Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 01, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SMSI | ||
Entity Registrant Name | SMITH MICRO SOFTWARE, INC. | ||
Entity Central Index Key | 0000948708 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Tax Identification Number | 33-0029027 | ||
Entity File Number | 01-35525 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 5800 Corporate Drive | ||
Entity Address, City or Town | Pittsburgh | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 15237 | ||
City Area Code | 412 | ||
Local Phone Number | 837-5300 | ||
Security Exchange Name | NASDAQ | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding | 54,326,806 | ||
Entity Public Float | $ 248,361,681 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Name | SingerLewak LLP | ||
Auditor Location | Los Angeles, California | ||
Auditor Firm ID | 367 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement for the 2022 Annual Meeting of Stockholders to be filed under the Securities Exchange Act of 1934 are incorporated by reference in Part III of this report. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 16,078 | $ 25,754 |
Accounts receivable, net of allowance for doubtful accounts of $2 and $10 at December 31, 2021 and 2020, respectively | 10,590 | 12,347 |
Prepaid expenses and other current assets | 1,988 | 1,189 |
Total current assets | 28,656 | 39,290 |
Equipment and improvements, net | 2,698 | 2,170 |
Right-of-use assets | 5,710 | 5,785 |
Other assets | 620 | 694 |
Intangible assets, net | 42,631 | 12,698 |
Goodwill | 35,041 | 12,266 |
Total assets | 115,356 | 72,903 |
Current liabilities: | ||
Accounts payable | 3,301 | 2,282 |
Accrued payroll and benefits | 4,055 | 2,867 |
Current operating lease liabilities | 1,400 | 1,433 |
Other accrued liabilities | 436 | 216 |
Deferred revenue | 176 | 1,572 |
Total current liabilities | 9,368 | 8,370 |
Non-current liabilities: | ||
Operating lease liabilities | 4,467 | 4,805 |
Deferred rent and other long-term liabilities | 844 | 953 |
Deferred tax liability, net | 117 | 59 |
Total non-current liabilities | 5,428 | 5,817 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 54,259,390 and 41,232,804 shares issued and outstanding at December 31, 2021 and 2020, respectively | 54 | 41 |
Additional paid-in capital | 352,779 | 279,905 |
Accumulated comprehensive deficit | (252,273) | (221,230) |
Total stockholders’ equity | 100,560 | 58,716 |
Total liabilities and stockholders' equity | $ 115,356 | $ 72,903 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 2 | $ 10 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 54,259,390 | 41,232,804 |
Common stock, shares outstanding | 54,259,390 | 41,232,804 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 58,422 | $ 51,300 |
Cost of revenues | 12,698 | 5,190 |
Gross profit | 45,724 | 46,110 |
Operating expenses: | ||
Selling and marketing | 11,581 | 9,096 |
Research and development | 26,197 | 17,772 |
General and administrative | 17,920 | 12,801 |
Change in fair value of contingent consideration | 12,864 | |
Amortization of intangible assets | 8,100 | 2,920 |
Total operating expenses | 76,662 | 42,589 |
Operating (loss) income | (30,938) | 3,521 |
Non-operating income (expense): | ||
Gain on sale of software products | 711 | |
Interest income, net | 34 | 96 |
Other income (expense), net | 76 | (3) |
(Loss) income before provision for income taxes | (30,828) | 4,325 |
Provision for income tax expense | 215 | 160 |
Net (loss) income | $ (31,043) | $ 4,165 |
Net (loss) earnings per share: | ||
Basic and diluted | $ (0.61) | $ 0.10 |
Weighted average shares outstanding: | ||
Basic | 51,232 | 40,808 |
Diluted | 51,232 | 42,764 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Comprehensive Deficit [Member] |
BALANCE at Dec. 31, 2019 | $ 48,684 | $ 38 | $ 274,041 | $ (225,395) |
BALANCE, Shares at Dec. 31, 2019 | 38,476,000 | |||
Non-cash compensation recognized on stock options and ESPP | 65 | 65 | ||
Restricted stock grants, net of cancellations | 2,999 | $ 1 | 2,998 | |
Restricted stock grants, net of cancellations, shares | 1,000,000 | |||
Cancellation of shares for payment of withholding tax | (1,440) | (1,440) | ||
Cancellation of shares for payment of withholding tax, shares | (309,000) | |||
Employee stock purchase plan | 19 | 19 | ||
Employee stock purchase plan, shares | 6,000 | |||
Exercise of common stock warrants | 4,196 | $ 2 | 4,194 | |
Exercise of common stock warrants, shares | 2,047,000 | |||
Exercise of stock options | 28 | 28 | ||
Exercise of stock options, shares | 13,000 | |||
Net income (loss) | 4,165 | 4,165 | ||
BALANCE at Dec. 31, 2020 | $ 58,716 | $ 41 | 279,905 | (221,230) |
BALANCE, Shares at Dec. 31, 2020 | 41,232,804 | 41,233,000 | ||
Non-cash compensation recognized on stock options and ESPP | $ 83 | 83 | ||
Restricted stock grants, net of cancellations | 4,765 | $ 1 | 4,764 | |
Restricted stock grants, net of cancellations, shares | 991,000 | |||
Cancellation of shares for payment of withholding tax | (2,220) | (2,220) | ||
Cancellation of shares for payment of withholding tax, shares | (385,000) | |||
Employee stock purchase plan | 37 | 37 | ||
Employee stock purchase plan, shares | 10,000 | |||
Common shares issued in stock offering,net of offering costs | 59,711 | $ 10 | 59,701 | |
Common shares issued in stock offering, net offering costs, shares | 9,521,000 | |||
Common shares issued in connection with Avast acquisition, net | 8,381 | $ 1 | 8,380 | |
Common shares issued in connection with Avast acquisition, net, shares | 1,460,000 | |||
Exercise of common stock warrants | 2,065 | $ 1 | 2,064 | |
Exercise of common stock warrants, shares | 1,408,000 | |||
Exercise of stock options | $ 65 | 65 | ||
Exercise of stock options, shares | 21,000 | 21,000 | ||
Net income (loss) | $ (31,043) | (31,043) | ||
BALANCE at Dec. 31, 2021 | $ 100,560 | $ 54 | $ 352,779 | $ (252,273) |
BALANCE, Shares at Dec. 31, 2021 | 54,259,390 | 54,259,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | ||
Net (loss) income | $ (31,043) | $ 4,165 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 9,338 | 3,582 |
Non-cash rent expense | 1,160 | 1,110 |
Change in fair value of contingent consideration | 12,864 | |
Gain on sale of software products | (711) | |
Provision for adjustments to accounts receivable and doubtful accounts | 5 | (60) |
Provision for excess and obsolete inventory | (97) | |
Gain on disposal of fixed assets | (14) | |
Non-cash compensation related to stock options and restricted stock | 4,848 | 3,064 |
Deferred income taxes | 58 | 153 |
Change in operating accounts: | ||
Accounts receivable | 7,938 | (1,269) |
Prepaid expenses and other assets | (268) | (388) |
Accounts payable and accrued liabilities | (16,309) | (1,906) |
Deferred revenue | (1,396) | 184 |
Net cash (used in) provided by operating activities | (12,916) | 7,924 |
Investing activities: | ||
Acquisitions, net | (56,865) | (13,500) |
Proceeds from sale of software products | 192 | 367 |
Capital expenditures | (830) | (1,323) |
Purchase of equity instrument | (225) | |
Net cash used in investing activities | (57,503) | (14,681) |
Financing activities: | ||
Proceeds from exercise of common stock warrants | 2,066 | 4,196 |
Payments related to contingent consideration | (1,136) | |
Proceeds from exercise of stock options | 65 | 29 |
Proceeds from stock sale for employee stock purchase plan | 37 | 18 |
Proceeds from common stock offering | 59,711 | |
Net cash provided by financing activities | 60,743 | 4,243 |
Net decrease in cash and cash equivalents | (9,676) | (2,514) |
Cash and cash equivalents, beginning of year | 25,754 | 28,268 |
Cash and cash equivalents, end of year | 16,078 | 25,754 |
Supplemental disclosures of cash flow information: | ||
Cash paid (received) for income taxes | 84 | $ (173) |
Non-cash investing and financing activities: | ||
Issuance of common stock in connection with acquisition | $ 8,381 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies The Company Smith Micro Software, Inc. (“Smith Micro” or “the Company”) develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless and cable service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, the Company strives to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things (“IoT”) devices. Smith Micro’s portfolio includes a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, retail content display optimization and performance analytics on any product set. Smith Micro’s solution portfolio is comprised of proven products that enable its customers to provide: • In-demand digital services that connect today’s digital lifestyle, including family location services, parental controls, and consumer IoT devices to mobile consumers worldwide; • Easy visual access to voice messages on mobile devices through visual voicemail and voice-to-text transcription functionality; and • Strategic, consistent, and measurable digital demonstration experiences that educate retail shoppers, create awareness of products and services, and drive in-store sales, and optimize retail experiences with actionable analytics derived from in-store customer behavior. Basis of Presentation The accompanying consolidated financial statements reflect the operating results and financial position of Smith Micro and its wholly owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany amounts have been eliminated in consolidation. 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 in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. Foreign Currency Transactions The Company has international operations resulting from current and prior year acquisitions. The countries in which the Company has a subsidiary or branch office are Serbia, Sweden, Portugal, Czech Republic, and Slovakia. The functional currency for all of these foreign entities is the U.S. dollar in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 830. Foreign currency transactions that increase or decrease expected functional currency cash flows is a foreign currency transaction gain or loss that are included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction is included in determining net income for the period in which the transaction is settled. F-8 Business Combinations The Company applies the provisions of FASB ASC Topic No. 805, Business Combinations , in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period that exists up to twelve months from the acquisition date, the Company may record adjustments to the tangible and specifically identifiable intangible assets acquired and liabilities assumed with a corresponding adjustment to goodwill in the reporting period in which the adjusted amounts are determined. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, the impact of any subsequent adjustments is included in the consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or the Company’s internal operations are accounted for as a one-time termination and exit cost pursuant to FASB ASC Topic No. 420, Exit or Disposal Cost Obligations , and are accounted for separately from the business combination. A liability for costs associated with an exit or disposal activity is recognized and measured at its fair value in the Company’s consolidated statement of operations in the period in which the liability is incurred. Uncertain income tax positions and tax-related valuation allowances that are acquired in connection with a business combination are initially estimated as of the acquisition date. The Company reevaluates these items quarterly based upon facts and circumstances that existed as of the acquisition date, with any adjustments to the preliminary estimates being recorded to goodwill if such adjustments occur within the 12-month measurement period. Subsequent to the end of the measurement period or the Company’s final determination of the value of the tax allowance or contingency, whichever comes first, changes to these uncertain tax positions and tax-related valuation allowances will affect the provision for income taxes in the consolidated statement of operations and could have a material impact on results of operations and financial position. Fair Value of Financial Instruments The Company measures and discloses fair value measurements as required by FASB ASC Topic No. 820, Fair Value Measurements and Disclosures Fair value is an exit price, representing the amount that would be received upon the sale of an asset or the amount that would be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the FASB establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: • Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 – Include other inputs that are directly or indirectly observable in the marketplace. • Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As required by FASB ASC Topic No. 820, the Company measures its cash equivalents and short-term investments at fair value. The Company’s cash equivalents and short-term investments are classified within Level 1 by using quoted market prices utilizing market observable inputs. F-9 As required by FASB ASC Topic No. 825, Financial Instruments , an entity can choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. Subsequent changes in fair value for designated items are required to be reported in earnings in the current period. This Topic also establishes presentation and disclosure requirements for similar types of assets and liabi lities measured at fair value. As required by FASB ASC Topic No. 350, Intangibles – Goodwill and Other, As required by FASB ASC Topic No. 805, Business Combinations, The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration that are measured at fair value on a recurring basis (in thousands): Balance at January 1, 2021 $ — Contingent consideration 1,136 Change in fair value of contingent consideration 12,864 Contingent consideration payments (14,000 ) Balance, December 31, 2021 $ - During the year ended December 31, 2021, the Company recorded an increase in the fair value of the contingent consideration of $12.9 million and reported such increase in operating expenses. See Note 2 for additional information. Cash and Cash Equivalents Cash and cash equivalents generally consist of cash and money market funds. The carrying amount of cash and cash equivalents approximates fair value due to the short-term maturities of these instruments. Accounts Receivable and Allowance for Doubtful Accounts Smith Micro sells its products worldwide. