Document and Entity Information
Document and Entity Information - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | Rimini Street, Inc. | |
Entity Central Index Key | 0001635282 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | false | |
Trading Symbol | RMNI | |
Entity Common Stock, Shares Outstanding | 65,293 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 32,264 | $ 24,771 |
Restricted cash | 435 | 435 |
Accounts receivable, net of allowance of $296 and $489, respectively | 63,642 | 80,599 |
Other receivable | 12,987 | 0 |
Prepaid expenses and other | 8,842 | 7,099 |
Total current assets | 118,170 | 112,904 |
Long-term assets: | ||
Property and equipment, net of accumulated depreciation and amortization of $9,037 and $8,543, respectively | 3,673 | 3,634 |
Deposits and other | 1,406 | 1,438 |
Deferred income taxes, net | 934 | 909 |
Total assets | 124,183 | 118,885 |
Current liabilities: | ||
Current maturities of long-term debt | 1,222 | 2,372 |
Accounts payable | 2,921 | 12,851 |
Accrued compensation, benefits and commissions | 18,922 | 22,503 |
Other accrued liabilities | 25,094 | 20,424 |
Deferred revenue | 180,580 | 180,358 |
Total current liabilities | 228,739 | 238,508 |
Long-term liabilities: | ||
Deferred revenue | 28,148 | 28,898 |
Accrued PIK dividends payable | 1,059 | 1,056 |
Other long-term liabilities | 2,038 | 2,011 |
Total liabilities | 259,984 | 270,473 |
Commitments and contingencies (Note 8) | ||
Authorized 180 shares; issued and outstanding 148 shares and 141 shares as of March 31, 2019 and December 31, 2018, respectively. Liquidation preference of $148,408, net of discount for $27,557 and $140,846, net of discount for $26,848, as of March 31, 2019 and December 31, 2018, respectively. | 120,851 | 113,998 |
Stockholders’ deficit: | ||
Preferred stock; $0.0001 par value. Authorized 99,820 shares (excluding 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 65,242 and 64,193 shares as of March 31, 2019 and December 31, 2018, respectively | 7 | 6 |
Additional paid-in capital | 105,455 | 108,347 |
Accumulated other comprehensive loss | (1,566) | (1,567) |
Accumulated deficit | (360,548) | (372,372) |
Total stockholders' deficit | (256,652) | (265,586) |
Total liabilities, redeemable preferred stock and stockholders' deficit | $ 124,183 | $ 118,885 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Statement of Financial Position [Abstract] | ||
Current allowance for doubtful accounts receivable | $ 296 | $ 489 |
Accumulated depreciation and amortization of property, plant, and equipment | $ 9,037 | $ 8,543 |
Redeemable preferred stock authorized (shares) | 180,000 | 180,000 |
Redeemable preferred stock issued (shares) | 148,000 | 141,000 |
Redeemable preferred stock outstanding (shares) | 148,408 | 141,000 |
Liquidation preference of redeemable preferred stock | $ 148,408 | $ 140,846 |
Discount on redeemable preferred stock | $ 27,557 | $ 26,848 |
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (shares) | 99,820,000 | 99,820,000 |
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock issued (shares) | 65,242,000 | 64,193,000 |
Common stock outstanding (shares) | 65,242,000 | 64,193,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenue | $ 66,260 | $ 59,805 |
Cost of revenue | 23,837 | 23,541 |
Gross profit | 42,423 | 36,264 |
Operating expenses: | ||
Sales and marketing | 23,376 | 20,207 |
General and administrative | 12,424 | 10,805 |
Litigation costs and related recoveries: | ||
Professional fees and other defense costs of litigation | 2,041 | 8,899 |
Litigation appeal refunds | (12,775) | (21,285) |
Insurance costs and recoveries, net | 4,639 | (7,583) |
Litigation costs and related recoveries, net | (6,095) | (19,969) |
Total operating expenses | 29,705 | 11,043 |
Operating income | 12,718 | 25,221 |
Non-operating expenses: | ||
Interest expense | (232) | (13,409) |
Other debt financing expenses | 0 | (8,617) |
Gain from change in fair value of embedded derivatives | 0 | 500 |
Other income, net | 43 | 328 |
Income before income taxes | 12,529 | 4,023 |
Income tax expense | (705) | (516) |
Net income | 11,824 | 3,507 |
Other comprehensive income: | ||
Foreign currency translation gain (loss) | 1 | (37) |
Comprehensive income | 11,825 | 3,470 |
Net income attributable to common stockholders | $ 4,740 | $ 3,507 |
Net earnings per share attributable to common stockholders: | ||
Basic (usd per share) | $ 0.07 | $ 0.06 |
Diluted (usd per share) | $ 0.07 | $ 0.05 |
Weighted average number of shares of Common Stock outstanding: | ||
Basic (shares) | 64,622 | 59,393 |
Diluted (shares) | 69,101 | 68,154 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statement of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Private Placement | Private PlacementCommon Stock | Private PlacementAdditional Paid-in Capital |
Beginning balance (shares) at Dec. 31, 2017 | 59,314 | |||||||
Beginning balance, stockholders' equity at Dec. 31, 2017 | $ (210,301) | $ 6 | $ 94,967 | $ (867) | $ (304,407) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | 867 | 867 | ||||||
Exercise of stock options for cash (shares) | 126 | |||||||
Exercise of stock options for cash | 153 | $ 0 | 153 | |||||
Foreign currency translation gain (loss) | (37) | (37) | ||||||
Net income | 3,507 | 3,507 | ||||||
Ending balance (shares) at Mar. 31, 2018 | 59,440 | |||||||
Ending balance, stockholders' equity at Mar. 31, 2018 | (205,811) | $ 6 | 95,987 | (904) | (300,900) | |||
Beginning balance (shares) at Dec. 31, 2018 | 64,193 | |||||||
Beginning balance, stockholders' equity at Dec. 31, 2018 | (265,586) | $ 6 | 108,347 | (1,567) | (372,372) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | $ 1,155 | 1,155 | ||||||
Exercise of stock options for cash (shares) | 667 | 667 | ||||||
Exercise of stock options for cash | $ 783 | $ 1 | 782 | |||||
Restricted stock units vested (shares) | 138 | |||||||
Issuance of Common Stock (shares) | 110 | 134 | ||||||
Issuance of Common Stock | 599 | 599 | $ 602 | $ 602 | ||||
Accretion of discount on Series A Preferred Stock | (1,359) | (1,359) | ||||||
Payable in cash | (3,593) | (3,593) | ||||||
Payable in kind | (1,078) | (1,078) | ||||||
Foreign currency translation gain (loss) | 1 | 1 | ||||||
Net income | 11,824 | 11,824 | ||||||
Ending balance (shares) at Mar. 31, 2019 | 65,242 | |||||||
Ending balance, stockholders' equity at Mar. 31, 2019 | $ (256,652) | $ 7 | $ 105,455 | $ (1,566) | $ (360,548) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 11,824 | $ 3,507 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Accretion and amortization of debt discount and issuance costs | 128 | 5,968 |
Write-off of debt discount and issuance costs | 0 | 7,169 |
Gain from change in fair value of embedded derivatives | 0 | (500) |
Stock-based compensation expense | 1,155 | 867 |
Paid-in-kind interest expense | 0 | 931 |
Depreciation and amortization | 494 | 484 |
Deferred income taxes | (26) | (6) |
Make-whole applicable premium included in interest expense | 0 | 3,103 |
Other | 141 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 17,015 | (7,409) |
Prepaid expenses, deposits and other | (14,669) | 272 |
Accounts payable | (9,900) | (3,005) |
Accrued compensation, benefits, commissions and other liabilities | 886 | 1,337 |
Deferred insurance settlement | 0 | (8,033) |
Deferred revenue | (488) | 14,000 |
Net cash provided by operating activities | 6,560 | 18,685 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
Capital expenditures | (381) | (321) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | 5,785 | 0 |
Principal payments on borrowings | (1,277) | (3,000) |
Payments for deferred offering and financing costs | (294) | (951) |
Payments of cash dividends on Series A Preferred Stock | (3,566) | 0 |
Principal payments on capital leases | (197) | (137) |
Proceeds from exercise of employee stock options | 782 | 153 |
Net cash provided by (used in) financing activities | 1,233 | (3,935) |
Effect of foreign currency translation changes | 81 | 34 |
Net change in cash, cash equivalents and restricted cash | 7,493 | 14,463 |
Cash, cash equivalents and restricted cash at beginning of period | 25,206 | 40,027 |
Cash, cash equivalents and restricted cash at end of period | 32,699 | 54,490 |
Supplemental Cash Flow Information [Abstract] | ||
Cash paid for interest | 95 | 3,770 |
Cash paid for income taxes | 647 | 441 |
Investor transaction costs | 390 | 0 |
Accrued cash dividends | 3,593 | 0 |
Accrued PIK dividends | 1,078 | 0 |
Accretion of discount on Series A Preferred Stock | 1,359 | 0 |
Issuance of Series A Preferred Stock for PIK dividends | 1,062 | 0 |
Adjustment for updated calculation of mandatory trigger event exit fees | 0 | 1,480 |
Purchase of equipment under capital lease obligations | 206 | 126 |
Common Stock | ||
Issuance of 85 shares of Common Stock for consent regarding Private Placement | 456 | 0 |
Redeemable Series A Preferred Stock | ||
Fair value of 134 shares of Common Stock issued for no consideration | 722 | 0 |
Original issuance discount on Series A Preferred Stock | $ 325 | $ 0 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) shares in Thousands | 3 Months Ended |
Mar. 31, 2019shares | |
Common stock issued (shares) | 134 |
Private Placement | Common Stock | |
Common stock issued (shares) | 85 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business Rimini Street, Inc. ("the Company") 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. 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 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, 2018 , included in the Company’s 2018 Annual Report on Form 10-K as filed with the SEC on March 14, 2019 (the “ 2018 Form 10-K”). The accompanying condensed consolidated balance sheet and related disclosures as of December 31, 2018 have been derived from the Company’s audited financial statements. The Company’s financial condition as of March 31, 2019 , and operating results for the three months ended March 31, 2019 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, 2019 . |
LIQUIDITY AND SIGNIFICANT ACCOU
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES | LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES Liquidity As of March 31, 2019 , the Company’s current liabilities exceeded its current assets by $110.6 million , and the Company earned net income of $11.8 million for the three months ended March 31, 2019 . As of March 31, 2019 , the Company had available cash, cash equivalents and restricted cash of $32.7 million . As of March 31, 2019, the Company's current liabilities included $180.6 million of deferred revenue whereby the historical costs of fulfilling the Company's commitments to provide services to its customers was approximately 36% of the related deferred revenue for the three months ended March 31, 2019. As discussed in Note 5, the Company completed a private placement on March 7, 2019, that provided additional net cash proceeds of $5.0 million from the sale of 6,500 shares of 13.00% Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share (the "Series A Preferred Stock") and 134,483 shares of Common Stock. In addition, the Company had previously refinanced and repaid its Credit Facility (defined below) on July 19, 2018 through aggregate cash payments of $132.8 million that resulted in the termination of the Credit Facility. These cash payments were funded from the Initial Private Placement (defined below) discussed in Note 5 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 Credit Facility and transaction costs due at the closing of the Initial Private Placement. These refinancing arrangements are 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 $3.6 million to $4.2 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 $1.2 million loan payable to GPIC, Ltd. ("GP Sponsor") during the second quarter of 2019, and to make operating and capital lease payments that are due within the next 12 months in the aggregate amount of $4.6 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. Recent Accounting Pronouncements Recently Adopted Standards. The following accounting standards were adopted during the first quarter of fiscal year 2019 : In May 2017, the FASB issued ASU No. 2017-9, Compensation-Stock Compensation: Scope of Modification Accounting , which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications of share-based payment awards but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This standard did not have a material impact for the Company in the first quarter of fiscal 2019. 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 has provided an unaudited condensed consolidated statement of stockholders' deficit for the three months ended March 31, 2019 and 2018. 