On April 30, 2018, we entered into Amendment No. 4 and Waiver to Financing Agreement (the “Fourth Financing Amendment”), which provided for, among other things, (i) a reduction in the interest rate on the remaining amount outstanding under the Financing Agreement to three-month LIBOR plus 8.5% per annum, (ii) an extension of the maturity date under the Financing Agreement to September 30, 2020, (iii) a modification of certain of our covenants under the Financing Agreement, including covenants regarding capital expenditures, minimum value of certain of our assets, consolidated EBITDA of Vegas.com and its subsidiaries, and revenue generated by KanKan, (iv) an increase in the amount we are permitted to invest in our non-U.S. subsidiaries operating our KanKan business (v) a waiver by the Lenders of certain events of default under the Financing Agreement and (vi) prepayment by the Borrowers of $8.0 million principal amount outstanding and $3.5 million of exit fees under the Financing Agreement within 60 days following the date of the Fourth Financing Amendment. In consideration for the Lenders’ entry into the Fourth Financing Amendment, we also paid a closing fee of approximately $413 thousand . Effective as of June 29, 2018, we entered into Amendment No. 5 and Waiver to Financing Agreement (the “Fifth Financing Amendment”) pursuant to which the Lenders agreed, among other things, to extend the due date of the prepayments required by the Fourth Financing Amendment for up to three months , provided that we made extension payments on the first business day of each such month. The extension payments were $250,000 for each of the first two months and $500,000 for the third month, with the final extension period ending on September 28, 2018. We made the extension payments required by the Fifth Financing Amendment to extend the due date of the prepayments required by the Fourth Financing Amendment to September 28, 2018; however, we failed to prepay the $8.0 million principal amount and $3.5 million of exit fees due on such date. Such failure to make the required payments constitutes an event of default under the Financing Agreement and as a result, from September 28, 2018, the Loan bore interest at three-month LIBOR plus 11.0% , the default interest rate. The Financing Agreement also contains certain affirmative and negative covenants (including, but not limited to, financial covenants with respect to quarterly EBITDA levels and the value of our assets). As of September 30, 2018, we were not in compliance with the covenant under the Financing Agreement requiring minimum revenue from our KanKan business during the trailing nine-month period ended September 30, 2018 of $12.6 million , as actual revenue from our KanKan business during such period was $5.6 million . Our non-compliance with such covenant constitutes an event of default under the Financing Agreement. As a result of our events of default under the Financing Agreement, the Lenders may declare our obligations under the Financing Agreement, including all unpaid principal and interest, due and payable immediately and exercise such other rights available to them under the Financing Agreement, which could have a material adverse effect on our financial condition. We have classified the debt as current in the accompanying balance sheet. See Note 17 |
OTHER LIABILITIES
OTHER LIABILITIES | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LIABILITIES | NOTE 12. OTHER LIABILITIES The following table presents the components of other liabilities (in thousands): September 30, 2018 December 31, 2017 Deferred rent $ 1,650 $ 1,820 Early lease termination liability 1,242 — Contingent consideration liability, net of current portion — 940 Deferred tax liability, net 369 741 Other 35 — Total $ 3,296 $ 3,501 During the first quarter of 2018, we determined that we would no longer use certain leased office space and, as a result, we sublet the majority of such office space to third parties. As a result of our decision, we recognized $2.3 million of unallocated rent expense in the corporate entity, and an associated liability for early lease termination. The current portion of the liability is recorded in Accrued expense and other current liabilities, with the long-term portion recorded in Other liabilities (see table above). The following table presents the change in the liability balance related to the early lease termination (in thousands): Nine Months Ended September 30, 2018 Balance at beginning of period $ — Establishment of early lease termination liability 2,295 Payment of rent and other costs (798 ) Receipt of amounts due under subleases 95 Other 16 Balance at end of period $ 1,608 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13. COMMITMENTS AND CONTINGENCIES |
STOCKHOLDERS' EQUITY AND NET LO
STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE | NOTE 14. STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE Equity Issuances On July 2, 2018, we entered into the 2018 Aspire Purchase Agreement with Aspire Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Aspire Capital to purchase up to an aggregate of $30.0 million of shares of our common stock over the 30 -month term of the 2018 Aspire Purchase Agreement. The 2018 Aspire Purchase Agreement replaced the 2016 Aspire Purchase Agreement, which was terminated under the terms of the 2018 Aspire Purchase Agreement. Under the 2018 Aspire Purchase Agreement, on any trading day over the 30 -month term of such agreement, we have the right, in our sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”) directing Aspire Capital to purchase up to 50,000 shares of our common stock per business day, up to an aggregate of $30.0 million under the 2018 Aspire Purchase Agreement, at a per share price (the “Purchase Price”) equal to the lesser of (i) the lowest sale price of our common stock on the purchase date or (ii) the arithmetic average of the three lowest closing sale prices for our common stock during the 10 consecutive trading days ending on the trading day immediately preceding the purchase date. The aggregate purchase price payable by Aspire Capital on any one purchase date may not exceed $250,000 , unless otherwise mutually agreed. The parties may mutually agree to increase the number of shares of our common stock that may be purchased per trading day pursuant to the terms of the 2018 Aspire Purchase Agreement to 3,000,000 shares. In addition, on any trading day on which we submit a Purchase Notice to Aspire Capital to purchase at least 50,000 shares, we also have the right, in our sole discretion, to present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of our common stock equal to up to 30% of the aggregate shares of our common stock traded on the next trading day (the “VWAP Purchase Date”), subject to a maximum number of shares we may determine, and a minimum purchase price threshold equal to the greater of (i) 80% of the closing price of our common stock on the business day immediately preceding the VWAP Purchase Date or (ii) a higher price that may be determined by us. The purchase price per share pursuant to such VWAP Purchase Notice will be equal to the lesser of (i) the closing sale price of our common stock on the VWAP Purchase Date, or (ii) 97% of the volume-weighted average price for our common stock traded on its principal market on the VWAP Purchase Date, subject to certain exceptions. We may deliver multiple Purchase Notices and VWAP Purchase Notices to Aspire Capital from time to time during the term of the Purchase Agreement, so long as the most recent purchase has been completed. In addition, Aspire Capital will not be required to buy any shares of our common stock pursuant to a Purchase Notice that is received by Aspire Capital on any trading day on which the last closing trade price of our common stock is below $1.00 . There are no trading volume requirements or restrictions under the 2018 Aspire Purchase Agreement, and we will control the timing and amount of sales of our common stock to Aspire Capital. Aspire Capital has no right to require any sales by us, but is obligated to make purchases from us as directed by us in accordance with the 2018 Aspire Purchase Agreement. There are no