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history, the customer’s current credit worthiness and various other factors, as determined by review of their current credit information. The Company continuously monitors collections and payments from its customers. The Company estimates credit losses and maintains an allowance for doubtful accounts based upon these estimates. While such credit losses have historically been within its estimated reserves, the Company cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. If not, this could have an adverse effect on Smith Micro’s consolidated financial statements. Equipment and Improvements Equipment and improvements are stated at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets, generally ranging from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. Internal Software Development Costs Development costs incurred in the research and development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. The F-10 Company considers technological feasibility to be established when all planning, designing, coding, and testing has been completed accor ding to design specifications. After technological feasibility is established, any add itional costs are capitalized. Through December 31, 2021 , software has been substantially completed concurrently with the establishment of technological feasibility; accordingly, no costs have been capitalized to date. Impairment or Disposal of Long-Lived Assets Long-lived assets to be held are reviewed for events or changes in circumstances which indicate their carrying value may not be recoverable. They are tested for recoverability using undiscounted cash flows to determine whether or not impairment to such value has occurred. Goodwill and Intangible Assets Goodwill represents purchase consideration from a business combination that exceeds the value assigned to the net assets of the acquired businesses. Smith Micro is required to periodically assess the recoverability of the carrying value of its goodwill at least annually during the fourth quarter of the fiscal year or whenever events or circumstances indicate a potential impairment. If the carrying amount of the Company’s single reporting unit exceeds its fair value, an impairment loss equal to the excess of carrying value over fair value is recorded. The Company’s 2021 fourth quarter annual test included the assessment of qualitative factors to determine whether or not it was more likely than not that the fair value of Smith Micro’s single reporting unit was less than it’s carrying value. The qualitative assessment considered factors such as macroeconomic conditions, industry and market trends, cost factors, and overall financial performance, among others. In consideration of the totality of the qualitative factors assessed, based on the weight of the evidence no circumstances existed that would indicate that it was more likely than not that goodwill was impaired. There was no goodwill impairment recognized during the years ended December 31, 2021 or 2020. The Company has no indefinite-lived intangible assets. Amortization expense related to the Company’s definite-lived intangible assets resulting from acquisitions is calculated based on the pattern of economic benefit expected to be generated from the use of that asset. Intangible assets are tested for impairment if events or circumstances occur indicating that the respective asset might be impaired. Revenue Recognition In accordance with FASB ASC Topic No. 606, Revenue from Contracts with Customers Smith Micro transfers software licenses to its customers on a royalty free, non-exclusive, non-transferrable, limited use basis during the term of the agreement. In some instances, the Company performs customization services to ensure the software operates within its customer’s operating platforms as well as the operating platforms of the mobile devices used by their end customers, before transferring the license. Revenue related to these services is recognized at a point in time upon acceptance of the software license by the customer. The Company also earns usage-based revenue on its platforms. Usage based revenue is generated based on active licenses used by Smith Micro’s customer’s end customers, the provision of hosting services, revenue share based on media placements on Smith Micro’s platform and use of the Company’s cloud-based services. Smith Micro recognizes usage-based revenue when the Company has completed its performance obligation and has the right to invoice the customer. This revenue is generally recognized monthly or quarterly. Finally, the Company ratably recognizes revenue over the contract period when customers pay in advance of service delivery. On February 12, 2020, the Company acquired certain assets from Circle Media Labs Inc. (“Circle”) (as further described in Note 2 below), including a source code license to Circle’s parental control software solution and two customer contracts. Pursuant to these contracts, the customer parties thereto license the parental control F-11 software solution for distribution to their respective subscribers in designated markets. In each case, the contracts allow the customer to take possession of the software solution and to host it on their platform or with an independent third-party hosting service provider without significant cost. The Company also provide s significant services that are required by the customer to ensure they have the utility of the license. As the license to the software solution and the services the Company provide s are highly interrelated, the Company has concluded that the license and services are a single performance obligation. The license fee is earned and recognized on a pro-rata basis over the contract term based on the customer’s continued use of the license and the services. In April 2021, Smith Micro acquired certain assets and liabilities from Avast plc and certain of its affiliates (“Avast”) and all of the outstanding membership interests of its then subsidiary, Location Labs LLC all related to its family safety mobile software business (“Family Safety Mobile Business”). Acquired assets included the source code to Avast’s family safety mobile software solution and cloud-based services (a portion of which was acquired through a perpetual license grant), and the acquired subsidiary’s existing contracts for the solution with five customers. Each contract involves the grant of software licenses and provision of cloud-based services. Smith Micro does not allow its customers to take possession of the software solution, and since the utility of the license comes from the cloud-based services that are provided, the Company considers the software license and the cloud-based services to be a single performance obligation. Smith Micro also provides consulting services to develop customer-specified functionality that are generally not on its software development roadmap. The Company recognizes revenue from its consulting services upon delivery and acceptance by the customer of its software enhancements and upgrades. For certain customers the Company provides maintenance and technology support services for which the customer either pays upfront or as the Company provides the services. When the customer pays upfront, the payments are recorded as contract liabilities and revenue is recognized ratably over the contract period as this is the Company’s stand ready performance obligation that is satisfied ratably over the maintenance and technology services period. The Company receives upfront payments from customers from services to be provided under its ViewSpot® contracts. The advance receipts are deferred and subsequently recognized ratably over the contract period. Smith Micro also provides consulting services to configure ad hoc targeted promotional content for its customers upon request. These requests are driven by customers’ marketing initiatives and tend to be short term “bursts” of activity. These revenues are recognized upon delivery of the configured promotional content to the cloud platform. Smith Micro primarily sell its software solutions, cloud-based services and consulting services to major wireless network and cable operators. The Company recognize sales of goods and services based on the five-step analysis of transactions as provided in Topic 606. For all contracts with customers, the Company first identifies the contract which usually is established when a contract is fully executed by each party and consideration is expected to be received. Next, the Company identifies the performance obligations in the contract. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company then determines the transaction price in the arrangement and allocates the transaction price, if necessary, to each performance obligation identified in the contract. The allocation of the transaction price to the performance obligations are based on the relative standalone selling prices for the goods and services contained in a particular performance obligation. The transaction price is adjusted for the Company’s estimate of variable consideration which may include certain incentives and discounts, product returns, distributor fees, and storage fees. The Company evaluates the total amount of variable consideration expected to be earned by using the expected value method, as the Company believes this method represents the most appropriate estimate for this consideration, based on historical service trends, the individual contract considerations, and its best judgment at the time. The Company includes estimates of variable consideration in revenues only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company also generates the majority of its revenue on usage-based fees which are variable and depend entirely on customers’ use of perpetual licenses, transactions processed on the Company’s hosted environment, advertisement placements on the Company’s service platform, and activity on the Company’s cloud-based service platform. F-12 The Company’s contracts with the MNO customers include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Smith Micro’s cloud-based service includes a software solution license integrated with cloud-based services. Judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Since the Company do es not allow its customers to take possession of the software solution, and since the utility of the license comes from the c l oud-based services that the Company provides, Smith Micro considers the software license and the cloud services to be a single performance obligation. The Company provides the Circle software solution license together with highly integrated consulting services to generate the utility of the license to the customers. Since the software solution and consulting services provided are highly interrelated, Smith Micro consider the license and the consulting services to be a single performance obligation. The Company recognizes revenue associated with its MNO customers based on their active subscribers’ access and usage of Smith Micro’s software licenses and cloud-based services on Smith Micro’s platforms. Smith Micro has made accounting policy elections to exclude all taxes by governmental authorities from the measurement of the transaction price, and since the Company’s standard payment terms are less than one year, the Company has elected the practical expedient not to assess whether a contract has a significant financing component. Principal and Agent Considerations Smith Micro owns the Intellectual Property and retains ownership when the Company licenses its customized software solutions for use by its customers. The Company is a principal in these transactions and as such revenue is recognized with respect thereto on a gross basis. Stock-Based Compensation The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognizes such awards as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation Income Taxes The Company accounts for income taxes as required by FASB ASC Topic No. 740 , Income Taxes The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax liabilities against gross deferred tax assets); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards. F-13 Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments Impact of COVID-19 In March 2020, the World Health Organization categorized coronavirus disease 2019 (COVID-19) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects are currently unknown. While the response to the COVID-19 outbreak continues to rapidly evolve, it has led to stay-at-home orders and social distancing guidelines that have seriously disrupted activities in large segments of the economy. During the past seven quarters, the Company saw a reduction in the number of SafePath® platform subscribers compared to March 2020 and customer decision delays regarding the ViewSpot® platform, which the Company believes were driven by the COVID-19 related economic slowdown. The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. The severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, all of which are uncertain and cannot be predicted. As the impact of the COVID-19 pandemic on the economy and the Company’s operations continues to evolve, the Company will continue to monitor the impact on the Company’s operations and, if needed, postpone non-essential capital expenditures, reduce operating costs, and substantially reduce discretionary spending. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 2. Acquisitions Avast Family Safety Mobile Business On April 16, 2021, the Company acquired substantially all the assets and assumed certain specified liabilities related to Avast and its subsidiaries’ family safety mobile software business (the “Family Safety Mobile Business”), including all of the outstanding membership interests of Location Labs, LLC, pursuant to a Membership Interest and Asset Purchase Agreement (the “Purchase Agreement”). The following table summarizes the consideration paid for the Family Safety Mobile Business in 2021 (in thousands): Fair value of assets acquired $ 74,818 Fair value of liabilities assumed 2,085 Total purchase price $ 72,733 Components of purchase price: Cash $ 63,216 Common stock 8,381 Contingent consideration 1,136 Total purchase price $ 72,733 F-14 The Company’s allocation of the purchase price is summarized as follows (in thousands): Assets: Cash $ 6,351 Accounts receivable 6,225 Prepaid expenses 513 Fixed assets 921 Intangible assets 38,033 Goodwill 22,775 Total assets $ 74,818 Liabilities: Accounts payable $ 392 Accrued payroll and benefits 1,662 Accrued expenses 31 Total liabilities $ 2,085 Total purchase price $ 72,733 The Purchase Agreement included an earn-out provision that provided for additional future payments to Avast aggregating up to $14.0 million. A The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of the Family Safety Mobile Business. The goodwill is expected to be deductible for income tax purposes. Approximately $19.7 million in revenues and $6.2 million in cost of revenues from the Family Safety Mobile Business are included in the consolidated statement of operations for the period from April 16, 2021, through December 31, 2021. Unaudited pro forma results of operations for the years ended December 31, 2021 and 2020 are included below as if the acquisition of the Family Safety Mobile business occurred on January 1, 2020. This summary of the unaudited pro forma results of operations is not necessarily indicative of what the Company’s results of operations would have been had the Family Safety Mobile Business been acquired at the beginning of 2020, nor does it purport to represent results of operations for any future periods. Year Ended December 31, 2021 2020 (in thousands, except per share amounts) Revenues $ 67,654 $ 87,908 Net (loss) income (16,304 ) 4,046 Earnings per share: Basic $ (0.30 ) $ 0.08 Diluted $ (0.30 ) $ 0.08 F-15 The purpose of the Family Safety Mobile Business acquisition was to acquire a portfolio of mobile family safety services including location features, content filtering and screen time management, cementing Smith Micro as a leader in delivering mobile family safety software solutions to wireless carriers and to further expand Smith Micro’s white-label digital safety solutions, positioning the Company as a leading family safety software-as-a-service provider globally while adding critical headcount in the U.S. and Europe. Circle Operator Business On February 12, 2020, the Company acquired the operator business of Circle Media Labs Inc. (“Circle”) pursuant to a certain Asset Purchase Agreement by and between the Company and Circle. The following table summarizes the consideration paid for the Circle acquisition in 2020 (in thousands): Fair value of assets acquired $ 14,966 Fair value of liabilities assumed 1,466 Total purchase price $ 13,500 Components of purchase price: Cash $ 13,500 Total purchase price $ 13,500 The Company’s allocation of the purchase price is summarized as follows (in thousands): Assets: Inventory, net $ 14 Intangible assets 10,483 Goodwill 4,469 Total assets $ 14,966 Liabilities: Deferred revenue $ 1,290 Amounts due to seller 176 Total liabilities $ 1,466 Total purchase price $ 13,500 The purpose of the transaction was to acquire certain assets related to the Circle operator business, including two new customer contracts and a source code license to Circle’s then deployed parental control software and related technology. All of the goodwill acquired as a part of this transaction is deductible for tax purposes. |
Equipment and Improvements