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 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 currently intends to adopt this standard using the full retrospective method. Due to the Company’s emerging growth status and certain elections made, the new standard is effective for the Company in fiscal year 2019. As an emerging growth company for interim reporting purposes, we can elect to initially apply the standard either in the year of adoption or in the subsequent year. The Company has elected to adopt the standard for interim reporting purposes beginning in the first quarter of fiscal 2020. As a result of this election, fiscal year 2019 interim periods will continue to be reported under legacy GAAP while full year 2019 will be reported under the new standard. We have made significant progress in our analysis of how the standard will impact our revenue, but we have not completed our evaluation and therefore the full impact upon adoption of this standard is not known and cannot be reasonably estimated. Based on our preliminary evaluation to date, we believe that the primary change will be the accelerated timing of revenue recognition for certain contracts due to the removal of the current limitation associated with revenue contingent upon the future delivery of support services. In addition, we expect to capitalize approximately $18.5 million as of January 1, 2017 for costs incurred to obtain new client 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 of 3 years under the new standard. We will complete our evaluation during fiscal 2019. 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. |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | OTHER FINANCIAL INFORMATION Other Accrued Liabilities As of March 31, 2019 and December 31, 2018 , other accrued liabilities consist of the following (in thousands): 2019 2018 Accrued sales and other taxes $ 4,777 $ 5,687 Accrued professional fees 7,237 7,035 Accrued dividends on Redeemable Series A Preferred Stock 3,561 3,521 Current maturities of capital lease obligations 307 387 Income taxes payable 641 767 Other accrued expenses 8,571 3,027 Total other accrued liabilities $ 25,094 $ 20,424 Other accrued expenses includes amount due to insurance company as a result of the U.S. Supreme Court decision as described in Note 8. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Debt is presented net of debt discounts and issuance costs (“DDIC”) in the Company’s balance sheets. As of March 31, 2019 and December 31, 2018 , the net carrying value and balance sheet classification of debt is summarized as follows (in thousands): 2019 2018 Note payable to GP Sponsor, net of DDIC $ 1,222 $ 2,372 Less current maturities 1,222 2,372 Long-term debt, net of current maturities $ — $ — 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, as of March 31, 2019, the $1.2 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 in June 2019. As discussed below, the Company repaid in full and terminated its former Credit Facility on July 19, 2018 . Related Party Note Payable Upon consummation of a merger with GP Investments Acquisition Corp. ("GPIA") in May 2017, an outstanding loan payable to GP Sponsor with an initial face amount of approximately $3.0 million was assumed by Company. This loan was originally non-interest bearing and was not due and payable until the outstanding principal balance under the former Credit Facility was 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. Interest was initially imputed under this loan payable at the rate of 15.0% per annum. The net carrying value of this note payable was $2.1 million as of December 31, 2017, and the Company recognized accretion expense of $0.2 million for the three months ended March 31, 2018. This note payable was amended twice in 2018 which resulted in further changes to the effective interest rate. The second amendment to the loan agreement was effective on December 21, 2018, and provided for an extension of the maturity date from January 4, 2019 to June 28, 2019. In addition, the parties agreed that the note payable would retroactively bear interest at 13.0% per annum from July 19, 2018 through the maturity date. Total retroactive interest amounted to $0.2 million which is accounted for as DDIC that is being accreted through the maturity date. In addition, the second amendment provided for monthly principal payments starting in December 2018 of approximately $0.4 million plus accrued interest. In December 2018, the Company made a payment of $0.6 million , primarily consisting of payment of retroactive interest of $0.2 million and the first monthly principal payment of $0.4 million . The Company made principal and interest payments totaling $1.3 million during the three months ended March 31, 2019. The effective interest rate for accretion of DDIC is 26.4% for the period from December 21, 2018 through June 28, 2019. Former 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 which consisted of an initial term loan for $30.0 million , a “delayed draw A Term Loan” for $65.0 million , and a “delayed draw B Term Loan” for $30.0 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. Interest and Fees. The outstanding principal balance under the former 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 during 2018 until the Credit Facility was terminated. The Credit Facility also required unused line fees of 5.0% per annum on the $17.5 million undrawn portion of the Credit Facility during 2018 until the termination date. 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. 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 exit fee 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. Termination of the Credit Facility. In connection with the closing on July 19, 2018 of the Initial Private Placement discussed in Note 5, the Company used substantially all of the $133.0 million of gross proceeds from the Initial 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 payments to terminate the Credit Facility amounted to $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 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 Interest Expense The components of interest expense are presented below (in thousands): Three Months Ended 2019 2018 Credit Facility: Interest expense at 12.0% $ — $ 3,726 PIK interest at 3.0% — 931 Accretion expense for funded debt — 5,418 Make-whole applicable premium — 3,103 Accretion expense for GP Sponsor note payable 128 207 Interest on other borrowings 104 24 Total interest expense $ 232 $ 13,409 Other Debt Financing Expenses The components of other debt financing expenses are presented below (in thousands): Three Months Ended 2019 2018 Write-off of DDIC related to Credit Facility $ — $ 7,169 Collateral monitoring fees — 776 Amortization of DDIC related to unfunded debt — 343 Unused line fees — 216 Amortization of prepaid agent fees and other — 113 Total other debt financing fees $ — $ 8,617 |
REDEEMABLE SERIES A PREFERRED S
REDEEMABLE SERIES A PREFERRED STOCK | 3 Months Ended |
Mar. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE SERIES A PREFERRED STOCK | 2019 Securities Purchase Agreement On March 7, 2019, the Company entered into a securities purchase agreement (the “2019 SPA”) with an accredited investor for a private placement (the "March 2019 Private Placement") of (i) 6,500 shares of Series A Preferred Stock, (ii) 134,483 shares of Common Stock, and (iii) a Convertible Note (as defined below) with no principal balance outstanding. The shares of Series A Preferred Stock were authorized pursuant to the CoD (as defined below) and are subject to the provisions set forth in an amended Security Agreement (as defined below), a Convertible Note and a registration rights agreement that is substantially similar in all material respects to the Registration Rights Agreement (as defined below) entered into in connection with the 2018 Securities Purchase Agreement discussed below. The accredited investor in the March 2019 Private Placement is affiliated with one of the accredited investors in the Initial Private Placement. The aggregate cash proceeds from the March 2019 Private Placement were $5.8 million in cash (after an 11.0% discount or $0.7 million ). The net proceeds were approximately $5.0 million after estimated transaction costs payable by the Company of approximately $0.8 million . The transaction costs consisted of 85,000 shares of Common Stock issued to the existing holders of the Series A Preferred Stock for their consent at a cost of $0.5 million and direct transaction costs of $0.3 million related to due diligence and professional fees. The net proceeds were allocated based on their relative fair values at issuance of the Series A Preferred Stock and the Common Stock. The allocation of the net proceeds from the March 2019 Private Placement as well as the changes in the net carrying value of Series A Preferred Stock from December 31, 2018 to March 31, 2019 are set forth below (dollars in thousands): Series A Preferred Stock Common Convertible Shares Amount Stock Notes Total Fair value on March 7, 2019: Series A Preferred Stock 6,500 $ 5,313 (1) $ — $ — $ 5,313 Common Stock — — 722 (2) — 722 Convertible Notes — — — — — Total 6,500 $ 5,313 $ 722 $ — $ 6,035 Relative fair value allocation on March 7, 2019: Aggregate cash proceeds on March 7, 2019 6,500 $ 5,093 (3) $ 692 (3) $ — $ 5,785 Incremental and direct costs — (661 ) (4) (90 ) (4) — (751 ) Net carrying value on March 7, 2019 6,500 $ 4,432 $ 602 $ — $ 5,034 Series A Preferred Stock Shares Amount Net carrying value as of December 31, 2018 140,846 $ 113,998 Issuance of shares to settle PIK Dividends on January 2, 2019 1,062 1,062 Additional shares issued on March 7, 2019 6,500 4,432 Accretion of discount for the three months ended March 31, 2019 — 1,359 Net carrying value as of March 31, 2019 148,408 $ 120,851 (1) The liquidation preference for each share of Series A Preferred Stock on the closing date for the March 2019 Private Placement was $1,000 per share for an aggregate liquidation preference of $6.5 million . The estimated fair value of the Series A Preferred Stock was approximately $5.3 million on March 7, 2019, which is the basis for allocation of the net proceeds. Please refer to Note 12 for further discussion of the valuation methodology employed. (2) The fair value of the issuance of approximately 134,483 shares of the Common Stock was based on the last closing price of $5.37 per share prior to closing. (3) The aggregate cash proceeds of $5.8 million on March 7, 2019 were allocated pro rata based on the fair value of all consideration issued. (4) Incremental and direct costs related to the March 2019 Private Placement were allocated pro rata based on the fair value of all consideration issued. Such costs included the issuance of 85,000 shares of Common Stock to the original investors in the Series A Preferred Stock for their consent of approximately $0.5 million and financial advisory and professional fees that were incurred of approximately $0.3 million was either paid or accrued directly by the Company as of March 31, 2019. The Company plans to use the net proceeds for growth capital, including to fund sales and marketing expenses. For future calculations of earnings applicable to common stockholders, the aggregate discount applicable to the Series A Preferred Stock will be accreted using the effective interest method from the issuance date through July 19, 2023 when the holders of all outstanding shares of Series A Preferred Stock may first elect to redeem their shares for cash. 2018 Securities Purchase Agreement On July 19, 2018, the closing occurred for a Securities Purchase Agreement (the “2018 SPA”) with several accredited investors (the “Purchasers”) for a private placement (the “Private Placement”) of (i) 140,000 shares of Series A Preferred Stock, (ii) approximately 2.9 million 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 aggregate cash proceeds from the Initial Private Placement were $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 Initial Private Placement of $4.6 million ). The Company used the net proceeds from the 2018 SPA to repay all outstanding indebtedness and various fees and expenses under the former Credit Facility as discussed in Note 4, and to pay certain fees and expenses of the Purchasers and the Company in connection with the 2018 SPA. Private Placement Transactions In connection with the completion of the Initial 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 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 Promissory Notes if certain redemption provisions of the Series A Preferred Stock are triggered in the future. In connection with the March 2019 Private Placement, the Company entered into a securities purchase agreement, Registration Rights Agreement, a First Amendment to the Security Agreement, as well as issued a Convertible Note, in each case substantially in the same form as entered into by the Company in the Initial Private Placement. 