Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 18, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Registrant Name | KLDiscovery Inc. | ||
Entity Central Index Key | 0001752474 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Small Business | true | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 42,533,482 | ||
Entity Public Float | $ 342 | ||
Entity File Number | 001-38789 | ||
Entity Tax Identification Number | 61-1898603 | ||
Entity Address, Address Line One | 8201 Greensboro Drive | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | McLean | ||
Entity Address, State or Province | VA | ||
Entity Address, Postal Zip Code | 22102 | ||
City Area Code | 703 | ||
Local Phone Number | 288-3380 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Incorporation, State or Country Code | DE | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement relating to its annual meeting of stockholders to be held in 2021 (the “2021 Annual Meeting”), to be filed with the Securities and Exchange Commission (the “SEC”) within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates, are incorporated herein by reference where indicated. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, such proxy statement is not deemed to be filed as part hereof. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 51,201 | $ 43,407 |
Accounts receivable, net of allowance for doubtful accounts of $8,513 and $7,486, respectively | 83,985 | 96,994 |
Prepaid expenses | 7,175 | 7,296 |
Other current assets | 709 | 556 |
Total current assets | 143,070 | 148,253 |
Property and equipment | ||
Accumulated depreciation | (77,697) | (64,682) |
Property and equipment, net | 25,150 | 38,303 |
Intangible assets, net | 109,733 | 130,568 |
Goodwill | 399,085 | 395,171 |
Other assets | 2,708 | 2,617 |
Total assets | 679,746 | 714,912 |
Current liabilities | ||
Current portion of long-term debt, net | 10,948 | 11,689 |
Accounts payable and accrued expense | 33,504 | 31,270 |
Current portion of contingent consideration | 695 | 340 |
Deferred revenue | 3,955 | 4,851 |
Total current liabilities | 49,102 | 48,150 |
Long-term debt, net | 472,600 | 468,932 |
Deferred tax liabilities | 7,335 | 6,294 |
Other liabilities | 8,488 | 7,771 |
Total liabilities | 537,525 | 531,147 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock $0.0001 par value, shares authorized - 200,000,000 shares authorized as of December 31, 2020 and December 31, 2019; 42,529,017 shares issued and outstanding as of December 31, 2020 and December 31, 2019 | 4 | 4 |
Preferred stock $0.0001 par value, 1,000,000 shares authorized, zero issued and outstanding as of December 31, 2020 and December 31, 2019 | ||
December 31, 2019 | 385,387 | 381,952 |
Accumulated deficit | (255,424) | (205,498) |
Accumulated other comprehensive income | 12,254 | 7,307 |
Total stockholders' equity | 142,221 | 183,765 |
Total liabilities and stockholders' equity | 679,746 | 714,912 |
Computer software and hardware | ||
Property and equipment | ||
Property and equipment, gross | 72,211 | 72,228 |
Leasehold improvements | ||
Property and equipment | ||
Property and equipment, gross | 27,271 | 26,963 |
Furniture, fixtures and other equipment | ||
Property and equipment | ||
Property and equipment, gross | $ 3,365 | $ 3,794 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 8,513 | $ 7,486 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 42,529,017 | 42,529,017 |
Common stock, shares outstanding | 42,529,017 | 42,529,017 |
Preferred Stock, per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 289,545 | $ 312,054 |
Cost of revenues | 147,732 | 160,845 |
Gross profit | 141,813 | 151,209 |
Operating expenses | ||
General and administrative | 58,509 | 55,005 |
Research and development | 7,167 | 5,945 |
Sales and marketing | 38,395 | 48,517 |
Depreciation and amortization | 35,955 | 39,149 |
Total operating expenses | 140,026 | 148,616 |
Income from operations | 1,787 | 2,593 |
Other expenses | ||
Other expense | 118 | 308 |
Loss on extinguishment of debt | 7,203 | |
Interest expense | 50,659 | 48,377 |
Loss before income taxes | (48,990) | (53,295) |
Income tax provision | 936 | 719 |
Net loss | (49,926) | (54,014) |
Other comprehensive income, net of tax | ||
Foreign currency translation | 4,947 | 311 |
Total other comprehensive income, net of tax | 4,947 | 311 |
Comprehensive loss | $ (44,979) | $ (53,703) |
Net loss per share - basic and diluted | $ (1.17) | $ (1.27) |
Weighted average shares outstanding - basic and diluted | 42,529,017 | 42,425,295 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income |
Balance at Dec. 31, 2018 | $ 228,956 | $ 4 | $ 372,316 | $ (2,406) | $ (147,954) | $ 6,996 |
Balance (in shares) at Dec. 31, 2018 | 42,288,870 | |||||
Issuance of common stock | $ 1,655 | 1,655 | ||||
Issuance of common shares (in shares) | 172,350 | 172,350 | ||||
Recapitalization transaction | $ 4,592 | 8,122 | (3,530) | |||
Retirement of treasury stock | (2,406) | $ 2,406 | ||||
Share-based compensation | 2,265 | 2,265 | ||||
Share based compensation (in shares) | 67,797 | |||||
Foreign exchange translation | 311 | 311 | ||||
Net loss | (54,014) | (54,014) | ||||
Balance at Dec. 31, 2019 | $ 183,765 | $ 4 | 381,952 | (205,498) | 7,307 | |
Balance (in shares) at Dec. 31, 2019 | 42,529,017 | |||||
Issuance of common shares (in shares) | 0 | |||||
Share-based compensation | $ 3,435 | 3,435 | ||||
Foreign exchange translation | 4,947 | 4,947 | ||||
Net loss | (49,926) | (49,926) | ||||
Balance at Dec. 31, 2020 | $ 142,221 | $ 4 | $ 385,387 | $ (255,424) | $ 12,254 | |
Balance (in shares) at Dec. 31, 2020 | 42,529,017 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities | ||
Net loss | $ (49,926) | $ (54,014) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 47,762 | 50,407 |
Non-cash interest | 19,450 | 5,320 |
Loss on extinguishment of debt | 7,203 | |
Stock-based compensation | 3,435 | 2,265 |
Provision for losses on accounts receivable | 4,088 | 3,104 |
Deferred income taxes | 1,041 | 219 |
Change in fair value of contingent consideration | 98 | 48 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10,050 | (16,712) |
Prepaid expenses and other assets | 87 | 2,404 |
Accounts payable and accrued expenses | 4,675 | (8,937) |
Deferred revenue | (984) | 396 |
Net cash provided by (used in) operating activities | 39,776 | (8,297) |
Investing activities | ||
Acquisitions, net of cash | (3,124) | (1,950) |
Purchases of property and equipment | (10,935) | (13,268) |
Net cash used in investing activities | (14,059) | (15,218) |
Financing activities | ||
Recapitalization transaction | 186,503 | |
Revolving credit facility draws | 29,000 | 54,500 |
Revolving credit facility repayments | (29,000) | (54,500) |
Payments for capital lease obligations | (1,595) | (1,427) |
Payments on long-term debt | (17,000) | (142,000) |
Issuance of common stock | 414 | |
Net cash (used in) provided by financing activities | (18,595) | 43,490 |
Effect of foreign exchange rates | 672 | (7) |
Net increase in cash | 7,794 | 19,968 |
Cash at beginning of period | 43,407 | 23,439 |
Cash at end of period | 51,201 | 43,407 |
Supplemental disclosure: | ||
Cash paid for interest | 32,196 | 42,693 |
Income taxes paid, net of refunds | (195) | 470 |
Significant noncash investing and financing activities | ||
Assumption of Pivotal Debentures | 200,000 | |
Equity issued for acquisitions | 1,241 | |
Purchases of property and equipment in accounts payable and accrued expenses on the consolidated balance sheets | $ 394 | $ 129 |
Organization, Business and Summ
Organization, Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization, business and summary of significant accounting policies | KLDiscovery Inc. Note 1 – Organization, business and summary of significant accounting policies Organization KLDiscovery Inc., (the “Company”) provides technology-based litigation support solutions and services including computer e-discovery, data hosting, and managed review predominantly to top law firms, corporations and government agencies. The majority of the Company’s current business is derived from these services. The Company’s headquarters is located in McLean, Virginia and has 32 locations in 18 countries, 9 data centers and 18 data recovery labs around the globe. The Company was originally incorporated under the name Pivotal Acquisition Corp. (“Pivotal”) as a blank check company on August 2, 2018 under the laws of the State of Delaware for the purpose of entering into a merger, capital stock exchange, stock purchase, reorganization or similar business combination with one or more businesses or entities. On December 19, 2019, Pivotal acquired of the outstanding shares of LD Topco, Inc. via a reverse capitalization (the “Business Combination”) and was renamed KLDiscovery Inc. Principles of consolidation The accompanying consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of KLDiscovery and all its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. The Business Combination was accounted for as a reverse recapitalization (the "Recapitalization Transaction") in accordance with Accounting Standard Codification (“ASC”) 805, Business Combinations • LD Topco, Inc.’s operations comprise the ongoing operations of the combined entity; • The officers of the newly combined company consist of LD Topco, Inc.’s executives, including the Chief Executive Officer, Chief Financial Officer and General Counsel; and, • The former shareholders of LD Topco, Inc. own a majority voting interest in the combined entity. As a result of LD Topco, Inc. being the accounting acquirer, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if” LD Topco, Inc. is the predecessor and legal successor to the Company. The historical operations of LD Topco, Inc. are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of LD Topco, Inc. prior to the Business Combination; (ii) the combined results of the Company and LD Topco, Inc. following the Business Combination on December 19, 2019; (iii) the assets and liabilities of LD Topco, Inc. at their historical cost; and (iv) KLDiscovery Inc.’s equity structure for all periods presented. The recapitalization of the number of shares of common stock attributable to the purchase of LD Topco, Inc. in connection with the Business Combination is reflected retroactively to January 1, 2018 and has been utilized for calculating earnings per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the transaction as a reverse capitalization of LD Topco, Inc. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Although actual results could differ from those estimates, management does not believe that such differences would be material. Significant estimates include, but are not limited to, the allowance for doubtful accounts, determining the fair values of assets acquired and liabilities assumed, the recoverability and useful lives of property and equipment, intangible assets, and other long-lived assets, the impairment of goodwill, the valuation and realization of deferred income taxes, the fair value of the Company’s common stock and stock option awards, and acquisition-related contingent consideration. Segments, concentration of credit risk and major customers The Company operates in one business segment, providing technology-based litigation support solutions and services. Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company places its cash with a banking institution where the balances, at times, exceed federally insured limits. Management believes the risks associated with these deposits are limited. With respect to accounts receivable, the Company performs ongoing evaluations of its customers, generally grants uncollateralized credit terms to its customers, and maintains an allowance for doubtful accounts based on historical experience and management’s expectations of future losses. As of and for the years ended December 31, 2020 and 2019, the Company did not have a single customer that represents more than five percent (5%) or more of its consolidated revenues or accounts receivable. The Company believes that the geographic and industry diversity of the Company’s customer base throughout the U.S. and internationally minimizes the risk of incurring material losses due to concentrations of credit risk. The Company’s foreign revenues, principally from businesses in the UK and Germany, totaled approximately $57.0 million in 2020 and $69.8 million in 2019. The Company’s long-lived assets in foreign countries, principally in the UK and Germany, totaled approximately $26.3 million at December 31, 2020 and $21.8 million at December 31, 2019. Foreign currency Results of operations for the Company’s non-U.S. subsidiaries are translated from the designated functional currency to the reporting currency of the U.S. dollar. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive income.” Transaction gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “Other expense” on the Company’s Consolidated Statements of Comprehensive Loss. Such transaction gains and losses may be realized or unrealized depending upon whether the transaction settled during the period or remains outstanding at the balance sheet date. Cash and cash equivalents The Company considers all highly liquid financial instruments with an original maturity of three months or less when purchased to be cash equivalents. Accounts receivable Accounts receivable are recorded at original invoice amount less an estimate for doubtful receivables based on a review of outstanding amounts monthly. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition and credit history. Accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. A rollforward of the allowance for doubtful accounts is presented below (in thousands): Balance at December 31, 2018 $ 5,564 Charged to/reversed from expense 3,104 Charged to/from other accounts — Deductions (write offs) (1,182 ) Balance at December 31, 2019 $ 7,486 Charged to/reversed from expense 4,088 Charged to/from other accounts 283 Deductions (write offs) (3,344 ) Balance at December 31, 2020 $ 8,513 Fixed Assets Computer software, property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: Computer software and hardware 3 to 5 years Leasehold improvements Shorter of lease term or useful life Furniture, fixtures and other equipment 3 to 5 years Gains or losses on disposals are included in results of operations at amounts equal to the difference between the net book value of the disposed assets and the proceeds received upon disposal. Costs for replacements and betterments are capitalized, while the costs of maintenance and repairs are expensed as incurred. Property under capital leases are depreciated using the straight-line method over the lease term. Depreciation expense totaled $16.9 million and $18.6 million for the years ended December 31, 2020 and 2019, respectively, and includes amortization of assets recorded under capital leases. Internal-use software development costs The Company capitalizes certain internal computer software costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing and installation activities. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditure will result in additional functionality. Capitalized software costs are depreciated over the estimated useful life of the underlying project on a straight-line basis. The Company’s estimated useful life of capitalized software costs varies between three and five years, depending on management’s expectation of the economic life of various software. Capitalized software amortization costs are recorded as a component of cost of revenue. Capitalized software costs are reflected as part of the “Intangible assets, net line” in the Company’s Consolidated Balance Sheets and totaled $18.5 million and $13.5 million, net of accumulated amortization, as of December 31, 2020 and 2019, respectively. Intangible assets and other long-lived assets The Company evaluates the recoverability of its long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of any asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the difference between the fair value of the asset compared to its carrying amount. No impairment losses were recognized in the accompanying consolidated financial statements. Amortization expense totaled $30.9 million and $31.8 million for the years ended December 31, 2020 and 2019, respectively; $11.8 million and $11.3 million of which was classified as part of the “Cost of revenues” line in the Company’s Consolidated Statements of Comprehensive Loss. The Company allocates the purchase price of an acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company recognizes as goodwill the amount by which the purchase price of an acquired entity exceeds the net of the fair values assigned to the assets acquired and liabilities assumed. In determining the fair values of assets acquired and liabilities assumed, the Company uses various recognized valuation methods including the income and market approaches. Further, the Company makes assumptions within certain valuation techniques, including discount rates, royalty rates, and the amount and timing of future cash flows. The Company records the net assets and results of operations of an acquired entity in the financial statements from the acquisition date. The Company initially performs these valuations based upon preliminary estimates and assumptions by management or independent valuation specialists under its supervision, where appropriate, and make revisions as estimates and assumptions are finalized. The Company expenses acquisition-related costs as they are incurred. Goodwill Goodwill represents the excess of the total consideration paid over identified intangible and tangible assets of the Company and its acquisitions. The Company tests its goodwill for impairment at the reporting unit level on an annual basis on October 1, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. As of the October 1 testing date the Company determined there is one reporting unit. Goodwill impairment exists when the estimated fair value of the reporting unit is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced by the excess through an impairment charge recorded in the Company’s statements of operations. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. The fair value of the Company’s reporting unit is estimated using a combination of a discounted cash flow (“DCF”) analysis and market-based valuation methodologies such as comparable public company trading values. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, discount rates and relevant comparable public company earnings multiples. The cash flows employed in the DCF analyses are based on the Company’s best estimate of future sales, earnings and cash flows after considering factors such as general market conditions, changes in working capital, long term business plans and recent operating performance. The carrying value of the reporting unit includes the assets and liabilities employed in its operations and goodwill. Accordingly, the Company has not identified any indicators of impairment, nor have any impairment charges been recorded related to goodwill resulting from the annual impairment test. The following table provides a rollforward of the carrying amount of goodwill (in thousands): Balance at December 31, 2018 $ 394,167 Acquisitions 263 Foreign currency translation 741 Balance at December 31, 2019 395,171 Acquisitions 1,009 Disposal (96 ) Foreign currency translation 3,001 Balance at December 31, 2020 $ 399,085 Debt issuance costs Debt issuance costs are stated at cost, net of accumulated amortization, and are amortized over the term of the debt using both the straight-line and the effective yield methods. U.S. GAAP requires that the effective yield method be used to amortize debt acquisition costs; however, if the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective yield method, the straight-line method may be used. The amortization for funded term debt is calculated according to the effective yield method and revolving and unfunded term debt is calculated according to the straight-line method. Debt issuance costs related to funded term debt is presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts or premiums. Debt issuance costs related to revolving and unfunded term debt is presented in the Consolidated Balance Sheets within “Other assets.” Revenue recognition The Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), effective January 1, 2019, utilizing the modified retrospective method. The Company’s adoption of ASC 606 did not result in material changes to the Company’s revenue recognition. Revenues are recognized when we satisfy a performance obligation by transferring goods or services promised in a contract to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate service streams that we provide to our customers. The Company evaluates its revenue contracts with customers based on the five-step model under ASC 606: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenues when (or as) each performance obligation is satisfied. The following table summarizes revenue from contracts with customers for the years ended December 31, 2020 and 2019 (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 eDiscovery services $ 197,300 $ 215,560 Managed review 49,985 50,290 Legal technology services 247,285 265,850 Data recovery 42,260 46,204 Total revenue $ 289,545 $ 312,054 Performance Obligations and Timing of Revenue Recognition The Company primarily sells services and products that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. (1) eDiscovery services, which provides end-to-end eDiscovery services support including collections, processing, analytics, hosting, production and professional services; (2) Managed review services, which provides the staffing necessary to review large complex data sets; and (3) Data recovery services, which offers data restoration, data erasure and data management. The Company generates the majority of its revenues by providing Legal Technology services to our clients. All of our eDiscovery service contracts are time and materials types of arrangements. Time and materials arrangements are based on units of data stored or processed. Unit-based revenues are recognized as services are provided, based on either the amount of data stored or processed, the number of concurrent users accessing the information, or the number of pages or images processed for a client, at agreed upon per unit rates. We recognize revenues for these arrangements utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date. Certain of our eDiscovery contracts are subscription-based, fixed-fee arrangements, which have tiered pricing based on the quantity of data hosted. For a fixed monthly fee, our clients receive a variety of optional eDiscovery services, which are included in addition to the data hosting. The Company recognizes revenues for these arrangements based on predetermined monthly fees as determined in our contractual agreements, utilizing a right-to-invoice practical expedient because the Company has a right to consideration for services completed to date. Managed review services are time and materials types of arrangements. These agreements require the client to pay us based on the number of hours worked at contractually agreed-upon rates. The Company recognizes revenues for these arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because the Company has a right to consideration for services completed to date. Data recovery services are mainly fixed fee arrangements requiring the client to pay a pre-established fee in exchange for the successful completion of a data recovery on a predetermined device. For the recovery services performed by the Company’s technicians, the revenue is recognized at a point in time, when the recovered data is sent to the customer. Data erasure services are fixed fee arrangements for which revenue is recognized at a point in time, when the certificate of erasure is sent to the customer. Ontrack PowerControls, included in the data recovery revenue stream, offers term license subscriptions for customers with on-premises installations of the software pursuant to contracts that are historically one to four years in length. The term license subscriptions include maintenance, support, as well as access to future software upgrades and fixes. The license and the additional support services are deemed to be one performance obligation, and thus revenue for these arrangements is recognized ratably over the term of the agreement. Share-based compensation The Company measures and recognizes compensation expense for all share-based awards to employees based on estimated grant date fair values on a straight-line basis over the requisite service period. The Company uses the Black-Scholes valuation model, depending on terms, facts and circumstances of each share-based award. The expected vesting of the Company’s performance-based RSUs is based upon the probability of a liquidity event, such as a change in control as defined under the 2019 Plan. The level of achievement of the liquidity event, if any, is re-evaluated quarterly. Advertising Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship and public relations. These costs are expensed as incurred. Advertising costs totaled $4.5 million and $7.1 million for the years ended December 31, 2020 and 2019, respectively. Advertising costs are reflected within “Sales and marketing” in the accompanying Consolidated Statements of Comprehensive Loss. Research and development expense Costs incurred in the research and development of the Company’s technologies primarily consist of developer salaries. Research and development expenses were $7.2 million and $5.9 million for the years ended December 31, 2020 and 2019, respectively. Income taxes Income taxes are accounted for using the asset and liability method. Deferred income taxes are provided for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes. Such deferred income taxes primarily relate to the difference between the tax bases of assets and liabilities and their financial reporting amounts. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. Excess tax benefits and tax deficiencies are recognized in the income tax provision in the period in which they occur. The Company records a valuation allowance when it determines, based on available positive and negative evidence, that it is more-likely-than-not that some portion, or all its deferred tax assets will not be realized. The Company determines the realizability of its deferred tax assets primarily based on the reversal of existing taxable temporary differences and projections of future taxable income (exclusive of reversing temporary differences and carryforwards). In evaluating such projections, the Company considers its history of profitability, the competitive environment, and general economic conditions. In addition, the Company considers the time frame over which it would take to utilize the deferred tax assets prior to their expiration. For certain tax positions, the Company uses a more-likely-than-not threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. Net Loss per Common Share Basic net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year, plus the dilutive effect of common stock equivalents, including stock options and restricted shares. Common stock and common stock equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and release of restricted shares, except when the effect of their inclusion would be antidilutive. On December 19, 2019, the Company completed a reverse merger with Pivotal Acquisition Corp. whereby the Company received 34,800,000 shares for its outstanding 3,707,564 shares, effecting 1-to-9.3862 stock exchange. The per share amounts have been updated to show the effect of the exchange on earnings per share as if the exchange occurred at the beginning of both years for the annual financial statements of the Company. The impact of the stock exchange is also shown on the Company’s Statements of Stockholders’ Equity.” Recently Adopted Accounting Standards In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, which amends ASC 820 to add, remove, and modify fair value measurement disclosure requirements. This standard was effective for the Company for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The adoption did not have a material impact on the Company’s current financial position and results of operations, but the financial statement disclosures were updated in accordance with the ASU. Accounting Standards Not Yet Adopted In connection with the transaction with Pivotal (see Note 2), the Company elected to be an Emerging Growth Company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act and take advantage of the extended transition period of delaying the adoption of new or revised accounting standards until such time as those standards apply to private companies. This may make the comparison of the Company’s consolidated financial statements to other public companies not meaningful due to the differences in accounting standards being applied. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (“ASC 326”): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. The Company is required to adopt ASC 326 effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and the Company is currently evaluating the impact that Topic 326 will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. The new standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption, including the adoption in any interim period, is permitted for all entities. The Company does not expect ASU 2019-12 to have a meaningful effect on the Company’s current financial position, results of operations or financial statement disclosures. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Note 2 – Acquisitions Pivotal Acquisition Corp. On December 19, 2019, Pivotal, the legal predecessor company, consummated the Business Combination with LD Topco, Inc. The stockholders of LD Topco, Inc. received an aggregate of 34,800,000 shares of Pivotal common stock. The former stockholders of LD Topco, Inc. also have the right to receive up to 2,200,000 shares of the Company’s common stock if (i) a change in control occurs or (ii) the reported closing sale price of the Company’s common stock exceeds $13.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations or other similar actions) for any 20 consecutive trading days during the five-year period following the closing of the Business Combination. The Company also assumed 29,500,000 warrants which entitles the holder to purchase shares of the Company’s common stock beginning December 18, 2019 at an exercise price of $11.50 per share as part of this transaction. As part of the transaction, on December 19, 2019, the Company assumed 8% convertible debentures (“Debentures”) due 2024 in an aggregate principal amount of $200 million. The proceeds of the Debentures were used in part to repay the Company’s outstanding Second Lien Facility and amounts outstanding under its revolving credit facility. The net proceeds from the Business Combination, as reported in the consolidated statements of cash flows for the year ended December 31, 2019 within the financing section are summarized below: Gross cash received by KLDiscovery from Business Combination $ 201,657 Less: fees to underwriters (6,500 ) Less: other transaction costs (8,654 ) Net cash received by KLDiscovery from Business Combination $ 186,503 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3 – Fair value measurements The Company accounts for recurring and non-recurring fair value measurements in accordance with ASC 820, Fair Value Measurements Level 1 – Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. Level 2 – Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. Level 3 – Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires significant judgments to be made by the Company. The Company believes that the fair values of its current assets and current liabilities (cash, accounts receivable, accounts payable, and other current liabilities) approximate their reported carrying amounts. The Company believes that the interest rates on its debt are current market rates. The Company estimates the fair value of contingent purchase consideration based on the present value of the consideration expected to be paid during the remainder of the earn-out period, based on management’s assessment of the acquired operations’ forecasted earnings. This fair value measure is based on significant inputs not observed in the market and thus represents a Level 3 measurement. During 2019, the Company acquired three companies for total consideration of $5.5 million, of which $2.0 million was in cash, $1.5 million was in deferred payments, $1.2 million was in stock and contingent consideration of $1.0 million, which was recorded at its estimated fair value of $0.8 million related to future earnouts. The fair value of future expected acquisition-related contingent consideration obligations was $0.9 million and $0.8 million at December 31, 2020 and 2019, respectively. The significant unobservable inputs used in the fair value measurements of the Company’s contingent purchase consideration include its measures of the future profitability and related cash flows of the acquired business or assets, impacted by appropriate discount rates. Significant increases (decreases) in any of these individual inputs would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumptions used for the discount rates is indirectly proportional to the fair value of contingent purchase consideration and a change in the assumptions used for the future cash flows is directly proportional to the fair value of contingent purchase consideration. The Company, using additional information as it becomes available, reassesses the fair value of the contingent purchase consideration on an annual basis. Any change in the fair value of contingent consideration liability results in a remeasurement gain or loss that is recorded as income or expense on the Consolidated Statements of Comprehensive Loss. The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2020 and 2019 (in thousands): Balance at December 31, 2018 $ — Additions (payments) to contingent consideration 774 Change in fair value of contingent consideration 48 Balance at December 31, 2019 822 Additions (payments) to contingent consideration — Change in fair value of contingent consideration 98 Balance at December 31, 2020 $ 920 Management estimates the carrying amount of the Company’s long-term debt approximates its fair value because the interest rates on these instruments are subject to changes in market interest rates or are consistent with prevailing interest rates. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4 – Intangible assets Intangible assets consist of the following (in thousands): Description Weighted Average Remaining Useful Life in Years December 31, 2020 December 31, 2019 Trademark and tradenames 5.5 $ 67,183 $ 66,311 Accumulated amortization (29,004 ) (21,504 ) Trademark and tradenames, net 38,179 44,807 Developed technology 4.2 79,796 71,327 Accumulated amortization (49,968 ) (36,838 ) Developed technology, net 29,828 34,489 Non-compete agreements — 1,402 1,467 Accumulated amortization (1,402 ) (1,242 ) Non-compete agreements, net — 225 Customer relationships 6.1 97,420 95,693 Accumulated amortization (55,694 ) (44,646 ) Customer relationships, net 41,726 51,047 Intangible assets, net of amortization $ 109,733 $ 130,568 Future amortization of intangible assets is as follows (in thousands): December 31, Amount 2021 $ 27,398 2022 23,153 2023 17,413 2024 13,111 2025 8,718 Thereafter 15,025 In process 4,916 Total $ 109,733 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | Note 5 – Accrued expenses Accrued expenses consisted of the following (in thousands): December 31, 2020 2019 Accrued expenses: Accrued interest $ 5,041 $ 7,000 Accrued salaries 11,802 9,509 Current taxes payable 519 535 Other accrued expenses 2,694 2,847 Total $ 20,056 $ 19,891 |
Leasing Arrangements
Leasing Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leasing Arrangements | Note 6 – Leasing arrangements The Company leases office space and certain equipment under operating and capital lease agreements, expiring in various years through 2029. Certain leases contain annual rent escalation clauses. Rent expense totaled $14.1 million and $14.7 million for the years ended December 31, 2020 and 2019, respectively. As part of an effort to optimize the Company’s real estate footprint, during 2020, the Company terminated leases in 18 locations and reduced the footprint of four locations resulting in lease termination savings of approximately $4.6 million. The amortization expense recorded for capital leases totaled $0.5 million and $0.7 million, respectively, for the years ended December 31, 2020 and 2019. For years subsequent to December 31, 2020, future minimum payments for all operating and capital lease obligations that have initial non-cancelable lease terms exceeding one year, net of rental income from subleases are as follows (in thousands): December 31, Capital Leases Operating Leases 2021 $ 1,313 $ 9,437 2022 1,586 8,936 2023 1,346 8,568 2024 721 7,377 2025 — 3,810 Thereafter — 2,552 Total $ 4,966 $ 40,680 Less: interest on lease obligations (464 ) Net amount 4,502 Less: current portion (1,313 ) Non-current $ 3,189 |
Long Term Debt
Long Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Long Term Debt [Abstract] | |