Equipment and Improvements | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Equipment and Improvements | 3. Equipment and Improvements Equipment and improvements consist of the following (in thousands): December 31, 2021 2020 Computer hardware, software, and equipment $ 10,531 $ 9,814 Leasehold improvements 3,378 2,959 Office furniture and fixtures 803 714 Construction in progress 13 24 14,725 13,511 Less accumulated depreciation and amortization (12,027 ) (11,341 ) Equipment and improvements, net $ 2,698 $ 2,170 Depreciation and amortization expense on equipment and improvements was $1.2 million and $0.7 million for the years ended December 31, 2021 and 2020, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and Intangible Assets The following table sets forth the Company’s acquired intangible assets by major asset class as of December 31, 2021 and December 31, 2020 (in thousands, except for useful life data): December 31, 2021 Useful life (years) Gross Additions Accumulated amortization Net book value before impairment Impairment charges Net book value Purchased technology 4-10 $ 5,400 $ 8,129 $ (3,764 ) $ 9,765 $ — $ 9,765 Customer relationships 3-14 3,975 23,985 (2,816 ) 25,144 25,144 Customer contracts 6 7,000 — (2,976 ) 4,024 $ (1,465 ) 2,559 Software License 10 — 5,419 (793 ) 4,626 $ — 4,626 Trademarks/trade names 2 38 — (38 ) — $ — — Non-compete 3 283 — (196 ) 87 $ — 87 Support agreement 0.5-1 369 500 (869 ) — $ — — Patents 7 600 — (150 ) 450 $ — 450 Total $ 17,665 $ 38,033 $ (11,602 ) $ 44,096 $ (1,465 ) $ 42,631 December 31, 2020 Useful life (years) Gross Additions Accumulated amortization Net book value before impairment Impairment charges Net book value Purchased technology 4-8 $ 2,518 $ 2,882 $ (1,612 ) $ 3,788 $ — $ 3,788 Customer relationships 3-10 3,975 — (1,158 ) 2,817 (411 ) 2,406 Customer contracts 6 — 7,000 (1,242 ) 5,758 — 5,758 Trademarks/trade names 2 38 — (38 ) — — — Non-compete 3 51 232 (119 ) 164 — 164 Support agreement 1 — 369 (323 ) 46 — 46 Patents 7 — 600 (64 ) 536 — 536 Total $ 6,582 $ 11,083 $ (4,556 ) $ 13,109 $ (411 ) $ 12,698 Intangible assets amortization expense was $8.1 million and $2.9 million for the years ended December 31, 2021 and 2020, respectively. Future amortization expense related to intangible assets as of December 31, 2021 are as follows (in thousands): Year Ending December 31, 2022 $ 6,311 2023 5,874 2024 5,635 2025 5,402 2026 5,007 thereafter 14,402 Total $ 42,631 F-17 During the first quarter of 2021, the Company received a customer contract termination notice related to a customer contract acquired in the acquisition of Circle’s operator business in February 2020, which was otherwise set to expire in the second quarter of 2024. The contract was terminated effective April 15, 2021; however, in accordance with its terms, Smith Micro continues to deliver wind-down services under the contract. While the terms of the contract allow for a wind-down period of up to two years post termination, the Company expects to continue services under this contract through 2022. The Company determined the customer contract should be accounted for under the contract modification guidance in Topic 606. As a result, the Company recognized deferred revenue of $0.6 million, which was being amortized over the customer contract term and is amortizing the remaining $0.3 million over the remaining service period. Additionally, the Company reviewed its customer contract intangible asset associated with this customer contract and determined that the carrying value was in excess of its fair value. Accordingly, the Company recorded a $1.5 million impairment charge within “amortization of intangible assets” in the consolidated statements of operations during the year ended December 31, 2021 and is amortizing the remaining $0.4 million over the remaining service period. Smith Micro reviews the recoverability of the carrying value of goodwill at least annually or whenever events or circumstances indicate a potential impairment. The annual impairment testing date is December 31. Recoverability of goodwill is determined by comparing the estimated fair value of reporting units to the carrying value of the underlying net assets in the reporting units. If the estimated fair value of a reporting unit is determined to be less than the fair value of its net assets, goodwill is deemed impaired, and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the estimated fair value of the reporting unit and the fair value of its other assets and liabilities. Smith Micro determined that there was not any impairment of the Company’s goodwill at December 31, 2021 and 2020. |
Equity Transactions
Equity Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Equity Transactions | 5. Equity Transactions Common Stock Offering On March 15, 2021, the Company completed a registered public offering (“Offering”), wherein a total of 9,520,787 shares of the Company’s common stock were issued at a purchase price of $6.85 per share, for a total purchase price of $65.2 million. The Offering raised net cash proceeds of approximately $59.7 million after deducting the underwriting discount and fees and expenses of the Offering. The Company used the net cash proceeds from the Offering to fund, in part, the acquisition of the Family Safety Mobile Business completed on April 16, 2021 (see Note 2 for additional information). Warrants The Company issued warrants to purchase shares of Common Stock in connection with registered direct offerings completed in 2017 and 2018. As of December 31, 2021 and 2020, there were approximately 2.0 million and 3.7 million warrants outstanding, respectively, with exercise prices ranging from $1.16 to $2.38 per share. These warrants expire in 2022 and 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 6. Income Taxes (Loss) income before provision for income taxes was generated from the following sources (in thousands): Year Ended December 31, 2021 2020 Domestic $ (31,301 ) $ 4,213 Foreign 473 112 Total (loss) income before provision for income taxes $ (30,828 ) $ 4,325 F-18 A summary of the income tax expense (benefit) is as follows (in thousands): Year Ended December 31, 2021 2020 Current: Federal $ — $ (133 ) State 5 6 Foreign 152 134 Total current 157 7 Deferred: Federal 24 155 State 35 24 Foreign (1 ) (26 ) Total deferred 58 153 Total income tax expense $ 215 $ 160 A reconciliation of the provision for income taxes to the amount of income tax expense (benefit) that would result from applying the federal statutory rate to the loss before income taxes is as follows: Year Ended December 31, 2021 2020 Federal statutory rate 21.0 % 21.0 % State tax, net of federal benefit 4.3 2.7 Equity compensation 0.4 (1.8 ) International tax items 0.1 (0.1 ) Foreign taxes (0.5 ) 2.5 State NOL true-up 1.2 2.5 Miscellaneous (0.4 ) 1.3 Effect of change in rate 0.8 3.5 Change in valuation allowance (27.6 ) (27.9 ) (0.7 ) % 3.7 % F-19 The major components of the Company’s deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2021 2020 Deferred income tax assets Net operating loss carry forwards $ 47,204 $ 42,127 Credit carry forwards 3,027 3,027 Fixed assets 84 116 Intangibles 6,259 3,346 Equity-based compensation 208 343 Nondeductible accruals 532 365 Various reserves - 23 Deferred rent 33 94 Other 7 2 Valuation allowance (57,346 ) (49,405 ) Total deferred income taxes - net 8 38 Deferred income tax liabilities Foreign intangibles - (1 ) Unrealized translation gain/loss (45 ) 3 Prepaid expenses (80 ) (99 ) Total deferred income liabilities (125 ) (97 ) Net deferred income tax (liabilities) $ (117 ) $ (59 ) The Company has federal and state net operating loss (“NOL”) carryforwards of approximately $180.3 million and $148.6 million, respectively, at December 31, 2021, to reduce future cash payments for income taxes. The federal NOL carryforwards generated prior to 2018 will expire from 2024 through 2037 and state NOL carryforwards will expire 2018 through 2041. Federal NOL carryforwards generated in 2018 and thereafter have no expiration date. The Company has federal and state tax credit carryforwards of approximately $2.5 million and $0.7 million, respectively, at December 31, 2021. These tax credits will begin to expire in 2028. To the extent that an ownership change has occurred under Internal Revenue Code Sections 382 and 383, the Company’s use of its loss carryforwards and credit carryforwards to offset future taxable income may be limited. At December 31, 2021 and 2020, the Company had unrecognized tax benefits, including interest and penalties, of approximately $0.4 million. The Company’s gross unrecognized tax benefits as of December 31, 2021 and 2020 and the changes in those balances are as follows (in thousands): Year Ended December 31, 2021 2020 Beginning balance $ 428 $ 428 Other (16 ) — Gross unrecognized tax benefits, ending balance $ 412 $ 428 In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be objectively verified. A significant factor in the Company’s assessment is that the Company was in a three-year F-20 After a review of the four sources of taxable income as of December 31, 2021 (as described above), and after consideration of the Company’s continuing cumulative loss position as of December 31, 2021, the Company recorded a valuation allowance related to its U.S.-based deferred tax assets of $57.3 million at December 31, 2021. The valuation allowance on deferred tax assets decreased by $7.9 million and $1.0 million in 2021 and 2020, respectively. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense, however during 2021 and 2020, the Company did not recognize any interest or penalties. The cumulative interest and penalties at December 31, 2021 and 2020 were $0. The Company does not anticipate any material changes to unrecognized tax benefits within the next twelve months that will affect the effective tax rate. The Company is subject to U.S. federal income tax as well as to income tax of multiple state jurisdictions. Currently there are no audits in process or pending from Federal or state tax authorities. The Company is no longer subject to examination for U.S. federal income tax returns for years before December 31, 2018 and for state income tax returns, the Company is no longer subject to examination for years before December 31, 2017. As of December 31, 2021, the Company had no outstanding tax audits. The outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. As of December 31, 2021, a current estimate of the range of changes that may occur within the next twelve months cannot be made due to the uncertainty regarding the timing of these events. For financial reporting purposes, income before provision for income taxes for the Company’s foreign subsidiaries was $0.5 million and $0.1 million for the years ended December 31, 2021 and 2020, respectively. Smith Micro does not provide for U.S. taxes on its unremitted earnings of foreign subsidiaries that have not been previously taxed since the Company intends to invest such undistributed earnings indefinitely outside of the U.S. The 2017 Act subjects a U.S. shareholder to current tax on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset taxable income for years beginning before 2021. The CARES Act also made modifications to IRC Sec. 163(j) to increase the allowable interest from 30% of adjusted taxable income to 50% of adjusted taxable income. The CARES Act changes in NOL carrybacks has no impact on the Company’s tax provision. The change in interest expense limitation pursuant to the CARES Act does not have a significant impact on the tax provision. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 7. Earnings Per Share The Company calculates earnings per share (“EPS”) as required by FASB ASC Topic No. 260, Earnings Per Share F-21 Year Ended December 31, 2021 2020 (in thousands, except per share amounts) Numerator: Net (loss) income $ (31,043 ) $ 4,165 Denominator: Weighted average shares outstanding - basic 51,232 40,808 Potential common shares - options (treasury stock method) — 1,956 Weighted average shares outstanding - diluted 51,232 42,764 Shares excluded (anti-dilutive) 1,324 98 Net (loss) earnings per common share: Basic and diluted $ (0.61 ) $ 0.10 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 8. Employee Benefit Plans The Company offers its employees participation in a 401(k) plan, in which the Company matches the employee contributions at a rate of 20%, subject to a vesting schedule. Total employer contributions amounted to $0.4 million and $0.2 million for the years ended December 31, 2021 and 2020, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation Stock Plans On June 18, 2015, Smith Micro’s stockholders approved the 2015 Omnibus Equity Incentive Plan (“2015 OEIP”) and subsequent amendments to the 2015 OEIP to increase the number of shares reserved thereunder were approved by its stockholders on June 14, 2018 and June 9, 2020. The 2015 OEIP replaced the 2005 Stock Option / Stock Issuance Plan (“2005 Plan”) which was due to expire on July 28, 2015. All outstanding options under the 2005 Plan remain outstanding, but no new grants will be made under the 2005 Plan. The maximum number of shares of the Company’s common stock available for issuance over the term of the 2015 OEIP may not exceed 9,625,000 shares. The 2015 OEIP provides for the issuance of full value awards (restricted stock, performance stock, dividend equivalent right or restricted stock units) and partial value awards (stock options or stock appreciation rights) to employees, non-employee members of the board and consultants. Any full value award settled in shares will be debited as 1.2 shares, and partial value awards settled in shares will be debited as 1.0 shares against the share reserve. The exercise price per share for stock option grants is not to be less than the fair market value per share of the Company’s common stock on the date of grant. The Board of Directors has the discretion to determine the vesting schedule. Stock options may be exercisable immediately or in installments, but generally vest over a four-year Employee Stock Purchase Plan The Company has a shareholder approved employee stock purchase plan (“ESPP”), under which substantially all employees may purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning and end of six-month offering periods. An employee’s payroll deductions under the ESPP are limited to 10% of the employee’s compensation and employees may not purchase more than the lesser of $25,000 of stock, or 250 shares, for any purchase period. Additionally, no more than 250,000 shares in the aggregate may be purchased under the plan. F-22 Stock Compensation Expense The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognized as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation Valuation of Stock Option and Restricted Stock Awards The assumptions used to compute the share-based compensation costs for the stock options granted during the years ended December 31, 2021 and 2020, using the Black-Scholes option pricing model, were as follows: Year Ended December 31, 2021 2020 Weighted average grant date fair value of stock options $ 5.94 $ 2.93 Assumptions Risk-free interest rate (weighted average) 0.87 % 0.44 % Expected dividend yield — — Weighted average expected life (years) 6.2 6.2 Volatility (weighted average) 74.5 % 80.8 % Forfeiture rate 12.0 % 12.0 % The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued. The Company assumed no dividend yield because it does not expect to pay dividends for the foreseeable future. The weighted average expected life is the vesting period for those options granted during that period. The average volatility is based on the actual historical volatility of the Company’s common stock. The forfeiture rate was based on modified employee turnover. Valuation of ESPP The fair values are estimated at the beginning of each offering period using a Black-Scholes valuation model that uses the assumptions noted in the following table. The risk-free rate is based on the U.S. treasury yield curve in effect at the time of grant. Expected volatility was based on the historical volatility on the day of grant. Following is a schedule of the shares purchased, the fair value per share, and the Black-Scholes model assumptions for each offering period: September March 31, September March 31, Offering Period Ended 2021 2021 2020 2020 Shares purchased for offering period 5,360 4,668 4,184 1,536 Fair value per share $ 1.90 $ 1.25 $ 1.75 $ 2.28 Assumptions Risk-free interest rate (average) 0.05 % 0.12 % 0.29 % 1.84 % Expected dividend yield — — — — Weighted average expected life (years) 0.5 0.5 0.5 0.5 Volatility (average) 44.6 % 47.1 % 86.8 % 86.3 % F-23 Compensation Costs Non-cash stock-based compensation expenses related to stock options, restricted stock grants and the ESPP were recorded in the financial statements as follows (in thousands): Year Ended December 31, 2021 2020 Cost of sales $ 1 $ — Sales and marketing 901 549 Research and development 965 559 General and administrative 2,981 1,956 Total non-cash stock compensation expense $ 4,848 $ 3,064 As of December 31, 2021, there