limitations on use of proceeds, financial or business covenants, restrictions on future fundings, rights of first refusal, participation rights, penalties or liquidated damages in the 2018 Aspire Purchase Agreement. The 2018 Aspire Purchase Agreement may be terminated by us at any time, at our discretion, without any cost to us. Aspire Capital has agreed that neither it nor any of its agents, representatives and affiliates will engage in any direct or indirect short-selling or hedging our common stock during any time prior to the termination of the 2018 Aspire Purchase Agreement. The 2018 Aspire Purchase Agreement provides that the total number of shares that may be issued pursuant to such agreement is limited to 6,629,039 shares (the “2018 Aspire Exchange Cap”), or 19.99% of our shares of common stock outstanding as of the date of the 2018 Aspire Purchase Agreement, unless stockholder approval is obtained in accordance with the rules of the Nasdaq Stock Market. If stockholder approval is not obtained, such limitation will not apply after the 2018 Aspire Exchange Cap is reached if at all times thereafter the average purchase price paid for all shares issued under the 2018 Aspire Purchase Agreement is equal to or greater than $3.91 per share. The 2018 Aspire Purchase Agreement also provides that at no time will Aspire Capital (together with its affiliates) beneficially own more than 19.99% of our outstanding shares of common stock. As of September 30, 2018, we have issued to Aspire Capital a total of 3,308,812 shares of our common stock under the 2018 Aspire Purchase Agreement, including 3,095,238 shares purchased by Aspire Capital for an aggregate purchase price of $10.0 million , and 213,574 shares issued to Aspire Capital upon executing the 2018 Aspire Purchase Agreement. During the nine months ended September 30, 2018 , we also issued 381,445 shares of our common stock as a result of stock option exercises, from which we obtained approximately $1.0 million as well as the shares of our common stock in settlement of the warrants as described in Note 4 . During the nine months ended September 30, 2017 , we issued a total of 3,052,897 shares of our common stock to investors in exchange for approximately $8.3 million in cash, including a $5.0 million issuance to Aspire. We did not issue our common stock in private sales during the nine months ended September 30, 2018 . Stock-Based Compensation We are authorized to issue equity-based awards under our 2010 Equity Incentive Plan, our 2014 Incentive Plan, and our 2017 Incentive Plan, each of which our stockholders have approved. We also award cash bonuses (“China Cash Bonuses”) to our employees in China, which grants are not subject to a formal incentive plan and which can only be settled in cash. We grant such awards to attract, retain and motivate eligible officers, directors, employees and consultants. Under each of the plans, we have granted shares of restricted stock and options to purchase common stock to our officers and employees with exercise prices equal to or greater than the fair value of the underlying shares on the grant date. Stock options and China Cash Bonuses generally expire 10 years from the grant date. All forms of equity awards and China Cash Bonuses vest upon the passage of time, the attainment of performance criteria, or both. When participants exercise stock options, we issue any shares of our common stock resulting from such exercise from new authorized and unallocated shares available at the time of exercise. The following table summarizes activity under our equity incentive plans related to equity-classified stock option grants as of September 30, 2018 , and changes during the nine months then ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2018 9,397,056 $ 3.80 Granted 1,909,500 6.79 Exercised (385,820 ) 2.60 Forfeited, cancelled or expired (46,377 ) 6.09 Outstanding at September 30, 2018 10,874,359 $ 4.36 7.8 $ 2,885 Options exercisable at September 30, 2018 10,009,767 $ 4.44 7.7 $ 2,319 We granted an option to purchase 1.3 million shares of our common stock at an exercise price of $7.81 per share to Kai-Shing Tao, our Chief Executive Officer and Chairman of the Board, under the 2017 Incentive Plan, which our stockholders approved in January 2018. We recorded the entire $11.6 million of compensation expense associated with this award in January 2018 because Mr. Tao fully vested in the award at the time we received stockholder approval. The following table summarizes activity under our equity incentive plans related to the China Cash Bonuses as of September 30, 2018 , and changes during the nine months then ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2018 266,500 $ 3.84 Granted 1,367,375 6.02 Exercised (7,875 ) 4.28 Forfeited, cancelled or expired (233,375 ) 5.76 Outstanding at September 30, 2018 1,392,625 $ 5.67 9.3 $ 36 Bonuses exercisable at September 30, 2018 169,750 $ 4.04 8.2 $ 19 During the nine months ended September 30, 2018 , we did not award restricted stock under our equity incentive plans. We incurred share-based compensation expense of $0.9 million and $1.6 million , respectively, during the three months ended September 30, 2018 and 2017 , and of $12.9 million and $2.2 million , respectively, during the nine months ended September 30, 2018 and 2017 . Net Income (Loss) per Share For the three and nine months ended September 30, 2018 and 2017 , there were no reconciling items related to either the numerator or denominator of the loss per share calculation. Securities which would have been anti-dilutive to a calculation of diluted earnings per share for the three and nine months ended September 30, 2018 and 2017 include: • the outstanding stock options described above; • the outstanding CBG Acquisition Warrant, which may be exercised to purchase 40,000 shares of our common stock at a per-share exercise price of $10.00 (we are also committed to the future issuance of additional CBG Acquisition Warrants at the same per-share exercise price as the CBG Acquisition Warrant that has already been issued), and the outstanding CBG Financing Warrants, which may be exercised to purchase 3,070,638 shares of our common stock at an exercise price of $4.78 per share; • the warrants issued in conjunction with our acquisition of Hotelmobi, Inc., which may be exercised to purchase 1,000,000 shares of our common stock, half at an exercise price of $8.00 per share and half at an exercise price of $12.00 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 15. SEGMENT INFORMATION We currently report on two segments: our Travel & Entertainment segment, which provides our customers with access to a full range of travel and entertainment services in Las Vegas and surrounding areas, and our Technology & Data Intelligence segment, which provides services to our customers based upon the data collected and processed by our proprietary data intelligence software. Our chief operating decision makers use Adjusted EBITDA as the primary measure of profitability for evaluating the operational performance of our reportable segments. Adjusted EBITDA represents operating income (loss) plus depreciation and amortization expense, share-based compensation expense, impairments and net other income, less other loss. For our Travel & Entertainment segment, Adjusted EBITDA includes an allocation of rent expense, which allocation we base on usage of space. We do not allocate certain other types of shared expense, such as legal and accounting, to our reportable segments; such costs are included in Corporate Entity and Other. The following table presents certain financial information regarding our business segments and other entities for the three and nine months ended September 30, 2018 and 2017 (in thousands): Travel & Entertainment Technology & Data Intelligence Corporate Entity and Other Consolidated Three Months Ended September 30, 2018 Revenue $ 17,596 $ 1,039 $ 716 $ 19,351 Adjusted EBITDA $ 2,324 $ (1,674 ) $ (3,428 ) $ (2,778 ) Three Months Ended September 30, 2017 Revenue $ 16,284 $ 2,203 $ 962 $ 19,449 Adjusted EBITDA $ 1,955 $ (946 ) $ (2,833 ) $ (1,824 ) Nine Months Ended September 30, 2018 Revenue $ 49,320 $ 5,591 $ 1,877 $ 56,788 Adjusted EBITDA $ 