Long Term Debt | Note 7 – Long term debt The table below summarizes the components of the Company’s long-term debt (in thousands): December 31, 2020 2019 First lien facility due 2022 289,000 306,000 Convertible debenture notes due 2024 214,541 200,000 Total debt 503,541 506,000 Less: unamortized original issue discount (16,126 ) (19,806 ) Less: unamortized debt issuance costs (3,867 ) (5,573 ) Total debt, net 483,548 480,621 Current portion of debt 17,000 17,000 Less: current portion of unamortized original issue discount (4,312 ) (3,687 ) Less: current portion of unamortized debt issuance costs (1,740 ) (1,624 ) Total current portion of debt, net 10,948 11,689 Total long-term debt, net $ 472,600 $ 468,932 On February 8, 2021 we entered into the 2021 Credit Agreement, the details of which are disclosed below in Note 17 - Subsequent Events. 2016 Credit Agreement On December 9, 2016, KLDiscovery entered into a Credit Agreement with a group of lenders to establish term loan facilities and a revolving line of credit for borrowings by LD Intermediate, Inc. and LD Lower Holdings, Inc. (the “Initial Term Loans”). The Initial Term Loan borrowings of $340.0 million (“First Lien Facility”) and $125.0 million (“Second Lien Facility”) were to mature on December 9, 2022 and December 9, 2023, respectively. The First Lien Facility was repaid on February 8, 2021 (see Note 17) and the Second Lien Facility was repaid on December 19, 2019. The First Lien Facility established a term loan principal payment schedule with payments due on the last day of each calendar quarter beginning on March 31, 2017 of $2.1 million. Quarterly principal payments increased to $4.3 million beginning on March 31, 2019 with a balloon payment of $259.3 million due at maturity. The interest rate for the First Lien Facility adjusted every interest rate period, which could be one, two, three or six months in duration and was decided by the Company, or to the extent consented to by all appropriate Lenders, twelve months thereafter. Interest payment dates include the last day of each interest period and any maturity dates of the facility; however, if any interest period exceeded three months, the respective dates that fall every three months after the beginning of an interest period was also an interest payment date. For each interest period, the interest rate per annum was 5.875% plus the Adjusted Eurocurrency Rate which was defined as an amount equal to the Statutory Reserve Rate multiplied by the greatest of a) LIBOR, b) 0.00% per annum and c) solely with respect to the Initial Term Loans, 1.00% per annum. At December 31, 2020, the balance due was $289.0 million with an interest rate of 5.875% plus an Adjusted Eurocurrency Rate of 1.00%. At December 31, 2019, the balance due was $306.0 million with an interest rate of 5.875% plus an Adjusted Eurocurrency Rate of 2.596%. The Second Lien Facility required a balloon payment of $125.0 million due at maturity. The interest rate for the Second Lien Facility adjusted every interest rate period, which could have been one, two, three or six months in duration and was decided by the Company, or to the extent consented to by all appropriate Lenders, twelve months thereafter. Interest payment dates included the last day of each interest period and any maturity dates of the facility; however, if any interest period exceeded three months, the respective dates that fall every three months after the beginning of an interest period was also an interest payment date. For each interest period, the interest rate per annum was 10.0% plus the Adjusted Eurocurrency Rate which was defined as an amount equal to the Statutory Reserve Rate multiplied by the greatest of a) LIBOR, b) 0.00% per annum and c) solely with respect to the Initial Term Loans, 1.00% per annum. On December 19, 2019, the Second Lien Facility was paid off and closed. A loss on debt extinguishment was recognized related to the Second Lien Facility closing in the amount of $7.2 million in 2019 related to the write off of deferred financing costs and original issue discounts on the Second Lien Facility. At December 31, 2019 the balance due was zero. The First and Second Lien Facilities were secured by substantially all the Company’s assets and contain financial covenants. As of December 31, 2020 and 2019, the Company was in compliance with all covenants. The 2016 Credit Agreement included a mandatory prepayment within ten days after delivery of the annual audited financial statements commencing with the year ending December 31, 2016, in an amount equal to the Excess Cash Flow Percentage of Excess Cash Flow for such Fiscal Year, as defined in the agreement. There were no mandatory prepayments with respect to 2020 and 2019. Revolving Credit Facility The 2016 Credit Agreement also provided for unfunded revolver commitment (the “Revolving Credit Facility”) for borrowing up to $30.0 million and was to mature on June 9, 2022. Interest was due at adjustable interest rates ranging from 5.375% to 5.875% based on the First Lien Net Leverage Ratio plus an amount equal to the LIBOR. No amounts were outstanding under the revolving loan as of December 31, 2020 and 2019. The Revolving Credit Facility was retired on February 8, 2021. As of December 31, 2020, there was approximately $29.3 million available capacity for borrowing under the Revolving Credit Facility due to $0.7 million of letters of credit outstanding (See Note 15). Convertible Debentures On December 19, 2019, the Company assumed 8% convertible debentures (“Debentures”) due 2024 in an aggregate principal amount of $200 million. The proceeds of the Debentures were used in part to repay the Company’s outstanding Second Lien Facility and amounts outstanding under the Revolving Credit Facility. At December 31, 2020 and 2019, the balance due under the Convertible Debentures, including in-kind and accrued interest, was $214.5 million and $200.0 million, respectively. The Debentures will mature on December 19, 2024 unless earlier converted, redeemed or repurchased. The Debentures will bear interest at an annual rate of 4.00% in cash, payable quarterly, and 4.00% in kind, accrued quarterly, on the last business day of March, June, September and December. In addition, on each anniversary of the Closing Date, the Company will add to the principal amount (subject to reduction for any principal amount repaid) of the Debentures an amount equal to 3.00% of the original aggregate principal amount of the Debentures outstanding. The additional payment will accrue from the last payment date for the additional payment (or the Closing Date if no prior payment has been made), and will also be payable at maturity, upon conversion and upon an optional redemption. At any time, upon notice as set forth in the Debentures, the Debentures will be redeemable at the Company’s option, in whole or in part, at a price equal to 100% of the principal amount of the Debentures redeemed, plus accrued and unpaid interest thereon. Subject to approval to allow for the full conversion of the Debentures into common stock, the Debentures will be convertible into shares of the Company’s common stock at the option of the debenture holders at any time and from time to time at a price of $18 per share, subject to certain adjustments. However, in the event the Company elects to redeem any Debentures, the holders will have a right to purchase common stock from the Company in an amount equal to the amount redeemed at the conversion price. The Debentures contain covenants that limit the Company’s ability to, among other things: (i) incur additional debt; (ii) create liens on assets; (iii) engage in certain transactions with affiliates; or (iv) designate the Company’s subsidiaries as unrestricted subsidiaries. The Debentures provide for customary events of default, including non-payment, failure to comply with covenants or other agreements in the Debentures and certain events of bankruptcy or insolvency. If an event of default occurs and continues, the holders of at least 25% in aggregate principal amount of the outstanding Debentures may declare the entire principal amount of all the Debentures to be due and payable immediately. As of December 31, 2020 and 2019 the Company was in compliance with all covenants. Future principal payments, including in kind interest, are as follows (in thousands): December 31, Amount 2021 17,000 2022 272,000 2023 - 2024 277,287 Thereafter - Total $ 566,287 The initial term loan borrowings related to the 2016 Credit Agreement were issued at an original issue discount of $11.9 million and $6.3 million for the First Lien Facility and Second Lien Facility, respectively. The Debentures were issued at an original discount of $13.7 million. The original issue discount is amortized using the effective yield method over the respective term of each facility or debenture. Accretion of the original issue discount totaled $3.7 million and $2.7 million during the years ended December 31, 2020 and 2019, respectively. Amortization is recorded as interest expense in the accompanying Consolidated Statements of Comprehensive Loss. The Company incurred term loan facilities and revolver closing fees related to the 2016 Credit Agreement of $13.6 million. The term loan facilities and revolver closing fees were deferred on December 9, 2016, along with fees of $0.6 million related to the 2016 Credit Agreement and are amortized over their respective terms. The Company incurred closing fees related to the Debentures of $0.9 million which were deferred on December 19, 2019 and are amortized over the term of the debentures. Amortization of debt issuance costs totaled $1.6 million and $2.1 million during the years ended December 31, 2020 and 2019, respectively. Amortization is recorded as interest expense in the accompanying Consolidated Statements of Comprehensive Loss. A loss on debt extinguishment was recognized related to the closing of the Second Lien Facility in the amount of $7.2 million for deferred financing costs and original issue discounts in 2019. The future amortization of debt issuance costs and original issue discount related to the 2016 Credit Agreement, the Revolving Credit Facility and Convertible Debentures are as follows (in thousands): December 31, Amount 2021 $ 6,052 2022 6,453 2023 3,528 2024 3,961 Total $ 19,994 In February 2021, the Company expensed $7.2 million of these debt issuance costs in connection with the retirement of the 2016 Credit Agreement. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | Note 8 – Employee benefit plan The Company’s 401(k) plan covers employees who are at least 21 years of age, have completed one year of employment and worked a minimum of 1,000 hours. Employees may elect to defer a percentage of their salary up to the maximum allowed under the Internal Revenue Service Code. During 2019, the Company made matching contributions to its 401(k) plan equal to 100% of the first 3% of salary deferred plus 50% of the next 2% of an employee’s contribution for a total maximum Company match of 4% of the salary deferred by the employee, subject to Internal Revenue Service Code limitations. Starting in January 2020, the Company discontinued matching contributions to the 401(k) plan. Contributions to the 401(k) plan were $0.3 million and $3.7 million for the years ended December 31, 2020 and 2019, respectively. |
Equity Incentive Plan
Equity Incentive Plan | 12 Months Ended |
Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plan | Note 9 – Equity incentive plan On December 19, 2019, the Company adopted the 2019 Incentive Award Plan (the “2019 Plan”) under which eligible employees, officers, directors and consultants of the Company may be granted incentive or non-qualified stock options, restricted stock, restricted stock units, or other stock-based awards, including shares of common stock. As of December 31, 2020, 7,500,000 shares of Common Stock were reserved under the 2019 Plan, of which 1,948,815 shares of Common Stock remained available for issuance. On March 29, 2016, the Company adopted the 2016 Equity Incentive Plan (as amended, the “2016 Plan”) under which eligible employees, officers, directors and consultants of the Company may be granted incentive or non-qualified stock options, restricted stock, restricted stock units, or other stock-based awards, including shares of common stock. The 2016 Plan was terminated on December 19, 2019 and all outstanding awards were cancelled. Stock option activity The following table summarizes the Company’s stock option activity under the 2019 Plan: Description Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Options outstanding, December 31, 2018 - Granted 514,710 $ 9.90 10.0 Forfeited - Expired - Options outstanding, December 31, 2019 514,710 $ 9.90 10.0 Granted 4,137,750 8.49 Forfeited (387,186 ) 8.85 Expired (4,521 ) 8.85 Options outstanding, December 31, 2020 4,260,753 $ 8.46 9.0 $ 54 Options vested and exercisable, December 31, 2020 1,204,863 $ 8.20 9.0 $ 54 Options vested and expected to vest, December 31, 2020 4,260,753 $ 8.46 9.0 $ 54 The following table summarizes the Company’s stock option activity under the 2016 Plan: Description Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Options Outstanding, December 31, 2018 411,480 $ 100 8.3 $ — Granted 67,050 90 Forfeited (32,860 ) 99 Expired (8,640 ) 99 Cancelled (437,030 ) 100 Options Outstanding, December 31, 2019 - $ — (1) Aggregate intrinsic value (in thousands) represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. No stock options were exercised during the years ended December 31, 2020 and 2019. The following table summarizes additional information on stock option grants and vesting (in thousands): 2016 Plan 2019 Plan Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2020 Year Ended December 31, 2019 Total fair value of stock options granted $ - $ 2,492 $ 9,241 $ 974 Total fair value of options vested - 1,439 2,711 - Time-based vesting stock options Under the 2016 Plan, time-based vesting stock options vested over a five-year period, subject to graded vesting schedules, and expired ten years from the date of grant or within 90 days of termination. The weighted-average fair value per share of time-based vesting stock options granted by the Company was $37.16 during the year ended December 31, 2019. Under the 2016 Plan, for the year ended December 31, 2019, the Company recognized $2.3 million of stock-based compensation expense in connection with time-based stock options. Under the 2019 Plan, time-based vesting stock options generally vest over a three-year period, are subject to graded vesting schedules, and expire ten years from the date of grant or within 90 days of termination. The weighted-average fair value per share of time-based vesting stock options granted by the Company was $2.19, and $1.89 during the years ended December 31, 2020 and 2019, respectively. Under the 2019 Plan, for the years ended December 31, 2020 and 2019, the Company recognized $3.4 million and $0.01 million of stock-based compensation expense in connection with time-based stock options, respectively. As of December 31, 2020 and 2019, there was $6.4 million and $1.0 million of unrecognized stock-based compensation expense related to unvested time-based stock options that is expected to be recognized over a weighted-average period of three years, respectively. Performance-based vesting stock options Performance-based vesting stock options were issued under the 2016 Plan, which was terminated in December 2019, and generally vested upon the satisfaction of performance- and market-based criteria, based on the Principal Stockholders’ (as defined in the 2016 Plan) internal rate of return on their investment in the Company as measured following their sale of at least 70% of the Principal Stockholders total holdings in the Company, and expire ten years from the date of grant. The weighted-average fair value per share of performance-based vesting stock options granted by the Company was $37.16 during the year ended December 31, 2019. Award Valuation The Company used valuation models to value both time and performance-based vesting stock options granted during 2020 and 2019. The following table summarizes the assumptions used in the valuation models to determine the fair value of awards granted to employees and non-employees under both the 2019 Plan and the 2016 Plan: Year Ended December 31, 2020 Year Ended December 31, 2019 Expected volatility 37.63 - 41.24% 36.92 - 37.70% Expected term (in years) 6.0 6 - 6.5 Dividend yield 0% 0% Risk free interest rate 0.30 - 1.43% 1.79 - 2.89% A discussion of management’s methodology for developing each of the assumptions used in the valuation model follows: • Expected volatility – Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses an estimated volatility based on the historical and implied volatilities of comparable companies. • Expected term – This is the period that the options granted are expected to remain unexercised. For options granted during the years ended December 31, 2020 and 2019, the Company derived the expected life of the option based on the average midpoint between vesting and the contractual term as there is little exercise history. • Dividend yield – The Company has never declared or paid dividends and have no plans to do so in the foreseeable future. • Risk-free interest rate – This is the U.S. Treasury rate for securities with similar terms that most closely resembles the expected life of the option. Stock award activity During the years ended December 31, 2020 and 2019, the Company granted to certain non-employee directors 136,956 and 7,223 stock awards, respectively. These stock awards were issued to non-employee directors in satisfaction of their annual retainer payments and are not subject to any vesting conditions, and thus became issued and outstanding shares on the grant date. Accordingly, the Company recognized the grant-date fair value of the stock awards of $0.4 million and $0.7 million as stock-based compensation expense concurrent with the grant date of the awards during the years ended December 31, 2020 and 2019, respectively. Stock-based compensation expense Stock-based compensation expense is included in the Consolidated Statements of Comprehensive Loss within the following line items (in thousands): December 31, 2020 2019 Cost of revenues $ 1,336 $ 573 General and administrative 1,198 1,161 Research and development 268 87 Sales and marketing 633 444 Total $ 3,435 $ 2,265 Restricted stock units Certain employees may be eligible to receive restricted stock unit (“RSU”) awards in the event of a change in control or IPO (as both terms are defined in the respective employment agreements) with a market value equal to the greater of (1) $3.5 million for two employees, or $4 million for the other referenced employee or (2) an amount determined using a formula-based model (as defined in the respective employment agreements), as of the date of such grants. The amount and timing of the vesting of the RSUs is dependent on the type and timing of the liquidity event as it relates to the Business Combination date of December 19, 2019. Generally, a portion of the RSUs will first vest upon the occurrence of the liquidity event and the remainder will vest in installments thereafter, provided that if the liquidity event occurs after the third anniversary of the Business Combination, all RSUs will vest immediately upon the liquidity event. The vesting of the RSUs is generally subject to continued employment. The following table summarizes the Company’s RSU activity under the 2019 Plan: RSUs Description Outstanding Outstanding at December 31, 2019 - Granted 1,402,312 Forfeited (111,880 ) Expired - Outstanding at December 31, 2020 1,290,432 The Company determined that the achievement of the liquidity event was not probable and therefore no expense was recorded during the year ended December 31, 2020. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Equity | Note 10 – Equity The Company is authorized to issue up to 200,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”) and 1,000,000 shares of preferred stock, $0.0001 par value per share. Each holder of Common Stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. The holders of the Common Stock are entitled to receive dividends out of assets legally available at the time and in the amounts as the Company’s Board of Directors may from time to time determine. In the event of any liquidation, dissolution or winding up of the Company, the assets of the Company shall be distributed ratably among the holders of the then outstanding common stock. During 2019, the Company issued 172,350 shares of Common Stock in exchange for $1.7 million. There were no stock issuances during 2020. Warrants On December 19, 2019, in connection with the consummation of the Business Combination, the Company assumed 23,000,000 warrants (the “Public Warrants”), 4,585,281 warrants (the “Private Warrants”) and (iii) 1,764,719 warrants (the “Debenture Holder Warrants”). These warrants qualified for equity accounting as the warrants did not fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity The warrants were measured at fair value at the time of issuance and classified as equity. Each warrant entitles the holder to purchase one share of common stock for $11.50 per share. If held by the initial purchaser of the Private Warrant or certain permitted transferees, the purchase can occur on a cashless basis. The warrants will expire on December 19, 2024 or earlier upon redemption or liquidation. If the reported last sale price of the Company’s common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders, the Company may redeem all the Public Warrants at a price of $0.01 per warrant upon not less than 30 days’ prior written notice. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. The warrants will not be adjusted for issuance of common stock at a price below its exercise price. The Company will not be required to net cash settle the warrants. The Private Warrants are identical to the Public Warrants except that the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Shares Subject to Forfeiture On December 19, 2019, in connection with the consummation of the reverse merger transaction, 550,000 shares of common stock held by Pivotal Acquisition Holdings LLC are subject to an additional lockup that will be released only if the last reported sale price of the common stock equals or exceeds $15.00 for a period of 20 consecutive trading days during the five-year period following the Closing Date. If the last reported sale price of common stock does not equal or exceed $15.00 within five years from the Closing Date, such shares will be forfeited to the Company for no consideration. These shares are reported as outstanding in our financial statements and continue to be subject to the additional lockup as of December 31, 2020. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Note 11 – Loss per share Basic loss per common share (“EPS”) is calculated by dividing the net loss for the year by the weighted-average number of common shares outstanding during the period. Due to the Company’s net loss for the years ended December 31, 2020 and 2019, all potential common stock equivalents were anti-dilutive. The following table summarizes basic and diluted loss per share or the years ended December 31, 2020 and 2019 (in thousands, except per share amounts): Year Ended December 31, 2020 Year Ended December 31, 2019 Basic and diluted loss per share: Net loss $ (49,926 ) $ (54,014 ) Weighted average common shares outstanding - basic 42,529,017 42,529,017 Dilutive effect of potentially issuable shares — — Weighted average common shares outstanding - diluted 42,529,017 42,529,017 Basic loss per share $ (1.17 ) $ (1.27 ) Dilutive effect of potentially issuable shares — — Diluted loss per share $ (1.17 ) $ (1.27 ) Common share equivalents excluded due to anti-dilutive effect 3,788,388 — |
Foreign Currency
Foreign Currency | 12 Months Ended |
Dec. 31, 2020 | |
Foreign Currency [Abstract] | |
Foreign Currency | Note 12 – Foreign currency The Company had immaterial foreign currency losses that are reflected in “Other expense” on the Company’s Consolidated Statements of Comprehensive Loss for years December 31, 2020 and 2019. Transaction gains and losses, both realized and unrealized, relate to the remeasurement or settlement of monetary assets and liabilities that are denominated in a currency other than an entity’s functional currency. These monetary assets and liabilities include cash as well as third party receivables and payables. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 – Income taxes The components of income tax expense for the years ended December 31, 2020 and 2019 are presented below (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Current Federal $ (712 ) $ (37 ) State 73 61 Foreign 729 447 Deferred Federal 334 332 State 806 705 Foreign (294 ) (789 ) Total income tax provision $ 936 $ 719 The actual income tax expense amounts for the years ended December 31, 2020 and 2019 differed from the expected tax amounts computed by applying the U.S. federal corporate income tax rate of 21% for 2020 and 2019 to the amounts of loss before income taxes as presented below (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Pre-tax book loss $ (48,990 ) $ (53,295 ) Tax at Federal statutory rate of 21% in 2020 and 2019 (10,288 ) (11,192 ) State taxes 879 766 Stock based compensation 3 1,060 Foreign rate differential (1,223 ) (871 ) Unrecognized tax benefit 549 - Other adjustments 1,453 (1,707 ) Valuation allowance 9,563 12,663 Total income tax provision $ 936 $ 719 The domestic and foreign components of loss before income taxes from continuing operations for the years ended December 31, 2020 and 2019 are as follows (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Domestic $ (46,686 ) $ (52,438 ) Foreign (2,304 ) (857 ) Total $ (48,990 ) $ (53,295 ) The tax effects of temporary differences at December 31, 2020 and 2019 are as follows (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Net operating losses and other carryforwards $ 42,859 $ 41,299 Interest expense carryforward 30,112 20,070 Property and equipment 2,448 2,221 Accrued expenses 512 82 Payroll tax deferral 1,089 - Allowance for doubtful accounts 1,768 1,517 Stock-based compensation 878 — Other 540 633 Deferred tax asset 80,206 65,822 Valuation allowance (65,228 ) (51,895 ) Total deferred tax assets, net of valuation allowance 14,978 13,927 Intangible assets (21,791 ) (20,098 ) Prepaid expenses (107 ) (73 ) Other (415 ) (50 ) Deferred tax liability (22,313 ) (20,221 ) Net deferred tax liability $ (7,335 ) $ (6,294 ) At December 31, 2020 and 2019, the Company had tax effected U.S. federal net operating loss carryforwards of approximately $32.1 million and $31.0 million, respectively, of which $7.8 million tax effected, begin to expire in 2024 but approximately $16.5 million, tax effected, begin to expire in 2035 and $7.8 million, tax effected, have no expiration. At December 31, 2020 and 2019, the Company had tax effected state net operating loss carryforwards of approximately $6.7 million and $6.5 million, respectively. The majority of the state tax losses will not begin expiring until 2035 or later. At December 31, 2020 and 2019, the Company also had U.S. tax credit carryforwards of approximately $0.9 million and $0.9 million, respectively. The tax credits will expire in 2021. The tax effected foreign net operating loss at December 31, 2020 and 2019 is approximately $3.1 million and $2.9 million, respectively, the majority of which has an unlimited carryforward period. The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities. The Company is subject to examination by U.S. tax authorities beginning with the year ended December 31, 2016. The Company is also subject to examination in various foreign jurisdictions. In material foreign jurisdictions, the statute of limitations ranges one – four years from the filing of a tax return. The Company has not provided for U.S. income and foreign withholding taxes on approximately $13.5 million of certain foreign subsidiaries' undistributed earnings as of December 31, 2020, because such earnings have been retained and are intended to be indefinitely reinvested outside of the U.S. These earnings could become subject to additional tax, if they were remitted as dividends, loaned to the Company, or if the Company should sell its stock in these foreign subsidiaries. However, it is not practicable to estimate the amount of taxes that would be payable for these earnings because such tax, if any, is dependent on circumstances existing if and when a taxable event occurs. Valuation Allowance As of December 31, 2020 and 2019, the Company had a valuation allowance of $65.2 million and $51.9 million, respectively, against certain deferred tax assets. The valuation allowance relates to the deferred tax assets of the Company’s U.S. entities, including federal and state tax attributes and timing differences, as well as the deferred tax assets of certain foreign subsidiaries. The increase in the valuation allowance during 2020 is primarily related to operating losses incurred during the year and the limitation on deductibility of interest expense. To the extent the Company determines that, based on the weight of available evidence, all or a portion of its valuation allowance is no longer necessary, the Company will recognize an income tax benefit in the period such determination is made for the reversal of the valuation allowance. If management determines that, based on the weight of available evidence, it is more-likely-than-not that all or a portion of the net deferred tax assets will not be realized; the Company may recognize income tax expense in the period such determination is made to increase the valuation allowance. It is possible that such reduction of or addition to the Company’s valuation allowance may have a material impact on the Company’s results from operations. The U.S. federal and foreign changes to valuation allowance of approximately $9.6 million is presented in the effective tax rate reconciliation as part of the valuation allowance. The U.S. state changes to valuation allowance of approximately $3.8 million is presented as part of the state taxes in the effective tax rate reconciliation as part of the unrecognized tax benefit. A summary of the deferred tax asset valuation allowance is as follows: Year Ended December 31, 2020 Year Ended December 31, 2019 Beginning Balance $ 51,895 $ 36,595 Additions $ 14,149 $ 15,622 Reductions (816 ) (322 ) Ending Balance $ 65,228 $ 51,895 Uncertain Tax Positions As of December 31, 2020 and 2019, the total amount of unrecognized tax benefits was $1.0 million and $0 million, respectively, that would favorably impact the Company’s effective income tax rate. However, due to the Company’s determination that the deferred tax asset would not more-likely-than-not be realized, a full valuation allowance was recorded, therefore, zero net impact resulted in the Company’s effective income tax rate. The Company’s uncertain income tax position liability has been recorded to deferred income taxes to offset the tax attribute carryforward amounts. The U.S. federal and foreign changes to uncertain tax positions of approximately $0.6 million is presented in the effective tax rate reconciliation as part of the unrecognized tax benefit. The U.S. state changes to uncertain tax positions of approximately $0.4 million is presented as part of the state taxes in the effective tax rate reconciliation as part of the unrecognized tax benefit. A summary of the unrecognized tax benefits is as follows: Year Ended December 31, 2020 Beginning Balance $ - Additions $ 1,002 Reductions - Ending Balance $ 1,002 |
Severance and Retention
Severance and Retention | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Severance and Retention | Note 14 – Severance and retention In connection with the Company’s continued integration and realignment efforts following the 2016 acquisition of Kroll Ontrack, LLC, the Company recorded severance and retention expense of $2.5 million and $1.4 million during the years ended December 31, 2020 and 2019, comprised of employee severance and other employee-related costs associated with a reduction in workforce of 39 and 33 employees for 2020 and 2019, respectively. Severance and retention expense are included in the Consolidated Statements of Comprehensive Loss as follows: Year Ended December 31, 2020 Year Ended December 31, 2019 Costs of revenues $ 950 $ 301 General and administrative 469 567 Sales and marketing 1,076 516 Research and development 8 19 Total $ 2,503 $ 1,403 The activity and balance of severance-related liabilities, which are recorded within Accounts payable and accrued expense in our Consolidated Balance Sheet, are as follows (in thousands): Balance at December 31, 2018 $ 555 Payments (1,600 ) Expense 1,403 Balance at December 31, 2019 $ 358 Payments (1,395 ) Expense 2,503 Balance at December 31, 2020 $ 1,466 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 – Commitments and contingencies The Company is involved in various legal proceedings, which may arise occasionally in the normal course of business. While the ultimate results of such matters generally cannot be predicted with certainty, management does not expect such matters to have a material effect on the financial position and results of operations as of December 31, 2020. The Company has three letters of credit totaling $0.7 million as additional security for lease guarantees related to leased properties. Risks and Uncertainties Impacts of COVID-19 pandemic on KLDiscovery’s Business The potential impacts of the ongoing COVID-19 pandemic on the Company’s business are currently not estimable or determinable. The Company has made modifications to employee travel, work locations, and cancellation of certain events, among other modifications. During 2020, the Company implemented a salary exchange program pursuant to which certain employees took a temporary reduction in salary through December 31, 2020 that ranges from 2% to 20% in exchange for receiving 417,673 stock options and 211,207 RSUs , |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Parties | Note 16 – Related parties On December 22, 2015, the Company entered into a consulting agreement with Carlyle Investment Management, LLC, an affiliate of Carlyle, for advisory, consulting and other services in relation to the strategic and financial management of the Company. For the year ended December 31, 2019, the Company recognized $1.0 million in management consulting fees, reflected within “General and administrative expenses” in the accompanying consolidated Statements of Comprehensive Loss. The consulting agreement was terminated on December 19, 2019. As of December 31, 2020, $107.3 million including paid-in kind of the Company’s Debentures are owed to affiliates of MGG Investment Group, which is an affiliate of a director of the Company. For the years ended December 31, 2020 and December 31,2019, the Company recognized $12.1 million and $0.4 million in interest expense, respectively related to the amounts owned by the MGG Investment Group. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 17 – Subsequent events The Company has evaluated subsequent events through the dates on which this Form 10-K was filed, the date on which these financial statements were issued, and identified the below item for discussion. 2021 Credit Agreement On February 8, 2021, the Company entered into a new secured credit agreement (the “2021 Credit Agreement”). Proceeds were used to pay in full all outstanding loans and terminate all lending commitments under the 2016 Credit Agreement. The 2021 Credit Agreement provides for (i) initial term loans in an aggregate principal amount of $300 million (the “Initial Term Loans”), (ii) delayed draw term loans in an aggregate principal amount of $50 million (the “Delayed Draw Term Loans”), and (iii) revolving credit loans in an aggregate principal amount of $40 million (the “Revolving Credit Loans”). The Delayed Draw Term Loans will be available to the Company at any time prior to February 8, 2023, subject to certain conditions. The Initial Term Loans and Delayed Draw Term Loans will bear interest, at the Company’s option, at the rate of (x) with respect to Eurocurrency Rate Loans (as defined in the 2021 Credit Agreement), the Adjusted Eurocurrency Rate (as defined in the 2021 Credit Agreement) with a 1.0% floor, plus 6.50% per annum, or (y) with respect to Base Rate Loans (as defined in the 2021 Credit Agreement), the Base Rate (as defined in the 2021 Credit Agreement) plus 5.50% per annum. The Revolving Credit Loans will bear interest, at our option, at the rate of (x) with respect to Eurocurrency Rate Loans, the Adjusted Eurocurrency Rate plus 4.00% per annum, or (y) with respect to Base Rate Loans, the Base Rate plus 3.00% per annum. The Initial Term Loans and Delayed Draw Term Loans amortize at a rate of 1.00% of the aggregate principal amount of Initial Term Loans and Delayed Draw Term Loans outstanding, payable in consecutive quarterly installments, beginning on June 30, 2021. The Initial Term Loans, Delayed Draw Term Loans and Revolving Credit Loans are each scheduled to mature on the earlier of February 16, 2026 and or six months prior to maturity of our Debentures due in December 2024. The Initial Term Loans and Delayed Draw Term Loans may be voluntarily repaid at any time, but may be subject to a prepayment premium. The Initial Term Loans and Delayed Draw Term Loans are required to be repaid under certain circumstances, including with Excess Cash Flow (as defined in the 2021 Credit Agreement), the proceeds of an Asset Sale or Casualty Event (each as defined in the 2021 Credit Agreement) and the proceeds of certain refinancing indebtedness. The obligations under the 2021 Credit Agreement are secured by substantially all of the Company’s assets. The Company incurred closing fees of $8.0 million in connection with the entry into the 2021 Credit Agreement. These fees will be amortized over the full term of the 2021 Credit Agreement. In February 2021, a loss on debt extinguishment of $7.2 million was recognized in connection with the retirement of the 2016 Credit Agreement. Stock and option awards On February 16, 2021, the Company issued an additional 1.1 million time-based options and 0.3 million performance/market-based restricted stock units to its employees under the 2019 Plan. |
