Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Rimini Street, Inc. | |
Entity Central Index Key | 1,635,282 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | RMNI | |
Entity Common Stock, Shares Outstanding | 63,580,470 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 23,488 | $ 21,950 |
Restricted cash | 434 | 18,077 |
Accounts receivable, net of allowance of $260 and $51, respectively | 42,546 | 63,525 |
Prepaid expenses and other | 9,124 | 8,560 |
Total current assets | 75,592 | 112,112 |
Long-term assets: | ||
Property and equipment, net of accumulated depreciation and amortization of $8,173 and $6,947, respectively | 3,632 | 4,255 |
Deferred debt issuance costs, net | 0 | 3,520 |
Deferred offering costs | 0 | 500 |
Deposits and other | 1,338 | 1,065 |
Deferred income taxes, net | 921 | 719 |
Total assets | 81,483 | 122,171 |
Current liabilities: | ||
Current maturities of long-term debt | 2,735 | 15,500 |
Accounts payable | 9,574 | 10,137 |
Accrued compensation, benefits and commissions | 20,483 | 18,154 |
Other accrued liabilities | 23,434 | 32,553 |
Deferred revenue | 143,578 | 152,390 |
Total current liabilities | 199,804 | 228,734 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 0 | 66,613 |
Deferred revenue | 31,018 | 29,182 |
Accrued PIK dividends payable | 846 | 0 |
Other long-term liabilities | 1,979 | 7,943 |
Total liabilities | 233,647 | 332,472 |
Commitments and contingencies (Note 7) | ||
Redeemable Series A Preferred Stock. Authorized 180 shares, issued and outstanding 140 shares in 2018 Liquidation preference of $140,000, net of discount of $26,755 in 2018 | 113,245 | 0 |
Stockholders' deficit: | ||
Preferred Stock, $0.0001 par value per share. Authorized 99,820 shares (exclusive of 180 shares of Series A Preferred Stock); no other series has been designated | 0 | 0 |
Common Stock; $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding 63,514 and 59,314 shares as of September 30, 2018 and December 31, 2017, respectively | 6 | 6 |
Additional paid-in capital | 110,895 | 94,967 |
Accumulated other comprehensive loss | (1,596) | (867) |
Accumulated deficit | (374,714) | (304,407) |
Total stockholders' deficit | (265,409) | (210,301) |
Total liabilities, redeemable preferred stock and stockholders' deficit | $ 81,483 | $ 122,171 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets [Parenthetical] - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 260 | $ 51 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 8,173 | $ 6,947 |
Temporary Equity, Shares Issued | 140 | |
Temporary Equity, Shares Outstanding | 140 | |
Temporary Equity, Liquidation Preference | $ 140,000 | |
Preferred Stock, Discount on Shares | $ 26,755 | |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 99,820 | 99,820 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Common Stock, Shares, Issued | 63,514 | 59,314 |
Common Stock, Shares, Outstanding | 63,514 | 59,314 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive 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 | ||
Revenue | $ 62,629 | $ 53,611 | $ 185,083 | $ 154,729 | |
Cost of revenue | 22,220 | 20,109 | 71,845 | 58,002 | |
Gross profit | 40,409 | 33,502 | 113,238 | 96,727 | |
Operating expenses: | |||||
Sales and marketing | 22,312 | 17,188 | 65,616 | 47,685 | |
General and administrative | 8,585 | 8,580 | 29,714 | 26,784 | |
Litigation costs and related recoveries: | |||||
Professional fees and other defense costs of litigation | 6,990 | 3,327 | 25,002 | 11,724 | |
Litigation appeal refund | 0 | 0 | (21,285) | 0 | |
Insurance recoveries, net | 0 | (2,962) | (7,583) | (7,113) | |
Total operating expenses | 37,887 | 26,133 | 91,464 | 79,080 | |
Operating income | 2,522 | 7,369 | 21,774 | 17,647 | |
Non-operating expenses: | |||||
Interest expense | (9,499) | (9,152) | (32,231) | (33,629) | |
Other debt financing expenses | (48,375) | (2,563) | (58,331) | (14,704) | |
Loss from change in fair value of redeemable warrants | 0 | (5,817) | 0 | (14,067) | |
Gain (loss) from change in fair value of embedded derivatives | 7,800 | 1,400 | 1,600 | (4,400) | |
Other income (expense), net | (306) | 108 | (1,546) | 422 | |
Loss before income taxes | (47,858) | (8,655) | (68,734) | (48,731) | |
Income tax expense | (510) | (385) | (1,573) | (643) | |
Net loss | (48,368) | (9,040) | (70,307) | (49,374) | |
Other comprehensive income (loss): | |||||
Foreign currency translation gain (loss) | (377) | (17) | (729) | 160 | |
Comprehensive loss | (48,745) | (9,057) | (71,036) | (49,214) | |
Loss applicable to common stockholders (Note 9) | $ (53,070) | $ (9,040) | $ (75,009) | $ (49,374) | |
Net loss per share: | |||||
Net loss per share of Common Stock (basic and diluted): | [1] | $ (0.85) | $ (0.37) | $ (1.24) | $ (2.02) |
Weighted average number of shares of Common Stock outstanding: | |||||
Weighted average number of shares of Common Stock outstanding: (basic and diluted): | [1] | 62,590 | 24,727 | 60,565 | 24,457 |
[1] | See Note 1 for discussion of reverse recapitalization given effect herein. |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Deficit - 9 months ended Sep. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2017 | $ (210,301) | $ 6 | $ 94,967 | $ (867) | $ (304,407) |
Balance (in shares) at Dec. 31, 2017 | 59,314,000 | ||||
Stock-based compensation expense | 3,143 | $ 0 | 3,143 | 0 | 0 |
Exercise of stock options for cash | 1,349 | $ 0 | 1,349 | 0 | 0 |
Exercise of stock options for cash (in shares) | 1,303,000 | ||||
Issuance of Common Stock in Private Placement, net | $ 16,138 | $ 0 | 16,138 | 0 | 0 |
Issuance of Common Stock in Private Placement, net (in shares) | 2,897 | 2,897,000 | |||
Accretion of discount on Series A Preferred Stock | $ (1,011) | $ 0 | (1,011) | 0 | 0 |
Accrued dividends on Series A Preferred Stock: | |||||
Payable in cash | (2,845) | 0 | (2,845) | 0 | 0 |
Payable in kind | (846) | 0 | (846) | 0 | 0 |
Foreign currency translation loss | (729) | 0 | 0 | (729) | 0 |
Net loss | (70,307) | 0 | 0 | 0 | (70,307) |
Balance at Sep. 30, 2018 | $ (265,409) | $ 6 | $ 110,895 | $ (1,596) | $ (374,714) |
Balance (in shares) at Sep. 30, 2018 | 63,514,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (70,307) | $ (49,374) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Write-off of debt discount and issuance costs | 54,536 | 9,861 |
Accretion and amortization of debt discount and issuance costs | 13,102 | 19,403 |
Make-whole applicable premium included in interest expense | 10,410 | 4,607 |
Stock-based compensation expense | 3,143 | 1,916 |
Paid-in-kind interest expense | 1,886 | 2,038 |
Depreciation and amortization | 1,399 | 1,477 |
Write-off of deferred debt financing costs | 704 | 0 |
Loss (gain) from change in fair value of embedded derivatives | (1,600) | 4,400 |
Deferred income taxes | (255) | (32) |
Loss from change in fair value of redeemable warrants | 0 | 14,067 |
Other | 0 | 364 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 20,206 | 21,745 |
Prepaid expenses, deposits and other | (1,148) | (1,756) |
Accounts payable | (759) | 291 |
Accrued compensation, benefits, commissions and other liabilities | 67 | 547 |
Deferred insurance settlement | (8,033) | 13,230 |
Deferred revenue | (5,800) | (12,021) |
Net cash provided by operating activities | 17,551 | 30,763 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
Capital expenditures | (890) | (1,074) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of Series A Preferred Stock and Common Stock in Private Placement | 133,000 | 0 |
Payments for principal and other contractual obligations | (145,382) | (36,993) |
Make-whole applicable premium related to prepayment of borrowings | (10,410) | (4,607) |
Payments for DDIC and other financing costs | (5,704) | 0 |
Payments for deferred offering costs | (3,937) | (1,036) |
Principal payments on capital leases | (502) | (648) |
Proceeds from exercise of employee stock options | 1,349 | 397 |
Net cash used in financing activities | (31,586) | (42,887) |
Effect of foreign currency translation changes | (1,180) | 550 |
Net decrease in cash, cash equivalents and restricted cash | (16,105) | (12,648) |
Cash, cash equivalents and restricted cash at beginning of period | 40,027 | 28,237 |
Cash, cash equivalents and restricted cash at end of period | 23,922 | 15,589 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 19,294 | 13,377 |
Cash paid for income taxes | 1,372 | 1,414 |
Discount on shares issued in Private Placement: | ||
Fair value of 2,897 shares of Common Stock issued for no consideration | 20,131 | 0 |
Original issuance discount | 7,000 | 0 |
Redeemable Series A Preferred Stock Dividends and Accretion: | ||
Accrued cash dividends | 2,845 | 0 |
Accrued PIK dividends | 846 | 0 |
Accretion of original issue discount and transaction costs | 1,011 | 0 |
Adjustment for updated calculation of mandatory trigger event exit fees under Credit Facility | 3,952 | 5,775 |
Purchase of equipment under capital lease obligations | 126 | 0 |
Increase in payables for: | ||
Deferred offering costs | 350 | 3,253 |
Capital expenditures | 44 | 85 |
Debt issuance costs | $ 0 | $ 1,250 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows [Parenthetical] | 9 Months Ended |
Sep. 30, 2018shares | |
Stock Issued During Period, Shares, New Issues | 2,897 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2018 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 — NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business Rimini Street, Inc. is a global provider of enterprise software support services. The Company’s subscription-based software support products and services offer enterprise software licensees a choice of solutions that replace or supplement the support products and services offered by enterprise software vendors. Reverse Recapitalization Rimini Street, Inc. (“RSI”) was incorporated in the state of Nevada in September 2005. In May 2017, RSI entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GP Investments Acquisition Corp. (“GPIA”), a publicly-held special purpose acquisition company incorporated in the Cayman Islands and formed for the purpose of effecting a business combination with one or more businesses. The Merger Agreement was approved by the respective shareholders of RSI and GPIA in October 2017, and closing occurred on October 10, 2017, resulting in (i) the merger of a wholly owned subsidiary of GPIA with and into RSI, with RSI as the surviving corporation, after which (ii) RSI merged with and into GPIA, with GPIA as the surviving corporation and renamed “Rimini Street, Inc.” (referred to herein as “RMNI”, as distinguished from RSI, which is defined as the predecessor entity with the same legal name) immediately after consummation of the second merger. The transactions associated with the first merger and the second merger are referred to herein as the “Mergers”. The accompanying financial statements refer to the “Company” to include the accounts and activities of RSI before the Mergers, and those of RMNI after the Mergers, except where the context indicates otherwise. RSI’s capital structure consisted of Series A, B and C Convertible Preferred Stock (“RSI Preferred Stock”) and Class A and B Common Stock (“RSI Common Stock”). RSI Preferred Stock and RSI Common Stock are collectively referred to as “RSI Capital Stock”. Since GPIA was a non-operating public shell company, the Mergers have been accounted for as a capital transaction rather than a business combination. Specifically, the transaction was accounted for as a reverse recapitalization consisting of the issuance of RMNI Common Stock (defined below) by RSI for the net monetary assets of GPIA accompanied by a recapitalization. Accordingly, the net monetary assets received by RMNI as a result of the Mergers with GPIA were treated as a capital infusion on the closing date. In order to reflect the change in capitalization, the historical capitalization related to shares of RSI Common Stock have been retroactively restated based on the exchange ratio as if shares of RMNI Common Stock had been issued as of the later of (i) the issuance date of the shares, or (ii) the earliest period presented in the accompanying unaudited condensed consolidated financial statements. The conversion of RSI Preferred Stock to RMNI Common Stock required the affirmative vote by the respective holders of RSI Preferred Stock. Therefore, conversion was not reflected until October 10, 2017, and the capital structure of RMNI was deemed to include the RSI Preferred Stock until consummation of the Mergers when it converted into approximately 24.1 million shares of RMNI Common Stock. As the surviving legal entity, the legal capital structure of GPIA is maintained post-merger, while the amounts associated with the historical capital activities and retained earnings of GPIA were eliminated since the amounts associated with the historical capital activities and operations are deemed to be those of RSI, the operating company and predecessor for accounting purposes. Prior to the consummation of the Mergers, GPIA domesticated as a Delaware corporation (the “Delaware Domestication”) and is authorized to issue up to one billion shares of $0.0001 par value common stock (referred to herein as “RMNI Common Stock” or “Common Stock”), and up to 100 million shares of $0.0001 par value preferred stock that may be issued in one or more series as determined by the Board of Directors. As such, the financial results of the Company for the three and nine months ended September 30, 2017 reflect the operating results of RSI and its consolidated subsidiaries. The exchange ratio for the Mergers resulted in the issuance of approximately 0.2394 shares of RMNI Common Stock for each outstanding share of RSI Capital Stock (the “Exchange Ratio”) on October 10, 2017. Upon consummation of the Mergers, the former GPIA shareholders owned approximately 9.3 million shares of RMNI Common Stock and the former RSI shareholders obtained an 83% controlling interest in the outstanding shares of RMNI Common Stock. Upon consummation of the Mergers, seven of the nine members of the Board of Directors of RMNI previously served as directors of RSI. Basis of Presentation and Consolidation The unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, certain information and footnote disclosures required by U.S. GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2017, included in the Company’s 2017 Annual Report on Form 10-K as filed with the SEC on March 15, 2018 (the “2017 Form 10-K”). The accompanying condensed balance sheet and related disclosures as of December 31, 2017 have been derived from the Company’s audited financial statements. The Company’s financial condition as of September 30, 2018, and operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the year ending December 31, 2018. Reclassifications In addition to the accounting for the reverse recapitalization discussed above, certain amounts in the balance sheet as of December 31, 2017 and the unaudited condensed consolidated financial statements of RSI issued for the three and nine months ended September 30, 2017, have been reclassified to conform to the Company’s presentation for the current period. These reclassifications had no effect on the previously reported net loss, stockholders’ deficit and cash flows. |
LIQUIDITY AND SIGNIFICANT ACCOU
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Significant Accounting Policies [Text Block] | NOTE 2 — LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES Liquidity As of September 30, 2018, the Company’s current liabilities exceeded its current assets by $124.2 million, and the Company incurred a net loss of $70.3 million for the nine months ended September 30, 2018. As of September 30, 2018, the Company had available cash, cash equivalents and restricted cash of $23.9 . As discussed in Note 11, the Company refinanced and repaid its Credit Facility on July 19, 2018 through aggregate cash payments of $132.8 million that resulted in the termination of the Credit Facility. These payments were funded from the Private Placement discussed in Note 11 that resulted in cash proceeds of $133.0 million from the sale of 140,000 shares of Series A Preferred Stock and approximately 2.9 million shares of Common Stock. In addition, the Company used approximately $2.7 million of its cash, primarily for interest and fees under the Credit Facility and transaction costs that were due at the Closing. This refinancing is expected to improve the Company’s liquidity and capital resources whereby cash dividends are payable at 10.0% per annum that will result in quarterly cash dividends ranging from $3.5 million to $4.0 million over the initial 5-year period beginning on the issuance date assuming all shares of Series A Preferred Stock remain outstanding, and thereafter, if not previously redeemed or converted, cash dividends will be payable at 13.0% per annum. Additionally, as discussed in Note 4 the Company is obligated to repay the $3.0 million face amount of the note payable to GP Sponsor in January 2019, and to make operating and capital lease payments that are due within the next 12 months in the aggregate amount of $5.6 million. The Company believes that current cash, cash equivalents, restricted cash, and future cash flow from operating activities will be sufficient to meet the Company’s anticipated cash needs, including cash dividend requirements, working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of these financial statements. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, accounts receivable, valuation assumptions for stock options, embedded derivatives, deferred income taxes and the related valuation allowances, and the evaluation and measurement of contingencies. To the extent there are material differences between the Company’s estimates and the actual results, the Company’s future consolidated results of operation may be affected. Accounting for Series A Preferred Stock Series A Preferred Stock is classified as mezzanine equity in the Company’s consolidated balance sheet since the holders have redemption rights beginning in July 2023 (and earlier under certain circumstances). The discount related to Series A Preferred Stock is being accreted using the effective interest method. Accordingly, the carrying value of the Series A Preferred Stock is being increased with a corresponding reduction in additional paid-in capital from the issuance date of July 19, 2018 until the first redemption date of July 19, 2023, when the carrying value will be equal to the aggregate liquidation preference. The Company records a liability for dividends in the period incurred. Accretion and accrued dividends are treated as deductions in the calculation of earnings applicable to common stockholders. Recent Accounting Pronouncements Recently Adopted Standards. The following recently issued accounting standard was adopted during the fourth quarter of fiscal year 2017: In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments. The new standard is intended to reduce diversity in practice in how certain cash receipts and cash payments are classified in the statements of cash flows and must be adopted retrospectively for each prior reporting period presented upon initial adoption. The new standard is effective for the Company beginning in the first quarter of 2019 with early adoption permitted. The Company elected to adopt this standard during the fourth quarter of 2017, and there were no transactions that required retrospective adjustments in the consolidated statements of cash flows for the years ended December 31, 2016 and 2015. For the nine months ended September 30, 2017, the Company was required to pay $4.6 million for a make-whole applicable premium associated with a mandatory principal prepayment in April 2017. This new standard required that this payment be classified as a financing cash flow in the Company’s consolidated statement of cash flows for the year ended December 31, 2017. For the nine months ended September 30, 2017, retrospective effect must be given since the $4.6 million make-whole applicable premium payment was reflected as an operating cash flow when those financial statements were originally issued. Presented below is the retrospective effect of adoption of ASU No. 2016-15 on the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2017 (in thousands): Originally Impact of As Stated Adoption Restated Net cash provided by (used in): Operating activities $ 26,156 $ 4,607 $ 30,763 Investing activities (1,074 ) - (1,074 ) Financing activities (38,280 ) (4,607 ) (42,887 ) The following accounting standards are not yet effective; Management has not completed its evaluation to determine the impact that adoption of these standards will have on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes nearly all existing revenue recognition standards under U.S. GAAP. The new standard provides a five-step process for recognizing revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires expanded qualitative and quantitative disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for the Company beginning in the first quarter of fiscal 2019. The new standard allows for two transition methods: (i) a full retrospective method applied to each prior reporting period presented, or (ii) a modified retrospective method applied with the cumulative effect of adoption recognized on adoption date. The Company will adopt this standard using the full retrospective method. The Company has assigned internal resources, engaged a third-party service provider, and is continuing the evaluation of the quantitative impact to our financial statements as well its accounting policies, processes and systems. While the Company is continuing to assess all potential impacts of adoption, management currently believes that the primary impact will be the timing of revenue recognition for certain contracts due to the removal of the current limitation on contingent revenue. The Company also expects potential impact to the accounting for costs to obtain contracts, which is primarily comprised of sales commissions. Such costs, which are expensed as incurred under the current standard, will be capitalized and amortized over their estimated useful lives under the new standard. The Company is currently evaluating the useful life over which such costs will be amortized. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires organizations that lease assets (“lessees”) to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. Under the new standard, both finance and operating leases will be required to be recognized on the balance sheet. Additional quantitative and qualitative disclosures, including significant judgments made by management, will also be required. The standard will be effective for the Company beginning in the first quarter of fiscal 2020, assuming the Company still qualifies as an emerging growth company. Early adoption is permitted, and the new standard was required to be adopted retrospectively to each prior reporting period presented upon initial adoption. However, in July 2018 the FASB issued ASU No. 2018-11 Targeted Improvements , which provides lessees the option to apply the new leasing standard to all open leases as of the adoption date by recognizing a cumulative-effect adjustment to accumulated deficit in the period of adoption without restating prior periods. The Company is still evaluating which transition approach will be implemented upon adoption of ASU No. 2016-02. In August 2018, the SEC adopted a final rule that extends the current annual requirement to disclose changes in stockholders’ equity to interim periods and will also require interim disclosure of dividends per share for each class of shares (including the Company’s Series A Preferred Stock). These disclosure provisions become effective beginning in the first quarter of 2019, whereby the Company will be required to disclose changes in stockholders’ deficit for the current and comparative fiscal quarters as well as the current and comparative year-to-date periods presented in future interim condensed consolidated financial statements. The Company intends to provide the expanded disclosures with respect to changes in stockholders’ deficit beginning in the first quarter of 2019. |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Financial Information Disclosure [Text Block] | NOTE 3 — OTHER FINANCIAL INFORMATION Cash, Cash Equivalents and Restricted Cash As of September 30, 2018 and December 31, 2017, cash, cash equivalents and restricted cash are as follows (in thousands): 2018 2017 Cash and cash equivalents $ 23,488 $ 21,950 Restricted cash: Control accounts under Credit Facility (Note 4) - 17,644 Corporate credit card debts and other 434 433 Total restricted cash 434 18,077 Total cash, cash equivalents and restricted cash $ 23,922 $ 40,027 Upon termination of the Credit Facility as discussed in Note 4, the restrictions related to the control accounts were eliminated and the related funds have been classified as cash and cash equivalents as of September 30, 2018. Other Accrued Liabilities As of September 30, 2018 and December 31, 2017, other accrued liabilities consist of the following (in thousands): 2018 2017 Accrued sales and other taxes $ 8,663 $ 11,266 Accrued professional fees 8,329 8,407 Accrued dividends on Redeemable Series A Preferred Stock 2,845 - Current maturities of capital lease obligations 371 533 Income taxes payable 597 485 Appeal proceeds payable to insurance company 449 - Deferred insurance settlement - 8,033 Liability for embedded derivatives - 1,600 Other accrued expenses 2,180 2,229 Total other accrued liabilities $ 23,434 $ 32,553 As of September 30, 2018 and December 31, 2017, accrued professional fees included a 15% holdback, or approximately $2.7 million, for amounts due to one of the Company’s attorneys for defense costs in connection with the Oracle litigation described in Note 7. The holdback amount is currently expected to be paid in fiscal 2019. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 4 — DEBT Debt is presented net of debt discounts and issuance costs (“DDIC”) in the Company’s balance sheets. As of September 30, 2018 and December 31, 2017, the net carrying value and balance sheet classification of debt is summarized as follows (in thousands): 2018 2017 Credit Facility, net of DDIC $ - $ 80,054 Note payable to GP Sponsor, net of DDIC 2,735 2,059 Total 2,735 82,113 Less current maturities (2,735 ) (15,500 ) Long-term debt, net of current maturities $ - $ 66,613 For purposes of classifying current maturities of long-term debt in the Company’s balance sheets, none of the discount is attributed to the current portion until the maturity date is less than one year from the balance sheet date. Accordingly, the $2.7 million net carrying amount of the related party note payable to GP Sponsor is classified as a current liability due to the amended maturity date of January 4, 2019. As discussed below, the Company repaid in full and terminated the Credit Facility on July 19, 2018. Credit Facility Overview. In June 2016, the Company entered into a multi-draw term loan Financing Agreement (the “Credit Facility”) with a syndicate of lenders (the “Lenders”). The Credit Facility would have matured in June 2020 but was repaid and terminated in July 2018 as discussed below. The Credit Facility provided for an aggregate commitment of up to $125.0 million. An origination fee equal to 5.0% of the $125.0 million commitment was paid in cash to the Lenders from the proceeds of the initial term loan. The Credit Facility provided for an Original Issue Discount (“OID”) of 2.0% of the initial face amount of borrowings. Origination fees and OID were accounted for as DDIC. Borrowings under the Credit Facility were collateralized by substantially all assets of the Company, including certain cash depository accounts that were subject to control agreements with the Lenders as discussed in Note 3. Upon termination of the Credit Facility as discussed below, the restrictions related to the cash control account were eliminated and the related funds held in the control accounts are classified as cash and cash equivalents as of September 30, 2018. The Company was previously required to comply with various financial and operational covenants on a monthly or quarterly basis, including a leverage ratio, minimum liquidity, churn rate, asset coverage ratio, minimum gross margin, and certain budget compliance restrictions under the Credit Facility. Additionally, the covenants in the Credit Facility prohibited or limited the Company’s ability to incur additional debt, pay cash dividends, sell assets, merge or consolidate with another company, and other customary restrictions associated with debt arrangements. Interest and Fees. The outstanding principal balance under the Credit Facility provided for monthly interest payments at 15.0% per annum, consisting of 12.0% per annum that was payable in cash and 3.0% per annum that was payable through the issuance of additional borrowings beginning on the interest payment due date (referred to as paid-in-kind, or “PIK” interest). In addition, a make-whole applicable premium payment of approximately 15.0% per annum through June 2019 was required for certain principal prepayments as defined in the Credit Facility. The Credit Facility provided for collateral monitoring fees at the rate of 2.5% of the outstanding principal balance. The Credit Facility also required unused line fees of 5.0% per annum on the $17.5 million undrawn portion. All unused line fees and collateral monitoring fees were payable monthly in arrears and were recorded as a component of other debt financing expenses in the period incurred. Upon the occurrence and during the continuance of any event of default, the principal (including PIK interest), and all unpaid interest provided for an additional interest rate of 2.0% per annum (the “Default Interest”) from the date such event of default occurred until it was cured or waived. The Lenders waived all Default Interest that would have otherwise been payable during periods when events of default existed. Accretion and Amortization. DDIC that relates to the entire Credit Facility was allocated pro rata between the funded and unfunded portions of the Credit Facility based on the relative amounts that were cumulatively borrowed versus the undrawn portion of the $125.0 million commitment. DDIC related to funded debt was accreted to interest expense using the effective interest method based on the aggregate principal obligations to the Lenders and consulting and Trigger Event obligations to one of the lenders that served as the origination agent (the “Origination Agent”). DDIC associated with unfunded debt was amortized using the straight-line method from the date incurred through the maturity date of the Credit Facility, which was included in other debt financing expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As of December 31, 2017, accretion of DDIC related to the funded portion of the Credit Facility was at an annual rate of 26.3%. Excluding the impact of unused line fees, collateral monitoring fees, and amortization of DDIC related to the unfunded portion of the Credit Facility, the overall effective rate was 41.3% as of December 31, 2017. Principal Prepayments. Under the Credit Facility, the Company was required to make payments to the Lenders when certain extraordinary cash receipts were received. Extraordinary receipts included certain insurance settlements, and court awards from litigation and appeals of judgments. As discussed in Note 7, on March 30, 2018, the Company received $21.5 million from the appeal of the Oracle litigation, of which approximately $0.5 million is payable to a third party that previously provided insurance coverage related to the litigation. On April 3, 2018, the Company paid $21.0 million consisting of $17.9 million of principal, and $3.1 million for make-whole applicable premium due to the Lenders. The Company also recognized a write-off of DDIC of $7.2 million related to the $17.9 million principal prepayment that was triggered by collection of the appeal proceeds. Termination of the Credit Facility. In connection with the closing on July 19, 2018 of the Private Placement discussed in Note 11, the Company used substantially all of the $133.0 million of gross proceeds from the Private Placement (together with cash-on-hand) to repay all outstanding indebtedness and fees under the Credit Facility and the Credit Facility was terminated. The aggregate cash payment to terminate the Credit Facility was $132.8 million and consisted of the following (in thousands): Contractual principal and exit fees: Principal balance $ 102,576 Mandatory trigger event exit fees 13,624 Mandatory consulting fees 2,000 Subtotal 118,200 Make-whole applicable premium 7,307 Amendment fees and related liabilities 6,250 Accrued interest and fees payable 1,073 Total cash termination payments $ 132,830 As a result of the early termination of the Credit Facility, the Company recognized a write-off of DDIC related to the funded debt for $44.6 million and the unfunded debt for $2.8 million. Certain investors in the Credit Facility, including ASP as discussed in Note 8, purchased an aggregate of approximately 42,000 shares of Series A Preferred Stock and 0.9 million shares of Common Stock in the Private Placement discussed in Note 11. Funded Credit Facility Activity. Presented below is a summary of activity related to the funded debt, including allocated DDIC, for the nine months ended September 30, 2018 (in thousands): December 31, PIK Liability Contractual Liability Payments Accretion DDIC Write-off September 30, 2017 Accrual Adjustments Scheduled Prepayments Pay-off Expense Prepayments Pay-off 2018 Contractual liabilities: Principal balance $ 125,872 $ 1,886 $ - $ (7,250 ) $ (17,932 ) $ (102,576 ) $ - $ - $ - $ - Mandatory trigger event exit fees 9,672 - 3,952 - - (13,624 ) - - - - Mandatory consulting fees 4,000 - - (2,000 ) - (2,000 ) - - - - Total contractual liability 139,544 1,886 3,952 (9,250 ) (17,932 ) (118,200 ) - - - - DDIC: Original issue discount 1,816 - - - - - - (234 ) (1,582 ) - Origination fee 4,538 - - - - - - (586 ) (3,952 ) - Amendment fee 11,521 - - - - - - (1,487 ) (10,034 ) - Fair value of warrants 6,424 - - - - - - (829 ) (5,595 ) - Consulting fees to lenders 6,519 - - - - - - (841 ) (5,678 ) - Mandatory trigger event exit fees 55,200 - 3,952 - - - - (7,314 ) (51,838 ) - Other issuance costs 3,600 - - - - - - (465 ) (3,135 ) - Total DDIC 89,618 - 3,952 - - - - (11,756 ) (81,814 ) - Cumulative accretion (30,128 ) - - - - - (11,670 ) 4,587 37,211 - Net DDIC 59,490 - 3,952 - - - (11,670 ) (7,169 ) (44,603 ) - Net carrying value $ 80,054 $ 1,886 $ - $ (9,250 ) $ (17,932 ) $ (118,200 ) $ 11,670 $ 7,169 $ 44,603 $ - Related Party Note Payable Upon consummation of the Merger Agreement with GPIA, the Company assumed an outstanding loan payable to GPIC Ltd., a Bermuda company (“GP Sponsor”) with a face amount of approximately $3.0 million. This loan is non-interest bearing and was originally due and payable upon the outstanding principal balance under the Credit Facility being less than $95.0 million. At inception of this loan, the maturity date was expected to occur in June 2020 based on the scheduled principal payments under the Credit Facility. Due to the $17.9 million principal prepayment on April 3, 2018 discussed above, the maturity date was prospectively accelerated to March 2019 for purposes of accretion calculations for the six months ended June 30, 2018. Effective in July 2018, the maturity date was amended to January 4, 2019 whereby the accretion calculations for the three months ended September 30, 2018 were prospectively adjusted to reflect the shorter period to maturity. Interest was initially imputed under this note payable assuming a maturity date in June 2020 and based on the estimated market rate of 15.0% per annum, which resulted in a discount of approximately $1.0 million as of October 10, 2017. Based on the revised maturity date of January 4, 2019, the imputed interest rate changed to 33.1% for the three months ended September 30, 2018. Interest Expense The components of interest expense for the three and nine months ended September 30, 2018 and 2017 are presented below (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Credit Facility: Interest expense at 12.0% $ 631 $ 2,389 $ 7,513 $ 8,327 PIK interest at 3.0% 162 582 1,886 2,038 Accretion expense for funded debt 1,071 6,151 11,670 18,548 Make-whole applicable premium: Credit Facility prepayments - - 3,103 4,607 Payoff of Credit Facility 7,307 - 7,307 - Accretion expense for GP Sponsor note payable 309 - 676 - Interest on other borrowings 19 30 76 109 Total interest expense $ 9,499 $ 9,152 $ 32,231 $ 33,629 Other Debt Financing Expenses The components of other debt financing expenses for the three and nine months ended September 30, 2018 and 2017 are presented below (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Write-off of DDIC: Credit Facility prepayments $ - $ 193 $ 7,169 $ 9,861 Payoff of funded Credit Facility 44,603 - 44,603 - Termination of unfunded Credit Facility 2,764 - 2,764 - Collateral monitoring fees 121 483 1,556 1,734 Target date fee under Credit Facility - 1,250 - 1,250 Amortization of DDIC related to unfunded debt 70 305 756 855 Unused line fees 42 219 481 664 Amortization of prepaid agent fees and other 775 113 1,002 340 Total other debt financing expenses $ 48,375 $ 2,563 $ 58,331 $ 14,704 Embedded Derivatives The Credit Facility included features that were determined to be embedded derivatives requiring bifurcation and accounting as separate financial instruments. Prior to termination of the Credit Facility on July 19, 2018, the Company determined that embedded derivatives included the requirements to pay make-whole applicable premium in connection with certain mandatory prepayments of principal, and default interest due to non-credit-related events of default. These embedded derivatives were classified within Level 3 of the fair value hierarchy and had an aggregate fair value of $7.8 million and $1.6 million as of June 30, 2018 and December 31, 2017, respectively. Due to the termination of the Credit Facility on July 19, 2018, the embedded derivatives no longer exist and therefore had no value as of September 30, 2018. The liability for embedded derivatives is included in other accrued liabilities in the accompanying unaudited condensed consolidated balances sheets. The change in the fair value of embedded derivative liabilities resulted in gains of $7.8 million and $1.6 million for the three and nine months ended September 30, 2018, respectively. The change in the fair value of embedded derivative liabilities resulted in a gain of $1.4 million and a loss of $4.4 million for the three and nine months ended September 30, 2017, respectively. The fair value of these embedded derivatives was estimated using the “with” and “without” method. Accordingly, the Credit Facility was first valued with the embedded derivatives (the “with” scenario) and subsequently valued without the embedded derivatives (the “without” scenario). Fair values of the embedded derivatives were estimated as the difference between these two scenarios. The fair values were determined using the income approach, specifically the yield method. As of December 31, 2017, key Level 3 assumptions and estimates used in the valuation of the embedded derivatives included timing of projected principal payments, remaining term to maturity of approximately 2.5 years, probability of default of approximately 35%, and a discount rate of 20.9%. As of December 31, 2017, the discount rate was comprised of a risk-free rate of 1.9% and a credit spread of 19.0% determined based on option-adjusted spreads from public companies with similar credit quality. |
RESTRICTED STOCK UNITS, STOCK O
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2018 | |
STOCK OPTIONS AND WARRANTS [Abstract] | |