4,493 $ (5,166 ) $ (12,292 ) $ (12,965 ) Nine Months Ended September 30, 2017 Revenue $ 45,765 $ 3,212 $ 3,027 $ 52,004 Adjusted EBITDA $ 4,322 $ (2,096 ) $ (7,788 ) $ (5,562 ) The following table reconciles Adjusted EBITDA to Loss before income taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted EBITDA $ (2,778 ) $ (1,824 ) $ (12,965 ) $ (5,562 ) Depreciation and amortization (2,756 ) (2,482 ) (8,220 ) (8,237 ) Impairments — (28 ) — (28 ) Share-based compensation expense (891 ) (1,629 ) (12,913 ) (2,225 ) Other loss (1 ) — (56 ) (20 ) Other loss (gain) 12 33 (511 ) 85 Operating loss $ (6,414 ) $ (5,930 ) $ (34,665 ) $ (15,987 ) Other income (expense) Interest expense (1,307 ) (1,080 ) (3,968 ) (3,279 ) Other income 1 — 56 20 Change in fair value of warrant liability 3,525 (5,978 ) 22,190 2,351 Other gain (loss) (12 ) (33 ) 511 (85 ) Total other income, net $ 2,207 $ (7,091 ) $ 18,789 $ (993 ) Income (loss) before income taxes $ (4,207 ) $ (13,021 ) $ (15,876 ) $ (16,980 ) The following table presents total assets for our segments and the corporate and other entities (in thousands): September 30, December 31, 2017 Travel & Entertainment segment $ 69,296 $ 75,820 Technology & Data Intelligence segment 3,824 5,105 Corporate entity and other business units 17,329 22,612 Consolidated $ 90,449 $ 103,537 Capital expenditures for our Travel & Entertainment segment totaled $0.3 million and $0.7 million during the three months ended September 30, 2018 and 2017 , respectively, while capital expenditures for our Technology & Data Intelligence segment totaled $0.1 million and $0.2 million during each of the same periods, respectively. Capital expenditures for our Travel & Entertainment segment totaled $2.0 million and $1.6 million during the nine months ended September 30, 2018 and 2017 , respectively, while capital expenditures for our Technology & Data Intelligence segment totaled $0.6 million and $1.0 million |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | NOTE 16. RELATED PARTY TRANSACTION On June 11, 2018, we sold the IRS.com web domain to a company in which our former CFO has a significant ownership interest. The consideration consisted of a cash payment of approximately $0.6 million and assumed liabilities of approximately $0.1 million . We recognized a gain of approximately $0.6 million |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17. SUBSEQUENT EVENTS Events Related to the Financing Agreement On October 4, 2018, $2.25 million held in a cash collateral account to secure our obligations under the Financing Agreement (such amount reflected in Restricted cash in our consolidated balance sheet) was transferred to the Lenders and applied to the amount of exit fees due and payable under the Financing Agreement. The Financing Agreement requires us to maintain a balance in that account of at least $2.25 million and we have not replaced that amount transferred to Lenders, which constitutes an event of default under the Financing Agreement. We are actively engaged in discussions with the Lenders regarding a resolution of the events of default under the Financing Agreement described herein. On October 16, 2018, in connection with those discussions, we agreed to increase the amount of the exit fees payable to the Lenders under the Financing Agreement by $1.0 million . Also in connection with those discussions, the Lenders have informed us that they are willing to forebear from taking any enforcement actions against us through December 31, 2018 if we continue to pursue certain strategic alternatives. We have engaged a financial advisor to assist us in assessing and pursuing those strategic alternatives, and we intend to continue pursuing those strategic alternatives and others, including the potential sale of certain non-core assets, investment assets and operating businesses, and to explore other alternatives for obtaining financing. We cannot provide any assurance that we will be successful in completing a strategic transaction or obtaining alternative financing, or that the Lenders will forebear from taking any enforcement actions against us. Common Stock Issuance On November 2, 2018, we sold 200,000 shares of our common stock to an accredited investor in a private placement for $0.5 million |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Accounting | We prepared the accompanying unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 , with the audited Consolidated Balance Sheet amounts as of December 31, 2017 presented for comparative purposes, and the related unaudited Condensed Consolidated Statements of Operations and Statements of Cash Flows in accordance with the instructions for Form 10-Q. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading. Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period. Management believes that we have included all adjustments (including those of a normal, recurring nature) considered necessary to fairly present our unaudited Condensed Consolidated Balance Sheet as of September 30, 2018 , our unaudited Condensed Consolidated Statements of Operations and our unaudited Condensed Consolidated Statements of Cash Flows for all periods presented. You should read our unaudited condensed consolidated interim financial statements and footnotes in conjunction with our consolidated financial statements and footnotes included within the Annual Report on Form 10-K (the “ 2017 |
Consolidation | Consolidation We include all of our subsidiaries, which include the VIEs for which we are the primary beneficiary, in our consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. To comply with China’s laws which restrict foreign ownership of entities that operate within industries deemed sensitive by the Chinese government, we employ what we believe is a commonly-used organizational structure consisting of a wholly-foreign owned enterprise (“WFOE”) and the VIEs to operate our KanKan business. We own 100% |
Use of Estimates | Use of Estimates |
Changes to Significant Accounting Policies - Revenue Recognition | Changes to Significant Accounting Policies - Revenue Recognition On January 1, 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers , and all subsequent amendments (collectively “ASC 606”) using the modified retrospective method. We recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of Accumulated deficit (the amount was not material). We have not retrospectively adjusted the information for the comparative period reported herein, which information we continue to report under the accounting standards in effect for that period. The amounts of revenue, accounts receivable and contract balances that we reported under ASC 606 as of and for the three and nine months ended September 30, 2018 , were not materially different than the amounts we would have reported under the accounting standards previously in effect. We recognize revenue when we transfer control of the promised goods or services to our customers, and we recognize an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation. As a result of our adoption of ASC 606, the line item previously labeled “Deferred revenue” on our condensed consolidated balance sheets is now labeled “Contract liability”; the comparative period balance as reported herein did not change as a result of our application of the modified retrospective transition approach. For our contracts with customers, we only extend short-term credit policies to our customers, generally of 90 days or less. We record the incremental costs of obtaining contracts as an expense when incurred, because such costs would otherwise be amortized over a period of less than one year if capitalized. Transaction Services Our Travel & Entertainment segment generates our transaction services revenue, most of which results from the use of the merchant model under which we remain the merchant of record, but various service providers with whom we maintain relationships are ultimately responsible for delivering the underlying services for which our customers transact, such as lodging, air travel, entertainment, or tours. Our obligation to our customers is to arrange for these service providers to provide the underlying services, and we satisfy our obligation at the