Organization, Business and Su_2
Organization, Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization KLDiscovery Inc., (the “Company”) provides technology-based litigation support solutions and services including computer e-discovery, data hosting, and managed review predominantly to top law firms, corporations and government agencies. The majority of the Company’s current business is derived from these services. The Company’s headquarters is located in McLean, Virginia and has 32 locations in 18 countries, 9 data centers and 18 data recovery labs around the globe. The Company was originally incorporated under the name Pivotal Acquisition Corp. (“Pivotal”) as a blank check company on August 2, 2018 under the laws of the State of Delaware for the purpose of entering into a merger, capital stock exchange, stock purchase, reorganization or similar business combination with one or more businesses or entities. On December 19, 2019, Pivotal acquired of the outstanding shares of LD Topco, Inc. via a reverse capitalization (the “Business Combination”) and was renamed KLDiscovery Inc. |
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of KLDiscovery and all its subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. The Business Combination was accounted for as a reverse recapitalization (the "Recapitalization Transaction") in accordance with Accounting Standard Codification (“ASC”) 805, Business Combinations • LD Topco, Inc.’s operations comprise the ongoing operations of the combined entity; • The officers of the newly combined company consist of LD Topco, Inc.’s executives, including the Chief Executive Officer, Chief Financial Officer and General Counsel; and, • The former shareholders of LD Topco, Inc. own a majority voting interest in the combined entity. As a result of LD Topco, Inc. being the accounting acquirer, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if” LD Topco, Inc. is the predecessor and legal successor to the Company. The historical operations of LD Topco, Inc. are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of LD Topco, Inc. prior to the Business Combination; (ii) the combined results of the Company and LD Topco, Inc. following the Business Combination on December 19, 2019; (iii) the assets and liabilities of LD Topco, Inc. at their historical cost; and (iv) KLDiscovery Inc.’s equity structure for all periods presented. The recapitalization of the number of shares of common stock attributable to the purchase of LD Topco, Inc. in connection with the Business Combination is reflected retroactively to January 1, 2018 and has been utilized for calculating earnings per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the transaction as a reverse capitalization of LD Topco, Inc. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. Although actual results could differ from those estimates, management does not believe that such differences would be material. Significant estimates include, but are not limited to, the allowance for doubtful accounts, determining the fair values of assets acquired and liabilities assumed, the recoverability and useful lives of property and equipment, intangible assets, and other long-lived assets, the impairment of goodwill, the valuation and realization of deferred income taxes, the fair value of the Company’s common stock and stock option awards, and acquisition-related contingent consideration. |
Segments, concentration of credit risk and major customers | Segments, concentration of credit risk and major customers The Company operates in one business segment, providing technology-based litigation support solutions and services. Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company places its cash with a banking institution where the balances, at times, exceed federally insured limits. Management believes the risks associated with these deposits are limited. With respect to accounts receivable, the Company performs ongoing evaluations of its customers, generally grants uncollateralized credit terms to its customers, and maintains an allowance for doubtful accounts based on historical experience and management’s expectations of future losses. As of and for the years ended December 31, 2020 and 2019, the Company did not have a single customer that represents more than five percent (5%) or more of its consolidated revenues or accounts receivable. The Company believes that the geographic and industry diversity of the Company’s customer base throughout the U.S. and internationally minimizes the risk of incurring material losses due to concentrations of credit risk. The Company’s foreign revenues, principally from businesses in the UK and Germany, totaled approximately $57.0 million in 2020 and $69.8 million in 2019. The Company’s long-lived assets in foreign countries, principally in the UK and Germany, totaled approximately $26.3 million at December 31, 2020 and $21.8 million at December 31, 2019. |
Foreign currency | Foreign currency Results of operations for the Company’s non-U.S. subsidiaries are translated from the designated functional currency to the reporting currency of the U.S. dollar. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive income.” Transaction gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “Other expense” on the Company’s Consolidated Statements of Comprehensive Loss. Such transaction gains and losses may be realized or unrealized depending upon whether the transaction settled during the period or remains outstanding at the balance sheet date. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid financial instruments with an original maturity of three months or less when purchased to be cash equivalents. |
Accounts receivable | Accounts receivable Accounts receivable are recorded at original invoice amount less an estimate for doubtful receivables based on a review of outstanding amounts monthly. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition and credit history. Accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. A rollforward of the allowance for doubtful accounts is presented below (in thousands): Balance at December 31, 2018 $ 5,564 Charged to/reversed from expense 3,104 Charged to/from other accounts — Deductions (write offs) (1,182 ) Balance at December 31, 2019 $ 7,486 Charged to/reversed from expense 4,088 Charged to/from other accounts 283 Deductions (write offs) (3,344 ) Balance at December 31, 2020 $ 8,513 |
Fixed Assets | Fixed Assets Computer software, property and equipment are recorded at cost. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: Computer software and hardware 3 to 5 years Leasehold improvements Shorter of lease term or useful life Furniture, fixtures and other equipment 3 to 5 years Gains or losses on disposals are included in results of operations at amounts equal to the difference between the net book value of the disposed assets and the proceeds received upon disposal. Costs for replacements and betterments are capitalized, while the costs of maintenance and repairs are expensed as incurred. Property under capital leases are depreciated using the straight-line method over the lease term. Depreciation expense totaled $16.9 million and $18.6 million for the years ended December 31, 2020 and 2019, respectively, and includes amortization of assets recorded under capital leases. |
Internal-use software development costs | Internal-use software development costs The Company capitalizes certain internal computer software costs incurred during the application development stage. The application development stage generally includes software design and configuration, coding, testing and installation activities. Training and maintenance costs are expensed as incurred, while upgrades and enhancements are capitalized if it is probable that such expenditure will result in additional functionality. Capitalized software costs are depreciated over the estimated useful life of the underlying project on a straight-line basis. The Company’s estimated useful life of capitalized software costs varies between three and five years, depending on management’s expectation of the economic life of various software. Capitalized software amortization costs are recorded as a component of cost of revenue. Capitalized software costs are reflected as part of the “Intangible assets, net line” in the Company’s Consolidated Balance Sheets and totaled $18.5 million and $13.5 million, net of accumulated amortization, as of December 31, 2020 and 2019, respectively. |
Intangible assets and other long-lived assets | Intangible assets and other long-lived assets The Company evaluates the recoverability of its long-lived assets, including finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of any asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the difference between the fair value of the asset compared to its carrying amount. No impairment losses were recognized in the accompanying consolidated financial statements. Amortization expense totaled $30.9 million and $31.8 million for the years ended December 31, 2020 and 2019, respectively; $11.8 million and $11.3 million of which was classified as part of the “Cost of revenues” line in the Company’s Consolidated Statements of Comprehensive Loss. The Company allocates the purchase price of an acquisition to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The Company recognizes as goodwill the amount by which the purchase price of an acquired entity exceeds the net of the fair values assigned to the assets acquired and liabilities assumed. In determining the fair values of assets acquired and liabilities assumed, the Company uses various recognized valuation methods including the income and market approaches. Further, the Company makes assumptions within certain valuation techniques, including discount rates, royalty rates, and the amount and timing of future cash flows. The Company records the net assets and results of operations of an acquired entity in the financial statements from the acquisition date. The Company initially performs these valuations based upon preliminary estimates and assumptions by management or independent valuation specialists under its supervision, where appropriate, and make revisions as estimates and assumptions are finalized. The Company expenses acquisition-related costs as they are incurred. |
Goodwill | Goodwill Goodwill represents the excess of the total consideration paid over identified intangible and tangible assets of the Company and its acquisitions. The Company tests its goodwill for impairment at the reporting unit level on an annual basis on October 1, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. As of the October 1 testing date the Company determined there is one reporting unit. Goodwill impairment exists when the estimated fair value of the reporting unit is less than its carrying value. If impairment exists, the carrying value of the goodwill is reduced by the excess through an impairment charge recorded in the Company’s statements of operations. The process of evaluating the potential impairment of goodwill is subjective and requires significant judgment at many points during the analysis. The fair value of the Company’s reporting unit is estimated using a combination of a discounted cash flow (“DCF”) analysis and market-based valuation methodologies such as comparable public company trading values. Determining fair value requires the exercise of significant judgments, including the amount and timing of expected future cash flows, long-term growth rates, discount rates and relevant comparable public company earnings multiples. The cash flows employed in the DCF analyses are based on the Company’s best estimate of future sales, earnings and cash flows after considering factors such as general market conditions, changes in working capital, long term business plans and recent operating performance. The carrying value of the reporting unit includes the assets and liabilities employed in its operations and goodwill. Accordingly, the Company has not identified any indicators of impairment, nor have any impairment charges been recorded related to goodwill resulting from the annual impairment test. The following table provides a rollforward of the carrying amount of goodwill (in thousands): Balance at December 31, 2018 $ 394,167 Acquisitions 263 Foreign currency translation 741 Balance at December 31, 2019 395,171 Acquisitions 1,009 Disposal (96 ) Foreign currency translation 3,001 Balance at December 31, 2020 $ 399,085 |
Debt issuance costs | Debt issuance costs Debt issuance costs are stated at cost, net of accumulated amortization, and are amortized over the term of the debt using both the straight-line and the effective yield methods. U.S. GAAP requires that the effective yield method be used to amortize debt acquisition costs; however, if the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective yield method, the straight-line method may be used. The amortization for funded term debt is calculated according to the effective yield method and revolving and unfunded term debt is calculated according to the straight-line method. Debt issuance costs related to funded term debt is presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts or premiums. Debt issuance costs related to revolving and unfunded term debt is presented in the Consolidated Balance Sheets within “Other assets.” |
Revenue recognition | Revenue recognition The Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), effective January 1, 2019, utilizing the modified retrospective method. The Company’s adoption of ASC 606 did not result in material changes to the Company’s revenue recognition. Revenues are recognized when we satisfy a performance obligation by transferring goods or services promised in a contract to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate service streams that we provide to our customers. The Company evaluates its revenue contracts with customers based on the five-step model under ASC 606: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to separate performance obligations; and (5) recognize revenues when (or as) each performance obligation is satisfied. The following table summarizes revenue from contracts with customers for the years ended December 31, 2020 and 2019 (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 eDiscovery services $ 197,300 $ 215,560 Managed review 49,985 50,290 Legal technology services 247,285 265,850 Data recovery 42,260 46,204 Total revenue $ 289,545 $ 312,054 Performance Obligations and Timing of Revenue Recognition The Company primarily sells services and products that fall into the categories discussed below. Each category contains one or more performance obligations that are either (1) capable of being distinct (i.e., the customer can benefit from the product or service on its own or together with readily available resources, including those purchased separately from us) and distinct within the context of the contract (i.e., separately identified from other promises in the contract) or (2) a series of distinct products or services that are substantially the same and have the same pattern of transfer to the customer. (1) eDiscovery services, which provides end-to-end eDiscovery services support including collections, processing, analytics, hosting, production and professional services; (2) Managed review services, which provides the staffing necessary to review large complex data sets; and (3) Data recovery services, which offers data restoration, data erasure and data management. The Company generates the majority of its revenues by providing Legal Technology services to our clients. All of our eDiscovery service contracts are time and materials types of arrangements. Time and materials arrangements are based on units of data stored or processed. Unit-based revenues are recognized as services are provided, based on either the amount of data stored or processed, the number of concurrent users accessing the information, or the number of pages or images processed for a client, at agreed upon per unit rates. We recognize revenues for these arrangements utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date. Certain of our eDiscovery contracts are subscription-based, fixed-fee arrangements, which have tiered pricing based on the quantity of data hosted. For a fixed monthly fee, our clients receive a variety of optional eDiscovery services, which are included in addition to the data hosting. The Company recognizes revenues for these arrangements based on predetermined monthly fees as determined in our contractual agreements, utilizing a right-to-invoice practical expedient because the Company has a right to consideration for services completed to date. Managed review services are time and materials types of arrangements. These agreements require the client to pay us based on the number of hours worked at contractually agreed-upon rates. The Company recognizes revenues for these arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because the Company has a right to consideration for services completed to date. Data recovery services are mainly fixed fee arrangements requiring the client to pay a pre-established fee in exchange for the successful completion of a data recovery on a predetermined device. For the recovery services performed by the Company’s technicians, the revenue is recognized at a point in time, when the recovered data is sent to the customer. Data erasure services are fixed fee arrangements for which revenue is recognized at a point in time, when the certificate of erasure is sent to the customer. Ontrack PowerControls, included in the data recovery revenue stream, offers term license subscriptions for customers with on-premises installations of the software pursuant to contracts that are historically one to four years in length. The term license subscriptions include maintenance, support, as well as access to future software upgrades and fixes. The license and the additional support services are deemed to be one performance obligation, and thus revenue for these arrangements is recognized ratably over the term of the agreement. |