Disclosure of Stock Options [Text Block] | NOTE 5—RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS The Company’s equity incentive plans consist of the 2007 Stock Plan (the “2007 Plan”) and the 2013 Equity Incentive Plan, as amended and restated in July 2017 (the “2013 Plan”). The 2007 Plan and the 2013 Plan are collectively referred to as the “Stock Plans”. For additional information about the Stock Plans, please refer to Note 7 to the Company’s consolidated financial statements for the year ended December 31, 2017, included in the 2017 Form 10-K. The information presented below provides an update for activity under the Stock Plans for the nine months ended September 30, 2018. Restricted Stock Units For the nine months ended September 30, 2018, the Board of Directors granted restricted stock units (“RSU’s”) under the 2013 Plan for an aggregate of approximately 0.2 million shares of Common Stock to members of the Board of Directors, officers and employees of the Company. These RSU’s vest over periods ranging from 12 to 24 months from the respective grant dates and the awards are subject to forfeiture upon termination of employment or service on the Board of Directors. Based on the weighted average fair market value of the Common Stock on the date of grant of $8.42 per share, the aggregate fair value for the shares underlying the RSU’s amounted to $1.6 million as of the grant date that is being recognized as compensation cost over the vesting period. Accordingly, compensation expense of $0.3 million and $0.8 million was recognized for the three and nine months ended September 30, 2018, respectively. The unrecognized portion of $0.8 million is expected to be charged to expense on a straight-line basis as the RSU’s vest are over a weighted-average period of approximately 0.5 years. Stock Options On February 6, 2018, the Board of Directors authorized an increase of 2.3 million shares available for grant under the 2013 Plan. For the nine months ended September 30, 2018, the Board of Directors granted stock options for the purchase of an aggregate of approximately 1.5 million shares of Common Stock at an exercise price equal to or greater than the fair market value of the Common Stock on the date of grant of $8.12 per share. These stock options generally vest annually for one-third of the awards and expire ten years after the grant date. The following table sets forth a summary of stock option activity under the Stock Plans for the nine months ended September 30, 2018 (shares in thousands): Shares Price (1) Term (2) Outstanding, December 31, 2017 12,130 $ 2.95 4.9 Granted 1,526 8.12 Forfeited (63 ) 7.18 Expired (1 ) 1.02 Exercised (1,303 ) 1.03 Outstanding, September 30, 2018 (3)(4) 12,289 3.77 5.0 Vested, September 30, 2018 (3) 9,787 2.73 4.0 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) As of September 30, 2018, the aggregate intrinsic value of all stock options outstanding was $36.2 million. As of September 30, 2018, the aggregate intrinsic value of vested stock options was $36.0 million. (4) The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.3 million shares as of September 30, 2018. The following table presents activity affecting the total number of shares available for grant under the Stock Plans for the nine months ended September 30, 2018 (in thousands): Available, December 31, 2017 2,413 Stock options granted (1,526 ) Restricted stock units granted (184 ) Expired options under 2007 Plan 1 Forfeited options under Stock Plans 63 Newly authorized by Board of Directors 2,300 Available, September 30, 2018 3,067 The aggregate fair value of approximately 1.5 million stock options granted for the nine months ended September 30, 2018 amounted to $4.3 million, or $2.80 per share as of the grant date. Fair value was computed using the Black-Scholes-Merton (“BSM”) method and will result in the recognition of compensation cost over the vesting period of the stock options. For the nine months ended September 30, 2018, the fair value of each stock option grant under the Stock Plans was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions: Expected life (in years) 5.9 Volatility 31 % Dividend yield 0 % Risk-free interest rate 2.7 % As of September 30, 2018 and December 31, 2017, total unrecognized compensation costs related to unvested stock options, net of estimated forfeitures, was $4.1 million and $3.2 million, respectively. As of September 30, 2018, the unrecognized costs are expected to be charged to expense on a straight-line basis over a weighted-average vesting period of approximately 1.7 years. Stock-Based Compensation Expense Stock-based compensation expense attributable to RSU’s and stock options for the three and nine months ended September 30, 2018 and 2017 is classified as follows (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Cost of revenues $ 246 $ 152 $ 612 $ 273 Sales and marketing 504 604 1,321 907 General and administrative 428 446 1,210 736 Total $ 1,178 $ 1,202 $ 3,143 $ 1,916 Employee Stock Purchase Plan At the Annual Meeting of Stockholders held on June 7, 2018, the Company’s stockholders approved the Rimini Street, Inc. 2018 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for the purchase by employees of up to an aggregate of 5.0 million shares of Common Stock. The purchase price per share at which shares are sold in an offering period under the ESPP will be equal to the lesser of 85% of the fair market value of the shares (i) on the first trading day of the offering period, or (ii) on the purchase date (i.e., the last trading day of the offering period). Offering periods will consist of two six-month periods generally commencing twice each calendar year. The purpose of the ESPP is to provide an opportunity for eligible employees of the Company to purchase shares of the Company at a discount through voluntary contributions from such employees’ eligible pay, thereby attracting, retaining and rewarding such persons and strengthening the mutuality of interest between such employees and the Company’s stockholders. Through September 30, 2018, no offering period under the ESPP had commenced and no shares of Common Stock have been issued under the ESPP. Warrants As of September 30, 2018, warrants are outstanding for an aggregate of 18.1 million shares of Common Stock, including 3.4 million shares of Common Stock exercisable at $5.64 per share, and an aggregate of 14.7 million shares of Common Stock exercisable at $11.50 per share. No warrants were granted or exercised for the nine months ended September 30, 2018. For additional information about these warrants, please refer to Note 8 to the Company’s consolidated financial statements for the year ended December 31, 2017, included in the 2017 Form 10-K. As of September 30, 2017, redeemable warrants were outstanding for approximately 3.4 million shares (as restated to give effect for the reverse recapitalization discussed in Note 1) of the Common Stock. These redeemable warrants were classified under Level 3 of the fair value hierarchy. No warrants were granted or exercised for the nine months ended September 30, 2017. The fair value of the warrants at September 30, 2017 was $21.3 million. The increase in fair value of $5.8 million and $14.1 million for the three and nine months ended September 30, 2017, respectively, was recorded as a loss from change in fair value of redeemable warrants in the Company’s unaudited condensed consolidated statements of operations. The cash redemption feature associated with these redeemable warrants was eliminated effective on October 10, 2017. Accordingly, the fair value of these warrants is no longer recognized as a liability in the Company’s consolidated balance sheets after October 10, 2017. As of September 30, 2017, the valuation methodology for the redeemable warrants discussed above was performed through a hybrid model using Monte Carlo simulation, which considered consummation of the reverse recapitalization discussed in Note 1, a subsequent initial public offering, and a liquidation of the Company. Key Level 3 assumptions inherent in the warrant valuation methodology as of September 30, 2017 include projected revenue multiples of 1.7 to 1.8, volatility of 46% to 48%, the risk-free interest rate of 1.4% to 2.0%, a discount rate for lack of marketability of 6%, and an overall discount rate of approximately 20%. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 6—INCOME TAXES In December 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Act”) was enacted into law which significantly revises the Internal Revenue Code of 1986, as amended. The imposition of the Transition Tax may reduce or eliminate U.S. federal deferred taxes on the unremitted earnings of the Company’s foreign subsidiaries. However, the Company may still be liable for withholding taxes, state taxes, or other income taxes that might be incurred upon the repatriation of foreign earnings. The Company has not made any provision for additional income taxes on undistributed earnings of its foreign subsidiaries. In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provided a measurement period of up to one year from the enactment date of the Tax Act for companies to complete the accounting for the Tax Act and its related impacts. The income tax effects of the Tax Act for which the accounting is incomplete for the year ended December 31, 2017 and the three and nine months ended September 30, 2018 include (i) whether to elect to expense or depreciate new capital equipment, (ii) the impact to the aforementioned item on state income taxes, and (iii) potential unrecognized tax benefits relating to the aforementioned items. The Company has made reasonable estimates for each of these items; however, such estimates may subsequently be revised based on evolving analyses and interpretation of the Tax Act and related accounting guidance. Through September 30, 2018, the Company has not made any changes to the provisional estimates established as of December 31, 2017. Due to a full valuation allowance for its net deferred tax assets in the United States, the Company recorded no change in deferred income tax expense for the three and nine months ended September 30, 2018 and 2017. For the three and nine months ended September 30, 2018 and 2017, no income tax expense was recorded in the United States since net operating losses were incurred. For the three and nine months ended September 30, 2018 and 2017, income tax expense was attributable to earnings in foreign jurisdictions subject to income taxes. The Company did not have any material changes to its conclusions regarding valuation allowances for deferred income tax assets or uncertain tax positions for the three and nine months ended September 30, 2018 and 2017. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 7 — COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases its office facilities under non-cancellable operating lease agreements that expire from October 2018 to September 2025. The Company recognizes rent expense on a straight-line basis over the lease period. Rent expense for the three months ended September 30, 2018 and 2017 was $1.4 million and $1.3 million, respectively. Rent expense for the nine months ended September 30, 2018 and 2017 was $4.1 million and $3.7 million, respectively. Future minimum lease payments under the non-cancellable operating lease agreements are as follows (in thousands): 12 months ending September 30: 2019 $ 5,174 2020 4,155 2021 3,843 2022 3,316 2023 795 Thereafter 422 Total $ 17,705 Series A Preferred Stock Dividends In connection with the issuance of Series A Preferred Stock on July 19, 2018 as discussed in Note 11, the Company is obligated to pay Cash Dividends and issue additional shares of Series A Preferred Stock in settlement of PIK Dividends. For the initial five-year period through July 19, 2023 that the Series A Preferred Stock is expected to be outstanding, estimated Cash Dividends and PIK Dividends are payable are as follows (in thousands): Year Ending December 31: Cash PIK Total 2018 $ 6,360 (1) (2) $ 1,908 (1) (2) $ 8,268 2019 14,351 (1) 4,305 (1) 18,656 2020 14,787 (1) 4,436 (1) 19,223 2021 15,235 (1) 4,571 (1) 19,806 2022 15,697 (1) 4,709 (1) 20,406 2023 8,839 (1) 2,652 (1) 11,491 Total $ 75,269 $ 22,581 $ 97,850 (1) Amounts shown assume there are no conversions to common stock or redemptions for the first five years. (2) Includes Cash Dividends of $2.8 million and PIK Dividends of $0.8 million declared for the period from July 19, 2018 through September 30, 2018 as discussed in Note 11. Rimini I Litigation In January 2010, certain subsidiaries of Oracle Corporation (together with its subsidiaries individually and collectively, “Oracle”) filed a lawsuit, Oracle USA, Inc. et al. v. Rimini Street, Inc. et al. (United States District Court for the District of Nevada) (“Rimini I”), against the Company and its Chief Executive Officer, Seth Ravin, alleging that certain of the Company’s processes violated Oracle’s license agreements with its customers and that the Company committed acts of copyright infringement and violated other federal and state laws. The litigation involved the Company’s business processes and the manner in which the Company provided its services to its clients. To provide software support and maintenance services, the Company requests access to a separate environment for developing and testing the updates to the software programs. Prior to July 2014, PeopleSoft, J.D. Edwards and Siebel clients switching from Oracle to the Company’s enterprise software support systems were given a choice of two models for hosting the development and testing environment for their software: the environment could be hosted on the client’s servers or on the Company’s servers. In addition to other allegations, Oracle challenged the Rimini Street-hosted model for certain Oracle license agreements with its customers that contained site-based restrictions. Oracle alleged that its license agreements with these customers restrict licensees’ rights to provide third parties, such as the Company, with copies of Oracle software and restrict where a licensee physically may install the software. Oracle alleged that, in the course of providing services, the Company violated such license agreements and illegally downloaded software and support materials without authorization. Oracle further alleged that the Company impaired its computer systems in the course of downloading materials for the Company’s clients. Oracle filed amended complaints (together, the “amended complaint”) in April 2010 and June 2011. Specifically, Oracle’s amended complaint asserted the following causes of action: copyright infringement; violations of the Federal Computer Fraud and Abuse Act; violations of the Computer Data Access and Fraud Act; violations of Nevada Revised Statute 205.4765; breach of contract; inducing breach of contract; intentional interference with prospective economic advantage; negligent interference with prospective economic advantage; unfair competition; trespass to chattels; unjust enrichment/restitution; unfair practices; and a demand for an accounting. Oracle’s amended complaint sought the entry of a preliminary and permanent injunction prohibiting the Company from copying, distributing, using, or creating derivative works based on Oracle Software and Support Materials except as allowed by express license from Oracle; from using any software tool to access Oracle Software and Support Materials; and from engaging in other actions alleged to infringe Oracle’s copyrights or were related to its other causes of action. The parties conducted extensive fact and expert discovery from 2010 through mid-2012. In March and September 2012, Oracle filed two motions seeking partial summary judgment as to, among other things, its claim of infringement of certain copyrighted works owned by Oracle. In February 2014, the court issued a ruling on Oracle’s March 2012 motion for partial summary judgment (i) granting summary judgment on Oracle’s claim of copyright infringement as it related to two of the Company’s PeopleSoft clients and (ii) denying summary judgment on Oracle’s claim with respect to one of the Company’s J.D. Edwards clients and one of the Company’s Siebel clients. The parties stipulated that the licenses among clients were substantially similar. In August 2014, the court issued a ruling on Oracle’s September 2012 motion for partial summary judgment (i) granting summary judgment on Oracle’s claim of copyright infringement as it relates to Oracle Database and (ii) dismissing the Company’s first counterclaim for defamation, business disparagement and trade libel and the Company’s third counterclaim for unfair competition. In response to the February 2014 ruling, the Company revised its business practices to eliminate the processes determined to be infringing, which was completed no later than July 2014. A jury trial in Rimini I commenced in September 2015. On October 13, 2015, the jury returned a verdict against the Company finding that (i) the Company was liable for innocent copyright infringement, (ii) the Company and Mr. Ravin were each liable for violating certain state computer access statutes, (iii) Mr. Ravin was not liable for copyright infringement, and (iv) neither the Company nor Mr. Ravin were liable for inducing breach of contract or intentional interference with prospective economic advantage. The jury determined that the copyright infringement did not cause Oracle to suffer lost profits, that the copyright infringement was not willful, and did not award punitive damages. Following post-trial motions, Oracle was awarded a final judgment of $124.4 million, consisting of copyright infringement damages based on the fair market value license damages theory, damages for violation of certain state computer access statutes, prejudgment interest and attorneys’ fees and costs. In addition, the court entered a permanent injunction prohibiting the Company from using certain processes – including processes adjudicated as infringing at trial – that the Company ceased using no later than July 2014. The Company accounted for the $124.4 million judgment to Oracle by recording accrued legal settlement expense of (i) $100.0 million for the year ended December 31, 2014, (ii) $21.4 million for the year ended December 31, 2015, and (iii) pre-judgment interest of $3.0 million for the period from January l, 2016 through October 31, 2016. Appeal of Rimini I Litigation On October 31, 2016, the Company paid the full judgment amount of approximately $124.4 million to Oracle and appealed the case to the United States Court of Appeals for the Ninth Circuit (“Court of Appeals”) to appeal items (i) and (ii) above, as well as the injunction, award of attorney’s fees, non-taxable costs, and interest. The Company argued on appeal that the injunction is vague and contains overly broad language that could be read to cover some of the Company’s current business practices that were not adjudicated to be infringing at trial and should not have been issued under applicable law. On December 6, 2016, the Court of Appeals granted the Company’s emergency motion for a stay of the permanent injunction pending resolution of the underlying appeal and agreed to consider the appeal on an expedited basis. The Court of Appeals heard argument on July 13, 2017. In January 2018, the Court of Appeals reversed certain awards totaling $50.3 million made in Oracle’s favor during and after the Company’s 2015 jury trial in Rimini I and vacated and remanded others, including the injunction that had previously been stayed by the appellate court in December 2016, and all awards and judgments against Mr. Ravin. The Court of Appeals reversed awards previously paid by the Company as part of the $124.4 million judgment, consisting of an award under state computer access statutes and taxable costs and interest totaling $21.3 million, Oracle’s attorneys’ fees of $28.5 million (that was subsequently remanded back to the District Court), and post-judgment interest of $0.5 million. The Court of Appeals also vacated and remanded the injunction originally ordered by the District Court. In its opinion, the Court of Appeals, while affirming the findings of infringement against Rimini (which the jury had found to be “innocent” infringement) for the processes that the Company ceased using no later than July 2014, also stated that the third-party support for Oracle's enterprise software, in lawful competition with Oracle's direct maintenance services.” As mandated by the Court of Appeals, on March 30, 2018 Oracle paid the Company $21.5 million for the reversal of the award under state computer access statutes and taxable costs and interest totaling $21.3 million, and post-judgment interest of $0.2 million. Due to collection of this award in cash, the Company recognized a recovery of the 2016 judgment for $21.3 million and interest income of $0.2 million for the nine months ended September 30, 2018. Additionally, in May 2018, by stipulation of the parties, Oracle deposited $28.5 million into an account with the District Court pending a decision by the District Court on the remanded attorneys’ fees . On August 15, 2018, the Company filed a notice of appeal of the District Court’s renewed injunction and its decision to return the $28.5 . On September 14, 2018, the Company filed a motion with the Court of Appeals, seeking a stay of the permanent injunction pending appeal and requesting a decision before the expiration of the temporary stay entered by the District Court. This motion is currently pending with the Court of Appeals. If the temporary stay of the injunction expires before a decision of the Court of Appeals on this issue, or if the Court of Appeals ultimately does