point in time that these service providers begin to provide the underlying service (e.g., upon the check-in date for lodging stays, upon the show/performance date for entertainment transactions, etc.). Though we are the merchant of record for transactions in which other entities provide the ultimate service, under current accounting guidance we are an agent in such transactions; therefore, we recognize revenue from transactions under the merchant model on a net basis (i.e., the amount we bill to our customers less the amounts we pay to the service providers). To a lesser extent, we provide tour services directly to our customers. Our obligation to provide such services is satisfied at the point in time that we finish providing the tour, and we recognize the resulting revenue on a gross basis when our obligation is satisfied. Our customers pay at the time the original transaction occurs via our sales channels, primarily the Vegas.com website and mobile application. Because the original transaction date almost always precedes the date that our performance obligation is satisfied, we record a Contract liability for the amount of consideration received (net of amounts owed to suppliers). In general, we satisfy most of our performance obligations within approximately three to four months from the original transaction date, and substantially all performance obligations are satisfied within one year from the original transaction date. Data Platform Services Our KanKan business generates our data platform services revenue. One of the business’s product offerings involves utilizing our proprietary data intelligence software to provide high-quality loan candidates to our customers, which are companies that help to market the loan products of banks and other lending institutions in China to potential loan candidates. We earn a commission for this service, which is deemed earned and is recognized at the point in time at which the related loan is issued to the candidate by a lending institution supporting the loan product being promoted by our customer. The amount of commission we recognize is determined by multiplying the commission rate specified in the applicable contract by the amount of the loan issued to the candidate. Under contracts with two of our customers, we are required to reimburse those customers for as much as 10% of the commissions paid under the contract if the total amount of the defaults across all of the loans issued and outstanding with respect to such contract exceeds an established threshold (the “Reimbursement Obligation”). Such contracts also require us to maintain a cash deposit with those customers to support the Reimbursement Obligation, and they permit the customer to deduct the required amount of any reimbursement from such deposit. We no longer provide new candidates to those customers under those particular contracts, and none of our remaining contracts related to providing loan candidates to customers include the Reimbursement Obligation or similar terms, so the maximum amount of our liability with respect to the Reimbursement Obligation as of September 30, 2018 and going forward is $0.5 million , Further, as of September 30, 2018, the amount we have on deposit with the customers under those contracts to support the Reimbursement Obligation exceeds such maximum liability with respect to the Reimbursement Obligation, and we have not reimbursed any customer any amount of commissions paid under these contracts, nor are we required to do so because the total amount of the defaults has not exceeded the established threshold. We have determined that the Reimbursement Obligation does not fall within the scope of ASC 606 and that we should account for it as a guarantee for accounting purposes using other GAAP. We recorded an initial liability, reported in Accrued expense and other current liabilities in our consolidated balance sheet, equal to our maximum potential Reimbursement Obligation, an amount which approximated fair value. As we are released from an amount of the Reimbursement Obligation, we record the amount of reduction in the Reimbursement Obligation as data platform services revenue. We have not recorded material amounts of revenue resulting from being released from the Reimbursement Obligation. We also generate revenue by creating and delivering integrated artificial-intelligence-based solutions for clients. Under this type of contract, we provide a single, continuous service to clients who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Advertising and Other Our Travel & Entertainment segment generates the majority of our advertising revenue, and we report the remaining amount of advertising revenue in Corporate Entity and Other in our segment information. We primarily generate advertising revenue from the use of sponsored links and display advertising placed directly on our website pages. Substantially all of our advertising contracts with customers are completed within one year or less. In click-through advertising contracts with customers, our obligation is to place our customers’ interactive ads on our websites for a specified period of time. We recognize revenue from click-through advertising at the point in time at which visitors to our websites click through the ads to our advertising customers’ websites. Any variability regarding contract consideration is resolved within the reporting period. Some of our advertising contracts with customers require us to place our advertising customers’ static display ads on our websites for a specified period of time or in a specific location on our websites, or both. We recognize revenue from such advertising placement arrangements either over time (ratably over the contract term) or based upon the delivery of advertising impressions, depending upon the terms of the contract. We also generate revenue from other sources, such as from e-commerce activity in which we sell goods to our customers, or media production which involves us producing video or Internet-based content for our customers. We recognize the revenue from these contracts at the point in time when we transfer control of the good sold to the customer or when we deliver the promised media content. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, Leases (Topic 842), which changes GAAP primarily by requiring lessees to recognize, at lease commencement, a lease liability representing the present value of the lessee’s obligation to make lease payments, and a right-of-use asset representing the lessee’s right to use (or control the use of) a specified asset during the lease term, for leases classified as operating leases. For us, the amendments in ASU 2016-02 will become effective on January 1, 2019. We are designing appropriate internal controls and modifying key processes to allow for the implementation of ASU 2016-02, which we anticipate will have a material impact on our balance sheet, as we will be recording right-of-use assets and lease liabilities related to our operating leases, including our leases for office space. We do not anticipate that application of ASU 2016-02 will have a material impact on our statement of operations or cash flows. We have reviewed all recently issued accounting pronouncements. The pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents a disaggregation of our revenue by major category for the three and nine months ended September 30, 2018 (in thousands): Revenue category Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Transaction services $ 16,619 $ 46,272 Data platform services 1,039 5,591 Advertising and other 1,693 4,925 Revenue $ 19,351 $ 56,788 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Quantitative inputs | The following table presents the quantitative inputs, which we classify in Level 3 of the fair value hierarchy, used in estimating the fair value of the warrants: September 30, December 31, 2018 2017 CBG Financing Warrants Expected volatility 60.00 % 60.00 % Risk-free interest rate 2.81 % 1.96 % Expected remaining term (years) 1.98 2.73 CBG Acquisition Warrants Expected volatility 60.00 % 60.00 % Risk-free interest rate 2.94 % 2.25 % Expected remaining term (years) 4.97 5.72 In addition to the quantitative assumptions above, we also consider whether we would issue additional equity and, if so, the price per share of such equity. At September 30, 2018 , we estimated that one future equity financing event would potentially occur within the subsequent twelve months. Our estimate of expected volatility and our stock price tend to have the most significant impact on the estimated fair value of the CBG Financing Warrants and the CBG Acquisition Warrants. If we added or subtracted five percentage points with regard to our estimate of expected volatility, or if our stock price increased or decreased by five percent, our estimates of fair value would change approximately as follows (in thousands): Change in volatility Increase Decrease CBG Financing Warrants $ 275 $ 275 CBG Acquisition Warrants 805 865 Change in stock price CBG Financing Warrants $ 245 $ 245 CBG Acquisition Warrants 345 405 |