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 March 31, 2019 and December 31, 2018 since the holders have redemption rights beginning on July 19, 2023 (and earlier under certain circumstances). As required under the CoD, the Cash Dividends and PIK Dividends for the period in which the Series A Preferred Stock was outstanding during the first quarter of 2019 were settled on April 1, 2019 to holders of record on March 16, 2019. Accrued Cash Dividends and PIK Dividends for the fourth quarter of 2018 were settled on January 2, 2019 to holders of record on December 16, 2018. Accordingly, the Company accrued a current liability for accrued Cash Dividends through March 31, 2019 for $3.6 million . A long-term liability was recorded for $1.1 million of PIK Dividends that accrued through March 31, 2019, and that were settled through the issuance of 1,059 shares of Series A Preferred Stock on April 1, 2019. Presented below is a summary of total and per share dividends declared through March 31, 2019 (dollars in thousands, except per share amounts): Dividends Payable in: Total Dividends Cash PIK Dividends Per Share Dividends payable as of December 31, 2018 $ 3,521 $ 1,056 $ 4,577 $ 32.50 Cash Dividends 10% per annum 3,593 — 3,593 $ 25.00 PIK Dividends 3% per annum — 1,065 1,065 $ 7.41 Fractional PIK shares settled for cash 13 — 13 $ 0.09 Less dividends settled January 2, 2019 (3,566 ) (1,062 ) (4,628 ) $ (32.62 ) Dividends payable as of March 31, 2019 $ 3,561 $ 1,059 $ 4,620 $ 31.13 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 14.8 million shares of Common Stock based on 148,408 shares of Series A Preferred Stock outstanding as of March 31, 2019. 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 July 19, 2021, 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 shares, on or after July 19, 2023. 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. Additionally, in certain circumstances the Company may require the holders of shares of the 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 July 19, 2021, 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 July 19, 2021, provided that such redemptions are subject to certain conditions and limitations. After July 19, 2021, 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 July 19, 2021, 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 July 19, 2021. 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 both the 2019 SPA and 2018 SPA), subject to certain exceptions. Registration Rights Agreement The original Registration Rights Agreement required the Company to register the resale of the shares of Common Stock and Series A Preferred Stock issued pursuant to the 2018 SPA. The Company satisfied such registration requirements in November 2018. The registration rights agreement entered into in connection with the March 2019 Private Placement requires the Company to register the resale of the shares of Common Stock and Series A Preferred Stock pursuant to the 2019 SPA within 120 days of the closing of March 7, 2019. Each such registration rights agreement also includes customary “piggyback” registration rights, suspension rights, indemnification, contribution, and assignment provisions. |
RESTRICTED STOCK UNITS, STOCK O
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS | RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS The Company’s stock option 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 8 to the Company’s consolidated financial statements for the year ended December 31, 2018 , included in the 2018 Form 10-K. The information presented below provides an update for activity under the Stock Plans for the three months ended March 31, 2019 . Restricted Stock Units For the three months ended March 31, 2019 , the Board of Directors granted restricted stock units (“RSUs”) under the 2013 Plan for an aggregate of approximately 207,000 shares of Common Stock to members of the Board of Directors, officers and employees of the Company. These RSUs 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 $5.42 per share, the aggregate fair value for the shares underlying the RSUs amounted to $1.1 million as of the grant date that will be recognized as compensation cost over the vesting period. Accordingly, compensation expense of $0.5 million and $0.2 million was recognized for the three months ended March 31, 2019 and 2018 , respectively. As of March 31, 2019 , the unrecognized expense of $1.1 million is expected to be charged to expense on a straight-line basis as the RSUs vest over a weighted-average period of approximately 0.7 years. Stock Options On February 13, 2019, the Board of Directors authorized an increase of approximately 2.6 million shares available for grant under the 2013 Plan. For the three months ended March 31, 2019 , the Board of Directors granted stock options for the purchase of an aggregate of approximately 0.3 million shares of Common Stock at an exercise prices that were equal to or greater than the fair market value of the Common Stock on the date of grant. 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 three months ended March 31, 2019 (shares in thousands): Shares Price (1) Term (2) Outstanding, December 31, 2018 11,904 $ 4.00 5.1 Granted 270 5.85 Forfeited (279 ) 8.15 Expired (104 ) 6.40 Exercised (667 ) 1.17 Outstanding, March 31, 2019 (3)(4) 11,124 4.09 4.9 Vested, March 31, 2019 (3) 10,915 4.03 4.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) As of March 31, 2019 , the aggregate intrinsic value of all stock options outstanding was $19.3 million . As of March 31, 2019 , the aggregate intrinsic value of vested stock options was $19.3 million . (4) The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.2 million shares as of March 31, 2019 . The following table presents activity affecting the total number of shares available for grant under the Stock Plans for the three months ended March 31, 2019 (in thousands): Available, December 31, 2018 2,758 Stock options granted 270 Restricted stock units granted 207 Expired options under 2007 Plan (104 ) Forfeited options under Stock Plans (279 ) Newly authorized by Board of Directors 2,567 Available, March 31, 2019 5,419 The aggregate fair value of approximately 270,000 stock options granted for the three months ended March 31, 2019 amounted to $0.6 million , or $2.26 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 three months ended March 31, 2019 , 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) 6.0 Volatility 35% Dividend yield 0% Risk-free interest rate 2.7% Fair value per common share on date of grant $5.85 As of March 31, 2019 and December 31, 2018 , total unrecognized compensation costs related to unvested stock options, net of estimated forfeitures, was $3.4 million and $4.5 million , respectively. As of March 31, 2019 , the unrecognized costs are expected to be charged to expense on a straight-line basis over a weighted-average vesting period of approximately 1.9 years . Stock-Based Compensation Expense Stock-based compensation expense attributable to RSUs and stock options is classified as follows (in thousands): Three Months Ended 2019 2018 Cost of revenues $ 209 $ 165 Sales and marketing 341 367 General and administrative 605 335 Total $ 1,155 $ 867 Warrants As of March 31, 2019 , 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. For additional information about these warrants, please refer to Note 8 to the Company’s consolidated financial statements for the year ended December 31, 2018 , included in the 2018 Form 10-K. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 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 Tax Act, among other things, contains significant changes to corporate taxation, including a flat corporate tax rate of 21% , limitation of the tax deduction for interest expense to 30% of adjusted earnings, limitation of the deduction for newly generated net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated (the “Transition Tax”), future taxation of certain classes of offshore earnings regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits beginning in 2018. 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. For the three months ended March 31, 2019 and 2018 , our effective rate was 5.6% and 12.8% , respectively. Our income tax expense was attributable to earnings in foreign jurisdictions subject to income taxes. For the three months ended March 31, 2019 and 2018 , no income tax expense was recorded in the United States as a result of historical net operating losses being incurred. 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 months ended March 31, 2019 and 2018 . |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases its office facilities under non-cancellable operating lease agreements that expire from May 2019 to January 2025. The Company recognizes rent expense on a straight-line basis over the lease period. Rent expense for the three months ended March 31, 2019 and 2018 was $1.5 million and $1.4 million , respectively. Future minimum lease payments under the non-cancellable operating lease agreements are as follows (in thousands): 12 months ending March 31: 2020 $ 4,632 2021 4,099 2022 3,661 2023 2,187 2024 297 Thereafter 275 Total $ 15,151 Series A Preferred Stock Dividends In connection with the issuance of Series A Preferred Stock on both March 7, 2019 and July 19, 2018 as discussed in Note 5, 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 required to be declared are as follows (in thousands): Year Ending December 31: Cash PIK Total 2019 $ 14,888 $ 4,466 $ 19,354 2020 15,460 4,638 20,098 2021 15,929 4,779 20,708 2022 16,412 4,924 21,336 2023 9,240 2,772 12,012 Total $ 71,929 $ 21,579 $ 93,508 Retirement Plan The Company has a qualified 401(k) plan for all eligible U.S. employees. Employees may contribute up to the statutory maximum, which is set by law each year. The plan also provides for discretionary employer contributions in an amount equal to 100% of each employee’s contribution, not to exceed 4% of eligible compensation. The Company’s matching contribution to the plan totaled $0.7 million and $0.5 million for the three months ended March 31, 2019 and 2018, respectively. 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 services to its clients. To provide software support and maintenance services to its clients, 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 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 may physically 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, “Oracle’s 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 District 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 for purposes of the Rimini I action. In August 2014, the District 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. This process 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 in October 2016, 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 District Court entered a permanent injunction prohibiting the Company from using certain processes. 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 (the “Court of Appeals”) to appeal findings (i) and (ii) above as well as the injunction and attorneys’ fee award, non-taxable expenses, and interest. With respect to the injunction entered by the District Court, the Company argued on appeal that the injunction was 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 the injunction 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. On January 8, 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 Court of Appeals on December 6, 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 expenses and interest totaling $21.3 million , Oracle’s attorneys’ fees of $28.5 million (that was subsequently remanded 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. Although the Court of Appeals affirmed 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, it stated in the opinion that the Company “provided 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 expenses 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 year ended December 31, 2018. Additionally, in May 2018, by stipulation of the parties, Oracle deposited $ 28.5 million into an escrow account with the District Court pending a decision by the District Court on the remanded attorneys’ fees award. 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) again awarded Oracle $28.5 million in attorneys’ fees, which were paid by funds deposited by Oracle with the District Court in May 2018. On August 16, 2018, the Company filed a notice of appeal of the District Court’s renewed injunction and its decision to return the $28.5 million attorneys' fee award to Oracle. The Company also filed in the District Court a motion to stay the injunction pending appeal. On September 11, 2018, the District Court denied the motion, but granted a temporary 60-day stay for the Company to obtain a stay with the Court of Appeals. 