not extend the stay during the pendency of the appeal, we could incur additional expenses in the range of 1% to 2% of revenue for additional labor costs because, as drafted, the injunction contains language that could be read to cover some current support practices that are being litigated in the “Rimini II” lawsuit (described below) and that have not been found to be infringing. Briefing on our appeal to the Court of Appeals is expected to be completed in early 2019, and a hearing on the Company’s appeal has not yet been scheduled. Petition for Rehearing En Banc and Appeal to the United States Supreme Court In January 2018, the Company filed a petition for rehearing en banc with the Court of Appeals regarding two other components of the final judgment awarded to Oracle. First, the Company asked the Court of Appeals to rehear the calculation of prejudgment interest, arguing that the trial court set the interest rate using a date that precedes the filing of the litigation, which resulted in an additional judgment amount of approximately $20.2 million that was paid by the Company to Oracle in October 2016. Second, the Company asked the Court of Appeals to rehear the award of non-taxable costs, arguing that this decision is in direct conflict with decisions in other federal circuit courts and decisions of the Supreme Court of the United States (the “Supreme Court”) and resulted in the Company paying approximately $12.8 million that it would not have had to pay in other court jurisdictions. The Court of Appeals denied the petition for rehearing en banc on March 2, 2018, and the mandate was issued on March 13, 2018. On May 31, 2018, the Company filed a request for certiorari in the Supreme Court appealing the decision of the Court of Appeals on the non-taxable costs issue. On September 27, 2018, the Supreme Court granted the Company’s petition for a writ of certiorari . Briefing on the Company’s appeal is expected to be completed in early 2019. While there is currently no hearing date scheduled, a hearing is currently expected to occur during the first half of 2019. Rimini II Litigation In October 2014, the Company filed a separate lawsuit, Rimini Street Inc. v. Oracle Int‘l Corp. (United States District Court for the District of Nevada) (“Rimini II”), against Oracle seeking a declaratory judgment that the Company’s revised development processes, in use since at least July 2014, do not infringe certain Oracle copyrights. In February 2015, Oracle filed a counterclaim alleging copyright infringement, which included (i) the same allegations asserted in Rimini I but limited to new or existing clients for whom the Company provided support from the conclusion of Rimini I discovery in December 2011 until the revised support processes were fully implemented by July 2014, and (ii) new allegations that the Company’s revised support processes also infringe Oracle copyrights. Oracle’s counterclaim also included allegations of violation of the Lanham Act, intentional interference with prospective economic advantage, breach of contract and inducing breach of contract, unfair competition, and unjust enrichment/restitution. It also sought an accounting. On February 28, 2016, Oracle filed amended counterclaims adding allegations of violation of the Digital Millennium Copyright Act. On December 19, 2016, the Company filed an amended complaint against Oracle asking for a declaratory judgment of non-infringement of copyright and alleging intentional interference with contract, intentional interference with prospective economic advantage, violation of the Nevada Deceptive Trade Practices Act, violation of the Lanham Act, and violation of California Business & Professions Code §17200 et seq. On January 17, 2017, Oracle filed a motion to dismiss the Company’s amended claims and filed its third amended counterclaims, adding three new claims for a declaratory judgment of no intentional interference with contractual relations, no intentional interference with prospective economic advantage, and no violation of California Business & Professions Code §17200 et seq. On February 14, 2017, the Company filed its answer and motion to dismiss Oracle’s third amended counterclaim. On March 7, 2017, Oracle filed a motion to strike the Company’s copyright misuse affirmative defense. By stipulation of the parties, the court granted the Company’s motion to file its third amended complaint to add claims arising from Oracle’s purported revocation of access by the Company to its support websites on behalf of the Company’s clients, which was filed and served on May 2, 2017. By agreement of the parties, Oracle filed its motion to dismiss the Company’s third amended complaint on May 30, 2017, and the Company’s opposition was filed on June 27, 2017, and Oracle’s reply was filed on July 11, 2017. On September 22, 2017, the Court issued an order granting in part and denying in part the Company’s motion to dismiss Oracle’s third amended counterclaim. The Court granted the Company’s motion to dismiss as to count five, intentional interference with prospective economic advantage, and count eight, unjust enrichment. On October 5, 2017, Oracle filed a motion for reconsideration of the Court’s September 22, 2017 Order. The Company filed its opposition to Oracle’s motion for reconsideration on October 19, 2017. Oracle filed its reply to its motion for reconsideration on October 26, 2017. On November 7, 2017, the Court issued an order granting in part and denying in part Oracle’s motion to dismiss the Company’s third amended complaint. The Court granted Oracle’s motion to dismiss as to the Company’s third cause of action for a declaratory judgment that Oracle has engaged in copyright misuse, fifth cause of action for intentional interference with prospective economic advantage; sixth cause of action for a violation of Nevada’s Deceptive Trade Practices Act under the “bait and switch” provision of NRS § 598.0917; and seventh cause of action for violation of the Lanham Act. The Court denied Oracle’s motion as to the Company’s causes of action for intentional interference with contractual relations, violation of Nevada Deceptive Trade Practices Act, under the “false and misleading” provision of NRS § 598.0915(8) and unfair competition. On November 17, 2017 the Court denied Oracle’s motion for reconsideration of the Court’s September 22, 2017 Order. On June 5, 2018, the Court denied the Company’s motion for reconsideration of the Court’s November 7, 2017 Order. Fact discovery with respect to the above action substantially ended by March 2018 to accommodate witness or counsel availability, and expert discovery ended in September 2018. There is currently no trial date scheduled, and we do not expect a trial to occur in this matter earlier than 2021, but the trial could occur earlier or later than that. At this time, we do not have sufficient information regarding possible damages exposure for the counterclaims asserted by Oracle or possible recovery by us in connection with our claims against Oracle. Both parties are seeking injunctive relief in addition to monetary damages in this matter. As a result, an estimate of the range of loss cannot be determined. The Company believes that an award for damages is not probable, so no accrual has been made as of September 30, 2018 and December 31, 2017. Other Litigation From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of judgment, defense and settlement costs, diversion of management resources and other factors. At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, Contingencies . Legal fees are expensed as incurred. Insurance Settlement Agreement On March 31, 2017, the Company entered into a Settlement Agreement, Release and Policy Buyback Agreement (“Settlement Agreement”) with an insurance company that previously provided coverage for the defense costs related to the Oracle litigation referred to as Rimini II. The Settlement Agreement provided for aggregate payments to the Company of $24.0 million and resulted in the termination of coverage under the insurance policies. Prior to execution of the Settlement Agreement, the insurance company reimbursed the Company an aggregate of $4.7 million of defense costs, and pursuant to the settlement executed in March 2017, agreed to make an additional payment to the Company of $19.3 million that was received in April 2017. The Settlement Agreement was initially accounted for by recognizing a deferred insurance settlement liability for $19.3 million. This deferred insurance settlement liability was reduced as legal defense costs related to Rimini II were incurred subsequent to September 30, 2017. Accordingly, the deferred insurance settlement liability was eliminated as of March 31, 2018 due to legal defense costs of $11.2 million incurred for the nine months ended December 31, 2017 and $8.1 million incurred for the three months ended March 31, 2018. Subpoena On March 2, 2018, the Company received a federal grand jury subpoena, issued from the United States District Court for the Northern District of California, requesting the Company produce certain documents relating to the Company’s support for certain software systems and certain related operational practices. The Company is cooperating with this inquiry. Liquidated Damages The Company enters into agreements with customers that contain provisions related to liquidated damages that would be triggered in the event that the Company is no longer able to provide services to these customers. The maximum cash payments related to these liquidated damages is approximately $24.7 million and $19.6 million as of September 30, 2018 and December 31, 2017, respectively. To date, the Company has not incurred any costs as a result of such provisions and has not accrued any liabilities related to such provisions in these unaudited condensed consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 8 — RELATED PARTY TRANSACTIONS As of December 31, 2017, Adams Street Partners LLC and its affiliates (“ASP”) owned approximately 39% of the Company’s issued and outstanding shares of Common Stock, and an individual that is affiliated with ASP is currently a member of the Company’s Board of Directors. ASP acquired 19,209 shares of Series A Preferred Stock, Convertible Notes (as defined in Note 11) and approximately 0.4 million shares of Common Stock issued in the Private Placement discussed in Note 11 for total consideration of approximately $19.2 million. As of September 30, 2018, ASP had voting control of approximately 33% of the Company’s issued and outstanding shares of Common Stock, including voting rights associated with the shares of Series A Preferred Stock. Prior to termination on July 19, 2018 of the amended Credit Facility discussed in Note 4, ASP owned a $10.0 million indirect interest in the Credit Facility. For the three months ended September 30, 2018 and 2017, the Company recognized revenue for software support services provided to two ASP investees of $0.2 million and $0.6 million, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized revenue for software support services provided to two ASP investees of $1.2 million and $1.6 million, respectively. As discussed in Note 4, on October 10, 2017, the Company assumed an outstanding loan payable to GP Sponsor with a face amount of approximately $3.0 . |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | NOTE 9 —NET LOSS PER SHARE The holders of Series A Preferred Stock are entitled to participate in Common Stock dividends, if and when declared, on a one-to-one per-share basis. Accordingly, in periods in which the Company has net income, earnings per share will be computed using the two-class method whereby the pro rata dividends distributable to the holders of Series A Preferred Stock will be deducted from earnings applicable to common stockholders, regardless of whether a dividend is declared for such undistributed earnings. For the three and nine months ended September 30, 2018 and 2017, the Company incurred a net loss and, accordingly, there were no undistributed earnings to allocate under the two-class method. For the three and nine months ended September 30, 2018 and 2017, basic and diluted net loss per share was computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. The following table sets forth the computation of basic and diluted loss per share of Common Stock for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Loss applicable to common stockholders: Net loss $ (48,368 ) $ (9,040 ) $ (70,307 ) $ (49,374 ) Dividends and accretion related to Series A Preferred Stock: Accrued cash dividends (2,845 ) - (2,845 ) - Accrued PIK dividends (846 ) - (846 ) - Accretion of discount (1,011 ) - (1,011 ) - Loss applicable to common stockholders $ (53,070 ) $ (9,040 ) $ (75,009 ) $ (49,374 ) Weighted average number of shares of Common Stock outstanding (basic and diluted) 62,590 24,727 60,565 24,457 Net loss per share of Common Stock (basic and diluted) $ (0.85 ) $ (0.37 ) $ (1.24 ) $ (2.02 ) For the three and nine months ended September 30, 2018 and 2017, basic and diluted net loss per share were the same since all Common Stock equivalents were anti-dilutive. As of September 30, 2018 and 2017, the following potential Common Stock equivalents were excluded from the computation of diluted net loss per share for the respective periods ending on these dates since the impact of inclusion was anti-dilutive (in thousands): 2018 2017 Warrants 18,128 3,461 Series A Preferred Stock 14,000 - Stock options 12,289 13,272 Restricted stock units 184 - RSI Preferred Stock - 24,058 Total 44,601 40,791 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments Disclosure [Text Block] | NOTE 10 — FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Additional information on fair value measurements is included in Note 13 to the Company’s consolidated financial statements for the year ended December 31, 2017, included in the 2017 Form 10-K. The Company does not have any assets that are carried at fair value on a recurring basis. The Company’s redeemable warrant liability and embedded derivative liability are the only liabilities that have been carried at fair value on a recurring basis and are classified within Level 3 of the fair value hierarchy. Details of the embedded derivative and the redeemable warrant liabilities, including valuation methodology and key assumptions and estimates used, are disclosed in Notes 4 and 5, respectively. As discussed in Note 5, the redemption feature for the redeemable warrant liability was eliminated on October 10, 2017, whereby the warrant is not carried at fair value after that date. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the three and nine months ended September 30, 2018 and 2017, the Company had no transfers of its assets or liabilities between levels of the fair value hierarchy. The carrying amounts of the Company’s financial instruments including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities approximate fair values due to their short-term maturities. Based on borrowing rates currently available to the Company for debt with similar terms, the carrying value of capital lease obligations approximate fair value as of the respective balance sheet dates. Due to the complex and unique terms of the Credit Facility and the related party note payable to GP Sponsor, it was not reasonably practicable to determine the current fair value for those financial instruments. Significant Concentrations The Company attributes revenues to geographic regions based on the location of its customers’ contracting entity. The following table shows revenue by geographic region (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 United States of America $ 40,363 $ 36,751 $ 119,405 $ 105,120 International 22,266 16,860 65,678 49,609 Total $ 62,629 $ 53,611 $ 185,083 $ 154,729 No customers represented more than 10% of revenue for the three and nine months ended September 30, 2018 and 2017. As of September 30, 2018, one customer accounted for approximately 10% of total net accounts receivable. As of December 31, 2017, no single customer accounted for 10% or more of total net accounts receivable. Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash at high-quality financial institutions, primarily in the United States of America. Deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. As of September 30, 2018 and December 31, 2017, the Company had cash, cash equivalents and restricted cash with a single financial institution for an aggregate of $18.4 million and $31.0 million, respectively. As of December 31, 2017, the Company also had restricted cash with another financial institution of $2.1 million. The Company has never experienced any losses related to these balances. Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company’s customer base and their dispersion across different geographies and industries. The Company performs ongoing credit evaluations on certain customers and generally does not require collateral on accounts receivable. The Company maintains reserves for potential bad debts and historically such losses are generally not significant. |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Private Placement [Text Block] | NOTE 11 — PRIVATE PLACEMENT Securities Purchase Agreement On June 18, 2018, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with several accredited investors (the “Purchasers”) for a private placement (the “Private Placement”) of (i) shares of 13.00% Series A Redeemable Convertible Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”), (ii) shares of Common Stock, and (iii) convertible secured promissory notes (the “Convertible Notes”), with no principal amount outstanding at issuance that solely collateralize amounts, if any, that may become payable by the Company pursuant to certain redemption provisions of the Series A Preferred Stock. The completion of the Private Placement was approved by the Company’s stockholders at a special meeting held on July 12, 2018, and the closing of the Private Placement occurred on July 19, 2018 (the “Closing Date”). Pursuant to the Securities Purchase Agreement, the Purchasers acquired an aggregate of 140,000 shares of Series A Preferred Stock, 2,896,556 shares of Common Stock, and Convertible Notes with no principal amount outstanding as of the issuance date, for an aggregate purchase price equal to $133.0 million in cash (after taking into account a discount of $7.0 million, but before the incremental and direct transaction costs associated with the Private Placement of $4.6 million). The allocation of the net proceeds as of the Closing Date, along with the net carrying value of the Series A Preferred Stock as of September 30, 2018, are set forth below (in thousands): Series A Common Convertible Preferred Stock Stock Notes Liquidation preference of Series A Preferred Stock (1) $ 140,000 $ - $ - Fair value of common stock (2) - 20,131 - Principal balance under Convertible Notes - - - Total 140,000 20,131 - Allocation of discount and issuance costs: Original issue discount (3) (6,120 ) (880 ) - Incremental and direct costs (3)(4) (4,046 ) (582 ) - Common stock issuance (3)(5) (17,600 ) (2,531 ) - Total (27,766 )(6) (3,993 ) - Net carrying value on Closing Date 112,234 $ 16,138 $ - Accretion of discount through September 30, 2018 1,011 (6) Net carrying value as of September 30, 2018 $ 113,245 (1) The liquidation preference for each share of Series A Preferred Stock on the Closing Date was $1,000 per share for an aggregate liquidation preference of $140.0 million. (2) The fair value of the issuance of approximately 2.9 million shares of the Common Stock was based on the last closing price of $6.95 per share prior to closing. (3) Discounts and incremental and direct costs of the Private Placement were allocated on a pro rata basis as of the Closing Date. (4) Incremental and direct costs of the Private Placement include financial advisor and professional fees of $2.7 million that were incurred by the Company, and due diligence and professional fees incurred by the investors of $1.9 million. Of the total incremental and direct costs of $4.6 million, $2.7 million was paid from the net proceeds at closing and $1.9 million was paid or is payable directly by the Company. (5) The pro rata fair value of approximately 2.9 million shares of Common Stock issued in the Private Placement was treated as an additional discount for the issuance of the Series A Preferred Stock. (6) The aggregate discount of $27.8 million for the Series A Preferred Stock is being accreted at a rate of 4.5% per annum using the effective