was $9.0 million of unrecognized compensation costs related to non-vested stock options and restricted stock granted under the 2015 OEIP and the 2005 Plan. At December 31, 2021, there were 3.8 million shares available for future grants under the 2015 OEIP Plan. Stock Options A summary of the Company’s stock options outstanding under the 2015 OEIP and 2005 Plan as of December 31, 2021 and 2020 and the activity during the years ended herein are as follows (in thousands except per share amounts): Shares Weighted Avg. Exercise Price Wtd. Avg. Remaining Contractual Life (Yrs) Aggregate Intrinsic Value Outstanding as of December 31, 2020 205 $ 3.95 Granted 20 $ 5.94 $ - Exercised (21 ) $ 3.12 $ 55 Forfeited (8 ) $ 2.99 $ 20 Expired (2 ) $ 16.28 $ - Outstanding as of December 31, 2021 194 $ 3.95 4.9 $ 218 Vested and expected to vest at December 31, 2021 181 $ 4.03 4.9 $ 211 Exercisable as of December 31, 2021 140 $ 4.04 3.6 $ 163 F-24 Restricted Stock Awards A summary of the Company’s restricted stock awards outstanding under the 2015 OEIP and 2005 Plan as of December 31, 2021 and 2020, and the activity during years ended therein, are as follows (in thousands, except weighted average grant date fair value): Weighted Number grant date of shares fair value Unvested at December 31, 2019 1,559 $ 1.98 Granted 1,000 $ 6.40 Vested (857 ) $ 2.99 Canceled and forfeited — $ - Unvested at December 31, 2020 1,702 $ 4.07 Granted 1,287 $ 7.02 Vested (1,027 ) $ 4.47 Canceled and forfeited (295 ) $ 5.60 Unvested at December 31, 2021 1,667 $ 5.83 |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenues | 10. Revenues Performance Obligations CommSuite ® ® Smith Micro sells its software solutions to major wireless network and cable operators. For CommSuite and Netwise products, the Company may provide customization services for a fee to ensure the Company’s software solution can operate on the customer’s operating platforms and the operating platform of the mobile devices of Smith Micro’s customer’s end users. In addition, since the mobile device OEMs change their operating systems regularly, Smith Micro provides maintenance services to ensure utility of the software license is not diminished for the Company’s customers. Smith Micro considers the customization services, the software license, and maintenance services to maintain the utility of the software license for its customers as a single performance obligation. The Company provides the perpetual license on a royalty free basis. Revenue related to customization services, if charged, is recognized at a point in time upon delivery and acceptance of the customized software license by the customer. To support the CommSuite and Netwise solutions, Smith Micro also provides customers with its hosted environment and Application Service Provider (“ASP”) services for the duration of the license term. The Company considers the provision of these services to be a separate performance obligation. In these transactions, the total consideration expected is variable. The Company does not estimate when the variable consideration will be recognized because the License Usage Based Fees, Hosting Service Fees and ASP Advertising Fees relate specifically to the Company’s efforts to transfer the services for a specified period (month or quarter) which are distinct from the services provided in other specified periods. Smith Micro’s customer’s or the customer’s end customer’s usage occurs within the defined period, and the variability of Smith Micro’s license, hosting and ASP fees is resolved in the specified period, and such fees earned are not subject to adjustment based on the activity in other periods. Smith Micro earns revenue from these services on a fixed fee per perpetual license usage on its hosted environment and advertising revenue share for advertisements placed by its customers on the Company’s platform. The usage fees are not earned until Smith Micro transfers its software license to its customers. The Company recognizes the usage-based fees when it is entitled to the consideration earned for the distinct service period based on its customer’s usage of its licenses, hosting services, and ASP advertising platform (“hosted environment usage fees”). F-25 SafePath Cloud Based Services Smith Micro’s SafePath solution is a hybrid Software as a Service (“SaaS”) offering. The Company considers the provision of the perpetual license and the cloud-based platform as a single performance obligation. The Company provides the perpetual license on a royalty free basis and earns revenue based on a fixed fee usage of its cloud-based services. Smith Micro recognizes the usage-based fees when it is entitled to the consideration earned for the distinct service period based on its customer’s usage of its cloud-based services. Smith Micro acquired certain assets from Circle, including a source code license to Circle’s parental control software solution and two customer contracts. Pursuant to these contracts, the customer parties thereto license the parental control software solution for distribution to their respective subscribers in designated markets. In each case, the contracts allow the customer to take possession of the software solution and to host it on their platform or with an independent third-party hosting service provider without significant cost. Smith Micro also provide significant services that are required by the customer to ensure they have the utility of the software license. As the license to the software solution and the services the Company provides are highly interrelated, Smith Micro has concluded that the license and its services are a single performance obligation. The license fee is earned and recognized on a pro-rata basis over the contract term based on the customer’s continued use of the license and the Company’s services ViewSpot Cloud Based Services ViewSpot product is a cloud-based platform that its MNO customers use to display its promotional content to mobile devices being sold in its retail outlets. Using this solution, the MNOs have the ability to promote specific mobile devices in targeted geographic retail locations and monitor the efficacy of the promotions and the mobile device user’s behavior to the targeted advertising. Smith Micro sells a royalty free license, consulting services to configure the advertising content so that it can be displayed on targeted mobile devices, and cloud-based services to serve the advertising content and capture end consumer’s behavior on the mobile device. ViewSpot services depend on a significant level of integration, interdependency, and interrelation between the on-premise applications, consulting services and the cloud services, and are accounted for together as a single performance obligation. The ViewSpot services are sold on a fixed fee basis to Smith Micro’s customers based on pre-defined purchase order. Since Smith Micro is obligated to provide the required services over the contract period, the revenue is recognized over time. From time to time, the Company also provides consulting services to configure ad hoc targeted promotional content for Smith Micro’s customers upon request. These requests are driven by the customers’ marketing initiatives and tend to be short term “bursts” of activity. Smith Micro recognizes revenues from these ad hoc services at a point in time which is upon delivery of the configured promotional content to the cloud platform. Consulting Services and Other Smith Micro has developed a roadmap for adding new functionality to its wireless products to extend the product lifecycle and expand its customer’s use of the product on their networks. From time to time, the Company enters into consulting services arrangements with its customers to develop incremental functionality not included on the developmental roadmap. The Company earns revenue from these consulting services that is recognized at the time of delivery of the software when the services have been completed and control has been transferred to the customers. The Company also enters into arrangements with certain customers to provide technology support services beyond the initial warranty period. Technology support services include e-mail and telephone support and unspecified rights to bug fixes available on a when-and-if available basis. Smith Micro considers the provision of such technology support services to be a separate performance obligation which is generally billed in advance for a fixed term and recognized as revenue ratably over the contractual term as the Company performs its services. In 2020 and prior, Smith Micro sold off-the-shelf Graphics software products directly to end users as well as through its distribution and reseller channel partners. These products required no customization and minimal post-sale technology support services. The Company recognized revenue from software sales at the time it F-26 transfer red control of the product to the customer. This occur red upon shipment of the product or when the customer download ed the software from the Company’s website or website of Smith Micro’s distributor and resellers partners. In some instances, Smith Micro consign ed its software products to a distributor or reseller. In those instances, Smith Micro recognize d revenue when the end consumer takes control of the product. Smith Micro offer ed a 30 day return policy to its customers and a return reserve wa s established at the time revenue wa s recorded. The Company review ed available retail channel information and made a determination of a return provision for sales made to distributors and retailers based on current channel inventory levels and historical return patterns. The return reserve wa s monitored and adjusted based on actual experience. Historically, returns were insignificant. Deferred Revenue Deferred revenue represents amounts billed to customers for which revenue has not been recognized. Deferred revenue primarily consists of the unearned portion of monthly, quarterly, and annually billed service fees and prepayments made by customers for a future period. Smith Micro recognizes revenue upon transfer of control. As of December 31, 2021 and 2020, the Company’s total deferred revenue balance was $0.2 million and $1.6 million, respectively, of which $0.1 and $1.5 million, respectively, were related to the acquisition of the Circle operator business. As discussed in Note 4, during the first quarter of 2021, Smith Micro received a customer contract termination notice related to a customer contract acquired in the acquisition of Circle’s operator business, which was otherwise set to expire in the second quarter of 2024. The contract was terminated effective April 15, 2021; however, in accordance with its terms, Smith Micro continues to deliver wind-down services under the contract. While the terms of the contract allow for a wind-down period of up to two years post termination, the Company expects to continue services under this contract through 2022. The Company determined the customer contract should be accounted for under the contract modification guidance in Topic 606. As a result, the Company recognized deferred revenue of $0.6 million which was being amortized over the customer contract term with the remaining $0.3 million being amortized over the remaining service period. Additionally, the Company reviewed its customer contract intangible asset associated with this customer contract and determined that the carrying value was in excess of its fair value. Accordingly, the Company recorded a $1.5 million impairment charge within “amortization of intangible assets” in the consolidated statements of operations during the year ended December 31, 2021 with the remaining $0.4 million being amortized over the remaining service period. Costs to Obtain a Customer Contract The Company generally pays sales commissions to its sales force, which are incremental and recoverable costs of acquiring contracts. In most instances, sales commissions are only paid when the Company earns usage-based fees on the contracts. The commission obligation is established each quarter based on the usage-based fees earned. The commission obligation is not adjusted by future usage-based fees earned, that is each period is discrete from the other. As a result of the structure of the commission plan, Smith Micro records the commission expense when the commission obligation is determined, which is generally quarterly. Certain provisions of the sales commission plan incentivize and recognize the efforts of eligible participants to earn commissions on future revenue generated on new contracts, sale of a new product to an existing contract, or sale of a product to a different group within an existing customer. The sales commissions are tiered based on the opportunity size. Sales commissions paid under these provisions of the sales commission plan are incremental contract acquisition costs, and accordingly are recorded as a deferred contract asset that is amortized on a straight-line basis over the average contract life of the new, renewed, and modified contract. Costs to Fulfill a Customer Contract The Company incurs costs to fulfill obligations under a contract which are recognized as the Company fulfills its performance obligation and recognizes revenue. Where the Company provides services and earns revenue over the contract term based on usage of Smith Micro’s platforms, the associated fulfillment costs are recognized as they are incurred and as usage-based revenue is recognized. F-27 Disaggregation of Revenues Revenues on a disaggregated basis are as follows (in thousands): Year Ended December 31, 2021 2020 License and service fees $ 3,730 $ 3,575 Hosted environment usage fees 13,770 18,209 Cloud based usage fees 38,415 25,973 Consulting services and other 2,507 3,543 Total revenues $ 58,422 $ 51,300 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Litigation The Company may become involved in various legal proceedings arising from its business activities. While management does not believe the ultimate disposition of these matters will have a material adverse impact on the Company’s consolidated results of operations, cash flows, or financial position, litigation is inherently unpredictable, and depending on the nature and timing of these proceedings, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows, or financial position in a particular period. Other Contingent Contractual Obligations During its normal course of business, the Company has made certain indemnities, commitments, and guarantees under which it may be required to make payments in connection with certain transactions. These include: intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale, and/or license of Company products; indemnities to various lessors in connection with facility leases for certain claims arising from use of such facility or under such lease; indemnities to vendors and service providers pertaining to claims based on the negligence or willful misconduct of the Company; indemnities involving the accuracy of representations and warranties in certain contracts; and indemnities to directors and officers of the Company to the maximum extent permitted under the laws of the State of Delaware. In addition, the Company has made contractual commitments to employees providing for severance payments upon the occurrence of certain prescribed events. The Company may also issue a guarantee in the form of a standby letter of credit as security for contingent liabilities under certain customer contracts. The duration of these indemnities, commitments, and guarantees varies, and in certain cases may be indefinite. The majority of these indemnities, commitments, and guarantees may not provide for any limitation of the maximum potential for future payments the Company could be obligated to make. The Company has not recorded any liability for these indemnities, commitments, and guarantees in the accompanying consolidated balance sheets. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | 12. Leases The Company leases office space and equipment, and certain office space is subleased. Management determines if a contract is a lease at the inception of the arrangement and reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Leases with an initial term of greater than twelve months are recorded on the consolidated balance sheet. Lease expense is recognized on a straight-line basis over the lease term. The Company’s lease contracts generally do not provide a readily determinable implicit rate. For these contracts, the estimated incremental borrowing rate is based on information available at the inception of the lease. F-28 Operating lease cost consists of the following (in thousands): Year Ended December 31, 2021 2020 Lease cost, gross $ 2,297 $ 2,254 Sublease income (603 ) (603 ) Total lease cost, net $ 1,694 $ 1,651 Operating lease assets and liabilities are summarized as follows (in thousands): As of December 31, 2021 2020 Right-of-use assets $ 5,710 $ 5,785 Current lease liabilities $ 1,400 $ 1,433 Long-term lease liabilities 4,467 4,805 Total lease liabilities $ 5,867 $ 6,238 The maturity of operating lease liabilities is presented in the following table (in thousands): As of December 31, 2021 2022 $ 1,710 2023 1,697 2024 1,533 2025 1,175 2026 487 Total lease payments 6,602 Less imputed interest (735 ) Present value of lease liabilities $ 5,867 |