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. On November 5, 2018, the Court of Appeals denied the Company’s motion for a stay pending appeal of the injunction issued by the District Court without addressing the merits of the Company’s appeal, and it confirmed the briefing schedule for the appeal. The Company intends to continue pursuing its appeal of the injunction and the attorneys’ fee award. The Company expects 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 was completed on March 14, 2019, and a hearing on the Company’s appeal has been tentatively scheduled for July 12, 2019. As long as the injunction is still in place, Oracle may file contempt proceedings against the Company at any time to attempt to enforce its interpretation of the injunction or if it has reason to believe the Company is not in compliance with express terms of the injunction. T he Company believes that it is in compliance with the terms of the injunction insofar as they are comprehensible and within the scope of the judgment in Rimini I. On February 27, 2019, Oracle filed in the District Court a motion to reopen discovery in Rimini I and a motion to modify the protective order in Rimini II to permit Oracle to use discovery from Rimini II in Rimini I, in a purported effort to investigate whether the Company is complying with the injunction. On April 4, 2019, the District Court granted Oracle’s motion to reopen discovery in Rimini I. 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 District Court set the interest rate using a date that precedes the filing of Oracle's complaint, 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 expenses, 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 “U.S. 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 petition for writ of certiorari in the U.S. Supreme Court appealing the decision of the Court of Appeals on the non-taxable expenses issue. On September 27, 2018, the U.S. Supreme Court granted the Company’s petition for a writ of certiorari . Briefing on the Company’s appeal was completed in early 2019, and a hearing on the appeal was held on January 14, 2019. On March 4, 2019, the U.S. Supreme Court issued a unanimous decision reversing earlier decisions by the lower courts and ruling that Oracle must return approximately $12.8 million in non-taxable expenses that the Company had previously paid to Oracle (plus interest of $0.2 million ). As mandated by the U.S. Supreme Court, on April 5, 2019, Oracle paid the Company $13.0 million (the principal amount plus post-judgment interest). The award received by the Company will be required to be shared on a pro rata basis with an insurance company that previously paid for part of the judgment and reimbursed a portion of defense costs after deducting the costs of all of our past and pending appeal and remand proceedings in Rimini I. As a result of the U.S. Supreme Court decision, the Company recognized a recovery of the non-taxable expenses for $12.8 million and interest income of $0.2 million for the three months ended March 31, 2019, excluding any contractual amounts due to the insurance company. 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 clients not addressed in Rimini I, 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 District 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 District Court issued an order granting in part and denying in part the Company’s motion to dismiss Oracle’s third amended counterclaims. The District Court granted the Company’s motion to dismiss Oracle's intentional interference with prospective economic advantage and unjust enrichment counterclaims. On October 5, 2017, Oracle filed a motion for reconsideration of the District 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 District Court issued an order granting in part and denying in part Oracle’s motion to dismiss the Company’s third amended complaint. The District 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 District 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 District Court denied Oracle’s motion for reconsideration of the District Court’s September 22, 2017 Order. On June 5, 2018, the District Court denied the Company’s motion for reconsideration of the District Court’s November 7, 2017 Order. Fact discovery with respect to the above action substantially ended by March 2018, and expert discovery ended in September 2018. Briefing on the parties’ motions for summary judgment was completed December 14, 2018, and the parties await the District Court’s ruling on those motions. There is currently no trial date scheduled, and the Company does 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, the Company does not have sufficient information regarding possible damages exposure for the counterclaims asserted by Oracle or possible recovery by the Company in connection with its 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 March 31, 2019. 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 (the “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 agreed to make an additional payment to the Company of $19.3 million that was received in April 2017. In April 2017, the Company paid $0.6 million of settlement expenses, and the remaining $18.7 million of settlement proceeds was used to make a mandatory $14.1 million principal payment, and a $4.6 million make-whole applicable premium payment due to the Lenders pursuant to the terms of the Credit Facility discussed in Note 4. 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 March 31, 2017. Accordingly, the deferred insurance settlement liability was eliminated as of March 31, 2018 due to legal defense costs of $11.3 million incurred for the year ended December 31, 2017, resulted in a reduction of the deferred insurance settlement liability to $8.0 million as of December 31, 2017. There was no remaining liability as of December 31, 2018. Governmental Inquiry 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 specified support and related operational practices. The Company is cooperating with this inquiry. Proceeds from the U.S Supreme Court Decision On April 5, 2019, the Company received payment from Oracle of $13.0 million related to the U.S. Supreme Court ruling on March 4, 2019, which reversed earlier decisions by the lower courts that Oracle must return approximately $12.8 million in non-taxable expenses previously paid by the Company plus post-judgment interest. The reward is required to be shared with an insurance company on pro rata basis, whereby the insurance company may be entitled to 60% of the award after deducting the Company's costs for all appeal and remand proceedings. As a result, the Company has recognized a recovery of non-taxable expenses of $12.8 million and recorded interest income of $0.2 million for the three months ended March 31, 2019. The Company also recognized costs of $4.6 million , during the three months ended March 31, 2019, reflecting the current estimate of the amounts owed to the insurance company to date. This liability is subject to decrease as additional costs related to any future Rimini I appeal and remand proceedings are incurred. 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 $21.7 million and $30.4 million as of March 31, 2019 and December 31, 2018 , 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 | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Upon consummation of the Merger Agreement, an outstanding loan payable to GP Sponsor with a face amount of approximately $3.0 million was assumed by the Company. As discussed more thoroughly in Note 4, the loan was amended twice in 2018 whereby the maturity date changed to June 28, 2019. In addition, the parties agreed that the loan would retroactively bear interest at 13.0% per annum from July 19, 2018 through the maturity date. The second amendment also provides for monthly principal payments of approximately $0.4 million plus accrued interest. An affiliate of GP Sponsor is member of the Company’s Board of Directors. An affiliate of Adams Street Partners ("ASP") is a member of the Company’s Board of Directors. As of March 31, 2019, ASP owned approximately 36.3% of the Company’s issued and outstanding shares of Common Stock. In July 2018, ASP acquired 19,209 shares of Series A Preferred Stock and approximately 0.4 million shares of Common Stock issued in the Private Placement discussed in Note 6 for total consideration of approximately $19.2 million . As of March 31, 2019, ASP had voting control of approximately 32.0% of the Company’s issued and outstanding shares of Common Stock, including voting rights associated with the 19,468 shares of Series A Preferred Stock. Prior to termination on July 19, 2018 of the amended Credit Facility discussed in Note 5, ASP owned a $10.0 million indirect interest in the amended Credit Facility. For the three months ended March 31, 2019 and 2018, the Company recognized revenue for software support services provided to certain ASP investees for an aggregate of $0.3 million and $0.6 million , respectively. Accounts receivable includes no amounts due and $1.2 million due from ASP investees for software support services as of March 31, 2019 and December 31, 2018, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | PER SHARE We compute earnings per share in accordance with ASC Topic 260, Earnings per Share (“ASC 260”), which requires earnings per share for each class of stock to be calculated using the two-class method. 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 on Common Stock that are also 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. Under the two-class method, earnings for the reporting period are allocated between the holders of our Common Stock and the Series A Preferred Stock based on their respective participation rights in undistributed earnings. Basic earnings per Common Stock share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of basic Common Stock outstanding. Net income allocated to the holders of our Series A Preferred Stock is calculated based on the shareholders’ proportionate share of the weighted average shares of Common Stock outstanding on an if-converted basis. Diluted earnings per Common Stock share is calculated by adjusting the basic earnings per Common Stock share for the effects of potential dilutive Common Stock shares outstanding such as stock options, restricted stock units and warrants. For the three months ended March 31, 2019 and 2018 , basic and diluted net earnings per share of Common Stock were computed by dividing the net income attributable to common stockholders by the weighted average number of common shares outstanding during the respective periods. The following table sets forth the computation of basic and diluted net income attributable to common stockholders for the three months ended March 31, 2019 and 2018 (in thousands, except per share amounts): 2019 2018 Income attributable to common stockholders: Net income $ 11,824 $ 3,507 Dividends and accretion related to Series A Preferred Stock: Cash dividends declared (3,593 ) — PIK dividends declared (1,078 ) — Accretion of discount (1,359 ) — 5,794 3,507 Undistributed earnings allocated using the two-class method (1,054 ) — Net income attributable to common stockholders $ 4,740 $ 3,507 2019 2018 Weighted average number of shares of Common Stock outstanding 64,622 59,393 Additional shares outstanding if Series A Preferred Stock is converted to Common Stock 14,370 — Total shares outstanding if Series A Preferred Stock is converted to Common Stock 78,992 59,393 Percentage of shares allocable to Series A Preferred Stock 18.2 % — % Weighted average number of shares of Common Stock outstanding: Basic 64,622 59,393 Effect of dilutive securities: Origination Agent warrants — 1,132 Stock options 4,390 7,619 Restricted stock units 89 10 Diluted 69,101 68,154 Net earnings per share attributable to common stockholders: Basic $ 0.07 $ 0.06 Diluted $ 0.07 $ 0.05 As of March 31, 2019 , the following potential Common Stock equivalents were excluded from the computation of diluted net income per share for the respective periods ending on these dates since the impact of inclusion was anti-dilutive (in thousands): 2019 Series A Preferred Stock 14,370 Restricted stock units 4 Stock options 4,122 Warrants 18,128 Total 36,624 |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 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. When determining fair value, the Company considers the principal or most advantageous market in which it transacts, and considers assumptions that market participants would use when pricing the asset or liability. Additional information on fair value measurements is included in Note 13 to the Company’s consolidated financial statements for the year ended December 31, 2018, included in the 2018 Form 10-K. As discussed in Note 5, the fair value for our Series A Preferred Stock issuance on March 7, 2019 was determined to be $5.3 million , which was utilized to determine the basis for allocating the net proceeds. The fair value was determined by utilizing a combination of a discounted cash flow methodology related to funds generated by the Series A Preferred Stock, along with the BSM option-pricing model in relation to the conversion feature. Key assumptions applied for the discounted cash flow and BSM analysis included (i) three different scenarios whereby the Series A Preferred Stock would remain outstanding between 4 and 5 years along with a probability weighting assigned to each scenario, (ii) an implied yield of the Series A Preferred Stock of 22.1% calibrated to the transaction value as of March 7, 2019, (iii) risk-free interest rate of 2.44% , and (iv) historical volatility of 30.0% . For the three months ended March 31, 2018, the Company’s embedded derivative liability was the only liability that was carried at fair value on a recurring basis and was classified within Level 3 of the fair value hierarchy. Details of the embedded derivative, including valuation methodology and key assumptions and estimates used, were disclosed in Part II, Item 8 of our 2018 Form 10-K, in the Company's audited consolidated financial statements for the year ended December 31, 2018, within Note 5. As discussed in Note 5, all embedded derivative liabilities were eliminated on July 19, 2018 upon termination of the Credit Facility. These embedded derivatives had an aggregate fair value of $1.1 million and $1.6 million as of March 31, 2018 and December 31, 2017, respectively. The change in fair value of embedded derivatives resulted in the Company recognizing a gain of $0.5 million for the three months ended March 31, 2018. 