Share-based compensation | Share-based compensation The Company measures and recognizes compensation expense for all share-based awards to employees based on estimated grant date fair values on a straight-line basis over the requisite service period. The Company uses the Black-Scholes valuation model, depending on terms, facts and circumstances of each share-based award. The expected vesting of the Company’s performance-based RSUs is based upon the probability of a liquidity event, such as a change in control as defined under the 2019 Plan. The level of achievement of the liquidity event, if any, is re-evaluated quarterly. |
Advertising | Advertising Advertising costs consist of marketing, advertising through print and other media, professional event sponsorship and public relations. These costs are expensed as incurred. Advertising costs totaled $4.5 million and $7.1 million for the years ended December 31, 2020 and 2019, respectively. Advertising costs are reflected within “Sales and marketing” in the accompanying Consolidated Statements of Comprehensive Loss. |
Research and development expense | Research and development expense Costs incurred in the research and development of the Company’s technologies primarily consist of developer salaries. Research and development expenses were $7.2 million and $5.9 million for the years ended December 31, 2020 and 2019, respectively. |
Income taxes | Income taxes Income taxes are accounted for using the asset and liability method. Deferred income taxes are provided for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes. Such deferred income taxes primarily relate to the difference between the tax bases of assets and liabilities and their financial reporting amounts. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. Excess tax benefits and tax deficiencies are recognized in the income tax provision in the period in which they occur. The Company records a valuation allowance when it determines, based on available positive and negative evidence, that it is more-likely-than-not that some portion, or all its deferred tax assets will not be realized. The Company determines the realizability of its deferred tax assets primarily based on the reversal of existing taxable temporary differences and projections of future taxable income (exclusive of reversing temporary differences and carryforwards). In evaluating such projections, the Company considers its history of profitability, the competitive environment, and general economic conditions. In addition, the Company considers the time frame over which it would take to utilize the deferred tax assets prior to their expiration. For certain tax positions, the Company uses a more-likely-than-not threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted net loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the year, plus the dilutive effect of common stock equivalents, including stock options and restricted shares. Common stock and common stock equivalents included in the computation represent shares issuable upon assumed exercise of outstanding stock options and release of restricted shares, except when the effect of their inclusion would be antidilutive. On December 19, 2019, the Company completed a reverse merger with Pivotal Acquisition Corp. whereby the Company received 34,800,000 shares for its outstanding 3,707,564 shares, effecting 1-to-9.3862 stock exchange. The per share amounts have been updated to show the effect of the exchange on earnings per share as if the exchange occurred at the beginning of both years for the annual financial statements of the Company. The impact of the stock exchange is also shown on the Company’s Statements of Stockholders’ Equity.” |
Recently Adopted Accounting Standards and Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, which amends ASC 820 to add, remove, and modify fair value measurement disclosure requirements. This standard was effective for the Company for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. The adoption did not have a material impact on the Company’s current financial position and results of operations, but the financial statement disclosures were updated in accordance with the ASU. Accounting Standards Not Yet Adopted In connection with the transaction with Pivotal (see Note 2), the Company elected to be an Emerging Growth Company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act and take advantage of the extended transition period of delaying the adoption of new or revised accounting standards until such time as those standards apply to private companies. This may make the comparison of the Company’s consolidated financial statements to other public companies not meaningful due to the differences in accounting standards being applied. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (“ASC 326”): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This guidance is intended to introduce a revised approach to the recognition and measurement of credit losses, emphasizing an updated model based on expected losses rather than incurred losses. The Company is required to adopt ASC 326 effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and the Company is currently evaluating the impact that Topic 326 will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. The new standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption, including the adoption in any interim period, is permitted for all entities. The Company does not expect ASU 2019-12 to have a meaningful effect on the Company’s current financial position, results of operations or financial statement disclosures. |
Organization, Business and Su_3
Organization, Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Rollforward of Allowance for Doubtful Accounts | A rollforward of the allowance for doubtful accounts is presented below (in thousands): Balance at December 31, 2018 $ 5,564 Charged to/reversed from expense 3,104 Charged to/from other accounts — Deductions (write offs) (1,182 ) Balance at December 31, 2019 $ 7,486 Charged to/reversed from expense 4,088 Charged to/from other accounts 283 Deductions (write offs) (3,344 ) Balance at December 31, 2020 $ 8,513 |
Estimated Useful Lives of Assets | Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: Computer software and hardware 3 to 5 years Leasehold improvements Shorter of lease term or useful life Furniture, fixtures and other equipment 3 to 5 years |
Rollforward of Carrying Amount of Goodwill | The following table provides a rollforward of the carrying amount of goodwill (in thousands): Balance at December 31, 2018 $ 394,167 Acquisitions 263 Foreign currency translation 741 Balance at December 31, 2019 395,171 Acquisitions 1,009 Disposal (96 ) Foreign currency translation 3,001 Balance at December 31, 2020 $ 399,085 |
Summary of Revenue from Contracts with Customers | The following table summarizes revenue from contracts with customers for the years ended December 31, 2020 and 2019 (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 eDiscovery services $ 197,300 $ 215,560 Managed review 49,985 50,290 Legal technology services 247,285 265,850 Data recovery 42,260 46,204 Total revenue $ 289,545 $ 312,054 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Summary of Net Proceeds from Business Combination | The net proceeds from the Business Combination, as reported in the consolidated statements of cash flows for the year ended December 31, 2019 within the financing section are summarized below: Gross cash received by KLDiscovery from Business Combination $ 201,657 Less: fees to underwriters (6,500 ) Less: other transaction costs (8,654 ) Net cash received by KLDiscovery from Business Combination $ 186,503 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) | The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the years ended December 31, 2020 and 2019 (in thousands): Balance at December 31, 2018 $ — Additions (payments) to contingent consideration 774 Change in fair value of contingent consideration 48 Balance at December 31, 2019 822 Additions (payments) to contingent consideration — Change in fair value of contingent consideration 98 Balance at December 31, 2020 $ 920 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands): Description Weighted Average Remaining Useful Life in Years December 31, 2020 December 31, 2019 Trademark and tradenames 5.5 $ 67,183 $ 66,311 Accumulated amortization (29,004 ) (21,504 ) Trademark and tradenames, net 38,179 44,807 Developed technology 4.2 79,796 71,327 Accumulated amortization (49,968 ) (36,838 ) Developed technology, net 29,828 34,489 Non-compete agreements — 1,402 1,467 Accumulated amortization (1,402 ) (1,242 ) Non-compete agreements, net — 225 Customer relationships 6.1 97,420 95,693 Accumulated amortization (55,694 ) (44,646 ) Customer relationships, net 41,726 51,047 Intangible assets, net of amortization $ 109,733 $ 130,568 |
Schedule of Future Amortization of Intangible Assets | Future amortization of intangible assets is as follows (in thousands): December 31, Amount 2021 $ 27,398 2022 23,153 2023 17,413 2024 13,111 2025 8,718 Thereafter 15,025 In process 4,916 Total $ 109,733 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2020 2019 Accrued expenses: Accrued interest $ 5,041 $ 7,000 Accrued salaries 11,802 9,509 Current taxes payable 519 535 Other accrued expenses 2,694 2,847 Total $ 20,056 $ 19,891 |
Leasing Arrangements (Tables)
Leasing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Future Minimum Payments for Operating and Capital Lease Obligations | For years subsequent to December 31, 2020, future minimum payments for all operating and capital lease obligations that have initial non-cancelable lease terms exceeding one year, net of rental income from subleases are as follows (in thousands): December 31, Capital Leases Operating Leases 2021 $ 1,313 $ 9,437 2022 1,586 8,936 2023 1,346 8,568 2024 721 7,377 2025 — 3,810 Thereafter — 2,552 Total $ 4,966 $ 40,680 Less: interest on lease obligations (464 ) Net amount 4,502 Less: current portion (1,313 ) Non-current $ 3,189 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Long Term Debt [Abstract] | |
Summary of Components of Long-term Debt | The table below summarizes the components of the Company’s long-term debt (in thousands): December 31, 2020 2019 First lien facility due 2022 289,000 306,000 Convertible debenture notes due 2024 214,541 200,000 Total debt 503,541 506,000 Less: unamortized original issue discount (16,126 ) (19,806 ) Less: unamortized debt issuance costs (3,867 ) (5,573 ) Total debt, net 483,548 480,621 Current portion of debt 17,000 17,000 Less: current portion of unamortized original issue discount (4,312 ) (3,687 ) Less: current portion of unamortized debt issuance costs (1,740 ) (1,624 ) Total current portion of debt, net 10,948 11,689 Total long-term debt, net $ 472,600 $ 468,932 |
Summary of Future Principal Payments, Including in Kind Interest | Future principal payments, including in kind interest, are as follows (in thousands): December 31, Amount 2021 17,000 2022 272,000 2023 - 2024 277,287 Thereafter - Total $ 566,287 |
Schedule of Future Amortization of Debt Issuance Costs and Original Issue Discount | The future amortization of debt issuance costs and original issue discount related to the 2016 Credit Agreement, the Revolving Credit Facility and Convertible Debentures are as follows (in thousands): December 31, Amount 2021 $ 6,052 2022 6,453 2023 3,528 2024 3,961 Total $ 19,994 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of Additional Information on Stock Option Grants And Vesting | The following table summarizes additional information on stock option grants and vesting (in thousands): 2016 Plan 2019 Plan Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2020 Year Ended December 31, 2019 Total fair value of stock options granted $ - $ 2,492 $ 9,241 $ 974 Total fair value of options vested - 1,439 2,711 - |
Summary of Valuation Models of Fair Value of Awards Granted To Employees and Non-Employees Under 2016 Plan | The following table summarizes the assumptions used in the valuation models to determine the fair value of awards granted to employees and non-employees under both the 2019 Plan and the 2016 Plan: Year Ended December 31, 2020 Year Ended December 31, 2019 Expected volatility 37.63 - 41.24% 36.92 - 37.70% Expected term (in years) 6.0 6 - 6.5 Dividend yield 0% 0% Risk free interest rate 0.30 - 1.43% 1.79 - 2.89% |
Stock Based Compensation Expense Included In Consolidated Statements of Comprehensive Loss | Stock-based compensation expense is included in the Consolidated Statements of Comprehensive Loss within the following line items (in thousands): December 31, 2020 2019 Cost of revenues $ 1,336 $ 573 General and administrative 1,198 1,161 Research and development 268 87 Sales and marketing 633 444 Total $ 3,435 $ 2,265 |
Restricted Stock Units [Member] | |
Schedule of RSUs Activity Under 2019 Plan | The following table summarizes the Company’s RSU activity under the 2019 Plan: RSUs Description Outstanding Outstanding at December 31, 2019 - Granted 1,402,312 Forfeited (111,880 ) Expired - Outstanding at December 31, 2020 1,290,432 |
2019 Plan [Member] | |
Schedule of Stock Option Activity | The following table summarizes the Company’s stock option activity under the 2019 Plan: Description Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Options outstanding, December 31, 2018 - Granted 514,710 $ 9.90 10.0 Forfeited - Expired - Options outstanding, December 31, 2019 514,710 $ 9.90 10.0 Granted 4,137,750 8.49 Forfeited (387,186 ) 8.85 Expired (4,521 ) 8.85 Options outstanding, December 31, 2020 4,260,753 $ 8.46 9.0 $ 54 Options vested and exercisable, December 31, 2020 1,204,863 $ 8.20 9.0 $ 54 Options vested and expected to vest, December 31, 2020 4,260,753 $ 8.46 9.0 $ 54 |
2016 Plan [Member] | |
Schedule of Stock Option Activity | The following table summarizes the Company’s stock option activity under the 2016 Plan: Description Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (1) Options Outstanding, December 31, 2018 411,480 $ 100 8.3 $ — Granted 67,050 90 Forfeited (32,860 ) 99 Expired (8,640 ) 99 Cancelled (437,030 ) 100 Options Outstanding, December 31, 2019 - $ — (1) Aggregate intrinsic value (in thousands) represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Loss Per Share | The following table summarizes basic and diluted loss per share or the years ended December 31, 2020 and 2019 (in thousands, except per share amounts): Year Ended December 31, 2020 Year Ended December 31, 2019 Basic and diluted loss per share: Net loss $ (49,926 ) $ (54,014 ) Weighted average common shares outstanding - basic 42,529,017 42,529,017 Dilutive effect of potentially issuable shares — — Weighted average common shares outstanding - diluted 42,529,017 42,529,017 Basic loss per share $ (1.17 ) $ (1.27 ) Dilutive effect of potentially issuable shares — — Diluted loss per share $ (1.17 ) $ (1.27 ) Common share equivalents excluded due to anti-dilutive effect 3,788,388 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The components of income tax expense for the years ended December 31, 2020 and 2019 are presented below (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Current Federal $ (712 ) $ (37 ) State 73 61 Foreign 729 447 Deferred Federal 334 332 State 806 705 Foreign (294 ) (789 ) Total income tax provision $ 936 $ 719 |
Schedule of Loss Before Income Taxes | The actual income tax expense amounts for the years ended December 31, 2020 and 2019 differed from the expected tax amounts computed by applying the U.S. federal corporate income tax rate of 21% for 2020 and 2019 to the amounts of loss before income taxes as presented below (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Pre-tax book loss $ (48,990 ) $ (53,295 ) Tax at Federal statutory rate of 21% in 2020 and 2019 (10,288 ) (11,192 ) State taxes 879 766 Stock based compensation 3 1,060 Foreign rate differential (1,223 ) (871 ) Unrecognized tax benefit 549 - Other adjustments 1,453 (1,707 ) Valuation allowance 9,563 12,663 Total income tax provision $ 936 $ 719 |
Components of Loss Before Income Taxes from Continuing Operations | The domestic and foreign components of loss before income taxes from continuing operations for the years ended December 31, 2020 and 2019 are as follows (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Domestic $ (46,686 ) $ (52,438 ) Foreign (2,304 ) (857 ) Total $ (48,990 ) $ (53,295 ) |
Summary of Tax Effects of Temporary Differences | The tax effects of temporary differences at December 31, 2020 and 2019 are as follows (in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Net operating losses and other carryforwards $ 42,859 $ 41,299 Interest expense carryforward 30,112 20,070 Property and equipment 2,448 2,221 Accrued expenses 512 82 Payroll tax deferral 1,089 - Allowance for doubtful accounts 1,768 1,517 Stock-based compensation 878 — Other 540 633 Deferred tax asset 80,206 65,822 Valuation allowance (65,228 ) (51,895 ) Total deferred tax assets, net of valuation allowance 14,978 13,927 Intangible assets (21,791 ) (20,098 ) Prepaid expenses (107 ) (73 ) Other (415 ) (50 ) Deferred tax liability (22,313 ) (20,221 ) Net deferred tax liability $ (7,335 ) $ (6,294 ) |
Summary of Deferred Tax Asset Valuation Allowance | A summary of the deferred tax asset valuation allowance is as follows: Year Ended December 31, 2020 Year Ended December 31, 2019 Beginning Balance $ 51,895 $ 36,595 Additions $ 14,149 $ 15,622 Reductions (816 ) (322 ) Ending Balance $ 65,228 $ 51,895 |
Schedule of Unrecognized Tax Benefits Roll Forward | A summary of the unrecognized tax benefits is as follows: Year Ended December 31, 2020 Beginning Balance $ - Additions $ 1,002 Reductions - Ending Balance $ 1,002 |
Severance and Retention (Tables
Severance and Retention (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring And Related Activities [Abstract] | |
Summary of Severance and Retention Expense | Severance and retention expense are included in the Consolidated Statements of Comprehensive Loss as follows: Year Ended December 31, 2020 Year Ended December 31, 2019 Costs of revenues $ 950 $ 301 General and administrative 469 567 Sales and marketing 1,076 516 Research and development 8 19 Total $ 2,503 $ 1,403 |
Summary of Severance Related Liabilities within Accounts Payable and Accrued Expense | The activity and balance of severance-related liabilities, which are recorded within Accounts payable and accrued expense in our Consolidated Balance Sheet, are as follows (in thousands): Balance at December 31, 2018 $ 555 Payments (1,600 ) Expense 1,403 Balance at December 31, 2019 $ 358 Payments (1,395 ) Expense 2,503 Balance at December 31, 2020 $ 1,466 |
Organization, Business and Su_4