Reconciliation of liabilities of warrants | The following table presents the change in the liability balance associated with our liability-classified warrants (in thousands): Nine Months Ended September 30, Year Ended December 31, 2018 2017 Balance at beginning of period $ 89,169 $ 25,030 Warrant exercises (59,907 ) — Increase (decrease) in fair value (22,190 ) 64,139 Balance at end of period $ 7,072 $ 89,169 |
Reconciliation of earnout payments | The following table presents the change during the nine months ended September 30, 2018 in the balance of the liability associated with the Earnout Payments (in thousands): Balance at beginning of period $ 1,930 Payments (1,000 ) Change in fair value of contingent consideration (included in Other loss) 50 Balance at end of period $ 980 |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash, cash equivalents and restricted cash | The following table provides a reconciliation of the amounts separately reported as Cash and cash equivalents and Restricted cash on our consolidated balance sheets with the single line item reported on our consolidated statements of cash flows as Cash, cash equivalents and restricted cash (in thousands): September 30, December 31, 2017 Cash and cash equivalents $ 9,902 $ 22,632 Restricted cash reported in current assets 11,655 11,670 Total cash, cash equivalents and restricted cash $ 21,557 $ 34,302 |
PREPAID EXPENSE AND OTHER CUR_2
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expense and other current assets | The following table presents the components of prepaid expense and other current assets (in thousands): September 30, 2018 December 31, 2017 Prepaid expense $ 2,918 $ 2,036 Deposits 3,487 1,960 Inventory, net 744 234 Other current assets 1,561 1,288 Total $ 8,710 $ 5,518 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment consist of the following (in thousands, except estimated lives): Estimated Life (Years) September 30, December 31, 2017 Vehicles 5 $ 1,350 $ 447 Computers and equipment 2 - 12 1,978 1,635 Furniture and fixtures 2 - 9 221 220 Software 3 - 5 21,719 20,773 Software development in progress 2,010 1,935 Leasehold improvements 1 - 10 569 328 Total property, equipment and software $ 27,847 $ 25,338 Less accumulated depreciation (16,217 ) (11,951 ) Total property, equipment and software, net $ 11,630 $ 13,387 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-lived intangible assets | The following table summarizes intangible assets by category (in thousands): September 30, 2018 December 31, 2017 Gross Amount Accumulated Net Amount Gross Amount Accumulated Net Amount Finite-lived intangible assets Domain names $ 2,000 $ (1,358 ) $ 642 $ 2,591 $ (1,663 ) $ 928 Customer relationships 23,186 (13,509 ) 9,677 23,486 (10,539 ) 12,947 Media content and broadcast rights 2,485 (1,309 ) 1,176 2,485 (936 ) 1,549 Acquired technology 578 (527 ) 51 578 (461 ) 117 Other intangible assets 68 (68 ) — 68 (68 ) — $ 28,317 $ (16,771 ) $ 11,546 $ 29,208 $ (13,667 ) $ 15,541 Indefinite-lived intangible assets Trademarks and trade names $ 8,276 $ 8,276 $ 8,276 $ 8,276 License to operate in China 128 128 129 129 Total intangible assets $ 36,721 $ 19,950 $ 37,613 $ 23,946 |
Indefinite-lived intangible assets | The following table summarizes intangible assets by category (in thousands): September 30, 2018 December 31, 2017 Gross Amount Accumulated Net Amount Gross Amount Accumulated Net Amount Finite-lived intangible assets Domain names $ 2,000 $ (1,358 ) $ 642 $ 2,591 $ (1,663 ) $ 928 Customer relationships 23,186 (13,509 ) 9,677 23,486 (10,539 ) 12,947 Media content and broadcast rights 2,485 (1,309 ) 1,176 2,485 (936 ) 1,549 Acquired technology 578 (527 ) 51 578 (461 ) 117 Other intangible assets 68 (68 ) — 68 (68 ) — $ 28,317 $ (16,771 ) $ 11,546 $ 29,208 $ (13,667 ) $ 15,541 Indefinite-lived intangible assets Trademarks and trade names $ 8,276 $ 8,276 $ 8,276 $ 8,276 License to operate in China 128 128 129 129 Total intangible assets $ 36,721 $ 19,950 $ 37,613 $ 23,946 |
Goodwill | The following table summarizes the changes in goodwill during the nine months ended September 30, 2018 and the year ended December 31, 2017 (in thousands): Nine Months Ended September 30, 2018 Year Ended December 31, 2017 Travel & Entertainment Segment Corporate Entity and Other Business Units Total Travel & Entertainment Segment Corporate Entity and Other Business Units Total Balance at beginning of period $ 18,514 $ 1,585 $ 20,099 $ 18,514 $ 8,249 $ 26,763 Business acquisitions — — — — 2,116 2,116 Impairment of goodwill — — — — (8,796 ) (8,796 ) Other — — — — 16 16 Balance at end of period $ 18,514 $ 1,585 $ 20,099 $ 18,514 $ 1,585 $ 20,099 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following table presents long-term debt (in thousands) as of: September 30, 2018 December 31, 2017 Loan due September 2020 $ 35,500 $ 35,500 Unamortized original issue discount (1,660 ) (836 ) Unamortized debt issuance cost (21 ) (79 ) Carrying value of Loan 33,819 34,585 Exit fee payable in relation to Loan 3,500 3,500 Total long-term debt $ 37,319 $ 38,085 Less: current portion (37,319 ) (38,085 ) Long-term debt, less current portion and net of debt issuance cost $ — $ — |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other liabilities | The following table presents the components of other liabilities (in thousands): September 30, 2018 December 31, 2017 Deferred rent $ 1,650 $ 1,820 Early lease termination liability 1,242 — Contingent consideration liability, net of current portion — 940 Deferred tax liability, net 369 741 Other 35 — Total $ 3,296 $ 3,501 |
Early lease termination liability | The following table presents the change in the liability balance related to the early lease termination (in thousands): Nine Months Ended September 30, 2018 Balance at beginning of period $ — Establishment of early lease termination liability 2,295 Payment of rent and other costs (798 ) Receipt of amounts due under subleases 95 Other 16 Balance at end of period $ 1,608 |
STOCKHOLDERS' EQUITY AND NET _2
STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stock option activity under equity incentive plans | The following table summarizes activity under our equity incentive plans related to the China Cash Bonuses as of September 30, 2018 , and changes during the nine months then ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2018 266,500 $ 3.84 Granted 1,367,375 6.02 Exercised (7,875 ) 4.28 Forfeited, cancelled or expired (233,375 ) 5.76 Outstanding at September 30, 2018 1,392,625 $ 5.67 9.3 $ 36 Bonuses exercisable at September 30, 2018 169,750 $ 4.04 8.2 $ 19 September 30, 2018 , and changes during the nine months then ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2018 9,397,056 $ 3.80 Granted 1,909,500 6.79 Exercised (385,820 ) 2.60 Forfeited, cancelled or expired (46,377 ) 6.09 Outstanding at September 30, 2018 10,874,359 $ 4.36 7.8 $ 2,885 Options exercisable at September 30, 2018 10,009,767 $ 4.44 7.7 $ 2,319 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following table presents certain financial information regarding our business segments and other entities for the three and nine months ended September 30, 2018 and 2017 (in thousands): Travel & Entertainment Technology & Data Intelligence Corporate Entity and Other Consolidated Three Months Ended September 30, 2018 