Segment, Concentration and Geog
Segment, Concentration and Geographical Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment, Concentration and Geographical Information | 13. Segment, Concentration and Geographical Information Segment Information Public companies are required to report financial and descriptive information about their reportable operating segments as required by FASB ASC Topic No. 280, Segment Reporting The Company does not separately allocate operating expenses to these product lines, nor does it allocate specific assets. Therefore, product line information reported includes only revenues. The following table presents the Wireless revenues by product line (in thousands): Year Ended December 31, 2021 2020 CommSuite $ 13,717 $ 18,163 SafePath 40,981 28,027 ViewSpot 3,558 4,239 Netwise 117 151 Other 49 91 Total wireless revenues $ 58,422 $ 50,671 F-29 Concentration Information For the year ended December 31, 2021, the Company’s top two customers, accounting for over 10% of revenues, made up 56% and 24% of revenues and 42% and 27% of accounts receivable, respectively. Two service providers with more than 10% of purchases accounted for 36% and 13% of purchases in the year, totaling 15% and 0% of accounts payable, respectively. For the year ended December 31, 2020, one customer, accounting for over 10% of revenues, made up 81% of revenues and 91% of accounts receivable, and one service provider with more than 10% of purchases totaled 10% of accounts payable. The Company’s major customers could reduce their orders of the Company’s products in favor of a competitor's product or for any other reason. The loss of these major customers or decisions by a significant customer to substantially reduce purchases could have a material adverse effect on Smith Micro’s business. Geographical Information During the years ended December 31, 2021 and 2020, the Company operated in three geographic locations: the Americas, EMEA (Europe, the Middle East, and Africa), and Asia Pacific. Revenues attributed to the geographic location of the customer’s bill-to address were as follows (in thousands): Year Ended December 31, 2021 2020 Americas $ 55,322 $ 49,349 EMEA 3,024 1,930 Asia Pacific 76 21 Total revenues $ 58,422 $ 51,300 |
Gain on Sale of Software Produc
Gain on Sale of Software Products | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Gain on Sale of Software Products | 14. Gain on Sale of Software Products In December 2020, pursuant to an Asset Purchase Agreement entered in the same month, the Company sold certain assets of its Moho and Motion Artist animation software products to Lost Marble LLC and recorded a gain on the transaction in the amount of approximately $0.7 million, which is presented as Other Income in the consolidated statements of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events The Company evaluates and discloses subsequent events as required by ASC Topic No. 855, Subsequent Events |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company | The Company Smith Micro Software, Inc. (“Smith Micro” or “the Company”) develops software to simplify and enhance the mobile experience, providing solutions to some of the leading wireless and cable service providers around the world. From enabling the family digital lifestyle to providing powerful voice messaging capabilities, the Company strives to enrich today’s connected lifestyles while creating new opportunities to engage consumers via smartphones and consumer Internet of Things (“IoT”) devices. Smith Micro’s portfolio includes a wide range of products for creating, sharing, and monetizing rich content, such as visual voice messaging, retail content display optimization and performance analytics on any product set. Smith Micro’s solution portfolio is comprised of proven products that enable its customers to provide: • In-demand digital services that connect today’s digital lifestyle, including family location services, parental controls, and consumer IoT devices to mobile consumers worldwide; • Easy visual access to voice messages on mobile devices through visual voicemail and voice-to-text transcription functionality; and • Strategic, consistent, and measurable digital demonstration experiences that educate retail shoppers, create awareness of products and services, and drive in-store sales, and optimize retail experiences with actionable analytics derived from in-store customer behavior. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements reflect the operating results and financial position of Smith Micro and its wholly owned subsidiaries in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany amounts have been eliminated in consolidation. |
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 in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. |
Foreign Currency Transactions | Foreign Currency Transactions The Company has international operations resulting from current and prior year acquisitions. The countries in which the Company has a subsidiary or branch office are Serbia, Sweden, Portugal, Czech Republic, and Slovakia. The functional currency for all of these foreign entities is the U.S. dollar in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 830. Foreign currency transactions that increase or decrease expected functional currency cash flows is a foreign currency transaction gain or loss that are included in determining net income for the period in which the exchange rate changes. Likewise, a transaction gain or loss (measured from the transaction date or the most recent intervening balance sheet date, whichever is later) realized upon settlement of a foreign currency transaction is included in determining net income for the period in which the transaction is settled. |
Business Combinations | Business Combinations The Company applies the provisions of FASB ASC Topic No. 805, Business Combinations , in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period that exists up to twelve months from the acquisition date, the Company may record adjustments to the tangible and specifically identifiable intangible assets acquired and liabilities assumed with a corresponding adjustment to goodwill in the reporting period in which the adjusted amounts are determined. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, the impact of any subsequent adjustments is included in the consolidated statements of operations. Costs to exit or restructure certain activities of an acquired company or the Company’s internal operations are accounted for as a one-time termination and exit cost pursuant to FASB ASC Topic No. 420, Exit or Disposal Cost Obligations , and are accounted for separately from the business combination. A liability for costs associated with an exit or disposal activity is recognized and measured at its fair value in the Company’s consolidated statement of operations in the period in which the liability is incurred. Uncertain income tax positions and tax-related valuation allowances that are acquired in connection with a business combination are initially estimated as of the acquisition date. The Company reevaluates these items quarterly based upon facts and circumstances that existed as of the acquisition date, with any adjustments to the preliminary estimates being recorded to goodwill if such adjustments occur within the 12-month measurement period. Subsequent to the end of the measurement period or the Company’s final determination of the value of the tax allowance or contingency, whichever comes first, changes to these uncertain tax positions and tax-related valuation allowances will affect the provision for income taxes in the consolidated statement of operations and could have a material impact on results of operations and financial position. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company measures and discloses fair value measurements as required by FASB ASC Topic No. 820, Fair Value Measurements and Disclosures Fair value is an exit price, representing the amount that would be received upon the sale of an asset or the amount that would be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, the FASB establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: • Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 – Include other inputs that are directly or indirectly observable in the marketplace. • Level 3 – Unobservable inputs which are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As required by FASB ASC Topic No. 820, the Company measures its cash equivalents and short-term investments at fair value. The Company’s cash equivalents and short-term investments are classified within Level 1 by using quoted market prices utilizing market observable inputs. F-9 As required by FASB ASC Topic No. 825, Financial Instruments , an entity can choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. Subsequent changes in fair value for designated items are required to be reported in earnings in the current period. This Topic also establishes presentation and disclosure requirements for similar types of assets and liabi lities measured at fair value. As required by FASB ASC Topic No. 350, Intangibles – Goodwill and Other, As required by FASB ASC Topic No. 805, Business Combinations, The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration that are measured at fair value on a recurring basis (in thousands): Balance at January 1, 2021 $ — Contingent consideration 1,136 Change in fair value of contingent consideration 12,864 Contingent consideration payments (14,000 ) Balance, December 31, 2021 $ - During the year ended December 31, 2021, the Company recorded an increase in the fair value of the contingent consideration of $12.9 million and reported such increase in operating expenses. See Note 2 for additional information. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents generally consist of cash and money market funds. The carrying amount of cash and cash equivalents approximates fair value due to the short-term maturities of these instruments. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Smith Micro sells its products worldwide. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history, the customer’s current credit worthiness and various other factors, as determined by review of their current credit information. The Company continuously monitors collections and payments from its customers. The Company estimates credit losses and maintains an allowance for doubtful accounts based upon these estimates. While such credit losses have historically been within its estimated reserves, the Company cannot guarantee that it will continue to experience the same credit loss rates that it has in the past. If not, this could have an adverse effect on Smith Micro’s consolidated financial statements. |
Equipment and Improvements | Equipment and Improvements Equipment and improvements are stated at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets, generally ranging from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. |
Internal Software Development Costs | Internal Software Development Costs Development costs incurred in the research and development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility has been established. The F-10 Company considers technological feasibility to be established when all planning, designing, coding, and testing has been completed accor ding to design specifications. After technological feasibility is established, any add itional costs are capitalized. Through December 31, 2021 , software has been substantially completed concurrently with the establishment of technological feasibility; accordingly, no costs have been capitalized to date. |
Impairment or Disposal of Long-Lived Assets | Impairment or Disposal of Long-Lived Assets Long-lived assets to be held are reviewed for events or changes in circumstances which indicate their carrying value may not be recoverable. They are tested for recoverability using undiscounted cash flows to determine whether or not impairment to such value has occurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents purchase consideration from a business combination that exceeds the value assigned to the net assets of the acquired businesses. Smith Micro is required to periodically assess the recoverability of the carrying value of its goodwill at least annually during the fourth quarter of the fiscal year or whenever events or circumstances indicate a potential impairment. If the carrying amount of the Company’s single reporting unit exceeds its fair value, an impairment loss equal to the excess of carrying value over fair value is recorded. The Company’s 2021 fourth quarter annual test included the assessment of qualitative factors to determine whether or not it was more likely than not that the fair value of Smith Micro’s single reporting unit was less than it’s carrying value. The qualitative assessment considered factors such as macroeconomic conditions, industry and market trends, cost factors, and overall financial performance, among others. In consideration of the totality of the qualitative factors assessed, based on the weight of the evidence no circumstances existed that would indicate that it was more likely than not that goodwill was impaired. There was no goodwill impairment recognized during the years ended December 31, 2021 or 2020. The Company has no indefinite-lived intangible assets. Amortization expense related to the Company’s definite-lived intangible assets resulting from acquisitions is calculated based on the pattern of economic benefit expected to be generated from the use of that asset. Intangible assets are tested for impairment if events or circumstances occur indicating that the respective asset might be impaired. |