interest method. Accordingly, the carrying value of the Series A Preferred Stock is being increased with a corresponding reduction in additional paid-in capital from the issuance date of July 19, 2018 until July 19, 2023 when the holders may elect to redeem. As a result of these periodic accretion adjustments, the carrying value of the Series A Preferred Stock will be equal to the aggregate liquidation preference on July 19, 2023. As shown in Note 9, accretion is treated as a deduction in the calculation of earnings applicable to common stockholders. At the closing, the Company used the $133.0 million of proceeds from the Private Placement plus cash and cash equivalents of $2.7 million to (i) repay all outstanding indebtedness and various operating and financing fees and expenses under the Credit Facility in the aggregate amount of $132.8 million as discussed in Note 4, (ii) pay incremental and direct transaction costs of $2.7 million, and (iii) pay a professional services retainer of $0.2 million. In connection with the completion of the Private Placement, the Company, among other customary closing actions, (i) filed a Certificate of Designations with the State of Delaware setting forth the rights, preferences, privileges, qualifications, restrictions and limitations on the Series A Preferred Stock (the “CoD”), (ii) entered into a Registration Rights Agreement with the Purchasers setting forth certain registration rights of capital stock held by the Purchasers (the “Registration Rights Agreement”), (iii) delivered a Convertible Note to each Purchaser, and (iv) entered into a Security Agreement (the “Security Agreement”) in respect of the Company’s assets collateralizing the amounts that may become payable pursuant to the Convertible Notes if certain redemption provisions of the Series A Preferred Stock are triggered in the future. Certificate of Designations of the Series A Preferred Stock and Dividends The CoD authorizes the issuance of up to 180,000 shares of Series A Preferred Stock. The holders of Series A Preferred Stock are entitled to (i) a cash dividend of 10.0% per annum (the “Cash Dividend”), payable quarterly in arrears, and (ii) a payment-in-kind dividend of 3.0% per annum (the “PIK Dividend” and together with the Cash Dividend, the “Dividends”). The PIK dividend is accrued quarterly in arrears for the first five years following the Closing and thereafter all Dividends accruing on such Series A Preferred Stock will be payable in cash at a rate of 13.0% per annum. The Series A Preferred Stock is classified as mezzanine equity in the Company’s consolidated balance sheet as of September 30, 2018 since the holders have redemption rights beginning in July 2023 (and earlier under certain circumstances). As required under the CoD and approved by the Company’s Board of Directors, the Cash Dividends and PIK Dividends for the period in which the Series A Preferred Stock was outstanding during the third quarter of 2018 were paid on October 1, 2018 to holders of record on September 15, 2018. Accordingly, the Company accrued a current liability for $2.8 million of dividends payable in cash and a long-term liability for dividends settled through the issuance of 846 shares of Series A Preferred Stock with a liquidation preference of $0.8 million. On October 1, 2018, all accrued Cash Dividends were paid and 846 shares of Series A Preferred Stock were issued to settle the liability for PIK Dividends. Presented below is a summary of total and per share dividends declared based on 140,000 shares of Series A Preferred Stock outstanding as of September 30, 2018 (dollars in thousands, except per share amounts): Dividends Payable in: Total Cash PIK Dividends Per Share Cash Dividends at 10.0% per annum $ 2,839 $ - $ 2,839 $ 20.28 PIK Dividends at 3.0% per annum: Issuable for 846 shares of Series A Preferred Stock - 846 846 6.04 Fractional shares payable in cash 6 - 6 0.04 Total $ 2,845 $ 846 $ 3,691 $ 26.36 Each share of Series A Preferred Stock is entitled to vote with the Common Stock on an as-converted basis. In addition, the holders of the outstanding shares of Series A Preferred Stock are required to approve certain actions affecting the rights of the Series A Preferred Stock. The approval of a majority of the outstanding Series A Preferred Stock are required to approve any of the following: (i) the declaration or payment of any principal, dividend or distribution on securities junior in rights to the Series A Preferred Stock (“Junior Securities”) or pari passu in rights to the Series A Preferred Stock or the purchase, redemption or other acquisition by the Company of Junior Securities or pari passu securities if at the time of such declaration, payment, dividend or distribution, the Dividends for the Series A Preferred Stock have not been satisfied or paid in full; (ii) any amendment or repeal of the Company’s certificate of incorporation or the CoD adversely affecting the rights, preferences or privileges of the Series A Preferred Stock. The approval of all holders of outstanding Series A Preferred Stock are required for (i) the authorization or creation of, issuance of, or reclassification into, any stock that ranks pari passu with or senior to the Series A Preferred Stock with respect to payment of dividends and liquidation preference and (ii) amendment of the CoD provisions regarding Dividends, liquidation rights, redemption rights, conversion rights, voting rights and reorganization events. The liquidation value of the Series A Preferred Stock is convertible into shares of Common Stock at an initial conversion rate of $10.00 per share for a total of 14.0 million shares of Common Stock at inception. Each share of Series A Preferred Stock is convertible at the holder’s option into one share of Common Stock at a conversion price equal to the quotient of (i) the Liquidation Preference (as defined below), and (ii) $10.00 (subject to appropriate adjustment in the event of a stock split, stock dividend, combination or other similar recapitalization) (the “Per Share Amount”). The Company has the right to convert outstanding shares of Series A Preferred Stock into Common Stock for the Per Share Amount after the three-year anniversary of the Closing if the Company’s volume weighted average stock price for at least 30 trading days of the 45 consecutive trading days immediately preceding such conversion is greater than $11.50 per share. The Company can exercise this right to convert twice per calendar year for a maximum number of shares of Common Stock that has publicly traded over the 60 consecutive trading days prior to the conversion date (less any shares of Common Stock that have been issued pursuant to any such conversion during such 60-day period). The Series A Preferred Stock will become mandatorily redeemable, upon the election by the holders of a majority of the then outstanding Preferred Stock, on or after the five-year anniversary of the Closing. Any and all of the then outstanding liquidation value of the Series A Preferred Stock plus any capitalized PIK Dividends and any unpaid accrued Cash Dividends not previously included in the Liquidation Preference (the “Redemption Amount”) is required to be repaid in full in cash on such redemption date or satisfied in the form of obligations under the Convertible Notes, as further described below. Additionally, in certain circumstances the Company may require the holders of shares of Series A Preferred Stock to convert into shares of Common Stock in lieu of cash payable upon redemption. The Series A Preferred Stock will also become mandatorily redeemable at any time upon the reasonable determination of the holders of a majority of the Series A Preferred Stock then outstanding of the occurrence of a Material Adverse Effect or the occurrence of a Material Litigation Effect (as such terms are defined in the CoD), with the Redemption Amounts payable automatically becoming payment obligations pursuant to the Convertible Notes with a concurrent cancellation of the shares of the Series A Preferred Stock, unless under certain circumstances, the Company redeems the Series A Preferred Stock for cash at such time. Prior to the three-year anniversary of the Closing, the Company will have the right to redeem up to $80.0 million of shares of the Series A Preferred Stock for cash amounts equal to the Redemption Amount which would include a make-whole premium that provides the holders thereof with full yield maintenance as if the Series A Preferred Stock was held until the three-year anniversary of the Closing, provided that such redemptions are subject to certain conditions and limitations. After the three-year anniversary of the Closing, the Company will have the right to redeem shares of Series A Preferred Stock for a cash per share amount equal to the Redemption Amount. The holders of Series A Preferred Stock may exercise their conversion rights prior to any optional redemption. In the event of a liquidation, dissolution or winding up of the Company, the Series A Preferred Stock is entitled to a liquidation preference in the amount of the greater of (i) $1,000 plus accrued but unpaid Dividends (the “Liquidation Preference”), and (ii) the per share amount of all cash, securities and other property to be distributed in respect of the Common Stock such holder would have been entitled to receive for its Series A Preferred Stock on an as-converted basis. In the event of a liquidation, dissolution or winding up of the Company prior to the three-year anniversary of Closing, the holders are entitled to a make-whole premium that provides the holders thereof with full yield maintenance as if the shares of Series A Preferred Stock were held until the three-year anniversary of the Closing. Until approximately 95% of the Series A Preferred Stock or Convertible Notes are no longer outstanding, the Company is restricted from incurring Indebtedness (as defined in the Stock Purchase Agreement), subject to certain exceptions. Security Agreement and Convertible Notes At the Closing, the Company entered into the Security Agreement in respect of the Company’s assets collateralizing the amounts that may become payable pursuant to the Convertible Notes. The Company delivered a Convertible Note to each holder of Series A Preferred Stock to collateralize amounts, if any, that may become payable by the Company pursuant to certain redemption provisions of the shares of Series A Preferred Stock. No principal amount or interest will be outstanding under the Convertible Notes unless and until (i) there is a redemption event as described in the section above on the CoD, and (ii) the holders of Series A Preferred Stock elect to surrender their shares in exchange for the Convertible Notes. Prior to such time, the Convertible Notes may not be transferred by the Purchasers other than an automatic assignment in whole or in part in connection with a transfer by the Purchasers of the shares of Series A Preferred Stock issued pursuant to the Securities Purchase Agreement. The Convertible Notes will bear interest at the rate of 13.0% per annum (10.0% per annum in cash and 3.0% per annum payment-in-kind until the five-year anniversary of the Closing). The Convertible Notes mature five years after the date of Closing or upon a Reorganization Event (as defined in the CoD) and are secured by substantially all of the assets of the Company and certain of its domestic subsidiaries. After a redemption of the Series A Preferred Stock which causes there to be outstanding obligations under the Convertible Notes, the Convertible Notes are convertible at the option of the holder (but not the Company) on the same terms as the Series A Preferred Stock. The Company may prepay for cash up to $80.0 million of the Convertible Notes on a pro rata basis prior to the three-year anniversary of the Closing with full yield maintenance as if the Convertible Notes were held until the three-year anniversary of the Closing, provided that such redemptions are subject to certain conditions and limitations. The Company may prepay the Convertible Notes without penalty at any time on a pro rata basis after the three-year anniversary. All prepayments are subject to the right of the holder of each Convertible Note to convert the prepayment amount into shares of Common Stock. The Convertible Notes also contain customary restrictions on the ability of the Company to, among other things, make certain restricted payments with respect to its capital stock, subordinated indebtedness and unsecured indebtedness, consummate certain mergers, consolidations or dissolutions and make certain dispositions, subject to specific exclusions. Upon the occurrence of an Event of Default (as defined in the Convertible Notes), the holders of such Convertible Notes will have the right to accelerate all obligations of the Company thereunder (or in some instances, such obligations shall be accelerated with no action required on the part of the holders), and such obligations will become immediately due and payable. In addition, if such acceleration occurs prior to the three-year anniversary of the Closing, the holders will also have the right to receive a make-whole premium thereunder. Registration Rights Agreement The Registration Rights Agreement requires the Company to register the resale of the shares of Common Stock and Series A Preferred Stock issued pursuant to the Securities Purchase Agreement within 120 days following the Closing. The Registration Rights Agreement also includes customary “piggyback” registration rights, suspension rights, indemnification, contribution, and assignment provisions. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] |
LIQUIDITY AND SIGNIFICANT ACC_2
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Liquidity Policy [Policy Text Block] | Liquidity As of September 30, 2018, the Company’s current liabilities exceeded its current assets by $124.2 million, and the Company incurred a net loss of $70.3 million for the nine months ended September 30, 2018. As of September 30, 2018, the Company had available cash, cash equivalents and restricted cash of $23.9 . As discussed in Note 11, the Company refinanced and repaid its Credit Facility on July 19, 2018 through aggregate cash payments of $132.8 million that resulted in the termination of the Credit Facility. These payments were funded from the Private Placement discussed in Note 11 that resulted in cash proceeds of $133.0 million from the sale of 140,000 shares of Series A Preferred Stock and approximately 2.9 million shares of Common Stock. In addition, the Company used approximately $2.7 million of its cash, primarily for interest and fees under the Credit Facility and transaction costs that were due at the Closing. This refinancing is expected to improve the Company’s liquidity and capital resources whereby cash dividends are payable at 10.0% per annum that will result in quarterly cash dividends ranging from $3.5 million to $4.0 million over the initial 5-year period beginning on the issuance date assuming all shares of Series A Preferred Stock remain outstanding, and thereafter, if not previously redeemed or converted, cash dividends will be payable at 13.0% per annum. Additionally, as discussed in Note 4 the Company is obligated to repay the $3.0 million face amount of the note payable to GP Sponsor in January 2019, and to make operating and capital lease payments that are due within the next 12 months in the aggregate amount of $5.6 million. The Company believes that current cash, cash equivalents, restricted cash, and future cash flow from operating activities will be sufficient to meet the Company’s anticipated cash needs, including cash dividend requirements, working capital needs, capital expenditures and contractual obligations for at least 12 months from the issuance date of these financial statements. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, accounts receivable, valuation assumptions for stock options, embedded derivatives, deferred income taxes and the related valuation allowances, and the evaluation and measurement of contingencies. To the extent there are material differences between the Company’s estimates and the actual results, the Company’s future consolidated results of operation may be affected. |
Accounting For Series A Preferred Stock Policy [Policy Text Block] | Accounting for Series A Preferred Stock Series A Preferred Stock is classified as mezzanine equity in the Company’s consolidated balance sheet since the holders have redemption rights beginning in July 2023 (and earlier under certain circumstances). The discount related to Series A Preferred Stock is being accreted using the effective interest method. Accordingly, the carrying value of the Series A Preferred Stock is being increased with a corresponding reduction in additional paid-in capital from the issuance date of July 19, 2018 until the first redemption date of July 19, 2023, when the carrying value will be equal to the aggregate liquidation preference. The Company records a liability for dividends in the period incurred. Accretion and accrued dividends are treated as deductions in the calculation of earnings applicable to common stockholders. |
Recent Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Recently Adopted Standards. The following recently issued accounting standard was adopted during the fourth quarter of fiscal year 2017: In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments. The new standard is intended to reduce diversity in practice in how certain cash receipts and cash payments are classified in the statements of cash flows and must be adopted retrospectively for each prior reporting period presented upon initial adoption. The new standard is effective for the Company beginning in the first quarter of 2019 with early adoption permitted. The Company elected to adopt this standard during the fourth quarter of 2017, and there were no transactions that required retrospective adjustments in the consolidated statements of cash flows for the years ended December 31, 2016 and 2015. For the nine months ended September 30, 2017, the Company was required to pay $4.6 million for a make-whole applicable premium associated with a mandatory principal prepayment in April 2017. This new standard required that this payment be classified as a financing cash flow in the Company’s consolidated statement of cash flows for the year ended December 31, 2017. For the nine months ended September 30, 2017, retrospective effect must be given since the $4.6 million make-whole applicable premium payment was reflected as an operating cash flow when those financial statements were originally issued. Presented below is the retrospective effect of adoption of ASU No. 2016-15 on the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2017 (in thousands): Originally Impact of As Stated Adoption Restated Net cash provided by (used in): Operating activities $ 26,156 $ 4,607 $ 30,763 Investing activities (1,074 ) - (1,074 ) Financing activities (38,280 ) (4,607 ) (42,887 ) The following accounting standards are not yet effective; Management has not completed its evaluation to determine the impact that adoption of these standards will have on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes nearly all existing revenue recognition standards under U.S. GAAP. The new standard provides a five-step process for recognizing revenue that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires expanded qualitative and quantitative disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The new standard is effective for the Company beginning in the first quarter of fiscal 2019. The new standard allows for two transition methods: (i) a full retrospective method applied to each prior reporting period presented, or (ii) a modified retrospective method applied with the cumulative effect of adoption recognized on adoption date. The Company will adopt this standard using the full retrospective method. The Company has assigned internal resources, engaged a third-party service provider, and is continuing the evaluation of the quantitative impact to our financial statements as well its accounting policies, processes and systems. While the Company is continuing to assess all potential impacts of adoption, management currently believes that the primary impact will be the timing of revenue recognition for certain contracts due to the removal of the current limitation on contingent revenue. The Company also expects potential impact to the accounting for costs to obtain contracts, which is primarily comprised of sales commissions. Such costs, which are expensed as incurred under the current standard, will be capitalized and amortized over their estimated useful lives under the new standard. The Company is currently evaluating the useful life over which such costs will be amortized. In February 2016, the FASB issued ASU No. 2016-02, Leases , which requires organizations that lease assets (“lessees”) to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases with lease terms of more than 12 months. Under the new standard, both finance and operating leases will be required to be recognized on the balance sheet. Additional quantitative and qualitative disclosures, including significant judgments made by management, will also be required. The standard will be effective for the Company beginning in the first quarter of fiscal 2020, assuming the Company still qualifies as an emerging growth company. Early adoption is permitted, and the new standard was required to be adopted retrospectively to each prior reporting period presented upon initial adoption. However, in July 2018 the FASB issued ASU No. 2018-11 Targeted Improvements , which provides lessees the option to apply the new leasing standard to all open leases as of the adoption date by recognizing a cumulative-effect adjustment to accumulated deficit in the period of adoption without restating prior periods. The Company is still evaluating which transition approach will be implemented upon adoption of ASU No. 2016-02. In August 2018, the SEC adopted a final rule that extends the current annual requirement to disclose changes in stockholders’ equity to interim periods and will also require interim disclosure of dividends per share for each class of shares (including the Company’s Series A Preferred Stock). These disclosure provisions become effective beginning in the first quarter of 2019, whereby the Company will be required to disclose changes in stockholders’ deficit for the current and comparative fiscal quarters as well as the current and comparative year-to-date periods presented in future interim condensed consolidated financial statements. The Company intends to provide the expanded disclosures with respect to changes in stockholders’ deficit beginning in the first quarter of 2019. |