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. As of March 31, 2019, the Company does not have any assets or liabilities that are carried at fair value on a recurring basis. 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 and the related party note payable to GP Sponsor both approximate fair value as of the respective balance sheet dates. Significant Concentrations The Company attributes revenues to geographic regions based on the location of its customers’ contracting entity. The following table shows revenues by geographic region (in thousands): Three Months Ended March 31, 2019 2018 United States of America $ 42,871 $ 39,542 International 23,389 20,263 Total $ 66,260 $ 59,805 No customers represented more than 10% of revenue for the three months ended March 31, 2019 and 2018 . As of March 31, 2019 and December 31, 2018 , no customers accounted for more than 10% 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 March 31, 2019 and December 31, 2018 , the Company had cash, cash equivalents and restricted cash with a single financial institution for an aggregate of $25.2 million and $19.9 million , respectively. As of March 31, 2019 and December 31, 2018 , the Company had restricted cash of $0.4 million and $0.4 million , respectively. 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. |
LIQUIDITY AND SIGNIFICANT ACC_2
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Rimini Street, Inc. ("the Company") 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. |
Basis of Presentation and Consolidation | 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 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, 2018 , included in the Company’s 2018 Annual Report on Form 10-K as filed with the SEC on March 14, 2019 (the “ 2018 Form 10-K”). The accompanying condensed consolidated balance sheet and related disclosures as of December 31, 2018 have been derived from the Company’s audited financial statements. The Company’s financial condition as of March 31, 2019 , and operating results for the three months ended March 31, 2019 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, 2019 . |
Use of Estimates | 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Standards. The following accounting standards were adopted during the first quarter of fiscal year 2019 : In May 2017, the FASB issued ASU No. 2017-9, Compensation-Stock Compensation: Scope of Modification Accounting , which provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This standard does not change the accounting for modifications of share-based payment awards but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This standard did not have a material impact for the Company in the first quarter of fiscal 2019. 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 has provided an unaudited condensed consolidated statement of stockholders' deficit for the three months ended March 31, 2019 and 2018. 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 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 currently intends to adopt this standard using the full retrospective method. Due to the Company’s emerging growth status and certain elections made, the new standard is effective for the Company in fiscal year 2019. As an emerging growth company for interim reporting purposes, we can elect to initially apply the standard either in the year of adoption or in the subsequent year. The Company has elected to adopt the standard for interim reporting purposes beginning in the first quarter of fiscal 2020. As a result of this election, fiscal year 2019 interim periods will continue to be reported under legacy GAAP while full year 2019 will be reported under the new standard. We have made significant progress in our analysis of how the standard will impact our revenue, but we have not completed our evaluation and therefore the full impact upon adoption of this standard is not known and cannot be reasonably estimated. Based on our preliminary evaluation to date, we believe that the primary change will be the accelerated timing of revenue recognition for certain contracts due to the removal of the current limitation associated with revenue contingent upon the future delivery of support services. In addition, we expect to capitalize approximately $18.5 million as of January 1, 2017 for costs incurred to obtain new client 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 of 3 years under the new standard. We will complete our evaluation during fiscal 2019. 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. |
Earnings Per Share | We compute earnings per share in accordance with ASC Topic 260, Earnings per Share (“ASC 260”), which requires earnings per share for each class of stock to be calculated using the two-class method. 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 on Common Stock that are also 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. Under the two-class method, earnings for the reporting period are allocated between the holders of our Common Stock and the Series A Preferred Stock based on their respective participation rights in undistributed earnings. Basic earnings per Common Stock share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of basic Common Stock outstanding. Net income allocated to the holders of our Series A Preferred Stock is calculated based on the shareholders’ proportionate share of the weighted average shares of Common Stock outstanding on an if-converted basis. Diluted earnings per Common Stock share is calculated by adjusting the basic earnings per Common Stock share for the effects of potential dilutive Common Stock shares outstanding such as stock options, restricted stock units and warrants. |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Accrued Liabilities | As of March 31, 2019 and December 31, 2018 , other accrued liabilities consist of the following (in thousands): 2019 2018 Accrued sales and other taxes $ 4,777 $ 5,687 Accrued professional fees 7,237 7,035 Accrued dividends on Redeemable Series A Preferred Stock 3,561 3,521 Current maturities of capital lease obligations 307 387 Income taxes payable 641 767 Other accrued expenses 8,571 3,027 Total other accrued liabilities $ 25,094 $ 20,424 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Debt | As of March 31, 2019 and December 31, 2018 , the net carrying value and balance sheet classification of debt is summarized as follows (in thousands): 2019 2018 Note payable to GP Sponsor, net of DDIC $ 1,222 $ 2,372 Less current maturities 1,222 2,372 Long-term debt, net of current maturities $ — $ — |
Schedule of Extinguishment of Debt | The aggregate cash payments to terminate the Credit Facility amounted to $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 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 |
Schedule of Interest Expense | The components of interest expense are presented below (in thousands): Three Months Ended 2019 2018 Credit Facility: Interest expense at 12.0% $ — $ 3,726 PIK interest at 3.0% — 931 Accretion expense for funded debt — 5,418 Make-whole applicable premium — 3,103 Accretion expense for GP Sponsor note payable 128 207 Interest on other borrowings 104 24 Total interest expense $ 232 $ 13,409 |
Schedule of Other Debt Financing Expenses | The components of other debt financing expenses are presented below (in thousands): Three Months Ended 2019 2018 Write-off of DDIC related to Credit Facility $ — $ 7,169 Collateral monitoring fees — 776 Amortization of DDIC related to unfunded debt — 343 Unused line fees — 216 Amortization of prepaid agent fees and other — 113 Total other debt financing fees $ — $ 8,617 |
REDEEMABLE SERIES A PREFERRED_2
REDEEMABLE SERIES A PREFERRED STOCK (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Temporary Equity | The allocation of the net proceeds from the March 2019 Private Placement as well as the changes in the net carrying value of Series A Preferred Stock from December 31, 2018 to March 31, 2019 are set forth below (dollars in thousands): Series A Preferred Stock Common Convertible Shares Amount Stock Notes Total Fair value on March 7, 2019: Series A Preferred Stock 6,500 $ 5,313 (1) $ — $ — $ 5,313 Common Stock — — 722 (2) — 722 Convertible Notes — — — — — Total 6,500 $ 5,313 $ 722 $ — $ 6,035 Relative fair value allocation on March 7, 2019: Aggregate cash proceeds on March 7, 2019 6,500 $ 5,093 (3) $ 692 (3) $ — $ 5,785 Incremental and direct costs — (661 ) (4) (90 ) (4) — (751 ) Net carrying value on March 7, 2019 6,500 $ 4,432 $ 602 $ — $ 5,034 Series A Preferred Stock Shares Amount Net carrying value as of December 31, 2018 140,846 $ 113,998 Issuance of shares to settle PIK Dividends on January 2, 2019 1,062 1,062 Additional shares issued on March 7, 2019 6,500 4,432 Accretion of discount for the three months ended March 31, 2019 — 1,359 Net carrying value as of March 31, 2019 148,408 $ 120,851 (1) The liquidation preference for each share of Series A Preferred Stock on the closing date for the March 2019 Private Placement was $1,000 per share for an aggregate liquidation preference of $6.5 million . The estimated fair value of the Series A Preferred Stock was approximately $5.3 million on March 7, 2019, which is the basis for allocation of the net proceeds. Please refer to Note 12 for further discussion of the valuation methodology employed. (2) The fair value of the issuance of approximately 134,483 shares of the Common Stock was based on the last closing price of $5.37 per share prior to closing. (3) The aggregate cash proceeds of $5.8 million on March 7, 2019 were allocated pro rata based on the fair value of all consideration issued. (4) Incremental and direct costs related to the March 2019 Private Placement were allocated pro rata based on the fair value of all consideration issued. Such costs included the issuance of 85,000 shares of Common Stock to the original investors in the Series A Preferred Stock for their consent of approximately $0.5 million and financial advisory and professional fees that were incurred of approximately $0.3 million was either paid or accrued directly by the Company as of March 31, 2019. |
Dividends Declared | Presented below is a summary of total and per share dividends declared through March 31, 2019 (dollars in thousands, except per share amounts): Dividends Payable in: Total Dividends Cash PIK Dividends Per Share Dividends payable as of December 31, 2018 $ 3,521 $ 1,056 $ 4,577 $ 32.50 Cash Dividends 10% per annum 3,593 — 3,593 $ 25.00 PIK Dividends 3% per annum — 1,065 1,065 $ 7.41 Fractional PIK shares settled for cash 13 — 13 $ 0.09 Less dividends settled January 2, 2019 (3,566 ) (1,062 ) (4,628 ) $ (32.62 ) Dividends payable as of March 31, 2019 $ 3,561 $ 1,059 $ 4,620 $ 31.13 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 required to be declared are as follows (in thousands): Year Ending December 31: Cash PIK Total 2019 $ 14,888 $ 4,466 $ 19,354 2020 15,460 4,638 20,098 2021 15,929 4,779 20,708 2022 16,412 4,924 21,336 2023 9,240 2,772 12,012 Total $ 71,929 $ 21,579 $ 93,508 |
RESTRICTED STOCK UNITS, STOCK_2