Revenue $ 17,596 $ 1,039 $ 716 $ 19,351 Adjusted EBITDA $ 2,324 $ (1,674 ) $ (3,428 ) $ (2,778 ) Three Months Ended September 30, 2017 Revenue $ 16,284 $ 2,203 $ 962 $ 19,449 Adjusted EBITDA $ 1,955 $ (946 ) $ (2,833 ) $ (1,824 ) Nine Months Ended September 30, 2018 Revenue $ 49,320 $ 5,591 $ 1,877 $ 56,788 Adjusted EBITDA $ 4,493 $ (5,166 ) $ (12,292 ) $ (12,965 ) Nine Months Ended September 30, 2017 Revenue $ 45,765 $ 3,212 $ 3,027 $ 52,004 Adjusted EBITDA $ 4,322 $ (2,096 ) $ (7,788 ) $ (5,562 ) The following table reconciles Adjusted EBITDA to Loss before income taxes (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Adjusted EBITDA $ (2,778 ) $ (1,824 ) $ (12,965 ) $ (5,562 ) Depreciation and amortization (2,756 ) (2,482 ) (8,220 ) (8,237 ) Impairments — (28 ) — (28 ) Share-based compensation expense (891 ) (1,629 ) (12,913 ) (2,225 ) Other loss (1 ) — (56 ) (20 ) Other loss (gain) 12 33 (511 ) 85 Operating loss $ (6,414 ) $ (5,930 ) $ (34,665 ) $ (15,987 ) Other income (expense) Interest expense (1,307 ) (1,080 ) (3,968 ) (3,279 ) Other income 1 — 56 20 Change in fair value of warrant liability 3,525 (5,978 ) 22,190 2,351 Other gain (loss) (12 ) (33 ) 511 (85 ) Total other income, net $ 2,207 $ (7,091 ) $ 18,789 $ (993 ) Income (loss) before income taxes $ (4,207 ) $ (13,021 ) $ (15,876 ) $ (16,980 ) The following table presents total assets for our segments and the corporate and other entities (in thousands): September 30, December 31, 2017 Travel & Entertainment segment $ 69,296 $ 75,820 Technology & Data Intelligence segment 3,824 5,105 Corporate entity and other business units 17,329 22,612 Consolidated $ 90,449 $ 103,537 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) - USD ($) | Jul. 02, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Sep. 20, 2016 | Sep. 24, 2015 |
Debt Instrument [Line Items] | ||||||||
Accumulated deficit | $ 314,094,000 | $ 314,094,000 | $ 299,848,000 | |||||
Cash and cash equivalents | 9,902,000 | 9,902,000 | 22,632,000 | |||||
Working capital | 55,000,000 | 55,000,000 | ||||||
Revenue | 19,351,000 | $ 19,449,000 | 56,788,000 | $ 52,004,000 | ||||
Original principal amount | $ 35,500,000 | |||||||
Loans Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | 35,500,000 | $ 35,500,000 | $ 35,500,000 | $ 35,500,000 | $ 27,500,000 | |||
Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Common stock issuances (in shares) | 0 | 3,052,897 | ||||||
Common stock issuances (in shares) | $ 0 | $ 8,300,000 | ||||||
Common Stock | Aspire Capital Fund, LLC | ||||||||
Debt Instrument [Line Items] | ||||||||
Common stock issuances (in shares) | $ 5,000,000 | |||||||
Common Stock | 2018 Aspire Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Period of purchase stock | 30 months | |||||||
2018 Aspire Purchase Agreement | Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Common stock issuances (in shares) | 3,095,238 | |||||||
Value of shares purchased to date | $ 10,000,000 | $ 10,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Typical maximum term of short-term credit policies extended to customers | 90 days |
Reimbursement requirement, percentage of commissions paid | 10.00% |
Reimbursement obligation | $ 0.5 |
Transaction services | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Substantially all performance period | 1 year |
Transaction services | Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Typical performance period | 3 months |
Transaction services | Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Typical performance period | 4 months |
Advertising and other | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Substantially all performance period | 1 year |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Term of contract | 1 year | |||
Revenue | $ 19,351 | $ 19,449 | $ 56,788 | $ 52,004 |
Revenue recognized | 3,100 | |||
Transaction services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 16,619 | 46,272 | ||
Data platform services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 1,039 | 5,591 | ||
Advertising and other | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 1,693 | $ 4,925 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Assumptions Used in Calculating the Fair Value of Warrants (Details) - Fair Value, Inputs, Level 3 - China Branding Group Limited | Sep. 30, 2018 | Dec. 31, 2017 |
Expected volatility | CBG Financing Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.6000 | 0.6000 |
Expected volatility | CBG Acquisition Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.6000 | 0.6000 |
Risk-free interest rate | CBG Financing Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0281 | 0.0196 |
Risk-free interest rate | CBG Acquisition Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0294 | 0.0225 |
Expected remaining term (years) | CBG Financing Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, expected remaining term | 1 year 11 months 23 days | 2 years 8 months 23 days |
Expected remaining term (years) | CBG Acquisition Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, expected remaining term | 4 years 11 months 19 days | 5 years 8 months 19 days |
FAIR VALUE MEASUREMENTS - Estim
FAIR VALUE MEASUREMENTS - Estimate of Expected Volatility and Stock Price (Details) - China Branding Group Limited $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
CBG Financing Warrants | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Changes in fair value resulting from 5% increase in expected volatility | $ 275 |
Changes in fair value resulting from 5% decrease in expected volatility | 275 |
Changes in fair value resulting from 5% increase of stock price | 245 |
Changes in fair value resulting from 5% decrease of stock price | 245 |
CBG Acquisition Warrants | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Changes in fair value resulting from 5% increase in expected volatility | 805 |
Changes in fair value resulting from 5% decrease in expected volatility | 865 |
Changes in fair value resulting from 5% increase of stock price | 345 |
Changes in fair value resulting from 5% decrease of stock price | $ 405 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) | Jan. 10, 2018$ / sharesshares | Jan. 08, 2018shares | Sep. 30, 2018future_event |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated future equity financing events | future_event | 1 | ||
Stock price trigger (in dollars per share) | $ / shares | $ 14 | ||
Former Owner of Subsidiary | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Exercised warrants (shares) | 2,416,996 | ||
Shares issued in conversion of stock (shares) | 2,236,915 | 750,102 | |
Warrants that would have been issued to holders on as-exercised basis (shares) | 6,184,414 | ||
Lender | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Shares issued in conversion of stock (shares) | 1,385,396 | ||
Warrants that would have been issued to holders on as-exercised basis (shares) | 3,117,148 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Change in Fair Value of Warrants Accounted for as Derivative Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrant liabilities | ||
Contingent Consideration | ||
Balance at beginning of period | $ 89,169 | $ 25,030 |
Payments/exercises | (59,907) | 0 |
Increase (decrease) in fair value | (22,190) | 64,139 |
Balance at end of period | 7,072 | 89,169 |
Earnout payment liabilities | Vegas.com LLC | ||
Contingent Consideration | ||
Balance at beginning of period | 1,930 | |
Payments/exercises | (1,000) | |
Increase (decrease) in fair value | 50 | |
Balance at end of period | $ 980 | $ 1,930 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and Cash Equivalents [Abstract] | ||||
Restricted cash | $ 2,250 | |||
Cash and cash equivalents | 9,902 | $ 22,632 | ||
Restricted cash reported in current assets | 11,655 | 11,670 | ||
Total cash, cash equivalents and restricted cash | $ 21,557 | $ 34,302 | $ 27,640 | $ 18,548 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED AFFILIATE (Details) - USD ($) $ in Millions | 1 Months Ended | |
Jun. 30, 2018 | Sep. 30, 2018 | |
Sharecare | ||
Noncontrolling Interest [Line Items] | ||
Ownership percentage in unconsolidated affiliate | 5.00% | |
All-in-one Cloud Net Technology, Co | ||