LIQUIDITY AND SIGNIFICANT ACC_3
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Presented below is the retrospective effect of adoption of ASU No. 2016-15 on the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2017 (in thousands): Originally Impact of As Stated Adoption Restated Net cash provided by (used in): Operating activities $ 26,156 $ 4,607 $ 30,763 Investing activities (1,074 ) - (1,074 ) Financing activities (38,280 ) (4,607 ) (42,887 ) |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Restrictions on Cash and Cash Equivalents [Table Text Block] | As of September 30, 2018 and December 31, 2017, cash, cash equivalents and restricted cash are as follows (in thousands): 2018 2017 Cash and cash equivalents $ 23,488 $ 21,950 Restricted cash: Control accounts under Credit Facility (Note 4) - 17,644 Corporate credit card debts and other 434 433 Total restricted cash 434 18,077 Total cash, cash equivalents and restricted cash $ 23,922 $ 40,027 |
Schedule of Accrued Liabilities [Table Text Block] | As of September 30, 2018 and December 31, 2017, other accrued liabilities consist of the following (in thousands): 2018 2017 Accrued sales and other taxes $ 8,663 $ 11,266 Accrued professional fees 8,329 8,407 Accrued dividends on Redeemable Series A Preferred Stock 2,845 - Current maturities of capital lease obligations 371 533 Income taxes payable 597 485 Appeal proceeds payable to insurance company 449 - Deferred insurance settlement - 8,033 Liability for embedded derivatives - 1,600 Other accrued expenses 2,180 2,229 Total other accrued liabilities $ 23,434 $ 32,553 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | As of September 30, 2018 and December 31, 2017, the net carrying value and balance sheet classification of debt is summarized as follows (in thousands): 2018 2017 Credit Facility, net of DDIC $ - $ 80,054 Note payable to GP Sponsor, net of DDIC 2,735 2,059 Total 2,735 82,113 Less current maturities (2,735 ) (15,500 ) Long-term debt, net of current maturities $ - $ 66,613 |
Schedule of Line of Credit Facilities [Table Text Block] | The aggregate cash payment to terminate the Credit Facility was $132.8 million and consisted of the following (in thousands): Contractual principal and exit fees: Principal balance $ 102,576 Mandatory trigger event exit fees 13,624 Mandatory consulting fees 2,000 Subtotal 118,200 Make-whole applicable premium 7,307 Amendment fees and related liabilities 6,250 Accrued interest and fees payable 1,073 Total cash termination payments $ 132,830 |
Summary of Debt Activities During the Year [Table Text Block] | Funded Credit Facility Activity. Presented below is a summary of activity related to the funded debt, including allocated DDIC, for the nine months ended September 30, 2018 (in thousands): December 31, PIK Liability Contractual Liability Payments Accretion DDIC Write-off September 30, 2017 Accrual Adjustments Scheduled Prepayments Pay-off Expense Prepayments Pay-off 2018 Contractual liabilities: Principal balance $ 125,872 $ 1,886 $ - $ (7,250 ) $ (17,932 ) $ (102,576 ) $ - $ - $ - $ - Mandatory trigger event exit fees 9,672 - 3,952 - - (13,624 ) - - - - Mandatory consulting fees 4,000 - - (2,000 ) - (2,000 ) - - - - Total contractual liability 139,544 1,886 3,952 (9,250 ) (17,932 ) (118,200 ) - - - - DDIC: Original issue discount 1,816 - - - - - - (234 ) (1,582 ) - Origination fee 4,538 - - - - - - (586 ) (3,952 ) - Amendment fee 11,521 - - - - - - (1,487 ) (10,034 ) - Fair value of warrants 6,424 - - - - - - (829 ) (5,595 ) - Consulting fees to lenders 6,519 - - - - - - (841 ) (5,678 ) - Mandatory trigger event exit fees 55,200 - 3,952 - - - - (7,314 ) (51,838 ) - Other issuance costs 3,600 - - - - - - (465 ) (3,135 ) - Total DDIC 89,618 - 3,952 - - - - (11,756 ) (81,814 ) - Cumulative accretion (30,128 ) - - - - - (11,670 ) 4,587 37,211 - Net DDIC 59,490 - 3,952 - - - (11,670 ) (7,169 ) (44,603 ) - Net carrying value $ 80,054 $ 1,886 $ - $ (9,250 ) $ (17,932 ) $ (118,200 ) $ 11,670 $ 7,169 $ 44,603 $ - |
Schedule of Interest Expense [Table Text Block] | The components of interest expense for the three and nine months ended September 30, 2018 and 2017 are presented below (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Credit Facility: Interest expense at 12.0% $ 631 $ 2,389 $ 7,513 $ 8,327 PIK interest at 3.0% 162 582 1,886 2,038 Accretion expense for funded debt 1,071 6,151 11,670 18,548 Make-whole applicable premium: Credit Facility prepayments - - 3,103 4,607 Payoff of Credit Facility 7,307 - 7,307 - Accretion expense for GP Sponsor note payable 309 - 676 - Interest on other borrowings 19 30 76 109 Total interest expense $ 9,499 $ 9,152 $ 32,231 $ 33,629 |
Schedule of Debt Related Fee [Table Text Block] | The components of other debt financing expenses for the three and nine months ended September 30, 2018 and 2017 are presented below (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Write-off of DDIC: Credit Facility prepayments $ - $ 193 $ 7,169 $ 9,861 Payoff of funded Credit Facility 44,603 - 44,603 - Termination of unfunded Credit Facility 2,764 - 2,764 - Collateral monitoring fees 121 483 1,556 1,734 Target date fee under Credit Facility - 1,250 - 1,250 Amortization of DDIC related to unfunded debt 70 305 756 855 Unused line fees 42 219 481 664 Amortization of prepaid agent fees and other 775 113 1,002 340 Total other debt financing expenses $ 48,375 $ 2,563 $ 58,331 $ 14,704 |
RESTRICTED STOCK UNITS, STOCK_2
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
STOCK OPTIONS AND WARRANTS [Abstract] | |
Summary of Option Activity [Table Text Block] | The following table sets forth a summary of stock option activity under the Stock Plans for the nine months ended September 30, 2018 (shares in thousands): Shares Price (1) Term (2) Outstanding, December 31, 2017 12,130 $ 2.95 4.9 Granted 1,526 8.12 Forfeited (63 ) 7.18 Expired (1 ) 1.02 Exercised (1,303 ) 1.03 Outstanding, September 30, 2018 (3)(4) 12,289 3.77 5.0 Vested, September 30, 2018 (3) 9,787 2.73 4.0 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) As of September 30, 2018, the aggregate intrinsic value of all stock options outstanding was $36.2 million. As of September 30, 2018, the aggregate intrinsic value of vested stock options was $36.0 million. (4) The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.3 million shares as of September 30, 2018. The following table presents activity affecting the total number of shares available for grant under the Stock Plans for the nine months ended September 30, 2018 (in thousands): Available, December 31, 2017 2,413 Stock options granted (1,526 ) Restricted stock units granted (184 ) Expired options under 2007 Plan 1 Forfeited options under Stock Plans 63 Newly authorized by Board of Directors 2,300 Available, September 30, 2018 3,067 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | For the nine months ended September 30, 2018, the fair value of each stock option grant under the Stock Plans was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions: Expected life (in years) 5.9 Volatility 31 % Dividend yield 0 % Risk-free interest rate 2.7 % |
Schedule of Stock-based Compensation Expense [Table Text Block] | Stock-based compensation expense attributable to RSU’s and stock options for the three and nine months ended September 30, 2018 and 2017 is classified as follows (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Cost of revenues $ 246 $ 152 $ 612 $ 273 Sales and marketing 504 604 1,321 907 General and administrative 428 446 1,210 736 Total $ 1,178 $ 1,202 $ 3,143 $ 1,916 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Future minimum lease payments under the non-cancellable operating lease agreements are as follows (in thousands): 12 months ending September 30: 2019 $ 5,174 2020 4,155 2021 3,843 2022 3,316 2023 795 Thereafter 422 Total $ 17,705 |
Summary of Dividends Payable in Furure Periods [Table Text Block] | For the initial five-year period through July 19, 2023 that the Series A Preferred Stock is expected to be outstanding, estimated Cash Dividends and PIK Dividends are payable are as follows (in thousands): Year Ending December 31: Cash PIK Total 2018 $ 6,360 (1) (2) $ 1,908 (1) (2) $ 8,268 2019 14,351 (1) 4,305 (1) 18,656 2020 14,787 (1) 4,436 (1) 19,223 2021 15,235 (1) 4,571 (1) 19,806 2022 15,697 (1) 4,709 (1) 20,406 2023 8,839 (1) 2,652 (1) 11,491 Total $ 75,269 $ 22,581 $ 97,850 (1) Amounts shown assume there are no conversions to common stock or redemptions for the first five years. (2) Includes Cash Dividends of $2.8 million and PIK Dividends of $0.8 million declared for the period from July 19, 2018 through September 30, 2018 as discussed in Note 11. |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule Of Effect Of Dilutive Securities In Computation Of Diluted Income Per Share [Table Text Block] | For the three and nine months ended September 30, 2018 and 2017, basic and diluted net loss per share was computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. The following table sets forth the computation of basic and diluted loss per share of Common Stock for the three and nine months ended September 30, 2018 and 2017 (in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 Loss applicable to common stockholders: Net loss $ (48,368 ) $ (9,040 ) $ (70,307 ) $ (49,374 ) Dividends and accretion related to Series A Preferred Stock: Accrued cash dividends (2,845 ) - (2,845 ) - Accrued PIK dividends (846 ) - (846 ) - Accretion of discount (1,011 ) - (1,011 ) - Loss applicable to common stockholders $ (53,070 ) $ (9,040 ) $ (75,009 ) $ (49,374 ) Weighted average number of shares of Common Stock outstanding (basic and diluted) 62,590 24,727 60,565 24,457 Net loss per share of Common Stock (basic and diluted) $ (0.85 ) $ (0.37 ) $ (1.24 ) $ (2.02 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | As of September 30, 2018 and 2017, the following potential Common Stock equivalents were excluded from the computation of diluted net loss per share for the respective periods ending on these dates since the impact of inclusion was anti-dilutive (in thousands): 2018 2017 Warrants 18,128 3,461 Series A Preferred Stock 14,000 - Stock options 12,289 13,272 Restricted stock units 184 - RSI Preferred Stock - 24,058 Total 44,601 40,791 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Revenue from External Customers by Geographic Areas [Table Text Block] | The Company attributes revenues to geographic regions based on the location of its customers’ contracting entity. The following table shows revenue by geographic region (in thousands): Three Months Ended Nine Months Ended September 30: September 30: 2018 2017 2018 2017 United States of America $ 40,363 $ 36,751 $ 119,405 $ 105,120 International 22,266 16,860 65,678 49,609 Total $ 62,629 $ 53,611 $ 185,083 $ 154,729 |
PRIVATE PLACEMENT (Tables)
PRIVATE PLACEMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of Sale of Stock by Subsidiary or Equity Method Investee Disclosure [Table Text Block] | The allocation of the net proceeds as of the Closing Date, along with the net carrying value of the Series A Preferred Stock as of September 30, 2018, are set forth below (in thousands): Series A Common Convertible Preferred Stock Stock Notes Liquidation preference of Series A Preferred Stock (1) $ 140,000 $ - $ - Fair value of common stock (2) - 20,131 - Principal balance under Convertible Notes - - - Total 140,000 20,131 - Allocation of discount and issuance costs: Original issue discount (3) (6,120 ) (880 ) - Incremental and direct costs (3)(4) (4,046 ) (582 ) - Common stock issuance (3)(5) (17,600 ) (2,531 ) - Total (27,766 )(6) (3,993 ) - Net carrying value on Closing Date 112,234 $ 16,138 $ - Accretion of discount through September 30, 2018 1,011 (6) Net carrying value as of September 30, 2018 $ 113,245 (1) The liquidation preference for each share of Series A Preferred Stock on the Closing Date was $1,000 per share for an aggregate liquidation preference of $140.0 million. (2) The fair value of the issuance of approximately 2.9 million shares of the Common Stock was based on the last closing price of $6.95 per share prior to closing. (3) Discounts and incremental and direct costs of the Private Placement were allocated on a pro rata basis as of the Closing Date. (4) Incremental and direct costs of the Private Placement include financial advisor and professional fees of $2.7 million that were incurred by the Company, and due diligence and professional fees incurred by the investors of $1.9 million. Of the total incremental and direct costs of $4.6 million, $2.7 million was paid from the net proceeds at closing and $1.9 million was paid or is payable directly by the Company. (5) The pro rata fair value of approximately 2.9 million shares of Common Stock issued in the Private Placement was treated as an additional discount for the issuance of the Series A Preferred Stock. (6) The aggregate discount of $27.8 million for the Series A Preferred Stock is being accreted at a rate of 4.5% per annum using the effective interest method. Accordingly, the carrying value of the Series A Preferred Stock is being increased with a corresponding reduction in additional paid-in capital from the issuance date of July 19, 2018 until July 19, 2023 when the holders may elect to redeem. As a result of these periodic accretion adjustments, the carrying value of the Series A Preferred Stock will be equal to the aggregate liquidation preference on July 19, 2023. As shown in Note 9, accretion is treated as a deduction in the calculation of earnings applicable to common stockholders. |
Schedule of Dividends Payable [Table Text Block] | Dividends Payable in: Total Cash PIK Dividends Per Share Cash Dividends at 10.0% per annum $ 2,839 $ - $ 2,839 $ 20.28 PIK Dividends at 3.0% per annum: Issuable for 846 shares of Series A Preferred Stock - 846 846 6.04 Fractional shares payable in cash 6 - 6 0.04 Total $ 2,845 $ 846 $ 3,691 $ 26.36 |
NATURE OF BUSINESS AND BASIS _2
NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details Textual) shares in Thousands | Oct. 10, 2017shares | Sep. 30, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | |
Preferred Stock, Shares Authorized | 99,820 | 99,820 | |
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | |
Shares Issued to GPIA | 9,300 | ||
Shareholder Ownership Percentage | 83.00% | ||
Convertible Preferred Stock, Shares Issued upon Conversion | 24,100 | ||
GP Investments Acquisition Corp [Member] | |||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | |||
Business Combination Share Exchange Ratio | 0.2394 |
LIQUIDITY AND SIGNIFICANT ACC_4
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | $ 17,551 | $ 30,763 |
Investing activities | (1,074) | |
Financing activities | $ (31,586) | (42,887) |
Previously Reported [Member] | ||
Operating activities | 26,156 | |
Investing activities | (1,074) | |
Financing activities | (38,280) | |
Restatement Adjustment [Member] | ||
Operating activities | 4,607 | |
Investing activities | 0 | |
Financing activities | $ (4,607) |
LIQUIDITY AND SIGNIFICANT ACC_5
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) $ in Thousands | Apr. 03, 2018 | Jul. 19, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 23,922 | $ 15,589 | $ 23,922 | $ 15,589 | $ 40,027 | $ 28,237 | ||
Capital Leases, Future Minimum Payments Due, Next Twelve Months | $ 5,600 | |||||||
Working Capital Deficit | 124,200 | |||||||
Net Income (Loss) Attributable to Parent | (48,368) | $ (9,040) | $ (70,307) | (49,374) | ||||
Repayments of Lines of Credit | $ 17,900 | |||||||
Proceeds from Issuance or Sale of Equity | 133,000 | |||||||
Stock Issued During Period, Shares, New Issues | 2,897 | |||||||
Line of Credit Unpaid Transaction Costs | $ 2,700 | |||||||
Cash Dividends Payable Percentage | 10.00% | |||||||
Cash Dividends Payable after Five Year Period Percentage | 13.00% | |||||||
Payment For Making Whole Applicable Premium Related To Prepayemnt Of Borrowings | $ (10,410) | $ (4,607) | ||||||
Debt Instrument, Face Amount | $ 102,576 | |||||||
Deferred Revenue, Current | $ 143,578 | 143,578 | $ 152,390 | |||||
Percentage For Commitments For Services | 35.00% | |||||||
Revolving Credit Facility [Member] | ||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Repayments of Lines of Credit | $ 132,800 | |||||||
Series A Preferred Stock [Member] | ||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | 140,000 | |||||||
Dividends Payable | $ 97,850 | $ 97,850 | ||||||
Maximum [Member] | ||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Dividends Payable | $ 4,000 | |||||||
Minimum [Member] | ||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Dividends Payable | $ 3,500 | |||||||
Common Stock [Member] | ||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Stock Issued During Period, Shares, New Issues | 2,900,000 | |||||||
GP Sponsor [Member] | ||||||||
Significant Accounting Policies Disclosure [Line Items] | ||||||||
Debt Instrument, Face Amount | $ 3,000 |
OTHER FINANCIAL INFORMATION (De
OTHER FINANCIAL INFORMATION (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Cash and cash equivalents | $ 23,488 | $ 21,950 | ||
Restricted cash: | ||||
Total cash, cash equivalents and restricted cash | 23,922 | 40,027 | $ 15,589 | $ 28,237 |
Cash, cash equivalents and restricted cash [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Cash and cash equivalents | 23,488 | 21,950 | ||
Restricted cash: | ||||
Control accounts under Credit Facility (Note 4) | 0 | 17,644 | ||
Corporate credit card debts and other | 434 | 433 | ||
Total restricted cash | 434 | 18,077 | ||
Total cash, cash equivalents and restricted cash | $ 23,922 | $ 40,027 |
OTHER FINANCIAL INFORMATION (_2
OTHER FINANCIAL INFORMATION (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 30, 2018 | Dec. 31, 2017 |
Accrued compensation and benefits: | ||||
Appeal proceeds payable to insurance company | $ 500 | |||
Liability for embedded derivatives | $ 7,800 | $ 1,600 | ||
Other Accrued Liabilities [Member] | ||||
Accrued compensation and benefits: | ||||
Accrued sales and other taxes | $ 8,663 | 11,266 | ||
Accrued professional fees | 8,329 | 8,407 | ||
Accrued dividends on Redeemable Series A Preferred Stock | 2,845 | 0 | ||
Current maturities of capital lease obligations | 371 | 533 | ||
Income taxes payable | 597 | 485 | ||