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | The following table sets forth a summary of stock option activity under the Stock Plans for the three months ended March 31, 2019 (shares in thousands): Shares Price (1) Term (2) Outstanding, December 31, 2018 11,904 $ 4.00 5.1 Granted 270 5.85 Forfeited (279 ) 8.15 Expired (104 ) 6.40 Exercised (667 ) 1.17 Outstanding, March 31, 2019 (3)(4) 11,124 4.09 4.9 Vested, March 31, 2019 (3) 10,915 4.03 4.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) As of March 31, 2019 , the aggregate intrinsic value of all stock options outstanding was $19.3 million . As of March 31, 2019 , the aggregate intrinsic value of vested stock options was $19.3 million . (4) The number of outstanding stock options that are not expected to ultimately vest due to forfeiture amounted to 0.2 million shares as of March 31, 2019 |
Schedule of Shares Available for Grant Activity | The following table presents activity affecting the total number of shares available for grant under the Stock Plans for the three months ended March 31, 2019 (in thousands): Available, December 31, 2018 2,758 Stock options granted 270 Restricted stock units granted 207 Expired options under 2007 Plan (104 ) Forfeited options under Stock Plans (279 ) Newly authorized by Board of Directors 2,567 Available, March 31, 2019 5,419 |
Schedule of Assumptions of Fair Value of Stock Option Grants | For the three months ended March 31, 2019 , 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) 6.0 Volatility 35% Dividend yield 0% Risk-free interest rate 2.7% Fair value per common share on date of grant $5.85 |
Schedule of Stock-based Compensation Expense | Stock-based compensation expense attributable to RSUs and stock options is classified as follows (in thousands): Three Months Ended 2019 2018 Cost of revenues $ 209 $ 165 Sales and marketing 341 367 General and administrative 605 335 Total $ 1,155 $ 867 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments under the non-cancellable operating lease agreements are as follows (in thousands): 12 months ending March 31: 2020 $ 4,632 2021 4,099 2022 3,661 2023 2,187 2024 297 Thereafter 275 Total $ 15,151 |
Dividends Declared | Presented below is a summary of total and per share dividends declared through March 31, 2019 (dollars in thousands, except per share amounts): Dividends Payable in: Total Dividends Cash PIK Dividends Per Share Dividends payable as of December 31, 2018 $ 3,521 $ 1,056 $ 4,577 $ 32.50 Cash Dividends 10% per annum 3,593 — 3,593 $ 25.00 PIK Dividends 3% per annum — 1,065 1,065 $ 7.41 Fractional PIK shares settled for cash 13 — 13 $ 0.09 Less dividends settled January 2, 2019 (3,566 ) (1,062 ) (4,628 ) $ (32.62 ) Dividends payable as of March 31, 2019 $ 3,561 $ 1,059 $ 4,620 $ 31.13 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 required to be declared are as follows (in thousands): Year Ending December 31: Cash PIK Total 2019 $ 14,888 $ 4,466 $ 19,354 2020 15,460 4,638 20,098 2021 15,929 4,779 20,708 2022 16,412 4,924 21,336 2023 9,240 2,772 12,012 Total $ 71,929 $ 21,579 $ 93,508 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income attributable to common stockholders for the three months ended March 31, 2019 and 2018 (in thousands, except per share amounts): 2019 2018 Income attributable to common stockholders: Net income $ 11,824 $ 3,507 Dividends and accretion related to Series A Preferred Stock: Cash dividends declared (3,593 ) — PIK dividends declared (1,078 ) — Accretion of discount (1,359 ) — 5,794 3,507 Undistributed earnings allocated using the two-class method (1,054 ) — Net income attributable to common stockholders $ 4,740 $ 3,507 2019 2018 Weighted average number of shares of Common Stock outstanding 64,622 59,393 Additional shares outstanding if Series A Preferred Stock is converted to Common Stock 14,370 — Total shares outstanding if Series A Preferred Stock is converted to Common Stock 78,992 59,393 Percentage of shares allocable to Series A Preferred Stock 18.2 % — % Weighted average number of shares of Common Stock outstanding: Basic 64,622 59,393 Effect of dilutive securities: Origination Agent warrants — 1,132 Stock options 4,390 7,619 Restricted stock units 89 10 Diluted 69,101 68,154 Net earnings per share attributable to common stockholders: Basic $ 0.07 $ 0.06 Diluted $ 0.07 $ 0.05 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | As of March 31, 2019 , the following potential Common Stock equivalents were excluded from the computation of diluted net income per share for the respective periods ending on these dates since the impact of inclusion was anti-dilutive (in thousands): 2019 Series A Preferred Stock 14,370 Restricted stock units 4 Stock options 4,122 Warrants 18,128 Total 36,624 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Revenues by Geographic Regions | The Company attributes revenues to geographic regions based on the location of its customers’ contracting entity. The following table shows revenues by geographic region (in thousands): Three Months Ended March 31, 2019 2018 United States of America $ 42,871 $ 39,542 International 23,389 20,263 Total $ 66,260 $ 59,805 |
LIQUIDITY AND SIGNIFICANT ACC_3
LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) | Mar. 07, 2019 | Jul. 19, 2018 | Jul. 31, 2018 | Apr. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2017 |
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Working capital deficit | $ 110,600,000 | ||||||||
Net income (loss) attributable to parent | 11,824,000 | $ 3,507,000 | |||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents | 32,699,000 | $ 54,490,000 | $ 25,206,000 | $ 40,027,000 | |||||
Deferred revenue | $ 180,580,000 | 180,358,000 | |||||||
Historical cost of goods and services (as a percent of deferred revenue) | 36.00% | ||||||||
Repayments of lines of credit | $ 14,100,000 | ||||||||
Gross cash proceeds | $ 133,000,000 | ||||||||
Unpaid transaction costs | $ 2,700,000 | ||||||||
Cash dividends payable (as a percent) | 10.00% | ||||||||
Total | $ 93,508,000 | ||||||||
Initial dividend period (in years) | 5 years | ||||||||
Cash dividends payable after five year period (as a percent) | 13.00% | ||||||||
Capital leases - future minimum payments due in the next twelve months | $ 4,600,000 | ||||||||
Revolving Credit Facility | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Repayments of lines of credit | 132,800,000 | ||||||||
Maximum | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Total | 4,200,000 | ||||||||
Minimum | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Total | $ 3,600,000 | ||||||||
Common Stock | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
New stock issued during period (shares) | 134,483 | 2,900,000 | 110,000 | ||||||
Private Placement | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Consideration received | $ 5,034,000 | ||||||||
Private Placement | Common Stock | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Sale of stock (shares) | 134,483 | ||||||||
New stock issued during period (shares) | 134,483 | 134,000 | |||||||
Series A Preferred Stock | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Dividend rate (as a percent) | 13.00% | ||||||||
Temporary equity, par value | $ 0.0001 | ||||||||
New stock issued during period (shares) | 140,000 | 19,209 | |||||||
Total | 4,620,000 | $ 4,577,000 | |||||||
Series A Preferred Stock | Private Placement | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Sale of stock (shares) | 6,500 | 140,000 | |||||||
Notes Payable | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Notes payable, related parties, current | $ 1,200,000 | ||||||||
Pro Forma | Accounting Standards Update 2014-09 | |||||||||
Significant Accounting Policies Disclosure [Line Items] | |||||||||
Capitalized costs to obtain new client contracts | $ 18,500,000 | ||||||||
Capitalized costs to obtain new client contracts, amortization period (years) | 3 years |
OTHER FINANCIAL INFORMATION - O
OTHER FINANCIAL INFORMATION - Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued sales and other taxes | $ 4,777 | $ 5,687 |
Accrued professional fees | 7,237 | 7,035 |
Accrued dividends on Redeemable Series A Preferred Stock | 3,561 | 3,521 |
Current maturities of capital lease obligations | 307 | 387 |
Income taxes payable | 641 | 767 |
Other accrued expenses | 8,571 | 3,027 |
Total other accrued liabilities | $ 25,094 | $ 20,424 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | Mar. 07, 2019 | Dec. 21, 2018 | Jul. 19, 2018 | Dec. 31, 2018 | May 31, 2017 | Apr. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Net carrying value | $ 1,200,000 | ||||||||||
Outstanding principal balance (less than) | $ 95,000,000 | ||||||||||
Imputed interest rate (as a percent) | 13.00% | 13.00% | |||||||||
Initial carrying value of loan payable | $ 2,100,000 | ||||||||||
Accretion expense | $ 232,000 | $ 13,409,000 | |||||||||
Effective interest rate (as a percent) | 26.40% | ||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Stated interest rate (as a percent) | 12.00% | 12.00% | |||||||||
Line of credit facility, unused capacity, commitment fee (as a percent) | 5.00% | ||||||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | $ 5,785,000 | $ 0 | |||||||||
Repayments of lines of credit | $ 14,100,000 | ||||||||||
Revolving Credit Facility | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Maximum borrowing capacity | $ 125,000,000 | ||||||||||
Origination fee (as a percent) | 5.00% | ||||||||||
Original issue discount (as a percent) | 2.00% | ||||||||||
Stated interest rate (as a percent) | 15.00% | ||||||||||
Repayments of lines of credit | $ 132,800,000 | ||||||||||
Funded Debt | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Accretion expense | 7,307,000 | ||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Repayments of lines of credit | 132,830,000 | ||||||||||
Accretion expense for GP Sponsor note payable | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Accretion expense | $ 200,000 | $ 200,000 | |||||||||
Interest Payable In Cash | Revolving Credit Facility | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Stated interest rate (as a percent) | 12.00% | ||||||||||
Interest Payable through the Issuance of Additional Borrowings | Revolving Credit Facility | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Stated interest rate (as a percent) | 3.00% | ||||||||||
Initial Term Loan | Revolving Credit Facility | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Maximum borrowing capacity | $ 30,000,000 | ||||||||||
Delayed Draw A Term Loan | Revolving Credit Facility | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Maximum borrowing capacity | 65,000,000 | ||||||||||
Collateral fee percentage after amendment (as a percent) | 2.50% | ||||||||||
Delayed Draw B Term Loan | Revolving Credit Facility | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Maximum borrowing capacity | 17,500,000 | $ 30,000,000 | $ 17,500,000 | ||||||||
Accretion expense for GP Sponsor note payable | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Accretion expense | $ 128,000 | $ 207,000 | |||||||||
Notes Payable | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Net carrying value | 2,372,000 | 1,222,000 | $ 2,372,000 | ||||||||
Private Placement | |||||||||||
Line of Credit Facility [Abstract] | |||||||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | $ 5,785,000 | $ 133,000,000 | |||||||||
GP Investments Acquisition Corp | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Imputed interest rate (as a percent) | 15.00% | ||||||||||
Common Class A Stock | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Periodic payment amount of principal | 400,000 | ||||||||||
Total periodic payment amount | $ 600,000 | $ 1,300,000 | |||||||||
GP Sponsor | |||||||||||
Related Party Transaction, Note Payable [Abstract] | |||||||||||
Loan payable | $ 3,000,000 |
DEBT - Carrying Value of Debt (
DEBT - Carrying Value of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Net carrying value | $ 1,200 | |
Less current maturities | 1,222 | $ 2,372 |
Long-term debt, net of current maturities | 0 | 0 |
Note payable to GP Sponsor, net of DDIC | ||
Debt Instrument [Line Items] | ||
Net carrying value | $ 1,222 | $ 2,372 |
DEBT - Termination of Credit Fa
DEBT - Termination of Credit Facility (Details) - USD ($) $ in Thousands | Jul. 19, 2018 | Apr. 30, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Extinguishment of Debt [Line Items] | ||||
Make-whole applicable premium | $ 232 | $ 13,409 | ||
Total cash termination payments | $ 14,100 | |||
Funded Debt | ||||
Extinguishment of Debt [Line Items] | ||||
Long-term debt, gross | $ 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 | |||
Funded Debt | Principal Balance | ||||
Extinguishment of Debt [Line Items] | ||||
Long-term debt, gross | 102,576 | |||
Funded Debt | Mandatory Trigger Event Exit Fees | ||||
Extinguishment of Debt [Line Items] | ||||