Organization, Business and Summary of Significant Accounting Policies - Additional Information (Detail) | Dec. 19, 2019shares | Dec. 31, 2020USD ($)LocationCountryDatacenterLabSegmentCustomerReportingUnit | Dec. 31, 2019USD ($)Customer |
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of countries | Country | 18 | ||
Number of data centers | Datacenter | 9 | ||
Number of data recovery labs | Lab | 18 | ||
Date of incorporation | Aug. 2, 2018 | ||
Number of business segment | Segment | 1 | ||
Revenues | $ 289,545,000 | $ 312,054,000 | |
Depreciation expense | 16,900,000 | 18,600,000 | |
Impairment losses recognized | 0 | ||
Amortization expense | $ 30,900,000 | 31,800,000 | |
Number of reporting unit | ReportingUnit | 1 | ||
Research and development | $ 7,167,000 | 5,945,000 | |
Pivotal Acquisition Corp. [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Business combination, aggregate shares of common stock received by stockholders | shares | 34,800,000 | ||
Business combination, outstanding shares | shares | 3,707,564 | ||
Business combination, stock exchange ratio | shares | 9.3862 | ||
Cost of Revenues [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Amortization expense | 11,800,000 | 11,300,000 | |
Sales and Marketing [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Advertising costs | 4,500,000 | 7,100,000 | |
Internal-Use Software Development [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Capitalized software costs | 18,500,000 | 13,500,000 | |
UK and Germany [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Revenues | 57,000,000 | 69,800,000 | |
Long-lived assets | $ 26,300,000 | $ 21,800,000 | |
Consolidated Revenues [Member] | Customer Concentration Risk [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of customers representing more than 5% of consolidated revenues or accounts receivable | Customer | 0 | 0 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of customers representing more than 5% of consolidated revenues or accounts receivable | Customer | 0 | 0 | |
Minimum [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Number of locations | Location | 32 | ||
Minimum [Member] | Internal-Use Software Development [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful life | 3 years | ||
Maximum [Member] | Internal-Use Software Development [Member] | |||
Organization Business And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful life | 5 years |
Organization, Business and Su_5
Organization, Business and Summary of Significant Accounting Policies - Rollforward of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for Doubtful Accounts [Roll Forward] | ||
Balance at beginning | $ 7,486 | $ 5,564 |
Charged to/reversed from expense | 4,088 | 3,104 |
Charged to/from other accounts | 283 | |
Deductions (write offs) | (3,344) | (1,182) |
Balance at ending | $ 8,513 | $ 7,486 |
Organization, Business and Su_6
Organization, Business and Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Dec. 31, 2020 | |
Computer software and hardware | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 3 years |
Computer software and hardware | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Leasehold improvements | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | Shorter of lease term or useful life |
Furniture, fixtures and other equipment | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 3 years |
Furniture, fixtures and other equipment | Maximum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of assets | 5 years |
Organization, Business and Su_7
Organization, Business and Summary of Significant Accounting Policies - Rollforward of Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Balance at beginning | $ 395,171 | $ 394,167 |
Acquisitions | 1,009 | 263 |
Disposal | (96) | |
Foreign currency translation | 3,001 | 741 |
Balance at end | $ 399,085 | $ 395,171 |
Organization, Business and Su_8
Organization, Business and Summary of Significant Accounting Policies - Summary of Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 289,545 | $ 312,054 |
eDiscovery Services [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 197,300 | 215,560 |
Managed Review [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 49,985 | 50,290 |
Legal Technology Services [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 247,285 | 265,850 |
Data Recovery [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 42,260 | $ 46,204 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Dec. 19, 2019 | Dec. 31, 2019 | Dec. 18, 2019 |
8% Convertible Debentures Due 2024 [Member] | |||
Business Acquisition [Line Items] | |||
Debt, principal amount | $ 200 | ||
Pivotal Acquisition Corp. [Member] | |||
Business Acquisition [Line Items] | |||
Business combination, date of merger | Dec. 19, 2019 | ||
Business combination, aggregate shares of common stock received by stockholders | 34,800,000 | ||
Closing sale price of company's common stock | $ 13.50 | ||
Business combination, contingent consideration arrangements, description | The former stockholders of LD Topco, Inc. also have the right to receive up to 2,200,000 shares of the Company’s common stock if (i) a change in control occurs or (ii) the reported closing sale price of the Company’s common stock exceeds $13.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations or other similar actions) for any 20 consecutive trading days during the five-year period following the closing of the Business Combination. | ||
Warrants to receive shares of common stock | 29,500,000 | ||
Exercise price per share | $ 11.50 | $ 11.50 | |
Pivotal Acquisition Corp. [Member] | 8% Convertible Debentures Due 2024 [Member] | |||
Business Acquisition [Line Items] | |||
Debt, principal amount | $ 200 | ||
Pivotal Acquisition Corp. [Member] | Maximum [Member] | Common Stock Issuable Contingently [Member] | |||
Business Acquisition [Line Items] | |||
Common stock issuable pursuant to merger | 2,200,000 |
Acquisitions - Summary of Net P
Acquisitions - Summary of Net Proceeds from Business Combination (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Business Acquisition [Line Items] | |
Net cash received by KLDiscovery from Business Combination | $ 186,503 |
Pivotal Acquisition Corp. [Member] | |
Business Acquisition [Line Items] | |
Gross cash received by KLDiscovery from Business Combination | 201,657 |
Less: fees to underwriters | (6,500) |
Less: other transaction costs | (8,654) |
Net cash received by KLDiscovery from Business Combination | $ 186,503 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)Company | Dec. 31, 2019USD ($) | |
Fair Value Disclosures [Abstract] | ||
Fair value of future expected acquisition-related contingent consideration obligations | $ 0.9 | $ 0.8 |
Number of companies acquired | Company | 3 | |
Business acquisition, total consideration | $ 5.5 | |
Business acquisition, consideration in cash | 2 | |
Business acquisition, deferred payments | 1.5 | |
Business acquisition, stock | 1.2 | |
Business acquisition, future earnouts | $ 1 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning | $ 822 | |
Additions (payments) to contingent consideration | $ 774 | |
Change in fair value of contingent consideration | 98 | 48 |
Balance at ending | $ 920 | $ 822 |
Intangibles Assets - Schedule o
Intangibles Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, net of amortization | $ 109,733 | $ 130,568 |
Trademarks and Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life in Years | 5 years 6 months | |
Gross intangible assets | $ 67,183 | 66,311 |
Accumulated amortization | (29,004) | (21,504) |
Intangible assets, net of amortization | $ 38,179 | 44,807 |
Developed Technology Rights [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life in Years | 4 years 2 months 12 days | |
Gross intangible assets | $ 79,796 | 71,327 |
Accumulated amortization | (49,968) | (36,838) |
Intangible assets, net of amortization | 29,828 | 34,489 |
Non-compete Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross intangible assets | 1,402 | 1,467 |
Accumulated amortization | $ (1,402) | (1,242) |
Intangible assets, net of amortization | 225 | |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life in Years | 6 years 1 month 6 days | |
Gross intangible assets | $ 97,420 | 95,693 |
Accumulated amortization | (55,694) | (44,646) |
Intangible assets, net of amortization | $ 41,726 | $ 51,047 |
Intangibles Assets - Schedule_2
Intangibles Assets - Schedule of Future Amortization of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2021 | $ 27,398 | |
2022 | 23,153 | |
2023 | 17,413 | |
2024 | 13,111 | |
2025 | 8,718 | |
Thereafter | 15,025 | |
In process | 4,916 | |
Intangible assets, net of amortization | $ 109,733 | $ 130,568 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued expenses: | ||
Accrued interest | $ 5,041 | $ 7,000 |
Accrued salaries | 11,802 | 9,509 |
Current taxes payable | 519 | 535 |
Other accrued expenses | 2,694 | 2,847 |
Total | $ 20,056 | $ 19,891 |
Leasing Arrangements - Addition
Leasing Arrangements - Additional Information (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)Location | Dec. 31, 2019USD ($) | |
Leases [Abstract] | ||
Operating and capital lease agreements lease expiring year | 2029 | |
Rent expense | $ 14.1 | $ 14.7 |
Number of lease agreement terminated locations | Location | 18 | |
Number of reduce footprint lease location | Location | 4 | |
Savings on early lease termination | $ 4.6 | |
Amortization expense for capital leases | $ 0.5 | $ 0.7 |
Leasing Arrangements - Schedule
Leasing Arrangements - Schedule of Future Minimum Payments for Operating and Capital Lease Obligations (Detail) $ in Thousands | Dec. 31, 2020USD ($) |
Capital Leases | |
2021 | $ 1,313 |
2022 | 1,586 |
2023 | 1,346 |
2024 | 721 |
Total | 4,966 |
Less: interest on lease obligations | (464) |
Net amount | 4,502 |
Less: current portion | (1,313) |
Non-current | 3,189 |
Operating Leases | |
2021 | 9,437 |
2022 | 8,936 |
2023 | 8,568 |
2024 | 7,377 |
2025 | 3,810 |
Thereafter | 2,552 |
Total | $ 40,680 |
Long Term Debt - Summary of Com
Long Term Debt - Summary of Components of Long-term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total debt | $ 503,541 | $ 506,000 |
Less: unamortized original issue discount | (16,126) | (19,806) |
Less: unamortized debt issuance costs | (3,867) | (5,573) |
Total debt, net | 483,548 | 480,621 |
Current portion of debt | 17,000 | 17,000 |
Less: current portion of unamortized original issue discount | (4,312) | (3,687) |
Less: current portion of unamortized debt issuance costs | (1,740) | (1,624) |
Total current portion of debt, net | 10,948 | 11,689 |
Long-term debt, net | 472,600 | 468,932 |
First Lien Facility Due 2022 | ||
Debt Instrument [Line Items] | ||
Total debt | 289,000 | 306,000 |
Convertible Debenture Notes Due 2024 | ||
Debt Instrument [Line Items] | ||
Total debt | $ 214,541 | $ 200,000 |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | Dec. 19, 2019 | Dec. 09, 2016 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 28, 2021 |
Debt Instrument [Line Items] | |||||
Loss on extinguishment of debt | $ 7,203,000 | ||||
Mandatory prepayment amount | $ 0 | 0 | |||
Debt amount, balance due | 503,541,000 | 506,000,000 | |||
Accretion of original issue discount | 3,700,000 | 2,700,000 | |||
Amortization of debt issuance costs | 1,600,000 | 2,100,000 | |||
2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Debt closing fees | 13,600,000 | ||||
Deferred closing fees | $ 600,000 | ||||
2016 Credit Agreement | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 7,200,000 | ||||
2016 Credit Agreement | Revolving Loan Commitment | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 30,000,000 | ||||
Loan maturing date | Jun. 9, 2022 | ||||
Outstanding loan amount | $ 0 | $ 0 | |||
Available borrowing capacity | 29,300,000 | ||||
2016 Credit Agreement | Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding loan amount | $ 700,000 | ||||
LIBOR | 2016 Credit Agreement | Revolving Loan Commitment | |||||
Debt Instrument [Line Items] | |||||
Loan variable interest rate | 5.375% | ||||
Loan variable interest rate option three | 5.875% | ||||
First Lien Facility | |||||
Debt Instrument [Line Items] | |||||
Initial term loan borrowing | 340,000,000 | ||||
Term loan maturity date | Dec. 9, 2022 | ||||
Payments for loans | $ 2,100,000 | ||||
Debt instrument, date of first required payment | Mar. 31, 2017 | ||||
Quarterly principal payments increase | $ 4,300,000 | ||||
Term loan balloon payment | $ 259,300,000 | ||||
Term loan interest rate per annum during period | 5.875% | 5.875% | |||
Loan variable interest rate | 0.00% | ||||
Term loan description of variable rate basis | For each interest period, the interest rate per annum was 5.875% plus the Adjusted Eurocurrency Rate which was defined as an amount equal to the Statutory Reserve Rate multiplied by the greatest of a) LIBOR, b) 0.00% per annum and c) solely with respect to the Initial Term Loans, 1.00% per annum. | ||||
Term loan balance due | $ 289,000,000 | $ 306,000,000 | |||
First Lien Facility | 2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Original issue discount | 11,900,000 | ||||
First Lien Facility | Adjusted Eurocurrency Rate | |||||
Debt Instrument [Line Items] | |||||
Loan variable interest rate | 1.00% | 2.596% | |||
First Lien Facility | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Loan variable interest rate | 1.00% | ||||
Second Lien Facility | |||||
Debt Instrument [Line Items] | |||||
Initial term loan borrowing | 125,000,000 | ||||
Term loan maturity date | Dec. 9, 2023 | ||||
Term loan balloon payment | $ 125,000,000 | ||||
Term loan interest rate per annum during period | 10.00% | ||||
Loan variable interest rate | 0.00% | ||||
Term loan balance due | $ 0 | ||||
Loss on extinguishment of debt | $ 7,200,000 | 7,200,000 | |||
Second Lien Facility | 2016 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Original issue discount | $ 6,300,000 | ||||
Second Lien Facility | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Loan variable interest rate | 1.00% | ||||
8% Convertible Debentures Due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Term loan maturity date | Dec. 19, 2024 | ||||
Debt principal amount | $ 200,000,000 | ||||
Debt interest rate | 8.00% | ||||
Debt amount, balance due | $ 214,541,000 | $ 200,000,000 | |||
Debt interest rate in cash | 4.00% | ||||
Debt interest rate in kind | 4.00% | ||||
Debt periodic payment | The Debentures will bear interest at an annual rate of 4.00% in cash, payable quarterly, and 4.00% in kind, accrued quarterly, on the last business day of March, June, September and December. | ||||
Percentage of amount will add to principal amount | 3.00% | ||||
Principal amount of debt redeemed | 100.00% | ||||
Debt conversion price per share | $ 18 | ||||
Percentage of principal amount paid in event of default | 25.00% | ||||
Original issue discount | $ 13,700,000 | ||||
Deferred closing fees | $ 900,000 |
Long Term Debt - Summary of Fut
Long Term Debt - Summary of Future Principal Payments, Including in Kind Interest (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total debt, net | $ 483,548 | $ 480,621 |
Kind Interest | ||
Debt Instrument [Line Items] | ||
2021 | 17,000 | |
2022 | 272,000 | |
2024 | 277,287 | |
Total debt, net | $ 566,287 |
Long Term Debt - Summary of F_2
Long Term Debt - Summary of Future Amortization of Debt Issuance Costs and Original Issue Discount (Detail) - 2016 Credit Agreement $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |
2021 | $ 6,052 |
2022 | 6,453 |
2023 | 3,528 |
2024 | 3,961 |
Total | $ 19,994 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - 401(k) plan [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined contribution plan, description | The Company’s 401(k) plan covers employees who are at least 21 years of age, have completed one year of employment and worked a minimum of 1,000 hours. Employees may elect to defer a percentage of their salary up to the maximum allowed under the Internal Revenue Service Code. During 2019, the Company made matching contributions to its 401(k) plan equal to 100% of the first 3% of salary deferred plus 50% of the next 2% of an employee’s contribution for a total maximum Company match of 4% of the salary deferred by the employee, subject to Internal Revenue Service Code limitations. | |
Defined contribution plan, employee eligibility age | 21 years | |
Defined contribution plan, minimum service period required for eligibility | 1 year | |
Defined contribution plan, cost | $ 0.3 | $ 3.7 |
Defined contribution plan, matching contribution percent | 100.00% | |
Defined contribution plan, employee contribution deferred percent | 3.00% | |
Defined contribution plan, employee contribution percent | 2.00% | |
Defined contribution plan, maximum employee contribution percent | 4.00% | |
Maximum [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined contribution plan, matching contribution percent | 50.00% |
Equity Incentive Plan - Additio
Equity Incentive Plan - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2020USD ($)Employee$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock option exercised | shares | 0 | 0 |
Stock-based compensation | $ 3,435,000 | $ 2,265,000 |
Stock issued during period value | $ 3,500,000 | |
Number of employees issued stock during period | Employee | 2 | |
Restricted stock units, Description | market value equal to the greater of (1) $3.5 million for two employees, or $4 million for the other referenced employee or (2) an amount determined using a formula-based model (as defined in the respective employment agreements), as of the date of such grants. | |
Non Employee Director [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | $ 400,000 | $ 700,000 |
Options granted | shares | 136,956 | 7,223 |
Other Referenced Employee [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock issued during period value | $ 4,000,000 | |
Performance Based Vesting Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expiration period | 10 years | |
Weighted average fair value granted | $ / shares | $ 37.16 | |
Stock option termination | 2019-12 | |
Performance Based Vesting Stock Option [Member] | Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Internal rate of return on investment | 70.00% | |
2019 Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Common stock options authorized under plan | shares | 7,500,000 | |
Common stock options available for issuance | shares | 1,948,815 | |
Options granted | shares | 4,137,750 | 514,710 |
2019 Plan [Member] | Time Based Vesting Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Expiration period | 10 years | |
Weighted average fair value granted | $ / shares | $ 2.19 | $ 1.89 |
Stock-based compensation | $ 3,400,000 | $ 10,000 |
Unrecognized stock-based compensation expense | $ 6,400,000 | $ 1,000,000 |
Unrecognized stock-based compensation expense, period | 3 years | |