Revenue Recognition | Revenue Recognition In accordance with FASB ASC Topic No. 606, Revenue from Contracts with Customers Smith Micro transfers software licenses to its customers on a royalty free, non-exclusive, non-transferrable, limited use basis during the term of the agreement. In some instances, the Company performs customization services to ensure the software operates within its customer’s operating platforms as well as the operating platforms of the mobile devices used by their end customers, before transferring the license. Revenue related to these services is recognized at a point in time upon acceptance of the software license by the customer. The Company also earns usage-based revenue on its platforms. Usage based revenue is generated based on active licenses used by Smith Micro’s customer’s end customers, the provision of hosting services, revenue share based on media placements on Smith Micro’s platform and use of the Company’s cloud-based services. Smith Micro recognizes usage-based revenue when the Company has completed its performance obligation and has the right to invoice the customer. This revenue is generally recognized monthly or quarterly. Finally, the Company ratably recognizes revenue over the contract period when customers pay in advance of service delivery. On February 12, 2020, the Company acquired certain assets from Circle Media Labs Inc. (“Circle”) (as further described in Note 2 below), including a source code license to Circle’s parental control software solution and two customer contracts. Pursuant to these contracts, the customer parties thereto license the parental control F-11 software solution for distribution to their respective subscribers in designated markets. In each case, the contracts allow the customer to take possession of the software solution and to host it on their platform or with an independent third-party hosting service provider without significant cost. The Company also provide s significant services that are required by the customer to ensure they have the utility of the license. As the license to the software solution and the services the Company provide s are highly interrelated, the Company has concluded that the license and services are a single performance obligation. The license fee is earned and recognized on a pro-rata basis over the contract term based on the customer’s continued use of the license and the services. In April 2021, Smith Micro acquired certain assets and liabilities from Avast plc and certain of its affiliates (“Avast”) and all of the outstanding membership interests of its then subsidiary, Location Labs LLC all related to its family safety mobile software business (“Family Safety Mobile Business”). Acquired assets included the source code to Avast’s family safety mobile software solution and cloud-based services (a portion of which was acquired through a perpetual license grant), and the acquired subsidiary’s existing contracts for the solution with five customers. Each contract involves the grant of software licenses and provision of cloud-based services. Smith Micro does not allow its customers to take possession of the software solution, and since the utility of the license comes from the cloud-based services that are provided, the Company considers the software license and the cloud-based services to be a single performance obligation. Smith Micro also provides consulting services to develop customer-specified functionality that are generally not on its software development roadmap. The Company recognizes revenue from its consulting services upon delivery and acceptance by the customer of its software enhancements and upgrades. For certain customers the Company provides maintenance and technology support services for which the customer either pays upfront or as the Company provides the services. When the customer pays upfront, the payments are recorded as contract liabilities and revenue is recognized ratably over the contract period as this is the Company’s stand ready performance obligation that is satisfied ratably over the maintenance and technology services period. The Company receives upfront payments from customers from services to be provided under its ViewSpot® contracts. The advance receipts are deferred and subsequently recognized ratably over the contract period. Smith Micro also provides consulting services to configure ad hoc targeted promotional content for its customers upon request. These requests are driven by customers’ marketing initiatives and tend to be short term “bursts” of activity. These revenues are recognized upon delivery of the configured promotional content to the cloud platform. Smith Micro primarily sell its software solutions, cloud-based services and consulting services to major wireless network and cable operators. The Company recognize sales of goods and services based on the five-step analysis of transactions as provided in Topic 606. For all contracts with customers, the Company first identifies the contract which usually is established when a contract is fully executed by each party and consideration is expected to be received. Next, the Company identifies the performance obligations in the contract. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The Company then determines the transaction price in the arrangement and allocates the transaction price, if necessary, to each performance obligation identified in the contract. The allocation of the transaction price to the performance obligations are based on the relative standalone selling prices for the goods and services contained in a particular performance obligation. The transaction price is adjusted for the Company’s estimate of variable consideration which may include certain incentives and discounts, product returns, distributor fees, and storage fees. The Company evaluates the total amount of variable consideration expected to be earned by using the expected value method, as the Company believes this method represents the most appropriate estimate for this consideration, based on historical service trends, the individual contract considerations, and its best judgment at the time. The Company includes estimates of variable consideration in revenues only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company also generates the majority of its revenue on usage-based fees which are variable and depend entirely on customers’ use of perpetual licenses, transactions processed on the Company’s hosted environment, advertisement placements on the Company’s service platform, and activity on the Company’s cloud-based service platform. F-12 The Company’s contracts with the MNO customers include promises to transfer multiple products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Smith Micro’s cloud-based service includes a software solution license integrated with cloud-based services. Judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Since the Company do es not allow its customers to take possession of the software solution, and since the utility of the license comes from the c l oud-based services that the Company provides, Smith Micro considers the software license and the cloud services to be a single performance obligation. The Company provides the Circle software solution license together with highly integrated consulting services to generate the utility of the license to the customers. Since the software solution and consulting services provided are highly interrelated, Smith Micro consider the license and the consulting services to be a single performance obligation. The Company recognizes revenue associated with its MNO customers based on their active subscribers’ access and usage of Smith Micro’s software licenses and cloud-based services on Smith Micro’s platforms. Smith Micro has made accounting policy elections to exclude all taxes by governmental authorities from the measurement of the transaction price, and since the Company’s standard payment terms are less than one year, the Company has elected the practical expedient not to assess whether a contract has a significant financing component. |
Principal and Agent Considerations | Principal and Agent Considerations Smith Micro owns the Intellectual Property and retains ownership when the Company licenses its customized software solutions for use by its customers. The Company is a principal in these transactions and as such revenue is recognized with respect thereto on a gross basis. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for all stock-based payment awards made to employees and directors based on their fair values and recognizes such awards as compensation expense over the vesting period using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation |
Income Taxes | Income Taxes The Company accounts for income taxes as required by FASB ASC Topic No. 740 , Income Taxes The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax liabilities against gross deferred tax assets); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments |
Impact of COVID-19 | Impact of COVID-19 In March 2020, the World Health Organization categorized coronavirus disease 2019 (COVID-19) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects are currently unknown. While the response to the COVID-19 outbreak continues to rapidly evolve, it has led to stay-at-home orders and social distancing guidelines that have seriously disrupted activities in large segments of the economy. During the past seven quarters, the Company saw a reduction in the number of SafePath® platform subscribers compared to March 2020 and customer decision delays regarding the ViewSpot® platform, which the Company believes were driven by the COVID-19 related economic slowdown. The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. The severity of the impact of the COVID-19 pandemic on the Company’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, all of which are uncertain and cannot be predicted. As the impact of the COVID-19 pandemic on the economy and the Company’s operations continues to evolve, the Company will continue to monitor the impact on the Company’s operations and, if needed, postpone non-essential capital expenditures, reduce operating costs, and substantially reduce discretionary spending. |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Company’s Level 3 Financial Liabilities Related to Contingent Consideration | The following table presents a reconciliation of the Company’s Level 3 financial liabilities related to contingent consideration that are measured at fair value on a recurring basis (in thousands): Balance at January 1, 2021 $ — Contingent consideration 1,136 Change in fair value of contingent consideration 12,864 Contingent consideration payments (14,000 ) Balance, December 31, 2021 $ - |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Avast PLC Family Safety Mobile Software Business [Member] | |
Summary of Consideration Paid for Acquisitions | The following table summarizes the consideration paid for the Family Safety Mobile Business in 2021 (in thousands): Fair value of assets acquired $ 74,818 Fair value of liabilities assumed 2,085 Total purchase price $ 72,733 Components of purchase price: Cash $ 63,216 Common stock 8,381 Contingent consideration 1,136 Total purchase price $ 72,733 |
Summary of Allocation of Purchase Price | The Company’s allocation of the purchase price is summarized as follows (in thousands): Assets: Cash $ 6,351 Accounts receivable 6,225 Prepaid expenses 513 Fixed assets 921 Intangible assets 38,033 Goodwill 22,775 Total assets $ 74,818 Liabilities: Accounts payable $ 392 Accrued payroll and benefits 1,662 Accrued expenses 31 Total liabilities $ 2,085 Total purchase price $ 72,733 |
Summary of Unaudited Proforma Results of Operation | Unaudited pro forma results of operations for the years ended December 31, 2021 and 2020 are included below as if the acquisition of the Family Safety Mobile business occurred on January 1, 2020. This summary of the unaudited pro forma results of operations is not necessarily indicative of what the Company’s results of operations would have been had the Family Safety Mobile Business been acquired at the beginning of 2020, nor does it purport to represent results of operations for any future periods. Year Ended December 31, 2021 2020 (in thousands, except per share amounts) Revenues $ 67,654 $ 87,908 Net (loss) income (16,304 ) 4,046 Earnings per share: Basic $ (0.30 ) $ 0.08 Diluted $ (0.30 ) $ 0.08 |
Circle [Member] | |
Summary of Consideration Paid for Acquisitions | The following table summarizes the consideration paid for the Circle acquisition in 2020 (in thousands): Fair value of assets acquired $ 14,966 Fair value of liabilities assumed 1,466 Total purchase price $ 13,500 Components of purchase price: Cash $ 13,500 Total purchase price $ 13,500 |
Summary of Allocation of Purchase Price | The Company’s allocation of the purchase price is summarized as follows (in thousands): Assets: Inventory, net $ 14 Intangible assets 10,483 Goodwill 4,469 Total assets $ 14,966 Liabilities: Deferred revenue $ 1,290 Amounts due to seller 176 Total liabilities $ 1,466 Total purchase price $ 13,500 |
Equipment and Improvements (Tab
Equipment and Improvements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property Plant And Equipment [Abstract] | |
Summary of Equipment and Improvements | Equipment and improvements consist of the following (in thousands): December 31, 2021 2020 Computer hardware, software, and equipment $ 10,531 $ 9,814 Leasehold improvements 3,378 2,959 Office furniture and fixtures 803 714 Construction in progress 13 24 14,725 13,511 Less accumulated depreciation and amortization (12,027 ) (11,341 ) Equipment and improvements, net $ 2,698 $ 2,170 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Acquired Intangible Assets by Major Asset Class | The following table sets forth the Company’s acquired intangible assets by major asset class as of December 31, 2021 and December 31, 2020 (in thousands, except for useful life data): December 31, 2021 Useful life (years) Gross Additions Accumulated amortization Net book value before impairment Impairment charges Net book value Purchased technology 4-10 $ 5,400 $ 8,129 $ (3,764 ) $ 9,765 $ — $ 9,765 Customer relationships 3-14 3,975 23,985 (2,816 ) 25,144 25,144 Customer contracts 6 7,000 — (2,976 ) 4,024 $ (1,465 ) 2,559 Software License 10 — 5,419 (793 ) 4,626 $ — 4,626 Trademarks/trade names 2 38 — (38 ) — $ — — Non-compete 3 283 — (196 ) 87 $ — 87 Support agreement 0.5-1 369 500 (869 ) — $ — — Patents 7 600 — (150 ) 450 $ — 450 Total $ 17,665 $ 38,033 $ (11,602 ) $ 44,096 $ (1,465 ) $ 42,631 December 31, 2020 Useful life (years) Gross Additions Accumulated amortization Net book value before impairment Impairment charges Net book value Purchased technology 4-8 $ 2,518 $ 2,882 $ (1,612 ) $ 3,788 $ — $ 3,788 Customer relationships 3-10 3,975 — (1,158 ) 2,817 (411 ) 2,406 Customer contracts 6 — 7,000 (1,242 ) 5,758 — 5,758 Trademarks/trade names 2 38 — (38 ) — — — Non-compete 3 51 232 (119 ) 164 — 164 Support agreement 1 — 369 (323 ) 46 — 46 Patents 7 — 600 (64 ) 536 — 536 Total $ 6,582 $ 11,083 $ (4,556 ) $ 13,109 $ (411 ) $ 12,698 |
Future Amortization Expense Related to Intangible Assets | Future amortization expense related to intangible assets as of December 31, 2021 are as follows (in thousands): Year Ending December 31, 2022 $ 6,311 2023 5,874 2024 5,635 2025 5,402 2026 5,007 thereafter 14,402 Total $ 42,631 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of (Loss) Income before Provision for Income Taxes | (Loss) income before provision for income taxes was generated from the following sources (in thousands): Year Ended December 31, 2021 2020 Domestic $ (31,301 ) $ 4,213 Foreign 473 112 Total (loss) income before provision for income taxes $ (30,828 ) $ 4,325 F-18 |
Summary of Income Tax Expense (Benefit) | A summary of the income tax expense (benefit) is as follows (in thousands): Year Ended December 31, 2021 2020 Current: Federal $ — $ (133 ) State 5 6 Foreign 152 134 Total current 157 7 Deferred: Federal 24 155 State 35 24 Foreign (1 ) (26 ) Total deferred 58 153 Total income tax expense $ 215 $ 160 |
Federal Statutory Rate to Loss Before Income Taxes | A reconciliation of the provision for income taxes to the amount of income tax expense (benefit) that would result from applying the federal statutory rate to the loss before income taxes is as follows: Year Ended December 31, 2021 2020 Federal statutory rate 21.0 % 21.0 % State tax, net of federal benefit 4.3 2.7 Equity compensation 0.4 (1.8 ) International tax items 0.1 (0.1 ) Foreign taxes (0.5 ) 2.5 State NOL true-up 1.2 2.5 Miscellaneous (0.4 ) 1.3 Effect of change in rate 0.8 3.5 Change in valuation allowance (27.6 ) (27.9 ) (0.7 ) % 3.7 % F-19 |
Components of Deferred Tax Assets and Liabilities | The major components of the Company’s deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2021 2020 Deferred income tax assets Net operating loss carry forwards $ 47,204 $ 42,127 Credit carry forwards 3,027 3,027 Fixed assets 84 116 Intangibles 6,259 3,346 Equity-based compensation 208 343 Nondeductible accruals 532 365 Various reserves - 23 Deferred rent 33 94 Other 7 2 Valuation allowance (57,346 ) (49,405 ) Total deferred income taxes - net 8 38 Deferred income tax liabilities Foreign intangibles - (1 ) Unrealized translation gain/loss (45 ) 3 Prepaid expenses (80 ) (99 ) Total deferred income liabilities (125 ) (97 ) Net deferred income tax (liabilities) $ (117 ) $ (59 ) |