Long-term debt, gross | 13,624 | |||
Funded Debt | Mandatory Consulting Fees | ||||
Extinguishment of Debt [Line Items] | ||||
Long-term debt, gross | $ 2,000 |
DEBT - Interest Expense of Debt
DEBT - Interest Expense of Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | ||
Total interest expense | $ 232 | $ 13,409 |
Stated interest rate (as a percent) | 12.00% | 12.00% |
Accretion expense for GP Sponsor note payable | ||
Debt Instrument [Line Items] | ||
Total interest expense | $ 128 | $ 207 |
Interest on other borrowings | ||
Debt Instrument [Line Items] | ||
Total interest expense | $ 104 | 24 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 15.00% | |
Revolving Credit Facility | Interest expense at 12.0% | ||
Debt Instrument [Line Items] | ||
Total interest expense | $ 0 | 3,726 |
Revolving Credit Facility | PIK interest at 3.0% | ||
Debt Instrument [Line Items] | ||
Total interest expense | 0 | 931 |
Revolving Credit Facility | Accretion expense for funded debt | ||
Debt Instrument [Line Items] | ||
Total interest expense | 0 | 5,418 |
Revolving Credit Facility | Make-whole applicable premium | ||
Debt Instrument [Line Items] | ||
Total interest expense | $ 0 | $ 3,103 |
Payment in Kind (PIK) Note | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 3.00% | 3.00% |
DEBT - Components of Other Debt
DEBT - Components of Other Debt Financing Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Write-off of DDIC related to Credit Facility | $ 0 | $ 7,169 |
Collateral monitoring fees | 0 | 776 |
Amortization of DDIC related to unfunded debt | 0 | 343 |
Unused line fees | 0 | 216 |
Amortization of prepaid agent fees and other | 0 | 113 |
Total other debt financing fees | $ 0 | $ 8,617 |
REDEEMABLE SERIES A PREFERRED_3
REDEEMABLE SERIES A PREFERRED STOCK - Narrative (Details) $ / shares in Units, $ in Thousands | Apr. 01, 2019shares | Mar. 07, 2019USD ($)$ / sharesshares | Jan. 02, 2019shares | Jul. 19, 2018USD ($)$ / sharesshares | Jul. 31, 2018shares | Mar. 31, 2019USD ($)day$ / sharesshares | Mar. 31, 2018USD ($) | Dec. 31, 2018shares |
Securities Purchase Agreements [Abstract] | ||||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | $ 5,785 | $ 0 | ||||||
Discount on shares | $ 7,000 | |||||||
Stock issuance costs | $ 294 | $ 951 | ||||||
Certificate Of Designations [Abstract] | ||||||||
Shares authorized (shares) | shares | 180,000 | 180,000 | ||||||
Dividends payable, current | $ 3,600 | |||||||
Dividends payable, non-current | $ 1,100 | |||||||
Temporary equity, liquidation preference (usd per share) | $ / shares | $ 1,000 | $ 1,000 | $ 10 | |||||
Temporary equity liquidation preference | shares | 14,800,000 | |||||||
Temporary stock outstanding (shares) | shares | 148,408 | 141,000 | ||||||
Temporary equity, shares issued upon conversion | shares | 1 | |||||||
Threshold trading days | day | 30 | |||||||
Threshold consecutive trading days | 45 days | |||||||
Threshold stock price, minimum | $ / shares | $ 11.50 | |||||||
Consecutive trading days prior to conversion date | day | 60 | |||||||
Redemption rights prior to three year anniversary of closing, value | $ 80,000 | |||||||
Outstanding percentage, indebtedness restriction (as a percent) | 95.00% | |||||||
Private Placement | ||||||||
Securities Purchase Agreements [Abstract] | ||||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | $ 5,785 | $ 133,000 | ||||||
Discount on shares (as a percent) | 11.00% | |||||||
Discount on shares | $ 700 | |||||||
Consideration received | 5,034 | |||||||
Stock issuance costs | 800 | |||||||
Incremental and direct costs, shares issued, cost | 500 | |||||||
Incremental and direct transaction costs | $ 751 | $ 4,600 | ||||||
Series A Preferred Stock | ||||||||
Securities Purchase Agreements [Abstract] | ||||||||
New stock issued during period (shares) | shares | 140,000 | 19,209 | ||||||
Certificate Of Designations [Abstract] | ||||||||
Dividend rate (as a percent) | 13.00% | |||||||
Series A Preferred Stock | Private Placement | ||||||||
Securities Purchase Agreements [Abstract] | ||||||||
Sale of stock (shares) | shares | 6,500 | 140,000 | ||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | $ 5,093 | |||||||
Incremental and direct transaction costs | $ 661 | |||||||
Certificate Of Designations [Abstract] | ||||||||
Temporary equity issued for paid-in-kind dividends (shares) | shares | 1,062 | |||||||
Temporary stock outstanding (shares) | shares | 6,500 | 148,408 | 140,846 | |||||
Common Stock | ||||||||
Securities Purchase Agreements [Abstract] | ||||||||
New stock issued during period (shares) | shares | 134,483 | 2,900,000 | 110,000 | |||||
Common Stock | Private Placement | ||||||||
Securities Purchase Agreements [Abstract] | ||||||||
Sale of stock (shares) | shares | 134,483 | |||||||
New stock issued during period (shares) | shares | 134,483 | 134,000 | ||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | $ 692 | |||||||
Incremental and direct costs (shares) | shares | 85,000 | |||||||
Incremental and direct transaction costs | $ 90 | |||||||
Due Diligence And Professional Fees | Private Placement | ||||||||
Securities Purchase Agreements [Abstract] | ||||||||
Incremental and direct transaction costs | $ 300 | |||||||
Subsequent Event | ||||||||
Certificate Of Designations [Abstract] | ||||||||
Temporary equity issued for paid-in-kind dividends (shares) | shares | 1,059 | |||||||
Cash Dividend | ||||||||
Certificate Of Designations [Abstract] | ||||||||
Dividend rate (as a percent) | 10.00% |
REDEEMABLE SERIES A PREFERRED_4
REDEEMABLE SERIES A PREFERRED STOCK - Series A Preferred Stock Summary (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 07, 2019 | Jan. 02, 2019 | Jul. 19, 2018 | Jul. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 06, 2019 | Dec. 31, 2018 |
Temporary Equity [Line Items] | ||||||||
Issuance of Common Stock | $ 599 | |||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | 5,785 | $ 0 | ||||||
Net carrying value | 120,851 | $ 113,998 | ||||||
Common stock issued | $ 7 | $ 6 | ||||||
Temporary stock outstanding (shares) | 148,408 | 141,000 | ||||||
Footnotes [Abstract] | ||||||||
Temporary equity, liquidation preference (usd per share) | $ 1,000 | $ 1,000 | $ 10 | |||||
Liquidation preference of redeemable preferred stock | $ 6,500 | $ 148,408 | $ 140,846 | |||||
Series A Preferred Stock | ||||||||
Footnotes [Abstract] | ||||||||
New stock issued during period (shares) | 140,000 | 19,209 | ||||||
Private Placement | ||||||||
Temporary Equity [Line Items] | ||||||||
Temporary stock issued | 5,313 | |||||||
Issuance of Common Stock | 6,035 | 602 | ||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | 5,785 | $ 133,000 | ||||||
Incremental and direct costs | (751) | $ (4,600) | ||||||
Consideration received | 5,034 | |||||||
Footnotes [Abstract] | ||||||||
Incremental and direct costs, shares issued, cost | $ 500 | |||||||
Private Placement | Series A Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Temporary stock issued (shares) | 6,500 | |||||||
Temporary stock issued | $ 5,313 | |||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | 5,093 | |||||||
Incremental and direct costs | (661) | |||||||
Net carrying value | $ 4,432 | $ 120,851 | $ 113,998 | |||||
Temporary stock outstanding (shares) | 6,500 | 148,408 | 140,846 | |||||
Temporary equity issued for paid-in-kind dividends (shares) | 1,062 | |||||||
Temporary equity issued for paid-in-kind dividends (shares) | $ 1,062 | |||||||
Accretion of discount | $ 1,359 | |||||||
Common Stock | ||||||||
Footnotes [Abstract] | ||||||||
New stock issued during period (shares) | 134,483 | 2,900,000 | 110,000 | |||||
Shares issued (usd per share) | $ 5.37 | |||||||
Common Stock | Private Placement | ||||||||
Temporary Equity [Line Items] | ||||||||
Issuance of Common Stock | $ 722 | |||||||
Net proceeds from issuance of Series A Preferred Stock and Common Stock | 692 | |||||||
Incremental and direct costs | (90) | |||||||
Common stock issued | $ 602 | |||||||
Footnotes [Abstract] | ||||||||
New stock issued during period (shares) | 134,483 | 134,000 | ||||||
Incremental and direct costs (shares) | 85,000 | |||||||
Due Diligence And Professional Fees | Private Placement | ||||||||
Temporary Equity [Line Items] | ||||||||
Incremental and direct costs | $ (300) |
REDEEMABLE SERIES A PREFERRED_5
REDEEMABLE SERIES A PREFERRED STOCK - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 02, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Dividends Payable [Roll Forward] | ||||
Dividends, cash | $ 3,593 | $ 0 | ||
Dividends, paid-in-kind | 1,078 | $ 0 | ||
Dividends payable as of March 31, 2019 | $ 93,508 | |||
Cash Dividend | ||||
Dividends Payable [Roll Forward] | ||||
Dividend rate (as a percent) | 10.00% | |||
Dividends payable as of March 31, 2019 | $ 71,929 | |||
Paid-In-Kind Dividend | ||||
Dividends Payable [Roll Forward] | ||||
Dividend rate (as a percent) | 3.00% | |||
Dividends payable as of March 31, 2019 | $ 21,579 | |||
Series A Preferred Stock | ||||
Dividends Payable [Roll Forward] | ||||
Dividends payable as of December 31, 2018 | $ 4,577 | |||
Dividend rate (as a percent) | 13.00% | |||
Dividends, cash | $ 3,593 | |||
Dividends payable (usd per share) | $ 31.1303972831653 | $ 32.4964855231955 | ||
Payments of dividends | $ (4,628) | |||
Dividends, cash paid (usd per share) | $ (32.6154366578339) | |||
Dividends payable as of March 31, 2019 | $ 4,620 | |||
Series A Preferred Stock | Cash Dividend | ||||
Dividends Payable [Roll Forward] | ||||
Dividends payable as of December 31, 2018 | 3,521 | |||
Dividends | $ 3,593 | |||
Dividends payable (usd per share) | $ 25.0031314804248 | |||
Payments of dividends | $ (3,566) | |||
Dividends payable as of March 31, 2019 | $ 3,561 | |||
Series A Preferred Stock | Paid-In-Kind Dividend | ||||
Dividends Payable [Roll Forward] | ||||
Dividends payable as of December 31, 2018 | 1,056 | |||
Dividends | 1,065 | |||
Dividends, paid-in-kind | $ 1,065 | |||
Dividends payable (usd per share) | $ 7.41117033861742 | |||
Payments of dividends | $ (1,062) | |||
Dividends payable as of March 31, 2019 | $ 1,059 | |||
Series A Preferred Stock | Fractional Shares | ||||
Dividends Payable [Roll Forward] | ||||
Dividends, cash | 13 | |||
Dividends | $ 13 | |||
Dividends payable (usd per share) | $ 0.0904649900488511 |
RESTRICTED STOCK UNITS, STOCK_3
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Feb. 13, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Restricted Stock Units [Abstract] | ||||
Stock-based compensation expense | $ 1,155 | $ 867 | ||
Stock Options [Abstract] | ||||
Stock available for grant newly authorized by Board of Directors (shares) | 2,567 | |||
Stock options granted in period (shares) | 270 | |||
Warrants [Abstract] | ||||
Warrants outstanding (shares) | 18,100 | |||
Volatility (as a percent) | 35.00% | |||
Risk-free interest rate (as a percent) | 2.70% | |||
Restricted Stock Units (RSUs) | ||||
Restricted Stock Units [Abstract] | ||||
Share price of common stock on date of grant of RSUs (USD per share) | $ 5.42 | |||
Aggregate fair value of shares underlying RSU's | $ 1,100 | |||
Stock-based compensation expense | 500 | $ 200 | ||
Compensation costs not yet recognized of nonvested awards | $ 1,100 | |||
Period for recognition of compensation costs not yet recognized related to nonvested awards | 8 months 12 days | |||
Employee Stock Option | ||||
Restricted Stock Units [Abstract] | ||||
Period for recognition of compensation costs not yet recognized related to nonvested awards | 1 year 10 months 28 days | |||
Stock Options [Abstract] | ||||
Stock available for grant newly authorized by Board of Directors (shares) | 2,600 | |||
Stock options granted in period (shares) | 270 | |||
Weighted-average grant date fair value per share of options granted in period (usd per share) | $ 2.26 | |||
Fair value of stock options granted | $ 600 | |||
Unrecognized compensation costs | $ 3,400 | $ 4,500 | ||
Minimum | Restricted Stock Units (RSUs) | ||||
Restricted Stock Units [Abstract] | ||||
Award vesting period | 12 months | |||
Maximum | Restricted Stock Units (RSUs) | ||||
Restricted Stock Units [Abstract] | ||||
Award vesting period | 24 months | |||
Exercise Price $5.64 | ||||
Warrants [Abstract] | ||||
Warrants outstanding (shares) | 3,400 | |||
Exercise price of warrants (USD per share) | $ 5.64 | |||
Exercise Price $11.50 | ||||
Warrants [Abstract] | ||||
Warrants outstanding (shares) | 14,700 | |||
Exercise price of warrants (USD per share) | $ 11.5 | |||
Two Thousands And Thirteen Plan | Restricted Stock Units (RSUs) | ||||
Restricted Stock Units [Abstract] | ||||
Restricted stock units granted in period (shares) | 207 | |||
Two Thousands And Thirteen Plan | Employee Stock Option | ||||
Stock Options [Abstract] | ||||
Stock options granted in period (shares) | 300 | |||
Award vesting rights (percent) | 33.33% | |||