2019 Plan [Member] | Restricted Stock Units [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | $ 0 | |
2016 Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Options granted | shares | 67,050 | |
2016 Plan [Member] | Time Based Vesting Stock Option [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting period | 5 years | |
Expiration period | 10 years | |
Weighted average fair value granted | $ / shares | $ 37.16 | |
Stock-based compensation | $ 2,300,000 |
Equity Incentive Plan - Schedul
Equity Incentive Plan - Schedule of Stock Option Activity Under 2019 Plan (Detail) - 2019 Plan [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Options outstanding, beginning balance | 514,710 | |
Options granted | 4,137,750 | 514,710 |
Options forfeited | (387,186) | |
Options expired | (4,521) | |
Options outstanding, ending balance | 4,260,753 | 514,710 |
Options vested and exercisable | 1,204,863 | |
Options vested and expected to vest | 4,260,753 | |
Weighted average exercise price, beginning balance | $ 9.90 | |
Weighted average exercise price, granted | 8.49 | $ 9.90 |
Weighted average exercise price, forfeited | 8.85 | |
Weighted average exercise price, expired | 8.85 | |
Weighted average exercise price, ending balance | 8.46 | $ 9.90 |
Weighted average exercise price, vested and exercisable | 8.20 | |
Weighted average exercise price, vested and expected to vest | $ 8.46 | |
Weighted average remaining contractual term, granted | 10 years | |
Weighted average remaining contractual term, balance | 9 years | 10 years |
Weighted average remaining contractual term, vested and exercisable | 9 years | |
Weighted average remaining contractual term, vested and expected to vest | 9 years | |
Aggregate intrinsic value, ending balance | $ 54 | |
Aggregate intrinsic value, vested and exercisable | 54 | |
Aggregate intrinsic value, vested and expected to vest | $ 54 |
Equity Incentive Plan - Sched_2
Equity Incentive Plan - Schedule of Stock Option Activity Under 2016 Plan (Detail) - 2016 Plan [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Options outstanding, beginning balance | 411,480 | |
Options granted | 67,050 | |
Options forfeited | (32,860) | |
Options expired | (8,640) | |
Cancelled | (437,030) | |
Options outstanding, ending balance | 411,480 | |
Weighted average exercise price, beginning balance | $ 100 | |
Weighted average exercise price, granted | 90 | |
Weighted average exercise price, forfeited | 99 | |
Weighted average exercise price, expired | 99 | |
Weighted average exercise price, cancelled | $ 100 | |
Weighted average exercise price, ending balance | $ 100 | |
Weighted average remaining contractual term, balance | 8 years 3 months 18 days |
Equity Incentive Plan - Sched_3
Equity Incentive Plan - Schedule of Additional Information on Stock Option Grants And Vesting (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
2016 Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total fair value of stock options granted | $ 2,492 | |
Total fair value of options vested | 1,439 | |
2019 Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total fair value of stock options granted | $ 9,241 | $ 974 |
Total fair value of options vested | $ 2,711 |
Equity Incentive Plan - Summary
Equity Incentive Plan - Summary of Valuation Models of Fair Value of Awards Granted To Employees and Non-Employees Under 2016 Plan (Detail) - 2019 Plan and 2016 Plan [Member] | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected volatility | 37.63% | 36.92% |
Expected volatility | 41.24% | 37.70% |
Dividend yield | 0.00% | 0.00% |
Risk free interest rate | 0.30% | 1.79% |
Risk free interest rate | 1.43% | 2.89% |
Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years | 6 years |
Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 6 months |
Equity Incentive Plan - Stock B
Equity Incentive Plan - Stock Based Compensation Expense Included In Consolidated Statements of Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 3,435 | $ 2,265 |
Cost of Revenues [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,336 | 573 |
General and administrative [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,198 | 1,161 |
Research and development [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | 268 | 87 |
Sales and Marketing [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 633 | $ 444 |
Equity Incentive Plan - Sched_4
Equity Incentive Plan - Schedule of RSUs Activity Under 2019 Plan (Detail) - Restricted Stock Units [Member] - 2019 Plan [Member] | 12 Months Ended |
Dec. 31, 2020shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Granted | 1,402,312 |
Forfeited | (111,880) |
Ending balance | 1,290,432 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) | Dec. 19, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 18, 2019 |
Class Of Stock [Line Items] | ||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | ||
Preferred Stock, per share | $ 0.0001 | $ 0.0001 | ||
Common stock, voting rights | one vote for each share | |||
Common stock, shares issued | 0 | 172,350 | ||
Common stock, shares issued value | $ 1,655,000 | |||
Common Stock [Member] | ||||
Class Of Stock [Line Items] | ||||
Common stock, shares issued | 172,350 | |||
Pivotal Acquisition Corp. [Member] | ||||
Class Of Stock [Line Items] | ||||
Warrants outstanding | 29,500,000 | |||
Description of warrants | Each warrant entitles the holder to purchase one share of common stock for $11.50 per share. If held by the initial purchaser of the Private Warrant or certain permitted transferees, the purchase can occur on a cashless basis. The warrants will expire on December 19, 2024 or earlier upon redemption or liquidation. | |||
Price per share | $ 11.50 | $ 11.50 | ||
Warrants expiration date | Dec. 19, 2024 | |||
Sale price of common stock | $ 18 | |||
Number of business days | 3 days | |||
Recapitalization transaction (in shares) | 34,800,000 | |||
Pivotal Acquisition Corp. [Member] | Minimum [Member] | ||||
Class Of Stock [Line Items] | ||||
Number of trading days | 20 days | |||
Pivotal Acquisition Corp. [Member] | Maximum [Member] | ||||
Class Of Stock [Line Items] | ||||
Number of trading days | 30 days | |||
Pivotal Acquisition Corp. [Member] | Common Stock [Member] | ||||
Class Of Stock [Line Items] | ||||
Number of securities eligible for each warrant | 1 | |||
Pivotal Acquisition Holdings LLC [Member] | ||||
Class Of Stock [Line Items] | ||||
Recapitalization transaction (in shares) | 550,000 | |||
Number of consecutive trading days | 20 days | |||
Reverse merger transaction, sale of common stock description | On December?19, 2019, in connection with the consummation of the reverse merger transaction, 550,000 shares of common stock held by Pivotal Acquisition Holdings LLC are subject to an additional lockup that will be released only if the last reported sale price of the common stock equals or exceeds $15.00 for a period of 20 consecutive trading days during the five-year period following the Closing Date. If the last reported sale price of common stock does not equal or exceed $15.00 within five years from the Closing Date, such shares will be forfeited to the Company for no consideration. These shares are reported as outstanding in our financial statements. | |||
Closing stock price period | 5 years | |||
Forfeited amount | $ 0 | |||
Pivotal Acquisition Holdings LLC [Member] | Minimum [Member] | ||||
Class Of Stock [Line Items] | ||||
Closing sale price of company's common stock | $ 15 | |||
Pivotal Acquisition Holdings LLC [Member] | Maximum [Member] | ||||
Class Of Stock [Line Items] | ||||
Closing sale price of company's common stock | $ 15 | |||
Public Warrants [Member] | Pivotal Acquisition Corp. [Member] | ||||
Class Of Stock [Line Items] | ||||
Warrants outstanding | 23,000,000 | |||
Price per share | $ 0.01 | |||
Public Warrants [Member] | Pivotal Acquisition Corp. [Member] | Maximum [Member] | ||||
Class Of Stock [Line Items] | ||||
Minimum prior written notice period | 30 days | |||
Private Warrants [Member] | Pivotal Acquisition Corp. [Member] | ||||
Class Of Stock [Line Items] | ||||
Warrants outstanding | 4,585,281 | |||
Debenture Holder Warrants [Member] | Pivotal Acquisition Corp. [Member] | ||||
Class Of Stock [Line Items] | ||||
Warrants outstanding | 1,764,719 |
Loss Per Share - Summary of Bas
Loss Per Share - Summary of Basic and Diluted Loss Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Basic and diluted loss per share: | ||
Net loss | $ (49,926) | $ (54,014) |
Weighted average common shares outstanding - basic | 42,529,017 | 42,529,017 |
Weighted average common shares outstanding - diluted | 42,529,017 | 42,529,017 |
Basic loss per share | $ (1.17) | $ (1.27) |
Diluted loss per share | $ (1.17) | $ (1.27) |
Common share equivalents excluded due to anti-dilutive effect | 3,788,388 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current | ||
Federal | $ (712) | $ (37) |
State | 73 | 61 |
Foreign | 729 | 447 |
Deferred | ||
Federal | 334 | 332 |
State | 806 | 705 |
Foreign | (294) | (789) |
Total income tax provision | $ 936 | $ 719 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Federal corporate income tax rate | 21.00% | 21.00% | |
Tax credit carryforward | $ 900,000 | $ 900,000 | |
Foreign subsidiaries undistributed earnings | 13,500,000 | ||
Valuation allowance | 65,228,000 | 51,895,000 | $ 36,595,000 |
Unrecognized tax benefits | $ 1,000,000 | 0 | |
Minimum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Limitation range for income tax examination year | 1 year | ||
Maximum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Limitation range for income tax examination year | 4 years | ||
Federal [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 32,100,000 | 31,000,000 | |
Federal [Member] | Expire Till 2024 [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 7,800 | ||
Federal [Member] | Expire Till 2035 [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 16,500 | ||
Federal [Member] | No Expiration [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 7,800 | ||
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 6,700,000 | 6,500,000 | |
Changes in valuation allowance | 3,800,000 | ||
Changes in uncertain tax positions | 400,000 | ||
Foreign [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 3,100,000 | $ 2,900,000 | |
Federal And Foreign Tax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Changes in valuation allowance | 9,600,000 | ||
Changes in uncertain tax positions | $ 600,000 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Pre-tax book loss | $ (48,990) | $ (53,295) |
Tax at federal statutory rate | (10,288) | (11,192) |
State taxes | 879 | 766 |
Stock based compensation | 3 | 1,060 |
Foreign rate differential | (1,223) | (871) |
Unrecognized tax benefit | 549 | |
Other adjustments | 1,453 | (1,707) |
Valuation allowance | 9,563 | 12,663 |
Total income tax provision | $ 936 | $ 719 |
Income Taxes - Schedule of Lo_2
Income Taxes - Schedule of Loss Before Income Taxes (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal Statutory rate | 21.00% | 21.00% |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Before Income Taxes from Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (46,686) | $ (52,438) |
Foreign | (2,304) | (857) |
Total | $ (48,990) | $ (53,295) |
Income Taxes - Summary of Tax E
Income Taxes - Summary of Tax Effects of Temporary Differences (Detail) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | |||
Net operating losses and other carryforwards | $ 42,859 | $ 41,299 | |
Interest expense carryforward | 30,112 | 20,070 | |
Property and equipment | 2,448 | 2,221 | |
Accrued expenses | 512 | 82 | |
Payroll tax deferral | 1,089 | ||
Allowance for doubtful accounts | 1,768 | 1,517 | |
Stock-based compensation | 878 | ||
Other | 540 | 633 | |
Deferred tax asset | 80,206 | 65,822 | |
Valuation allowance | (65,228) | (51,895) | $ (36,595) |
Total deferred tax assets, net of valuation allowance | 14,978 | 13,927 | |
Intangible assets | (21,791) | (20,098) | |
Prepaid expenses | (107) | (73) | |
Other | (415) | (50) | |
Deferred tax liability | (22,313) | (20,221) | |
Net deferred tax liability | $ (7,335) | $ (6,294) |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Asset Valuation Allowance (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $ 51,895 | $ 36,595 |
Additions | 14,149 | 15,622 |
Reductions | (816) | (322) |
Ending Balance | $ 65,228 | $ 51,895 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Additions | $ 1,002 |
Ending Balance | $ 1,002 |
Severance and Retention - Addit
Severance and Retention - Additional Information (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)Employee | Dec. 31, 2019USD ($)Employee | |
Restructuring And Related Activities [Abstract] | ||
Severance and retention expense | $ | $ 2,503 | $ 1,403 |
Number of employees associated with reduction in workforce | Employee | 39 | 33 |
Severance and Retention - Summa
Severance and Retention - Summary of Severance and Retention Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost And Reserve [Line Items] | ||
Severance and retention expense | $ 2,503 | $ 1,403 |
Cost of Revenues [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Severance and retention expense | 950 | 301 |
General and Administrative [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Severance and retention expense | 469 | 567 |
Sales and Marketing [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Severance and retention expense | 1,076 | 516 |
Research and Development [Member] | ||
Restructuring Cost And Reserve [Line Items] | ||
Severance and retention expense | $ 8 | $ 19 |
Severance and Retention - Sum_2
Severance and Retention - Summary of Severance Related Liabilities within Accounts Payable and Accrued Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring And Related Activities [Abstract] | ||
Balance at beginning of year | $ 358 | $ 555 |
Payments | (1,395) | (1,600) |
Expense | 2,503 | 1,403 |
Balance at ending of year | $ 1,466 | $ 358 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)LetterofCreditshares | Dec. 31, 2019USD ($) | Dec. 31, 2018 | |
Loss Contingencies [Line Items] | |||
Number of letters of credit | LetterofCredit | 3 | ||
Letters of credit as additional security for lease guarantees | $ 0.7 | ||
Decrease in revenue | $ 22.5 | ||
Decrease in revenue percentage | 7.20% | ||
Revenue | $ 289.5 | $ 312.1 | |
Percentage of taxable income offset by NOL carryforwards and carrybacks | 100.00% | ||
Net operating loss carrybacks, period | 5 years | ||
Tax-deductible interest, base percentage | 50.00% | 50.00% | 30.00% |
Salary Exchange Program [Member] | Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Percentage of salary exchange program for award | 2.00% | ||
Salary Exchange Program [Member] | Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Percentage of salary exchange program for award | 20.00% | ||
Salary Exchange Program [Member] | Employee Stock Options [Member] | |||
Loss Contingencies [Line Items] | |||
Options granted | shares | 417,673 | ||
Salary Exchange Program [Member] | Restricted Stock Units [Member] | |||
Loss Contingencies [Line Items] | |||
Granted | shares | 211,207 |
Related Parties -Additional Inf
Related Parties -Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
MGG Investment Group [Member] | ||
Related Party Transaction [Line Items] | ||
Interest expense, related party | $ 12.1 | $ 0.4 |
MGG Investment Group [Member] | Debenture [Member] | ||
Related Party Transaction [Line Items] | ||
Debt instrument outstanding | $ 107.3 | |
Carlyle Investment Management, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Agreement termination date | Dec. 19, 2019 | |
General and administrative [Member] | Carlyle Investment Management, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Management consulting fees | $ 1 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions | Feb. 16, 2021 | Feb. 08, 2021 | Feb. 28, 2021 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||
Loss on debt extinguishment | $ (7,203) | |||
Subsequent Event [Member] | Term Loans and Delayed Draw Term Loans [Member] | ||||
Subsequent Event [Line Items] | ||||
Floor interest rate | 1.00% | |||
2019 Plan [Member] | Subsequent Event [Member] | Time-based Options [Member] | Employees [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued during period additional options issued | 1.1 | |||
2019 Plan [Member] | Subsequent Event [Member] | Performance/Market-based Restricted Stock Units [Member] | Employees [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued during period shares | 0.3 | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Initial term loan borrowing | $ 300,000 | |||
Delayed draw term loans | $ 50,000 | |||
Debt instrument, maturity description | The Initial Term Loans, Delayed Draw Term Loans and Revolving Credit Loans are each scheduled to mature on the earlier of February 16, 2026 and or six months prior to maturity of our Debentures due in December 2024. The Initial Term Loans and Delayed Draw Term Loans may be voluntarily repaid at any time, but may be subject to a prepayment premium. The Initial Term Loans and Delayed Draw Term Loans are required to be repaid under certain circumstances, including with Excess Cash Flow (as defined in the 2021 Credit Agreement), the proceeds of an Asset Sale or Casualty Event (each as defined in the 2021 Credit Agreement) and the proceeds of certain refinancing indebtedness | |||
Debt instrument, closing fees | $ 8,000 | |||
Loss on debt extinguishment | $ (7,200) | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Maximum [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, net leverage ratio | 7 | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Minimum [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt instrument, net leverage ratio | 1 | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Term Loans and Delayed Draw Term Loans [Member] | ||||
Subsequent Event [Line Items] | ||||
Loans amortize rate | 1.00% | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Adjusted Eurocurrency Rate | Term Loans and Delayed Draw Term Loans [Member] | ||||
Subsequent Event [Line Items] | ||||
Loan variable interest rate | 6.50% | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Base Rate [Member] | Term Loans and Delayed Draw Term Loans [Member] | ||||
Subsequent Event [Line Items] | ||||
Loan variable interest rate | 5.50% | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Outstanding loan amount | $ 40,000 | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | Adjusted Eurocurrency Rate | ||||
Subsequent Event [Line Items] | ||||
Loan variable interest rate | 4.00% | |||
2021 Credit Agreement [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | Base Rate [Member] | ||||
Subsequent Event [Line Items] | ||||
Loan variable interest rate | 3.00% |