Appeal proceeds payable to insurance company | 449 | 0 | ||
Deferred insurance settlement | 0 | 8,033 | ||
Liability for embedded derivatives | 0 | 1,600 | ||
Total other accrued liabilities | 23,434 | 32,553 | ||
Other Accrued Expenses | $ 2,180 | $ 2,229 |
OTHER FINANCIAL INFORMATION (_3
OTHER FINANCIAL INFORMATION (Details Textual) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Percentage Of Professional Fees Hold Back | 15.00% | 15.00% |
Accrued Professional Fees | $ 2.7 | $ 2.7 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Net carrying value of Credit Facility | $ 2,735 | $ 82,113 |
Less current maturities | (2,735) | (15,500) |
Long-term debt, net of current maturities | 0 | 66,613 |
Credit Facility, net of discount | ||
Net carrying value of Credit Facility | 0 | 80,054 |
Note Payable, net of discount | ||
Net carrying value of Credit Facility | $ 2,735 | $ 2,059 |
DEBT (Details 1)
DEBT (Details 1) $ in Thousands | Jul. 19, 2018USD ($) |
Contractual principal and exit fees: | |
Principal balance | $ 102,576 |
Mandatory trigger event exit fees | 13,624 |
Mandatory consulting fees | 2,000 |
Subtotal | 118,200 |
Make-whole applicable premium | 7,307 |
Amendment fees and related liabilities | 6,250 |
Accrued interest and fees payable | 1,073 |
Total cash termination payments | $ 132,830 |
DEBT (Details 2)
DEBT (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Contractual liabilities, Accretion Expense | $ 13,102,000 | $ 19,403,000 | |||
Debt discount and issuance costs, PIK Accrual | $ 9,499,000 | $ 9,152,000 | 32,231,000 | $ 33,629,000 | |
Write off of Deferred Debt Issuance Cost Pay-off | 37,211 | ||||
Net carrying value | 2,735,000 | 2,735,000 | $ 82,113,000 | ||
Funded Debt [Member] | |||||
Balance Beginning | 139,544,000 | ||||
Balance Ending | 0 | 0 | |||
Balance Beginning | 89,618,000 | ||||
Balance Ending | 0 | 0 | |||
Net carrying value | 0 | 0 | 80,054,000 | ||
Net DDIC | 0 | 0 | $ 59,490,000 | ||
Principal Balance [Member] | Funded Debt [Member] | |||||
Balance Beginning | 125,872,000 | ||||
Balance Ending | 0 | 0 | |||
Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Balance Beginning | 9,672,000 | ||||
Balance Ending | 0 | 0 | |||
Balance Beginning | 55,200,000 | ||||
Balance Ending | 0 | 0 | |||
Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Balance Beginning | 4,000,000 | ||||
Balance Ending | 0 | 0 | |||
Original issue discount [Member] | Funded Debt [Member] | |||||
Balance Beginning | 1,816,000 | ||||
Balance Ending | 0 | 0 | |||
Origination fee [Member] | Funded Debt [Member] | |||||
Balance Beginning | 4,538,000 | ||||
Balance Ending | 0 | 0 | |||
Amendment fee [Member] | Funded Debt [Member] | |||||
Balance Beginning | 11,521,000 | ||||
Balance Ending | 0 | 0 | |||
Fair value of warrants [Member] | Funded Debt [Member] | |||||
Balance Beginning | 6,424,000 | ||||
Balance Ending | 0 | 0 | |||
Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Balance Beginning | 6,519,000 | ||||
Balance Ending | 0 | 0 | |||
Other issuance costs [Member] | Funded Debt [Member] | |||||
Balance Beginning | 3,600,000 | ||||
Balance Ending | 0 | 0 | |||
Cumulative accretion [Member] | Funded Debt [Member] | |||||
Balance Beginning | (30,128,000) | ||||
Balance Ending | 0 | 0 | |||
Payment in Kind (PIK) Note [Member] | Funded Debt [Member] | |||||
Contractual liabilities, PIK Accrual | 1,886,000 | ||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Net carrying value | 1,886,000 | 1,886,000 | |||
Net DDIC | 0 | 0 | |||
Payment in Kind (PIK) Note [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual liabilities, PIK Accrual | 1,886,000 | ||||
Payment in Kind (PIK) Note [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual liabilities, PIK Accrual | 0 | ||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual liabilities, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Payment in Kind (PIK) Note [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, PIK Accrual | 0 | ||||
Liability Adjustment [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Liability Adjustments | 3,952,000 | ||||
Debt discount and issuance costs, Liability Adjustments | 3,952,000 | ||||
Net carrying value | 0 | 0 | |||
Net DDIC | 3,952,000 | 3,952,000 | |||
Liability Adjustment [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Liability Adjustments | 3,952,000 | ||||
Debt discount and issuance costs, Liability Adjustments | 3,952,000 | ||||
Liability Adjustment [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Liability Adjustment [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Liability Adjustments | 0 | ||||
Accretion Expense [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Accretion Expense | 0 | ||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Net carrying value | 11,670,000 | 11,670,000 | |||
Net DDIC | (11,670,000) | (11,670,000) | |||
Accretion Expense [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Accretion Expense | 0 | ||||
Accretion Expense [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Accretion Expense | 0 | ||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual liabilities, Accretion Expense | 0 | ||||
Accretion Expense [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | 0 | ||||
Accretion Expense [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Debt discount and issuance costs, Accretion Expenses | (11,670,000) | ||||
Contractual Liability Borrowings [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings | (9,250,000) | ||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Net carrying value | (9,250,000) | (9,250,000) | |||
Net DDIC | 0 | 0 | |||
Contractual Liability Borrowings [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings | (7,250,000) | ||||
Contractual Liability Borrowings [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings | 0 | ||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings | (2,000,000) | ||||
Contractual Liability Borrowings [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Borrowings [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Scheduled | 0 | ||||
Contractual Liability Prepayments [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Prepayments | (17,932,000) | ||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Net carrying value | (17,932,000) | (17,932,000) | |||
Net DDIC | 0 | 0 | |||
Contractual Liability Prepayments [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Prepayments | (17,932,000) | ||||
Contractual Liability Prepayments [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Prepayments | 0 | ||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability Prepayments [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Debt Issuance CostsPrincipal Borrowings Prepayments | 0 | ||||
Contractual Liability PayOff [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Paid | (118,200,000) | ||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Net carrying value | (118,200,000) | (118,200,000) | |||
Net DDIC | 0 | 0 | |||
Contractual Liability PayOff [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Paid | (102,576,000) | ||||
Contractual Liability PayOff [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Paid | (13,624,000) | ||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability Principal Borrowings Paid | (2,000,000) | ||||
Contractual Liability PayOff [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
Contractual Liability PayOff [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Debt Issuance Costs Principal Borrowings Paid | 0 | ||||
WriteOff DDIC Prepayments [Member] | Funded Debt [Member] | |||||
Contactual Liability Of Deferred Debt Issuance Cost Prepayments WrittenOff | 0 | ||||
Write off of Deferred Debt Issuance Cost Prepayments | (11,756,000) | ||||
Net carrying value | 7,169,000 | 7,169,000 | |||
Net DDIC | (7,169,000) | (7,169,000) | |||
WriteOff DDIC Prepayments [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contactual Liability Of Deferred Debt Issuance Cost Prepayments WrittenOff | 0 | ||||
WriteOff DDIC Prepayments [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contactual Liability Of Deferred Debt Issuance Cost Prepayments WrittenOff | 0 | ||||
Write off of Deferred Debt Issuance Cost Prepayments | (7,314,000) | ||||
WriteOff DDIC Prepayments [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contactual Liability Of Deferred Debt Issuance Cost Prepayments WrittenOff | 0 | ||||
WriteOff DDIC Prepayments [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | (234,000) | ||||
WriteOff DDIC Prepayments [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | (586,000) | ||||
WriteOff DDIC Prepayments [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | (1,487,000) | ||||
WriteOff DDIC Prepayments [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | (829,000) | ||||
WriteOff DDIC Prepayments [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | (841,000) | ||||
WriteOff DDIC Prepayments [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | (465,000) | ||||
WriteOff DDIC Prepayments [Member] | Cumulative accretion [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Prepayments | 4,587,000 | ||||
WriteOff DDIC Payoff [Member] | Funded Debt [Member] | |||||
Contractual Liability of Deferred Debt Issuance Cost WrittenOff Paid | 0 | ||||
Write off of Deferred Debt Issuance Cost Pay-off | (81,814,000) | ||||
Net carrying value | 44,603,000 | 44,603,000 | |||
Net DDIC | $ (44,603,000) | (44,603,000) | |||
WriteOff DDIC Payoff [Member] | Principal Balance [Member] | Funded Debt [Member] | |||||
Contractual Liability of Deferred Debt Issuance Cost WrittenOff Paid | 0 | ||||
WriteOff DDIC Payoff [Member] | Mandatory Trigger Event Exit Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability of Deferred Debt Issuance Cost WrittenOff Paid | 0 | ||||
Write off of Deferred Debt Issuance Cost Pay-off | (51,838,000) | ||||
WriteOff DDIC Payoff [Member] | Mandatory Consulting Fees [Member] | Funded Debt [Member] | |||||
Contractual Liability of Deferred Debt Issuance Cost WrittenOff Paid | 0 | ||||
WriteOff DDIC Payoff [Member] | Original issue discount [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Pay-off | (1,582,000) | ||||
WriteOff DDIC Payoff [Member] | Origination fee [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Pay-off | (3,952,000) | ||||
WriteOff DDIC Payoff [Member] | Amendment fee [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Pay-off | (10,034,000) | ||||
WriteOff DDIC Payoff [Member] | Fair value of warrants [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Pay-off | (5,595,000) | ||||
WriteOff DDIC Payoff [Member] | Consulting fees to lenders [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Pay-off | (5,678,000) | ||||
WriteOff DDIC Payoff [Member] | Other issuance costs [Member] | Funded Debt [Member] | |||||
Write off of Deferred Debt Issuance Cost Pay-off | $ (3,135,000) |
DEBT (Details 3)
DEBT (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Line of Credit Facility [Line Items] | ||||
Total interest expense | $ 9,499 | $ 9,152 | $ 32,231 | $ 33,629 |
Interest expense at 12.0% [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | 631 | 2,389 | 7,513 | 8,327 |
PIK interest at 3.0% [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | 162 | 582 | 1,886 | 2,038 |
Accretion expense for funded debt [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | 1,071 | 6,151 | 11,670 | 18,548 |
Credit Facility prepayments [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | 0 | 0 | 3,103 | 4,607 |
Payoff of Credit Facility [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | 7,307 | 0 | 7,307 | 0 |
Accretion expense for GP Sponsor note payable [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | 309 | 0 | 676 | 0 |
Interest on other borrowings [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Total interest expense | $ 19 | $ 30 | $ 76 | $ 109 |
DEBT (Details 4)
DEBT (Details 4) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Credit Facility prepayments | $ 0 | $ 193 | $ 7,169 | $ 9,861 |
Payoff of funded Credit Facility | 44,603 | 0 | 44,603 | 0 |
Termination of unfunded Credit Facility | 2,764 | 0 | 2,764 | 0 |
Collateral monitoring fees | 121 | 483 | 1,556 | 1,734 |
Target date fee under Credit Facility | 0 | 1,250 | 0 | 1,250 |
Amortization of DDIC related to unfunded debt | 70 | 305 | 756 | 855 |
Unused line fees | 42 | 219 | 481 | 664 |
Amortization of prepaid agent fees and other | 775 | 113 | 1,002 | 340 |
Total other debt financing expenses | $ 48,375 | $ 2,563 | $ 58,331 | $ 14,704 |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) $ in Thousands | Apr. 03, 2018 | Oct. 10, 2017 | Jul. 19, 2018 | Mar. 30, 2018 | Apr. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 30, 2018 |
Repayments of Lines of Credit | $ 17,900 | ||||||||||||
Embedded Derivative, Fair Value of Embedded Derivative Liability | $ 1,600 | $ 7,800 | |||||||||||
Line of Credit Facility, Impute Interest Rate | 33.10% | ||||||||||||
Line of Credit Facility, Discount From Payment | $ 1,000 | ||||||||||||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 3,000 | $ 3,000 | |||||||||||
Line of Credit Facility, Maximum Amount Outstanding During Period | 95,000 | ||||||||||||
Prepayment Of Principal | $ 17,900 | ||||||||||||
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net | 7,800 | $ 1,400 | 1,600 | $ (4,400) | |||||||||
Litigation Settlement, Amount Awarded from Other Party | $ 21,500 | $ 19,300 | |||||||||||
Accrued Insurance | $ 500 | ||||||||||||
Debt Instrument, Periodic Payment | 21,000 | ||||||||||||
Debt Instrument, Periodic Payment, Principal | 17,900 | ||||||||||||
Debt Instrument Payment, Make Whole Premiums | $ 3,100 | ||||||||||||
Write off of Deferred Debt Issuance Cost | $ 44,600 | $ 7,200 | 704 | $ 0 | |||||||||
Notes Payable, Related Parties, Current | 2,700 | 2,700 | |||||||||||
Proceeds from Issuance or Sale of Equity | 133,000 | ||||||||||||
Repayments of Long-term Lines of Credit | $ 132,800 | ||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 42,000 | ||||||||||||
Common Stock [Member] | |||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 900,000 | ||||||||||||
Measurement Input, Expected Term [Member] | |||||||||||||
Embedded Derivative Liability Measurement Input Expected Term | 2 years 6 months | ||||||||||||
Measurement Input, Default Rate [Member] | |||||||||||||
Embedded Derivative Liability Measurement Input Percentage | 35.00% | ||||||||||||
Measurement Input, Discount Rate [Member] | |||||||||||||
Embedded Derivative Liability Measurement Input Percentage | 20.90% | ||||||||||||
Measurement Input, Risk Free Interest Rate [Member] | |||||||||||||
Embedded Derivative Liability Measurement Input Percentage | 1.90% | ||||||||||||
Measurement Input, Counterparty Credit Risk [Member] | |||||||||||||
Embedded Derivative Liability Measurement Input Percentage | 19.00% | ||||||||||||
Line of Credit [Member] | |||||||||||||
Debt Instrument, Fee Amount | 125,000 | $ 125,000 | |||||||||||
Revolving Credit Facility [Member] | |||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 125,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 15.00% | ||||||||||||
Line of Credit Facility, Collateral Fee Percentage | 2.50% | ||||||||||||
Debt Instrument Additional Interest Rate, Debt Default | 2.00% | ||||||||||||
Debt instrument Origination Fee Percentage | 5.00% | 5.00% | |||||||||||
Debt instrument Original Issue Discount Percentage | 2.00% | ||||||||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 17,500 | $ 17,500 | |||||||||||
Repayments of Lines of Credit | $ 132,800 | ||||||||||||
Debt Instrument, Premium Rate, Stated Percentage | 15.00% | 15.00% | |||||||||||
Line of Credit Facility, Impute Interest Rate | 15.00% | ||||||||||||
Revolving Credit Facility [Member] | Funded Portion [Member] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 26.30% | ||||||||||||
Revolving Credit Facility [Member] | Unfunded Portion [Member] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 41.30% | ||||||||||||
UnFunded Debt [Member] | |||||||||||||
Write off of Deferred Debt Issuance Cost | $ 2,800 | ||||||||||||
Payable In Cash Interest [Member] | Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | 12.00% | |||||||||||
Paid-In-Kind [Member] | Revolving Credit Facility [Member] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 3.00% |
RESTRICTED STOCK UNITS, STOCK_3
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Details) - $ / shares shares in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | |||
Shares Granted | 1,526 | |||
Shares Forfeited | (63) | |||
Shares Expired | (1) | |||
Shares Vested, end of year | 300 | |||
Stock Options [Member] | ||||
Shares Outstanding, beginning of year | 12,130 | |||
Shares Granted | 1,526 | |||
Shares Forfeited | (63) | |||
Shares Expired | (1) | |||
Shares Exercised | (1,303) | |||
Shares Outstanding, end of year | 12,289 | 12,130 | ||
Shares Vested, end of year | 9,787 | |||
Price Outstanding, beginning of year | [1] | $ 2.95 | ||
Price Granted | [1] | 8.12 | ||
Price Forfeited | [1] | 7.18 | ||
Price Expired | [1] | 1.02 | ||
Price Exercised | [1] | 1.03 | ||
Price Outstanding, end of year | [1] | 3.77 | [2],[3] | $ 2.95 |
Price Vested, end of year | [1] | $ 2.73 | ||
Term Outstanding, end of year | [4] | 5 years | [2],[3] | 4 years 10 months 24 days |
Term Vested, end of year | [2] | 4 years | ||
[1] | Represents the weighted average exercise price. | |||
[2] | As of September 30, 2018, the aggregate intrinsic value of all stock options outstanding was $36.2 million. As of September 30, 2018, the aggregate intrinsic value of vested stock options was $36.0 million. | |||
[3] | The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.3 million shares as of September 30, 2018. | |||
[4] | Represents the weighted average remaining contractual term until the stock options expire. |
RESTRICTED STOCK UNITS, STOCK_4
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Details 1) shares in Thousands | 9 Months Ended |
Sep. 30, 2018shares | |
Available, beginning of year | 2,413 |
Stock options granted | (1,526) |
Restricted stock units granted | (184) |
Expired options under 2007 Plan | 1 |
Forfeited options under Stock Plans | 63 |
Newly authorized by Board of Directors | 2,300 |
Available, end of year | 3,067 |
RESTRICTED STOCK UNITS, STOCK_5
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Details 2) | 9 Months Ended |
Sep. 30, 2018 | |
Expected life (in years) | 5 years 10 months 24 days |
Volatility | 31.00% |
Dividend yield | 0.00% |
Risk-free interest rate | 2.70% |
RESTRICTED STOCK UNITS, STOCK_6
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Allocated Share-based Compensation Expense | $ 1,178 | $ 1,202 | $ 3,143 | $ 1,916 |
Cost of revenues | ||||
Allocated Share-based Compensation Expense | 246 | 152 | 612 | 273 |
Sales and marketing | ||||
Allocated Share-based Compensation Expense | 504 | 604 | 1,321 | 907 |
General and administrative | ||||
Allocated Share-based Compensation Expense | $ 428 | $ 446 | $ 1,210 | $ 736 |
RESTRICTED STOCK UNITS, STOCK_7
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Feb. 06, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 07, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,526 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.70% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 31.00% | ||||||
Class of Warrant or Right, Outstanding | 3,400 | 3,400 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 18,100 | 18,100 | |||||
Fair Value Adjustment of Warrants | $ 0 | $ 5,817 | $ 0 | $ 14,067 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 5,000 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 2,300 | ||||||
Warrants Not Settleable in Cash, Fair Value Disclosure | 21,300 | 21,300 | |||||
Allocated Share-based Compensation Expense | $ 1,178 | $ 1,202 | $ 3,143 | $ 1,916 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 300 | 300 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% | ||||||
Exercise Price 5.64 [Member] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.64 | $ 5.64 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,400 | 3,400 | |||||
Exercise Price 11.5 [Member] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | $ 11.50 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 14,700 | 14,700 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 200 | 200 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 6 months | ||||||
Share Price | $ 8.42 | $ 8.42 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 1,600 | ||||||
Allocated Share-based Compensation Expense | $ 300 | 800 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 800 | $ 800 | |||||