Noncontrolling Interest [Line Items] | ||
Interest in VIE acquired | 20.00% | |
Payments to acquire VIE | $ 1 |
PREPAID EXPENSE AND OTHER CUR_3
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Current Assets | ||
Prepaid expense | $ 2,918 | $ 2,036 |
Deposits | 3,487 | 1,960 |
Inventory, net | 744 | 234 |
Other current assets | 1,561 | 1,288 |
Total | $ 8,710 | $ 5,518 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Total property, equipment and software | $ 27,847 | $ 25,338 | |
Less accumulated depreciation | (16,217) | (11,951) | |
Total property, equipment and software, net | 11,630 | 13,387 | |
Depreciation and amortization | $ 4,400 | $ 4,100 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 5 years | ||
Total property, equipment and software | $ 1,350 | 447 | |
Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property, equipment and software | 1,978 | 1,635 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Total property, equipment and software | 221 | 220 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Total property, equipment and software | 21,719 | 20,773 | |
Software development in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property, equipment and software | 2,010 | 1,935 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property, equipment and software | $ 569 | $ 328 | |
Minimum | Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 2 years | ||
Minimum | Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 2 years | ||
Minimum | Software | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 3 years | ||
Minimum | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 1 year | ||
Maximum | Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 12 years | ||
Maximum | Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 9 years | ||
Maximum | Software | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 5 years | ||
Maximum | Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life (Years) | 10 years |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-lived intangible assets | |||
Gross Amount | $ 28,317 | $ 29,208 | |
Accumulated Amortization | (16,771) | (13,667) | |
Net Amount | 11,546 | 15,541 | |
Indefinite-lived intangible assets | |||
Total intangible assets, Gross Amount | 36,721 | 37,613 | |
Total intangible assets, Net Amount | 19,950 | 23,946 | |
Amortization expense | 3,800 | $ 4,100 | |
Trademarks and trade names | |||
Indefinite-lived intangible assets | |||
Indefinite lived intangible assets | 8,276 | 8,276 | |
License to operate in China | |||
Indefinite-lived intangible assets | |||
Indefinite lived intangible assets | 128 | 129 | |
Domain names | |||
Finite-lived intangible assets | |||
Gross Amount | 2,000 | 2,591 | |
Accumulated Amortization | (1,358) | (1,663) | |
Net Amount | 642 | 928 | |
Customer relationships | |||
Finite-lived intangible assets | |||
Gross Amount | 23,186 | 23,486 | |
Accumulated Amortization | (13,509) | (10,539) | |
Net Amount | 9,677 | 12,947 | |
Media content and broadcast rights | |||
Finite-lived intangible assets | |||
Gross Amount | 2,485 | 2,485 | |
Accumulated Amortization | (1,309) | (936) | |
Net Amount | 1,176 | 1,549 | |
Acquired technology | |||
Finite-lived intangible assets | |||
Gross Amount | 578 | 578 | |
Accumulated Amortization | (527) | (461) | |
Net Amount | 51 | 117 | |
Other intangible assets | |||
Finite-lived intangible assets | |||
Gross Amount | 68 | 68 | |
Accumulated Amortization | (68) | (68) | |
Net Amount | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 20,099 | $ 26,763 |
Business acquisitions | 0 | 2,116 |
Impairment of goodwill | 0 | (8,796) |
Other | 0 | 16 |
Balance at end of period | 20,099 | 20,099 |
Operating Segments | Travel & Entertainment | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 18,514 | 18,514 |
Business acquisitions | 0 | 0 |
Impairment of goodwill | 0 | 0 |
Other | 0 | 0 |
Balance at end of period | 18,514 | 18,514 |
Corporate Entity and Other Business Units | ||
Goodwill [Roll Forward] | ||
Balance at beginning of period | 1,585 | 8,249 |
Business acquisitions | 0 | 2,116 |
Impairment of goodwill | 0 | (8,796) |
Other | 0 | 16 |
Balance at end of period | $ 1,585 | $ 1,585 |
INCOME TAX (Details)
INCOME TAX (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate | 9.10% |
DEBT - Short-Term Debt (Details
DEBT - Short-Term Debt (Details) - Short-term note payable to private lender | Apr. 12, 2017USD ($) |
Short-term Debt [Line Items] | |
Short-term note payable | $ 3,000,000 |
Fee payable in relation to short-term note payable | 115,000 |
Daily interest accrued on unpaid balance after maturity | $ 500 |
DEBT - Schedule of Debt Instrum
DEBT - Schedule of Debt Instruments (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 20, 2016 | Sep. 24, 2015 |
Debt Instrument [Line Items] | ||||
Original principal amount | $ 35,500,000 | |||
Less: current portion | $ (37,319,000) | $ (38,085,000) | ||
Loans Payable | ||||
Debt Instrument [Line Items] | ||||
Original principal amount | 35,500,000 | 35,500,000 | $ 35,500,000 | $ 27,500,000 |
Unamortized original issue discount | (1,660,000) | (836,000) | ||
Unamortized debt issuance cost | (21,000) | (79,000) | ||
Carrying value of Loan | 33,819,000 | 34,585,000 | ||
Exit fee payable in relation to Loan | 3,500,000 | 3,500,000 | ||
Total long-term debt | 37,319,000 | 38,085,000 | ||
Less: current portion | (37,319,000) | (38,085,000) | ||
Long-term debt, less current portion and net of debt issuance cost | $ 0 | $ 0 |
DEBT - Long-Term Debt Narrative
DEBT - Long-Term Debt Narrative (Details) - USD ($) | Jun. 29, 2018 | Apr. 30, 2018 | Sep. 20, 2016 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 24, 2015 |
Debt Instrument [Line Items] | ||||||
Original principal amount | $ 35,500,000 | |||||
Additional principal amount | $ 8,000,000 | |||||
Interest rate floor of variable rate | 1.00% | |||||
Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Original principal amount | $ 35,500,000 | $ 35,500,000 | $ 35,500,000 | $ 27,500,000 | ||
Effective interest rate | 13.00% | |||||
Exit fee payable in relation to Loan | $ 3,500,000 | $ 3,500,000 | ||||
LIBOR | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 8.50% | 11.00% | ||||
Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Exit fee payable in relation to Loan | $ 3,500,000 | |||||
Prepayment of debt | 8,000,000 | |||||
Closing fee | $ 413,000 | |||||
Extension period for debt repayment | 3 months | |||||
Amendment | Loans Payable | ||||||
Debt Instrument [Line Items] | ||||||
Post-default rate | 11.00% | |||||
First Two Months | Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment of debt | $ 250,000 | |||||
Third Month | Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment of debt | $ 500,000 | |||||
KanKan | ||||||
Debt Instrument [Line Items] | ||||||
Revenues | $ 5,600,000 | |||||
KanKan | Amendment | ||||||
Debt Instrument [Line Items] | ||||||
Minimum revenue requirement | $ 12,600,000 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Deferred rent | $ 1,650 | $ 1,820 |
Early lease termination liability | 1,242 | 0 |
Contingent consideration liability, net of current portion | 0 | 940 |
Deferred tax liability, net | 369 | 741 |
Other | 35 | 0 |
Total | $ 3,296 | $ 3,501 |
OTHER LIABILITIES - Early Lease
OTHER LIABILITIES - Early Lease Termination Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2018 | Sep. 30, 2018 | |
Restructuring Reserve [Roll Forward] | ||
Balance at beginning of period | $ 0 | $ 0 |
Establishment of early lease termination liability | 2,295 | |
Payment of rent and other costs | (798) | |
Receipt of amounts due under subleases | 95 | |
Other | 16 | |
Balance at end of period | $ 1,608 | |
Corporate Entity and Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Rent expense | $ 2,300 |
STOCKHOLDERS' EQUITY AND NET _3
STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE - Narrative (Details) - USD ($) | Jul. 02, 2018 | Jan. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ 891,000 | $ 1,629,000 | $ 12,913,000 | $ 2,225,000 | ||
Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock issuances (in shares) | $ 0 | $ 8,300,000 | ||||
Common stock issuances (in shares) | 0 | 3,052,897 | ||||
Option award expiration period | 10 years | |||||