Gross Unrecognized Tax Benefits Changes in Balances | The Company’s gross unrecognized tax benefits as of December 31, 2021 and 2020 and the changes in those balances are as follows (in thousands): Year Ended December 31, 2021 2020 Beginning balance $ 428 $ 428 Other (16 ) — Gross unrecognized tax benefits, ending balance $ 412 $ 428 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Details of Basic and Diluted Earnings Per Share | Year Ended December 31, 2021 2020 (in thousands, except per share amounts) Numerator: Net (loss) income $ (31,043 ) $ 4,165 Denominator: Weighted average shares outstanding - basic 51,232 40,808 Potential common shares - options (treasury stock method) — 1,956 Weighted average shares outstanding - diluted 51,232 42,764 Shares excluded (anti-dilutive) 1,324 98 Net (loss) earnings per common share: Basic and diluted $ (0.61 ) $ 0.10 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Assumptions Used to Compute Share-Based Compensation Costs for Stock Options Granted | The assumptions used to compute the share-based compensation costs for the stock options granted during the years ended December 31, 2021 and 2020, using the Black-Scholes option pricing model, were as follows: Year Ended December 31, 2021 2020 Weighted average grant date fair value of stock options $ 5.94 $ 2.93 Assumptions Risk-free interest rate (weighted average) 0.87 % 0.44 % Expected dividend yield — — Weighted average expected life (years) 6.2 6.2 Volatility (weighted average) 74.5 % 80.8 % Forfeiture rate 12.0 % 12.0 % |
Assumptions Used Estimate Fair Value of Employee Stock Purchase Plans | Following is a schedule of the shares purchased, the fair value per share, and the Black-Scholes model assumptions for each offering period: September March 31, September March 31, Offering Period Ended 2021 2021 2020 2020 Shares purchased for offering period 5,360 4,668 4,184 1,536 Fair value per share $ 1.90 $ 1.25 $ 1.75 $ 2.28 Assumptions Risk-free interest rate (average) 0.05 % 0.12 % 0.29 % 1.84 % Expected dividend yield — — — — Weighted average expected life (years) 0.5 0.5 0.5 0.5 Volatility (average) 44.6 % 47.1 % 86.8 % 86.3 % |
Non-Cash Stock-Based Compensation Expenses | Non-cash stock-based compensation expenses related to stock options, restricted stock grants and the ESPP were recorded in the financial statements as follows (in thousands): Year Ended December 31, 2021 2020 Cost of sales $ 1 $ — Sales and marketing 901 549 Research and development 965 559 General and administrative 2,981 1,956 Total non-cash stock compensation expense $ 4,848 $ 3,064 |
Summary of Outstanding Stock Options and Related Activity | A summary of the Company’s stock options outstanding under the 2015 OEIP and 2005 Plan as of December 31, 2021 and 2020 and the activity during the years ended herein are as follows (in thousands except per share amounts): Shares Weighted Avg. Exercise Price Wtd. Avg. Remaining Contractual Life (Yrs) Aggregate Intrinsic Value Outstanding as of December 31, 2020 205 $ 3.95 Granted 20 $ 5.94 $ - Exercised (21 ) $ 3.12 $ 55 Forfeited (8 ) $ 2.99 $ 20 Expired (2 ) $ 16.28 $ - Outstanding as of December 31, 2021 194 $ 3.95 4.9 $ 218 Vested and expected to vest at December 31, 2021 181 $ 4.03 4.9 $ 211 Exercisable as of December 31, 2021 140 $ 4.04 3.6 $ 163 |
Summary of Outstanding Restricted Stock Awards and Related Activity | A summary of the Company’s restricted stock awards outstanding under the 2015 OEIP and 2005 Plan as of December 31, 2021 and 2020, and the activity during years ended therein, are as follows (in thousands, except weighted average grant date fair value): Weighted Number grant date of shares fair value Unvested at December 31, 2019 1,559 $ 1.98 Granted 1,000 $ 6.40 Vested (857 ) $ 2.99 Canceled and forfeited — $ - Unvested at December 31, 2020 1,702 $ 4.07 Granted 1,287 $ 7.02 Vested (1,027 ) $ 4.47 Canceled and forfeited (295 ) $ 5.60 Unvested at December 31, 2021 1,667 $ 5.83 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Revenues on Disaggregated Basis | Revenues on a disaggregated basis are as follows (in thousands): Year Ended December 31, 2021 2020 License and service fees $ 3,730 $ 3,575 Hosted environment usage fees 13,770 18,209 Cloud based usage fees 38,415 25,973 Consulting services and other 2,507 3,543 Total revenues $ 58,422 $ 51,300 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Summary of Operating Lease Cost | F-28 Operating lease cost consists of the following (in thousands): Year Ended December 31, 2021 2020 Lease cost, gross $ 2,297 $ 2,254 Sublease income (603 ) (603 ) Total lease cost, net $ 1,694 $ 1,651 |
Summary of Operating Lease Assets and Liabilities | Operating lease assets and liabilities are summarized as follows (in thousands): As of December 31, 2021 2020 Right-of-use assets $ 5,710 $ 5,785 Current lease liabilities $ 1,400 $ 1,433 Long-term lease liabilities 4,467 4,805 Total lease liabilities $ 5,867 $ 6,238 |
Summary of Maturity of Operating Lease Liabilities | The maturity of operating lease liabilities is presented in the following table (in thousands): As of December 31, 2021 2022 $ 1,710 2023 1,697 2024 1,533 2025 1,175 2026 487 Total lease payments 6,602 Less imputed interest (735 ) Present value of lease liabilities $ 5,867 |
Segment, Concentration and Ge_2
Segment, Concentration and Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Wireless Revenues by Product Line and Quarterly Revenues Generated by the Wireless Segment | The following table presents the Wireless revenues by product line (in thousands): Year Ended December 31, 2021 2020 CommSuite $ 13,717 $ 18,163 SafePath 40,981 28,027 ViewSpot 3,558 4,239 Netwise 117 151 Other 49 91 Total wireless revenues $ 58,422 $ 50,671 F-29 |
Company Revenue in Different Geographic Locations | Revenues attributed to the geographic location of the customer’s bill-to address were as follows (in thousands): Year Ended December 31, 2021 2020 Americas $ 55,322 $ 49,349 EMEA 3,024 1,930 Asia Pacific 76 21 Total revenues $ 58,422 $ 51,300 |
Organization, Basis of Presen_4
Organization, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Company's Level 3 Financial Liabilities Related to Contingent Consideration (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Acquisition Contingent Consideration [Line Items] | |
Change in fair value of contingent consideration | $ 12,864 |
Purchase Price Allocation [Member] | Level 3 [Member] | |
Business Acquisition Contingent Consideration [Line Items] | |
Contingent consideration | 1,136 |
Change in fair value of contingent consideration | 12,864 |
Contingent consideration payments | $ (14,000) |
Organization, Basis of Presen_5
Organization, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) | Feb. 12, 2020Customer | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Change in fair value of contingent consideration | $ 12,864,000 | ||
Costs capitalized | 0 | ||
Goodwill impairment | 0 | $ 0 | |
Indefinite-lived intangible assets | $ 0 | ||
Circle [Member] | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Number of customer contracts | Customer | 2 | ||
Minimum [Member] | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 3 years | ||
Maximum [Member] | |||
Organization Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Estimated useful lives of the assets | 7 years |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) | Apr. 16, 2021USD ($) | Feb. 12, 2020Customer | Dec. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | |||||
Revenues | $ 58,422,000 | $ 51,300,000 | |||
Cost of revenues | $ 12,698,000 | $ 5,190,000 | |||
Avast PLC Family Safety Mobile Software Business [Member] | |||||
Business Acquisition [Line Items] | |||||
Date of acquisition agreement | Apr. 16, 2021 | ||||
Revenues | $ 19,700,000 | ||||
Cost of revenues | $ 6,200,000 | ||||
Avast PLC Family Safety Mobile Software Business [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Earn-out provision for additional future payments | $ 14,000,000 | ||||
Avast PLC Family Safety Mobile Software Business [Member] | Other Accrued Liabilities [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | 13,700,000 | ||||
Avast PLC Family Safety Mobile Software Business [Member] | Operating Expense [Member] | |||||
Business Acquisition [Line Items] | |||||
Earn-out provision for additional future payments | 12,900,000 | ||||
Avast PLC Family Safety Mobile Software Business [Member] | Purchase Price Allocation [Member] | |||||
Business Acquisition [Line Items] | |||||
Earn-out provision for additional future payments | $ 1,100,000 | ||||
Circle [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of customer contracts | Customer | 2 |
Acquisitions - Summary of Consi
Acquisitions - Summary of Consideration Paid for Acquisitions (Detail) - USD ($) $ in Thousands | Apr. 16, 2021 | Feb. 12, 2020 |
Avast PLC Family Safety Mobile Software Business [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of assets acquired | $ 74,818 | |
Fair value of liabilities assumed | 2,085 | |
Total purchase price | 72,733 | |
Components of purchase price: | ||
Cash | 63,216 | |
Common stock | 8,381 | |
Contingent consideration | 1,136 | |
Total purchase price | $ 72,733 | |
Circle [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of assets acquired | $ 14,966 | |
Fair value of liabilities assumed | 1,466 | |
Total purchase price | 13,500 | |
Components of purchase price: | ||
Cash | 13,500 | |
Total purchase price | $ 13,500 |
Acquisitions - Summary of Alloc
Acquisitions - Summary of Allocation of Purchase Price (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 16, 2021 | Dec. 31, 2020 | Feb. 12, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 35,041 | $ 12,266 | ||
Avast PLC Family Safety Mobile Software Business [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 6,351 | |||
Accounts receivable | 6,225 | |||
Prepaid expenses | 513 | |||
Fixed assets | 921 | |||
Intangible assets | 38,033 | |||
Goodwill | 22,775 | |||
Total assets | 74,818 | |||
Accounts payable | 392 | |||
Accrued payroll and benefits | 1,662 | |||
Accrued expenses | 31 | |||
Total liabilities | 2,085 | |||
Total purchase price | $ 72,733 | |||
Circle [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 10,483 | |||
Goodwill | 4,469 | |||
Total assets | 14,966 | |||
Accounts payable | 176 | |||
Total liabilities | 1,466 | |||
Total purchase price | 13,500 | |||
Inventory, net | 14 | |||
Deferred revenue | $ 1,290 |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Proforma Results of Operation (Detail) - Avast PLC Family Safety Mobile Software Business [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||
Revenues | $ 67,654 | $ 87,908 |
Net (loss) income | $ (16,304) | $ 4,046 |
Earnings per share: | ||
Basic | $ (0.30) | $ 0.08 |
Diluted | $ (0.30) | $ 0.08 |
Equipment and Improvements - Su
Equipment and Improvements - Summary of Equipment and Improvements (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Gross, Total | $ 14,725 | $ 13,511 |
Less accumulated depreciation and amortization | (12,027) | (11,341) |
Equipment and improvements, net | 2,698 | 2,170 |
Computer Hardware, Software, and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross, Total | 10,531 | 9,814 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross, Total | 3,378 | 2,959 |
Office Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross, Total | 803 | 714 |
Construction In Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gross, Total | $ 13 | $ 24 |
Equipment and Improvements - Ad
Equipment and Improvements - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expense on equipment and improvements | $ 1.2 | $ 0.7 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Acquired Intangible Assets by Major Asset Class (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 17,665 | $ 6,582 |
Additions | 38,033 | 11,083 |
Accumulated amortization | (11,602) | (4,556) |
Net book value before impairment | 44,096 | 13,109 |
Impairment charges | (1,465) | (411) |
Net book value | 42,631 | 12,698 |
Purchased Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 5,400 | 2,518 |
Additions | 8,129 | 2,882 |
Accumulated amortization | (3,764) | (1,612) |
Net book value before impairment | 9,765 | 3,788 |
Net book value | 9,765 | 3,788 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 3,975 | 3,975 |
Additions | 23,985 | |
Accumulated amortization | (2,816) | (1,158) |
Net book value before impairment | 25,144 | 2,817 |
Impairment charges | (411) | |
Net book value | $ 25,144 | $ 2,406 |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 6 years | 6 years |
Gross | $ 7,000 | |
Additions | $ 7,000 | |
Accumulated amortization | (2,976) | (1,242) |
Net book value before impairment | 4,024 | 5,758 |
Impairment charges | (1,465) | |
Net book value | $ 2,559 | $ 5,758 |
Software License [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | |
Additions | $ 5,419 | |
Accumulated amortization | (793) | |
Net book value before impairment | 4,626 | |
Net book value | $ 4,626 | |
Trademarks/Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 2 years | 2 years |
Gross | $ 38 | $ 38 |
Accumulated amortization | $ (38) | $ (38) |
Non-Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | 3 years |
Gross | $ 283 | $ 51 |
Additions | 232 | |
Accumulated amortization | (196) | (119) |
Net book value before impairment | 87 | 164 |
Net book value | 87 | $ 164 |
Support Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 1 year | |
Gross | 369 | |
Additions | 500 | $ 369 |
Accumulated amortization | $ (869) | (323) |
Net book value before impairment | 46 | |
Net book value | $ 46 | |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 7 years | 7 years |
Gross | $ 600 | |
Additions | $ 600 | |
Accumulated amortization | (150) | (64) |
Net book value before impairment | 450 | 536 |
Net book value | $ 450 | $ 536 |
Minimum [Member] | Purchased Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 4 years | 4 years |
Minimum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 3 years | 3 years |
Minimum [Member] | Support Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 6 months | |
Maximum [Member] | Purchased Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 8 years | 8 years |
Maximum [Member] | Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 10 years | 10 years |
Maximum [Member] | Support Agreement [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 1 year |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | ||
Amortization of intangible assets | $ 8,100,000 | $ 2,920,000 |
Impairment charge within "amortization of intangible assets" | 1,465,000 | 411,000 |
Impairment of goodwill | 0 | $ 0 |
Circle [Member] | ||
Goodwill [Line Items] | ||
Amortization of intangible assets | $ 300,000 | |
Contract termination date | Apr. 15, 2021 | |
Deferred revenue, recognized | $ 600,000 | |
Impairment charge within "amortization of intangible assets" | 1,500,000 | |
Finite lived intangible assets remaining amortization | $ 400,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Finite Lived Intangible Assets Net [Abstract] | ||
2022 | $ 6,311 | |
2023 | 5,874 | |
2024 | 5,635 | |
2025 | 5,402 | |
2026 | 5,007 | |
thereafter | 14,402 | |
Total | $ 42,631 | $ 12,698 |
Equity Transactions - Additiona
Equity Transactions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 15, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Class Of Stock [Line Items] | |||
Purchase price | $ 59,711 | ||
Warrant outstanding | 2,000,000 | 3,700,000 | |
Minimum [Member] | |||
Class Of Stock [Line Items] | |||
Common stock exercise price | $ 1.16 | $ 1.16 | |
Warrant Expiry Year | 2022 | 2022 | |
Maximum [Member] | |||
Class Of Stock [Line Items] | |||
Common stock exercise price | $ 2.38 | $ 2.38 | |
Warrant Expiry Year | 2023 | 2023 | |
IPO [Member] | |||
Class Of Stock [Line Items] | |||
Proceeds from initial public offering | $ 59,700 | ||
IPO [Member] | Common Stock [Member] | |||
Class Of Stock [Line Items] | |||
Number of common shares issued | 9,520,787 | ||
Shares issued, price per share | $ 6.85 | ||
Purchase price | $ 65,200 |
Income Taxes - Schedule of (Los
Income Taxes - Schedule of (Loss) Income before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (31,301) | $ 4,213 |
Foreign | 473 | 112 |
(Loss) income before provision for income taxes | $ (30,828) | $ 4,325 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ (133) | |
State | $ 5 | 6 |
Foreign | 152 | 134 |
Total current | 157 | 7 |
Deferred: | ||
Federal | 24 | 155 |
State | 35 | 24 |
Foreign | (1) | (26) |
Total deferred | 58 | 153 |
Total income tax expense | $ 215 | $ 160 |
Income Taxes - Federal Statutor
Income Taxes - Federal Statutory Rate to Loss Before Income Taxes (Detail) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
State tax, net of federal benefit | 4.30% | 2.70% |
Equity compensation | 0.40% | (1.80%) |