Stock Plans | ||||
Stock Options [Abstract] | ||||
Term of vested options (years) | 10 years |
RESTRICTED STOCK UNITS, STOCK_4
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Shares | ||
Outstanding at beginning of period (shares) | 11,904 | |
Granted (shares) | 270 | |
Forfeited (shares) | (279) | |
Expired (shares) | (104) | |
Exercised (shares) | (667) | |
Outstanding at end of period (shares) | 11,124 | 11,904 |
Vested at end of period (shares) | 10,915 | |
Price | ||
Outstanding at beginning of period (USD per share) | $ 4 | |
Granted (USD per share) | 5.85 | |
Forfeited (USD per share) | 8.15 | |
Expired (USD per share) | 6.40 | |
Exercised (USD per share) | 1.17 | |
Outstanding at end of period (USD per share) | 4.09 | $ 4 |
Vested (USD per share) | $ 4.03 | |
Term | ||
Term of outstanding options | 4 years 10 months 20 days | 5 years 1 month 6 days |
Term of vested options (years) | 4 years 9 months 25 days | |
Aggregate intrinsic value of stock options outstanding | $ 19.3 | |
Aggregate intrinsic value of vested stock options | $ 19.3 | |
Outstanding stock options not expected to vest due to forfeitures (shares) | 200 |
RESTRICTED STOCK UNITS, STOCK_5
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Shares Available for Grant (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2019shares | |
Shares Available for Grant [Roll Forward] | |
Available at beginning of period (shares) | 2,758 |
Stock options granted (shares) | 270 |
Restricted stock units granted (shares) | (207) |
Expired options under 2007 Plan (shares) | (104) |
Forfeited options under Stock Plans (shares) | (279) |
Newly authorized by Board of Directors (shares) | 2,567 |
Available at end of period (shares) | 5,419 |
RESTRICTED STOCK UNITS, STOCK_6
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Assumptions of Fair Value of Stock Option Grants (Details) | 3 Months Ended |
Mar. 31, 2019$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected life (in years) | 6 years |
Volatility (as a percent) | 35.00% |
Dividend yield (as a percent) | 0.00% |
Risk-free interest rate (as a percent) | 2.70% |
Fair value per common share on date of grant (USD per share) | $ 5.85 |
RESTRICTED STOCK UNITS, STOCK_7
RESTRICTED STOCK UNITS, STOCK OPTIONS AND WARRANTS - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,155 | $ 867 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 209 | 165 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 341 | 367 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 605 | $ 335 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Federal statutory income tax rate (as a percent) | 5.60% | 12.80% |
Limitation for tax deduction of operating losses (as a percent of current year taxable income) | 80.00% | |
Income tax expense (benefit) | $ 705,000 | $ 516,000 |
Domestic Tax Authority | ||
Investments, Owned, Federal Income Tax Note [Line Items] | ||
Income tax expense (benefit) | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Apr. 05, 2019USD ($) | Mar. 04, 2019USD ($) | Mar. 30, 2018USD ($) | Mar. 31, 2017USD ($) | Jan. 17, 2017claim | Oct. 31, 2016USD ($) | Jan. 31, 2018USD ($)judgment_component | Apr. 30, 2017USD ($) | Oct. 31, 2016USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | May 31, 2018USD ($) | Jan. 08, 2018USD ($) |
Loss Contingencies [Line Items] | ||||||||||||||||||
Rent expense on operating leases | $ 1,500,000 | $ 1,400,000 | ||||||||||||||||
Employer matching contribution (as a percent of employee's contribution) | 100.00% | |||||||||||||||||
Employer matching contribution limit (as a percent of eligible compensation) | 4.00% | |||||||||||||||||
Employer contribution | $ 700,000 | $ 500,000 | ||||||||||||||||
Interest from litigation settlement | $ 200,000 | $ (20,200,000) | $ 200,000 | |||||||||||||||
Loss contingency receivable | $ 50,300,000 | |||||||||||||||||
Components of final judgment (number) | judgment_component | 2 | |||||||||||||||||
Litigation settlement, amount awarded from other party | 21,500,000 | |||||||||||||||||
Loss in period | $ 12,800,000 | |||||||||||||||||
Proceeds from insurance settlement - operating activities | $ 24,000,000 | $ 18,700,000 | ||||||||||||||||
Deferred long-term liability charges | 19,300,000 | |||||||||||||||||
Professional fees | $ 11,300,000 | |||||||||||||||||
Settlement expenses paid | 600,000 | |||||||||||||||||
Repayments of lines of credit | 14,100,000 | |||||||||||||||||
Repayment of line of credit interest | $ 4,600,000 | |||||||||||||||||
Deferred insurance settlement liability, current | $ 8,000,000 | 0 | ||||||||||||||||
Current carrying value of guarantor obligations | 21,700,000 | 30,400,000 | ||||||||||||||||
State Computer Access Statutes and Related Taxable Costs and Interest | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency receivable | $ 21,300,000 | $ 21,300,000 | 21,300,000 | |||||||||||||||
Oracles Legal Fees | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency receivable | $ 28,500,000 | 28,500,000 | ||||||||||||||||
Post-Judgment Interest | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Loss contingency receivable | $ 500,000 | |||||||||||||||||
Proceeds from insurance settlement - investing activities | $ 4,700,000 | |||||||||||||||||
Oracle Litigation | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Damages awarded | $ 124,400,000 | |||||||||||||||||
Accrued legal settlement expense | 4,600,000 | $ 21,400,000 | $ 100,000,000 | |||||||||||||||
Interest from litigation settlement | $ 200,000 | 200,000 | $ (3,000,000) | |||||||||||||||
Recovery of non-taxable expenses | $ 12,800,000 | |||||||||||||||||
Damages paid | $ 124,400,000 | |||||||||||||||||
Litigation settlement, amount awarded from other party | $ 12,800,000 | |||||||||||||||||
Amount of settlement award to other party (as a percent) | 60.00% | |||||||||||||||||
Oracle Litigation II | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Number of new claims filed | claim | 3 | |||||||||||||||||
Subsequent Event | Oracle Litigation | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Proceeds from legal settlement | $ 13,000,000 | |||||||||||||||||
Minimum | Oracles Legal Fees | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Expected additional expense (as a percent) | 1.00% | |||||||||||||||||
Maximum | Oracles Legal Fees | ||||||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||||||
Expected additional expense (as a percent) | 2.00% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments for Operating Leases (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 4,632 |
2021 | 4,099 |
2022 | 3,661 |
2023 | 2,187 |
2024 | 297 |
Thereafter | 275 |
Total | $ 15,151 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Series A Preferred Stock Dividends (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Dividends Payable [Line Items] | |
2019 | $ 19,354 |
2020 | 20,098 |
2021 | 20,708 |
2022 | 21,336 |
2023 | 12,012 |
Total | 93,508 |
Cash Dividend | |
Dividends Payable [Line Items] | |
2019 | 14,888 |
2020 | 15,460 |
2021 | 15,929 |
2022 | 16,412 |
2023 | 9,240 |
Total | 71,929 |
Paid-In-Kind Dividend | |
Dividends Payable [Line Items] | |
2019 | 4,466 |
2020 | 4,638 |
2021 | 4,779 |
2022 | 4,924 |
2023 | 2,772 |
Total | $ 21,579 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) | Dec. 21, 2018 | Jul. 19, 2018 | Dec. 31, 2018 | Jul. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jul. 18, 2018 |
Related Party Transaction [Line Items] | |||||||
Imputed interest rate (as a percent) | 13.00% | 13.00% | |||||
Common Class A Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Periodic payment amount of principal | $ 400,000 | ||||||
New stock issued during period (shares) | 400,000 | ||||||
Series A Preferred Stock | |||||||
Related Party Transaction [Line Items] | |||||||
New stock issued during period (shares) | 140,000 | 19,209 | |||||
GP Sponsor | |||||||
Related Party Transaction [Line Items] | |||||||
Loan payable | $ 3,000,000 | ||||||
Adams Street Partners | |||||||
Related Party Transaction [Line Items] | |||||||
Carrying value of preferred stock outstanding | $ 10,000,000 | ||||||
Expenses from transactions with related party | 300,000 | $ 600,000 | |||||
Due from related parties, current | $ 1,200,000 | $ 0 | |||||
Adams Street Partners | Series A Preferred Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Voting rights associated with shares of Series A Preferred Stock | 19,468 | ||||||
Adams Street Partners | Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership of common stock outstanding (as a percent) | 32.00% | ||||||
Adams Street Partners | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership of common stock outstanding (as a percent) | 36.30% | ||||||
Private Placements | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Total consideration | $ 19,200,000 |
EARNINGS PER SHARE - Earnings p
EARNINGS PER SHARE - Earnings per share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Temporary equity, conversion ratio | 1 | |
Net income | $ | $ 11,824 | $ 3,507 |
Cash dividends declared | $ | (3,593) | 0 |
PIK dividends declared | $ | (1,078) | 0 |
Accretion of discount | $ | (1,359) | 0 |
Net (loss) income after dividends and accretion | $ | 5,794 | 3,507 |
Undistributed earnings allocated using the two-class method | $ | (1,054) | 0 |
(Loss) income attributable to common stockholders | $ | $ 4,740 | $ 3,507 |
Basic (shares) | shares | 64,622 | 59,393 |
Additional shares outstanding if Series A Preferred Stock is converted to Common Stock (shares) | shares | 14,370 | 0 |
Total shares outstanding if Series A Preferred Stock is converted to Common Stock (shares) | shares | 78,992 | 59,393 |
Percentage of shares allocable to Series A Preferred Stock | 18.20% | 0.00% |
Diluted (shares) | shares | 69,101 | 68,154 |
Basic (usd per share) | $ / shares | $ 0.07 | $ 0.06 |
Diluted (usd per share) | $ / shares | $ 0.07 | $ 0.05 |
Warrant | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Diluted (shares) | shares | 0 | 1,132 |
Employee Stock Option | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Diluted (shares) | shares | 4,390 | 7,619 |
Restricted Stock Units (RSUs) | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Diluted (shares) | shares | 89 | 10 |
EARNINGS PER SHARE - Summary (D
EARNINGS PER SHARE - Summary (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2019shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from the computation of earnings per share (shares) | 36,624 |
Series A Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from the computation of earnings per share (shares) | 14,370 |
Restricted stock units | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from the computation of earnings per share (shares) | 4 |
Stock options | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from the computation of earnings per share (shares) | 4,122 |
Warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from the computation of earnings per share (shares) | 18,128 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Narrative (Details) $ in Thousands | Mar. 07, 2019USD ($)year | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Concentration Risk [Line Items] | |||||
Fair value of embedded derivative liability | $ 1,100 | $ 1,600 | |||
Gain (loss) on embedded derivative, net | $ 0 | $ 500 | |||
Cash and cash equivalents | 32,264 | $ 24,771 | |||
Single Financial Institution | |||||
Concentration Risk [Line Items] | |||||
Cash and cash equivalents | 25,200 | 19,900 | |||
Current restricted cash | $ 400 | $ 400 | |||
Private Placement | |||||
Concentration Risk [Line Items] | |||||
Temporary stock issued | $ 5,313 | ||||
Series A Preferred Stock | Private Placement | |||||
Concentration Risk [Line Items] | |||||
Temporary stock issued | $ 5,313 | ||||
Measurement Input, Expected Term | Series A Preferred Stock | Minimum | |||||
Concentration Risk [Line Items] | |||||
Measurement input (as a percent) | year | 4 | ||||
Measurement Input, Expected Term | Series A Preferred Stock | Maximum | |||||
Concentration Risk [Line Items] | |||||
Measurement input (as a percent) | year | 5 | ||||
Measurement Input, Implied Yield | Series A Preferred Stock | |||||
Concentration Risk [Line Items] | |||||
Measurement input (as a percent) | 0.221 | ||||
Measurement Input, Risk Free Interest Rate | Series A Preferred Stock | |||||
Concentration Risk [Line Items] | |||||
Measurement input (as a percent) | 0.0244 | ||||
Measurement Input, Price Volatility | Series A Preferred Stock | |||||
Concentration Risk [Line Items] | |||||
Measurement input (as a percent) | 0.300 |
FINANCIAL INSTRUMENTS AND SIG_4
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total | $ 66,260 | $ 59,805 |
United States of America | ||
Disaggregation of Revenue [Line Items] | ||
Total | 42,871 | 39,542 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Total | $ 23,389 | $ 20,263 |