Employee Stock Option [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,500 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 2.80 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 4,100 | $ 4,100 | $ 3,200 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | 2,300 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 8 months 12 days | ||||||
Share Price | $ 8.12 | $ 8.12 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Aggregate Faie Value | $ 4,300 | ||||||
Employee Stock Option [Member] | Board of Directors [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,500 | ||||||
Maximum [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 24 months | ||||||
Minimum [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | ||||||
Warrant [Member] | |||||||
Fair Value Assumptions Discount Rate For Lack of Marketability | 6.00% | ||||||
Fair Value Assumptions Overall Discount Rate | 20.00% | ||||||
Warrant [Member] | Maximum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.00% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 48.00% | ||||||
Fair Value Assumptions Projected Revenue Multiples | 1.8 | ||||||
Warrant [Member] | Minimum [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 1.40% | ||||||
Fair Value Assumptions Projected Revenue Multiples | 1.7 | ||||||
Label "2007 Plan and 2013 Plan [Member]" | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 36,200 | $ 36,200 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 36,000 | $ 36,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Sep. 30, 2018USD ($) |
2,019 | $ 5,174 |
2,020 | 4,155 |
2,021 | 3,843 |
2,022 | 3,316 |
2,023 | 795 |
Thereafter | 422 |
Total | $ 17,705 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) - Series A Preferred Stock [Member] $ in Thousands | Sep. 30, 2018USD ($) | |
2,018 | $ 8,268 | |
2,019 | 18,656 | |
2,020 | 19,223 | |
2,021 | 19,806 | |
2,022 | 20,406 | |
2,023 | 11,491 | |
Total | 97,850 | |
Cash Dividend [Member] | ||
2,018 | 6,360 | [1],[2] |
2,019 | 14,351 | [1] |
2,020 | 14,787 | [1] |
2,021 | 15,235 | [1] |
2,022 | 15,697 | [1] |
2,023 | 8,839 | [1] |
Total | 75,269 | |
Payment In Kind Dividend [Member] | ||
2,018 | 1,908 | [1],[2] |
2,019 | 4,305 | [1] |
2,020 | 4,436 | [1] |
2,021 | 4,571 | [1] |
2,022 | 4,709 | [1] |
2,023 | 2,652 | [1] |
Total | $ 22,581 | |
[1] | Amounts shown assume there are no conversions to common stock or redemptions for the first five years. | |
[2] | Includes Cash Dividends of $2.8 million and PIK Dividends of $0.8 million declared for the period from July 19, 2018 through September 30, 2018 as discussed in Note 11. |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||||||
Aug. 14, 2018 | Mar. 30, 2018 | Jan. 31, 2018 | Apr. 30, 2017 | Mar. 31, 2017 | Oct. 31, 2016 | Oct. 13, 2015 | Sep. 30, 2018 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Oct. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 31, 2018 | |
Operating Leases, Rent Expense, Net | $ 1,400 | $ 1,300 | $ 4,100 | $ 3,700 | ||||||||||||||
Loss Contingency, Damages Paid, Value | $ 21,500 | $ 124,400 | ||||||||||||||||
Litigation Settlement Interest | 20,200 | |||||||||||||||||
Proceeds from Insurance Settlement, Operating Activities | $ 24,000 | |||||||||||||||||
Guarantor Obligations, Current Carrying Value | 24,700 | $ 24,700 | 24,700 | $ 19,600 | ||||||||||||||
Loss Contingency, Receivable | 50,300 | |||||||||||||||||
Loss Contingency, Loss in Period | 12,800 | |||||||||||||||||
Deposit Assets | $ 28,500 | |||||||||||||||||
Deferred Long-term Liability Charges | $ 19,300 | |||||||||||||||||
Dividends, Preferred Stock, Cash | 2,845 | 0 | 2,845 | 0 | ||||||||||||||
Dividends, Preferred Stock, Paid-in-kind | 846 | $ 0 | 846 | $ 0 | ||||||||||||||
Loss Contingency, Actions Taken by Court, Arbitrator or Mediator | On August 14, 2018, the District Court (i) imposed an injunction that was substantially identical to the injunction that the Court of Appeals had vacated in January 2018, and (ii) ordered the return to Oracle of the $28.5 million of escrow funds deposited by Oracle with the District Court in May 2018. | |||||||||||||||||
Litigation Settlement, Amount Awarded from Other Party | $ 21,500 | $ 19,300 | ||||||||||||||||
Post-Judgment Interest [Member] | ||||||||||||||||||
Loss Contingency, Receivable | 500 | 200 | 200 | 200 | ||||||||||||||
Recovery of Direct Costs | 21,300 | |||||||||||||||||
Interest Income, Other | 200 | |||||||||||||||||
Proceeds from Insurance Settlement, Investing Activities | $ 4,700 | |||||||||||||||||
State Computer Access Statutes and Related Taxable Costs and Interest [Member] | ||||||||||||||||||
Loss Contingency, Receivable | 21,300 | $ 21,300 | 21,300 | 21,300 | ||||||||||||||
Proceeds from Insurance Settlement, Investing Activities | $ 8,100 | $ 11,200 | ||||||||||||||||
Oracle Litigation [Member] | ||||||||||||||||||
Loss Contingency, Damages Awarded, Value | $ 124,400 | $ 124,400 | $ 124,400 | |||||||||||||||
Litigation Settlement, Expense | $ 21,400 | $ 100,000 | ||||||||||||||||
Litigation Settlement Interest | $ 3,000 | |||||||||||||||||
Loss Contingency, Receivable | $ 28,500 | |||||||||||||||||
Loss Contingency, Actions Taken by Court, Arbitrator or Mediator | (i) imposed an injunction that was substantially identical to the injunction that the Court of Appeals had vacated in January 2018, and (ii) ordered the return to Oracle of the $28.5 million of escrowed funds deposited by Oracle with the District Court in May 2018 | |||||||||||||||||
Minimum [Member] | ||||||||||||||||||
Percentage of Additional Labour Costs Charged to Revenue | 1.00% | |||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Percentage of Additional Labour Costs Charged to Revenue | 2.00% | |||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||
Dividends, Preferred Stock, Cash | 2,800 | |||||||||||||||||
Dividends, Preferred Stock, Paid-in-kind | $ 800 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) $ in Thousands | Oct. 10, 2017 | Jul. 19, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 2,897 | ||||||
Stock Issued During Period, Value, New Issues | $ 16,138 | ||||||
Long-term Line of Credit | $ 10,000 | ||||||
Line of Credit Facility, Discount From Payment | $ 1,000 | ||||||
Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 2,900,000 | ||||||
Series A Preferred Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 140,000 | ||||||
Adams Street Partners and its affiliates [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of Common Stock Shares Outstanding | 33.00% | 39.00% | |||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 200 | $ 600 | $ 1,200 | $ 1,600 | |||
Stock Issued During Period, Value, New Issues | $ 19,200 | ||||||
Promissory Notes [Member] | Series A Preferred Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 19,209 | ||||||
Private Placement [Member] | Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 400,000 | ||||||
GP Sponsor [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Line of Credit Facility, Discount From Payment | $ 3,000 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Loss applicable to common stockholders: | |||||
Net loss | $ (48,368) | $ (9,040) | $ (70,307) | $ (49,374) | |
Dividends and accretion related to Series A Preferred Stock: | |||||
Accrued cash dividends | (2,845) | 0 | (2,845) | 0 | |
Accrued PIK dividends | (846) | 0 | (846) | 0 | |
Accretion of discount | (1,011) | 0 | (1,011) | 0 | |
Loss applicable to common stockholders | $ (53,070) | $ (9,040) | $ (75,009) | $ (49,374) | |
Weighted average number of shares of Common Stock outstanding (basic and diluted) | [1] | 62,590 | 24,727 | 60,565 | 24,457 |
Net loss per share of Common Stock (basic and diluted) | [1] | $ (0.85) | $ (0.37) | $ (1.24) | $ (2.02) |
[1] | See Note 1 for discussion of reverse recapitalization given effect herein. |
NET LOSS PER SHARE (Details 1)
NET LOSS PER SHARE (Details 1) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount, Total | 44,601 | 40,791 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount, Total | 18,128 | 3,461 |
Series A Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount, Total | 14,000 | 0 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount, Total | 12,289 | 13,272 |
Restricted stock units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount, Total | 184 | 0 |
RSI Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount, Total | 0 | 24,058 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule Of Cost Method Investment [Line Items] | ||||
Revenues | $ 62,629 | $ 53,611 | $ 185,083 | $ 154,729 |
United States of America | ||||
Schedule Of Cost Method Investment [Line Items] | ||||
Revenues | 40,363 | 36,751 | 119,405 | 105,120 |
International | ||||
Schedule Of Cost Method Investment [Line Items] | ||||
Revenues | $ 22,266 | $ 16,860 | $ 65,678 | $ 49,609 |
FINANCIAL INSTRUMENTS AND SIG_4
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Cost Method Investment [Line Items] | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 23,922 | $ 15,589 | $ 23,922 | $ 15,589 | $ 40,027 | $ 28,237 |
Sales Revenue, Net [Member] | ||||||
Schedule Of Cost Method Investment [Line Items] | ||||||
Concentration Risk, Percentage | 10.00% | 10.00% | 10.00% | 10.00% | ||
Accounts Receivable [Member] | ||||||
Schedule Of Cost Method Investment [Line Items] | ||||||
Concentration Risk, Percentage | 10.00% | |||||
Accounts Receivable [Member] | One Customer [Member] | ||||||
Schedule Of Cost Method Investment [Line Items] | ||||||
Concentration Risk, Percentage | 10.00% | |||||
Single Financial Institution [Member] | ||||||
Schedule Of Cost Method Investment [Line Items] | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 18,400 | $ 18,400 | $ 31,000 | |||
Other Financial Institution [Member] | ||||||
Schedule Of Cost Method Investment [Line Items] | ||||||
Restricted Cash, Current | $ 2,100 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Jul. 19, 2018 | Dec. 31, 2017 | ||
Fair value of common stock | $ 6 | $ 6 | ||
Principal balance under Convertible Notes | $ 102,576 | |||
Allocation of discount and issuance costs: | ||||
Net carrying value on Closing Date | 16,138 | |||
Accretion of discount through September 30, 2018 | 1,011 | |||
Convertible Notes [Member] | Securities Purchase Agreement [Member] | ||||
Liquidation preference of Series A Preferred Stock | [1] | 0 | ||
Fair value of common stock | [2] | 0 | ||
Principal balance under Convertible Notes | 0 | |||
Total value of consideration on Closing Date | 0 | |||
Allocation of discount and issuance costs: | ||||
Original issue discount | [3] | 0 | ||
Incremental and direct costs | [3],[4] | 0 | ||
Common stock issuance | [3],[5] | 0 | ||
Total discount and issuance costs | 0 | |||
Net carrying value on Closing Date | 0 | |||
Common Stock [member] | Securities Purchase Agreement [Member] | ||||
Liquidation preference of Series A Preferred Stock | [1] | 0 | ||
Fair value of common stock | [2] | 20,131 | ||
Principal balance under Convertible Notes | 0 | |||
Total value of consideration on Closing Date | 20,131 | |||
Allocation of discount and issuance costs: | ||||
Original issue discount | [3] | (880) | ||
Incremental and direct costs | [3],[4] | (582) | ||
Common stock issuance | [3],[5] | (2,531) | ||
Total discount and issuance costs | (3,993) | |||
Net carrying value on Closing Date | 16,138 | |||
Series A Preferred Stock [Member] | Securities Purchase Agreement [Member] | ||||
Liquidation preference of Series A Preferred Stock | [1] | 140,000 | ||
Fair value of common stock | [2] | 0 | ||
Principal balance under Convertible Notes | 0 | |||
Total value of consideration on Closing Date | 140,000 | |||
Allocation of discount and issuance costs: | ||||
Original issue discount | [3] | (6,120) | ||
Incremental and direct costs | [3],[4] | (4,046) | ||
Common stock issuance | [3],[5] | (17,600) | ||
Total discount and issuance costs | [6] | (27,766) | ||
Net carrying value on Closing Date | 112,234 | |||
Accretion of discount through September 30, 2018 | [6] | 1,011 | ||
Net carrying value as of September 30, 2018 | $ 113,245 | |||
[1] | The liquidation preference for each share of Series Preferred Stock on the Closing Date was $1,000 per share for an aggregate liquidation preference of $140.0 million. | |||
[2] | The fair value of the issuance of approximately 2.9 million shares of the Common Stock was based on the last closing price of $6.95 per share prior to closing. | |||
[3] | Discounts and incremental and direct costs of the Private Placement were allocated on a pro rata basis as of the Closing Date. | |||
[4] | Incremental and direct costs of the Private Placement include financial advisor and professional fees of $2.7 million that were incurred by the Company, and due diligence and professional fees incurred by the investors of $1.9 million. Of the total incremental and direct costs of $4.6 million, $2.7 million was paid from the net proceeds at closing and $1.9 million was paid or is payable directly by the Company. | |||
[5] | The pro rata fair value of approximately 2.9 million shares of Common Stock issued in the Private Placement was treated as an additional discount for the issuance of the Series A Preferred Stock. | |||
[6] | The aggregate discount of $27.8 million for the Series A Preferred Stock is being accreted at a rate of 4.5% per annum using the effective interest method. Accordingly, the carrying value of the Series A Preferred Stock is being increased with a corresponding reduction in additional paid-in capital from the issuance date of July 19, 2018 until July 19, 2023 when the holders may elect to redeem. As a result of these periodic accretion adjustments, the carrying value of the Series A Preferred Stock will be equal to the aggregate liquidation preference on July 19, 2023. As shown in Note 9, accretion is treated as a deduction in the calculation of earnings applicable to common stockholders. |
PRIVATE PLACEMENT (Details 1)
PRIVATE PLACEMENT (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Dividends at 10.0% per annum | $ 2,845,000 | $ 0 | $ 2,845,000 | $ 0 | |
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | $ 846,000 | $ 0 | $ 846,000 | $ 0 | |
Dividends Payable, Amount Per Share | $ 26.36 | $ 26.36 | $ 26.36 | ||
Dividends Payable in:Cash | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock | $ 2,845,000 | ||||
Dividends Payable in:PIK | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | 846,000 | ||||
Series A Preferred Stock [Member] | |||||
Cash Dividends at 10.0% per annum | $ 2,800,000 | ||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | $ 800,000 | ||||
Dividends, Preferred Stock | 3,691,000 | ||||
Series A Preferred Stock [Member] | Stock Dividend [Member] | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock | $ 846 | ||||
Dividends Payable, Amount Per Share | 6.04 | $ 6.04 | $ 6.04 | ||
Series A Preferred Stock [Member] | Fractional Shares Dividend [Member] | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock | $ 6 | ||||
Dividends Payable, Amount Per Share | 0.04 | 0.04 | $ 0.04 | ||
Series A Preferred Stock [Member] | Dividends Payable in:Cash | |||||
Cash Dividends at 10.0% per annum | $ 2,839,000 | ||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock | $ 2,839 | ||||
Dividends Payable, Amount Per Share | $ 20.28 | $ 20.28 | $ 20.28 | ||
Series A Preferred Stock [Member] | Dividends Payable in:Cash | Stock Dividend [Member] | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | $ 0 | ||||
Series A Preferred Stock [Member] | Dividends Payable in:Cash | Fractional Shares Dividend [Member] | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | 6,000 | ||||
Series A Preferred Stock [Member] | Dividends Payable in:PIK | |||||
Cash Dividends at 10.0% per annum | 0 | ||||
Series A Preferred Stock [Member] | Dividends Payable in:PIK | Stock Dividend [Member] | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | 846,000 | ||||
Series A Preferred Stock [Member] | Dividends Payable in:PIK | Fractional Shares Dividend [Member] | |||||
PIK Dividends at 3.0% per annum: | |||||
Dividends, Preferred Stock, Paid-in-kind | $ 0 |
PRIVATE PLACEMENT (Details Text
PRIVATE PLACEMENT (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 19, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | Dec. 31, 2017 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Stock Issued During Period, Shares, New Issues | 2,897 | ||||||
Proceeds from Issuance or Sale of Equity | $ 133,000,000 | ||||||
Preferred Stock, Discount on Shares | $ 26,755,000 | $ 26,755,000 | |||||
Preferred Stock Redemption Discount | 1,011,000 | $ 0 | 1,011,000 | $ 0 | |||
Proceeds from Issuance of Private Placement | 133,000,000 | 0 | |||||
Cash and Cash Equivalents, at Carrying Value | 23,488,000 | 23,488,000 | $ 21,950,000 | ||||
Payments of Stock Issuance Costs | $ 3,937,000 | $ 1,036,000 | |||||
Convertible Preferred Stock, Terms of Conversion | The Company has the right to convert outstanding shares of Series A Preferred Stock into Common Stock for the Per Share Amount after the three-year anniversary of the Closing if the Company’s volume weighted average stock price for at least 30 trading days of the 45 consecutive trading days immediately preceding such conversion is greater than $11.50 per share. | ||||||
Preferred Stock Liquidation PreferenceDescription | The holders of Series A Preferred Stock may exercise their conversion rights prior to any optional redemption. In the event of a liquidation, dissolution or winding up of the Company, the Series A Preferred Stock is entitled to a liquidation preference in the amount of the greater of (i) $1,000 plus accrued but unpaid Dividends (the “Liquidation Preference”), and (ii) the per share amount of all cash, securities and other property to be distributed in respect of the common stock such holder would have been entitled to receive for its Series A Preferred Stock on an as-converted basis. | ||||||
Private Placement [Member] | |||||||
Proceeds from Issuance or Sale of Equity | 133,000,000 | ||||||
Private Placement Incremental and Direct Transaction Costs | 4,600,000 | ||||||
Proceeds from Issuance of Private Placement | $ 133,000,000 | ||||||
Cash and Cash Equivalents, at Carrying Value | $ 2,700,000 | 2,700,000 | |||||
Repayments of Debt | 132,800,000 | ||||||
Payments of Stock Issuance Costs | 2,700,000 | ||||||
Professional Fees | $ 200,000 | ||||||
Financial Advisor and Professional Fees [Member] | Private Placement [Member] | |||||||
Private Placement Incremental and Direct Transaction Costs | 2,700,000 | ||||||
Due diligence and Professional Fees [Member] | Private Placement [Member] | |||||||
Private Placement Incremental and Direct Transaction Costs | $ 1,900,000 | ||||||
Series A Preferred Stock [Member] | |||||||
Preferred Stock, Dividend Rate, Percentage | 13.00% | ||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | ||||||
Stock Issued During Period, Shares, New Issues | 140,000 | ||||||
Convertible Preferred Stock Shares to be Issued upon Conversion | 14,000,000 | 14,000,000 | |||||
Preferred Stock, Convertible, Conversion Price, Decrease | $ 10 | ||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 80,000,000 | 80,000,000 | |||||
Percentage of Outstanding Stock to be Maintained for Incurring Indebtness | 95.00% | 95.00% | |||||
Temporary Equity, Shares Authorized | 180,000 | 180,000 | |||||
Temporary Equity, Accretion of Dividends | $ 1,000 | ||||||
Series A Preferred Stock [Member] | Paid In Cash [Member] | |||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||||||
Series A Preferred Stock [Member] | Paid-In-Kind [Member] | |||||||
Preferred Stock, Dividend Rate, Percentage | 3.00% | ||||||
Series A Preferred Stock [Member] | Private Placement [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 140,000 | ||||||
Preferred Stock, Discount on Shares | $ 7,000,000 | ||||||
Preferred Stock, Liquidation Preference Per Share | $ 1,000 | ||||||
Preferred Stock, Liquidation Preference, Value | $ 140,000,000 | $ 800,000 | $ 800,000 | ||||
Preferred Stock Redemption Discount | $ 27,800,000 | ||||||
Preferred Stock Percentage of Accretion of Redemption Discount | 4.50% | ||||||
Dividends Payable, Current | $ 2,800,000 | $ 2,800,000 | |||||
Preferred Stock Dividends, Shares | 846 | ||||||
Preferred Stock, Shares Outstanding | 140,000 | ||||||
Common Stock [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 2,900,000 | ||||||
Common Stock [Member] | Private Placement [Member] | |||||||
Stock Issued During Period, Shares, New Issues | 2,896,556 | ||||||
Share Price | $ 6.95 |