International tax items | 0.10% | (0.10%) |
Foreign taxes | (0.50%) | 2.50% |
State NOL true-up | 1.20% | 2.50% |
Miscellaneous | (0.40%) | 1.30% |
Effect of change in rate | 0.80% | 3.50% |
Change in valuation allowance | (27.60%) | (27.90%) |
Total | (0.70%) | 3.70% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred income tax assets | ||
Net operating loss carry forwards | $ 47,204 | $ 42,127 |
Credit carry forwards | 3,027 | 3,027 |
Fixed assets | 84 | 116 |
Intangibles | 6,259 | 3,346 |
Equity-based compensation | 208 | 343 |
Nondeductible accruals | 532 | 365 |
Various reserves | 23 | |
Deferred rent | 33 | 94 |
Other | 7 | 2 |
Valuation allowance | (57,346) | (49,405) |
Total deferred income taxes - net | 8 | 38 |
Deferred income tax liabilities | ||
Foreign intangibles | (1) | |
Unrealized translation gain/loss | (45) | 3 |
Prepaid expenses | (80) | (99) |
Total deferred income liabilities | (125) | (97) |
Net deferred income tax (liabilities) | $ (117) | $ (59) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards, Expire year | 2028 | ||
Unrecognized tax benefits | $ 412,000 | $ 428,000 | $ 428,000 |
Cumulative loss period | 3 years | ||
Valuation allowance | $ 57,346,000 | 49,405,000 | |
Increase (decrease) in valuation allowance of deferred tax assets | (7,900,000) | (1,000,000) | |
Interest and penalties | 0 | 0 | |
Cumulative interest and penalties | 0 | 0 | |
Outstanding tax audit | 0 | ||
Income before provision for income taxes for foreign subsidiaries | 473,000 | 112,000 | |
Income related to GILTI | $ 300,000 | ||
Federal [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 180,300,000 | ||
Net operating loss carryforwards, expiry terms | Federal NOL carryforwards will expire from 2024 through 2037 | ||
Tax credit carryforwards | $ 2,500,000 | ||
State [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 148,600,000 | ||
Net operating loss carryforwards, expiry terms | State NOL carryforwards will expire 2018 through 2041 | ||
Tax credit carryforwards | $ 700,000 | ||
Federal income tax returns subject to examination description | The Company is no longer subject to examination for U.S. federal income tax returns for years before December 31, 2018 and for state income tax returns, the Company is no longer subject to examination for years before December 31, 2017 |
Income Taxes - Gross Unrecogniz
Income Taxes - Gross Unrecognized Tax Benefits Changes in Balances (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Income Tax Disclosure [Abstract] | |
Beginning balance | $ 428 |
Other | (16) |
Gross unrecognized tax benefits, ending balance | $ 412 |
Earnings Per Share - Details of
Earnings Per Share - Details of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net (loss) income | $ (31,043) | $ 4,165 |
Denominator: | ||
Weighted average shares outstanding - basic | 51,232 | 40,808 |
Potential common shares - options (treasury stock method) | 1,956 | |
Weighted average shares outstanding - diluted | 51,232 | 42,764 |
Shares excluded (anti-dilutive) | 1,324 | 98 |
Net (loss) earnings per common share: | ||
Basic and diluted | $ (0.61) | $ 0.10 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | ||
Employers matching contribution percentage to 401(k) plan | 20.00% | |
Total employer contributions to 401(k) plan | $ 0.4 | $ 0.2 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Jun. 18, 2015 | |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Maximum number of shares available for issuance under plan | 250,000 | |
Percentage of market value | 85.00% | |
Percentage of employee's payroll deductions limited to employee's compensation | 10.00% | |
Maximum Stock value of shares purchased by employees if one thousand shares purchased | $ 25,000 | |
Maximum number of shares that employee can purchase each period | 250 | |
2015 Omnibus Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
1995 Stock option expiry date | Jul. 28, 2015 | |
Maximum number of shares available for issuance under plan | 9,625,000 | |
Unrecognized compensation costs related to non-vested awards granted | $ 9,000,000 | |
Number of shares available for future grants | 3,800,000 | |
2015 Omnibus Equity Incentive Plan [Member] | Full Value Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award settled against shares | 1.2 | |
2015 Omnibus Equity Incentive Plan [Member] | Partial Value Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award settled against shares | 1 | |
2015 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock vesting period | 4 years | |
Stock option expiration period | 10 years | |
2015 Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock vesting period | 48 months | |
Vested stock options exercised period following termination | 90 days | |
2015 Plan [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock vesting period | 12 months | |
2005 Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs related to non-vested awards granted | $ 9,000,000 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used to Compute Share-Based Compensation Costs for Stock Options Granted (Detail) - $ / shares | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||
Weighted average grant date fair value of stock options | $ 5.94 | $ 2.93 | ||||
Assumptions | ||||||
Risk-free interest rate (weighted average) | 0.05% | 0.12% | 0.29% | 1.84% | 0.87% | 0.44% |
Weighted average expected life (years) | 6 months | 6 months | 6 months | 6 months | 6 years 2 months 12 days | 6 years 2 months 12 days |
Volatility (weighted average) | 44.60% | 47.10% | 86.80% | 86.30% | 74.50% | 80.80% |
Forfeiture rate | 12.00% | 12.00% |
Stock-Based Compensation - As_2
Stock-Based Compensation - Assumptions Used Estimate Fair Value of Employee Stock Purchase Plans (Detail) - $ / shares shares in Thousands | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||
Shares purchased for offering period | 5,360 | 4,668 | 4,184 | 1,536 | ||
Fair value per share | $ 1.90 | $ 1.25 | $ 1.75 | $ 2.28 | ||
Assumptions | ||||||
Risk-free interest rate (average) | 0.05% | 0.12% | 0.29% | 1.84% | 0.87% | 0.44% |
Weighted average expected life (years) | 6 months | 6 months | 6 months | 6 months | 6 years 2 months 12 days | 6 years 2 months 12 days |
Volatility (average) | 44.60% | 47.10% | 86.80% | 86.30% | 74.50% | 80.80% |
Stock-Based Compensation - Non-
Stock-Based Compensation - Non-Cash Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total non-cash stock compensation expense | $ 4,848 | $ 3,064 |
Cost of Sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total non-cash stock compensation expense | 1 | |
Sales and Marketing [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total non-cash stock compensation expense | 901 | 549 |
Research and Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total non-cash stock compensation expense | 965 | 559 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total non-cash stock compensation expense | $ 2,981 | $ 1,956 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Outstanding Stock Options and Related Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Outstanding Shares, beginning balance | shares | 205 |
Granted Shares | shares | 20 |
Exercised Shares | shares | (21) |
Forfeited Shares | shares | (8) |
Expired Shares | shares | (2) |
Outstanding Shares, ending balance | shares | 194 |
Vested and expected to vest Shares | shares | 181 |
Exercisable Shares | shares | 140 |
Outstanding Weighted Avg. Exercise Price, beginning balance | $ / shares | $ 3.95 |
Granted, Weighted Avg. Exercise Price | $ / shares | 5.94 |
Exercised, Weighted Avg. Exercise Price | $ / shares | 3.12 |
Forfeited, Weighted Avg. Exercise Price | $ / shares | 2.99 |
Expired, Weighted Avg. Exercise Price | $ / shares | 16.28 |
Outstanding Weighted Avg. Exercise Price, ending balance | $ / shares | 3.95 |
Vested and expected to vest, Weighted Avg. Exercise Price | $ / shares | 4.03 |
Exercisable, Weighted Avg. Exercise Price | $ / shares | $ 4.04 |
Outstanding Wtd. Avg. Remaining Contractual Life | 4 years 10 months 24 days |
Vested and expected to vest, Wtd. Avg. Remaining Contractual Life | 4 years 10 months 24 days |
Exercisable, Wtd. Avg. Remaining Contractual Life | 3 years 7 months 6 days |
Aggregate Intrinsic Value, Exercised | $ | $ 55 |
Aggregate Intrinsic Value, Forfeited | $ | 20 |
Aggregate Intrinsic Value, ending balance | $ | 218 |
Vested and expected to vest, Aggregate Intrinsic Value | $ | 211 |
Exercisable, Aggregate Intrinsic Value | $ | $ 163 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Outstanding Restricted Stock Awards and Related Activity (Detail) - Restricted Stock [Member] - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, beginning balance | 1,702 | 1,559 |
Number of shares, Granted | 1,287 | 1,000 |
Number of shares, Vested | (1,027) | (857) |
Number of shares, Canceled and forfeited | (295) | |
Number of shares, ending balance | 1,667 | 1,702 |
Weighted average grant date fair value, beginning balance | $ 4.07 | $ 1.98 |
Weighted average grant date fair value, Granted | 7.02 | 6.40 |
Weighted average grant date fair value, Vested | 4.47 | 2.99 |
Number of shares, Canceled and forfeited | 5.60 | |
Weighted average grant date fair value, ending balance | $ 5.83 | $ 4.07 |
Revenues - Additional Informati
Revenues - Additional Information (Detail) $ in Thousands | Feb. 12, 2020Customer | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Disaggregation Of Revenue [Line Items] | |||
Deferred revenue | $ 176 | $ 1,572 | |
Amortization of intangible assets | 8,100 | 2,920 | |
Impairment charge within "amortization of intangible assets" | 1,465 | 411 | |
Circle [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Number of customer contracts | Customer | 2 | ||
Deferred revenue | $ 100 | $ 1,500 | |
Contract termination date | Apr. 15, 2021 | ||
Deferred revenue, recognized | $ 600 | ||
Amortization of intangible assets | 300 | ||
Impairment charge within "amortization of intangible assets" | 1,500 | ||
Finite lived intangible assets remaining amortization | 400 | ||
Circle [Member] | Selling and Marketing Expense [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Impairment charge within "amortization of intangible assets" | $ 1,500 |
Revenues - Schedule of Revenues
Revenues - Schedule of Revenues on Disaggregated Basis (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 58,422 | $ 51,300 |
Wireless [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 58,422 | 50,671 |
Wireless [Member] | License and Service Fees [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 3,730 | 3,575 |
Wireless [Member] | Hosted Environment Usage Fees [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 13,770 | 18,209 |
Wireless [Member] | Cloud Based Usage Fees [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | 38,415 | 25,973 |
Wireless [Member] | Consulting Services and Other [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues | $ 2,507 | $ 3,543 |
Leases - Additional Information
Leases - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Operating lease description | The Company leases office space and equipment, and certain office space is subleased. Management determines if a contract is a lease at the inception of the arrangement and reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. |
Leases - Summary of Operating L
Leases - Summary of Operating Lease Cost (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lease Cost [Abstract] | ||
Lease cost, gross | $ 2,297 | $ 2,254 |
Sublease income | (603) | (603) |
Total lease cost, net | $ 1,694 | $ 1,651 |
Leases - Summary of Operating_2
Leases - Summary of Operating Lease Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets And Liabilities Lessee [Abstract] | ||
Right-of-use assets | $ 5,710 | $ 5,785 |
Current lease liabilities | 1,400 | 1,433 |
Long-term lease liabilities | 4,467 | 4,805 |
Total lease liabilities | $ 5,867 | $ 6,238 |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Lease Liabilities Payments Due [Abstract] | ||
2022 | $ 1,710 | |
2023 | 1,697 | |
2024 | 1,533 | |
2025 | 1,175 | |
2026 | 487 | |
Total lease payments | 6,602 | |
Less imputed interest | (735) | |
Present value of lease liabilities | $ 5,867 | $ 6,238 |
Segment, Concentration and Ge_3
Segment, Concentration and Geographical Information - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2021CustomerBusiness_UnitServiceProviderLocation | Dec. 31, 2020CustomerServiceProviderLocation | |
Revenue, Major Customer [Line Items] | ||
Number of primary business units | Business_Unit | 1 | |
Number of customers concentrated | Customer | 2 | 1 |
Number of service providers concentrated | ServiceProvider | 2 | 1 |
Number of geographic locations | Location | 3 | 3 |
Customer Concentration Risk [Member] | Revenues [Member] | Minimum [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 10.00% | 10.00% |
Customer Concentration Risk [Member] | Revenues [Member] | Customer One [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 56.00% | |
Customer Concentration Risk [Member] | Revenues [Member] | Customer Two [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 24.00% | |
Customer Concentration Risk [Member] | Revenues [Member] | One Customer [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 81.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 42.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 27.00% | |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 91.00% | |
Supplier concentration risk [Member] | Purchase [Member] | Minimum [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 10.00% | 10.00% |
Supplier concentration risk [Member] | Service Provider One [Member] | Purchase [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 36.00% | |
Supplier concentration risk [Member] | Service Provider One [Member] | Accounts payable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 15.00% | |
Supplier concentration risk [Member] | Service Provider Two [Member] | Purchase [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 13.00% | |
Supplier concentration risk [Member] | Service Provider Two [Member] | Accounts payable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 0.00% | |
Supplier concentration risk [Member] | Service Provider [Member] | Accounts payable [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration percentage | 10.00% |
Segment, Concentration and Ge_4
Segment, Concentration and Geographical Information - Wireless Revenues by Product Line (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | ||
Total revenues | $ 58,422 | $ 51,300 |
Wireless [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 58,422 | 50,671 |
Wireless [Member] | CommSuite [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 13,717 | 18,163 |
Wireless [Member] | SafePath [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 40,981 | 28,027 |
Wireless [Member] | ViewSpot [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 3,558 | 4,239 |
Wireless [Member] | Netwise [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 117 | 151 |
Wireless [Member] | Other [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | $ 49 | $ 91 |
Segment, Concentration and Ge_5
Segment, Concentration and Geographical Information - Company Revenue in Different Geographic Locations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue from External Customer [Line Items] | ||
Total revenues | $ 58,422 | $ 51,300 |
Americas [Member] | Reportable Geographical Components [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 55,322 | 49,349 |
EMEA [Member] | Reportable Geographical Components [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | 3,024 | 1,930 |
Asia Pacific [Member] | Reportable Geographical Components [Member] | ||
Revenue from External Customer [Line Items] | ||
Total revenues | $ 76 | $ 21 |
Gain on Sale of Software Prod_2
Gain on Sale of Software Products - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
Income Statement Balance Sheet and Additional Disclosures by Disposal Groups Including Discontinued Operations [Line Items] | ||
Gain on sale of software products | $ 711 | |
Asset Purchase Agreement [Member] | Moho and Motion Artist Animation Software Product [Member] | Lost Marble LLC [Member] | ||
Income Statement Balance Sheet and Additional Disclosures by Disposal Groups Including Discontinued Operations [Line Items] | ||
Gain on sale of software products | $ 700 |