CEO and Chairman of the Board | 2017 Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (in shares) | 1,300,000 | |||||
Share price (in dollars per share) | $ 7.81 | |||||
Share-based compensation expense | $ 11,600,000 | |||||
2018 Aspire Purchase Agreement | Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock issuances (in shares) | $ 3,095,238 | |||||
Value of shares purchased | $ 10,000,000 | $ 10,000,000 | ||||
Stock options exercised (in shares) | 381,445 | |||||
Proceeds from stock options exercised | $ 1,000,000 | |||||
Aspire Capital Fund, LLC | Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock issuances (in shares) | $ 5,000,000 | |||||
Aspire Capital Fund, LLC | Private Placement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase amount of shares authorized | $ 30,000,000 | |||||
Term of agreement | 30 months | |||||
Purchase amount of shares authorized (in shares) | 50,000 | |||||
Purchase price covenant, consecutive trading days | 10 days | |||||
Aggregate purchase price payable, daily maximum | $ 250,000 | |||||
Maximum daily increase in shares for purchase | $ 3,000,000 | |||||
Percentage of aggregate shares of common stock | 30.00% | |||||
Percentage of closing price of common stock | 80.00% | |||||
Percentage of volume-weighted average price of common stock | 97.00% | |||||
Threshold minimum stock price (in dollars per share) | $ 1 | |||||
Shares authorized in transaction (in shares) | 6,629,039 | |||||
Shares authorized, percentage of shares of common stock | 19.99% | |||||
Minimum price per share to maintain average purchase price (in dollars per share) | $ 3.91 | |||||
Number of shares issued (in shares) | 213,574 | 3,308,812 |
STOCKHOLDERS' EQUITY AND NET _4
STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE - Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Stock Options | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 9,397,056 |
Granted (in shares) | shares | 1,909,500 |
Exercised (in shares) | shares | (385,820) |
Forfeited, cancelled or expired (in shares) | shares | (46,377) |
Outstanding at end of period (in shares) | shares | 10,874,359 |
Options exercisable at end of period (in shares) | shares | 10,009,767 |
Weighted-Average Exercise Price (in dollars per share) | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 3.80 |
Granted (in dollars per share) | $ / shares | 6.79 |
Exercised (in dollars per share) | $ / shares | 2.60 |
Forfeited, cancelled or expired (in dollars per share) | $ / shares | 6.09 |
Outstanding at end of period (in dollars per share) | $ / shares | 4.36 |
Options exercisable at end of period (in dollars per share) | $ / shares | $ 4.44 |
Weighted-Average Remaining Contractual Term (in years) | |
Outstanding at end of period | 7 years 9 months 18 days |
Options exercisable at end of period | 7 years 8 months 12 days |
Aggregate Intrinsic Value (in thousands) | |
Outstanding at end of period | $ | $ 2,885 |
Options exercisable at end of period | $ | $ 2,319 |
China Cash Bonus Awards | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 266,500 |
Granted (in shares) | shares | 1,367,375 |
Exercised (in shares) | shares | (7,875) |
Forfeited, cancelled or expired (in shares) | shares | (233,375) |
Outstanding at end of period (in shares) | shares | 1,392,625 |
Options exercisable at end of period (in shares) | shares | 169,750 |
Weighted-Average Exercise Price (in dollars per share) | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 3.84 |
Granted (in dollars per share) | $ / shares | 6.02 |
Exercised (in dollars per share) | $ / shares | 4.28 |
Forfeited, cancelled or expired (in dollars per share) | $ / shares | 5.76 |
Outstanding at end of period (in dollars per share) | $ / shares | 5.67 |
Options exercisable at end of period (in dollars per share) | $ / shares | $ 4.04 |
Weighted-Average Remaining Contractual Term (in years) | |
Outstanding at end of period | 9 years 3 months 18 days |
Options exercisable at end of period | 8 years 2 months 12 days |
Aggregate Intrinsic Value (in thousands) | |
Outstanding at end of period | $ | $ 36 |
Options exercisable at end of period | $ | $ 19 |
STOCKHOLDERS' EQUITY AND NET _5
STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE - Net Loss Per Share (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Hotelmobi, Inc. | Warrant | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities (in shares) | shares | 1,000,000 |
CBG Acquisition Warrants | China Branding Group Limited | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Equity interests issued (in shares) | shares | 40,000 |
Exercise price (usd per share) | $ 10 |
CBG Financing Warrants | China Branding Group Limited | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Equity interests issued (in shares) | shares | 3,070,638 |
Exercise price (usd per share) | $ 4.78 |
Warrant One | Hotelmobi, Inc. | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Exercise price (usd per share) | 8 |
Warrant Two | Hotelmobi, Inc. | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Exercise price (usd per share) | $ 12 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Revenue | $ 19,351 | $ 19,449 | $ 56,788 | $ 52,004 | |
Adjusted EBITDA | (2,778) | (1,824) | (12,965) | (5,562) | |
Depreciation and amortization | (2,756) | (2,482) | (8,220) | (8,237) | |
Impairments | 0 | (28) | 0 | (28) | |
Share-based compensation expense | (891) | (1,629) | (12,913) | (2,225) | |
Other loss | (1) | 0 | (56) | (20) | |
Other loss (gain) | 12 | 33 | (511) | 85 | |
Operating loss | (6,414) | (5,930) | (34,665) | (15,987) | |
Other income | |||||
Interest expense | (1,307) | (1,080) | (3,968) | (3,279) | |
Other income | 1 | 0 | 56 | 20 | |
Change in fair value of warrant liability | 3,525 | (5,978) | 22,190 | 2,351 | |
Other gain (loss) | (12) | (33) | 511 | (85) | |
Total other income (expense), net | 2,207 | (7,091) | 18,789 | (993) | |
Loss before income taxes | (4,207) | (13,021) | (15,876) | (16,980) | |
Assets | 90,449 | 90,449 | $ 103,537 | ||
Capital expenditures | 2,728 | 2,631 | |||
Travel & Entertainment | |||||
Other income | |||||
Capital expenditures | 300 | 700 | 2,000 | 1,600 | |
Technology & Data Intelligence | |||||
Other income | |||||
Capital expenditures | 100 | 200 | 600 | 1,000 | |
Operating Segments | Travel & Entertainment | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 17,596 | 16,284 | 49,320 | 45,765 | |
Adjusted EBITDA | 2,324 | 1,955 | 4,493 | 4,322 | |
Other income | |||||
Assets | 69,296 | 69,296 | 75,820 | ||
Operating Segments | Technology & Data Intelligence | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 1,039 | 2,203 | 5,591 | 3,212 | |
Adjusted EBITDA | (1,674) | (946) | (5,166) | (2,096) | |
Other income | |||||
Assets | 3,824 | 3,824 | 5,105 | ||
Corporate Entity and Other | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 716 | 962 | 1,877 | 3,027 | |
Adjusted EBITDA | (3,428) | $ (2,833) | (12,292) | $ (7,788) | |
Other income | |||||
Assets | $ 17,329 | $ 17,329 | $ 22,612 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 11, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Related Party Transaction [Line Items] | |||||
Gain (loss) on related party transaction | $ (12) | $ (33) | $ 511 | $ (85) | |
Related Party Sale Of IRS Web Domain | |||||
Related Party Transaction [Line Items] | |||||
Payment from related party | $ 600 | ||||
Debt assumed by related party | 100 | ||||
Gain (loss) on related party transaction | $ 600 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Nov. 02, 2018 | Oct. 04, 2018 | Oct. 16, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from debt in collateral account | $ 2,250 | ||||
The Financing Agreement | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Minimum amount required in collateral account | $ 2,250 | ||||
Loans Payable | |||||
Subsequent Event [Line Items] | |||||
Exit fee payable in relation to Loan | $ 3,500 | $ 3,500 | |||
Loans Payable | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Exit fee payable in relation to Loan | $ 1,000 | ||||
Private Placement | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Number of shares issued (in shares) | 200,000 | ||||
Consideration received on sale of stock | $ 500 |