x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New Jersey
(State or other jurisdiction of incorporation or organization)
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22-2746503
(I.R.S. Employer Identification No.)
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2015 W. Chestnut Street, Alhambra, California, 91803
(Address of principal executive offices) (Zip Code)
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Page
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For the three months ended December 31,
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||||||
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2017
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|
2016
|
|
||||
Revenue
|
$
|
24,036
|
|
|
$
|
30,176
|
|
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Cost of revenue
|
16,122
|
|
|
20,133
|
|
|
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Gross profit
|
7,914
|
|
|
10,043
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|
|
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Operating expense:
|
|
|
|
|
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Selling, general, and administrative
|
4,819
|
|
|
5,578
|
|
|
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Research and development
|
3,800
|
|
|
2,199
|
|
|
||
Loss on sale of assets
|
107
|
|
|
—
|
|
|
||
Total operating expense
|
8,726
|
|
|
7,777
|
|
|
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Operating (loss) income
|
(812
|
)
|
|
2,266
|
|
|
||
Other income (expense):
|
|
|
|
|
||||
Interest income, net
|
111
|
|
|
23
|
|
|
||
Foreign exchange gain (loss)
|
286
|
|
|
(403
|
)
|
|
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Total other income (expense)
|
397
|
|
|
(380
|
)
|
|
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(Loss) income from continuing operations before income tax benefit (expense)
|
(415
|
)
|
|
1,886
|
|
|
||
Income tax benefit (expense)
|
333
|
|
|
(120
|
)
|
|
||
(Loss) income from continuing operations
|
(82
|
)
|
|
1,766
|
|
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
(9
|
)
|
|
||
Net (loss) income
|
$
|
(82
|
)
|
|
$
|
1,757
|
|
|
Foreign exchange translation adjustment
|
253
|
|
|
(260
|
)
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|
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Comprehensive income
|
$
|
171
|
|
|
$
|
1,497
|
|
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Per share data:
|
|
|
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|
|
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Net (loss) income per basic share:
|
|
|
|
|
|
|
||
Continuing operations
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
|
Discontinued operations
|
—
|
|
|
(0.00
|
)
|
|
||
Net (loss) income per basic share
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
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Net (loss) income per diluted share:
|
|
|
|
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Continuing operations
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
|
Discontinued operations
|
—
|
|
|
(0.00
|
)
|
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Net (loss) income per diluted share
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$
|
(0.00
|
)
|
|
$
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0.07
|
|
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Weighted-average number of basic shares outstanding
|
27,032
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|
|
26,279
|
|
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Weighted-average number of diluted shares outstanding
|
27,032
|
|
|
27,039
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|
|
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As of
|
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As of
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||||
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December 31,
2017 |
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September 30,
2017 |
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ASSETS
|
|
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Current assets:
|
|
|
|
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Cash and cash equivalents
|
$
|
64,200
|
|
|
$
|
68,333
|
|
Restricted cash
|
33
|
|
|
421
|
|
||
Accounts receivable, net of allowance of $39 and $22, respectively
|
23,130
|
|
|
22,265
|
|
||
Inventory
|
23,401
|
|
|
25,139
|
|
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Prepaid expenses and other current assets
|
8,461
|
|
|
8,527
|
|
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Total current assets
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119,225
|
|
|
124,685
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Property, plant, and equipment, net
|
17,157
|
|
|
16,635
|
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Non-current inventory
|
2,510
|
|
|
2,686
|
|
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Other non-current assets
|
576
|
|
|
78
|
|
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Total assets
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$
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139,468
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|
|
$
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144,084
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LIABILITIES and SHAREHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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7,414
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$
|
11,818
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Accrued expenses and other current liabilities
|
9,206
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|
|
9,825
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Total current liabilities
|
16,620
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|
|
21,643
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|
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Asset retirement obligations
|
1,655
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|
|
1,638
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Other long-term liabilities
|
42
|
|
|
29
|
|
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Total liabilities
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18,317
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|
|
23,310
|
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Commitments and contingencies (Note 11)
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|
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|
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Shareholders’ equity:
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|
|
|
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Preferred stock, $0.0001 par value, 5,882 shares authorized; none issued or outstanding
|
—
|
|
|
—
|
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Common stock, no par value, 50,000 shares authorized; 34,062 shares issued and 27,152 shares outstanding as of December 31, 2017; 33,938 shares issued and 27,028 shares outstanding as of September 30, 2017
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731,112
|
|
|
730,906
|
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Treasury stock at cost; 6,910 shares
|
(47,721
|
)
|
|
(47,721
|
)
|
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Accumulated other comprehensive income
|
814
|
|
|
561
|
|
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Accumulated deficit
|
(563,054
|
)
|
|
(562,972
|
)
|
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Total shareholders’ equity
|
121,151
|
|
|
120,774
|
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Total liabilities and shareholders’ equity
|
$
|
139,468
|
|
|
$
|
144,084
|
|
|
For the three months ended December 31,
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||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
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Net (loss) income
|
$
|
(82
|
)
|
|
$
|
1,757
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
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Depreciation and accretion expense
|
1,202
|
|
|
758
|
|
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Stock-based compensation expense
|
915
|
|
|
772
|
|
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Provision adjustments related to doubtful accounts
|
17
|
|
|
—
|
|
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Provision adjustments related to product warranty
|
58
|
|
|
88
|
|
||
Net loss on disposal of equipment
|
107
|
|
|
—
|
|
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Other
|
(132
|
)
|
|
—
|
|
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Total non-cash adjustments
|
2,167
|
|
|
1,618
|
|
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Changes in operating assets and liabilities:
|
|
|
|
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Accounts receivable
|
(883
|
)
|
|
(2,645
|
)
|
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Inventory
|
2,169
|
|
|
(4,549
|
)
|
||
Other assets
|
(277
|
)
|
|
149
|
|
||
Accounts payable
|
(4,322
|
)
|
|
4,824
|
|
||
Accrued expenses and other current liabilities
|
(727
|
)
|
|
(495
|
)
|
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Total change in operating assets and liabilities
|
(4,040
|
)
|
|
(2,716
|
)
|
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Net cash (used in) provided by operating activities
|
(1,955
|
)
|
|
659
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of equipment
|
(1,881
|
)
|
|
(3,242
|
)
|
||
Proceeds from disposal of property, plant and equipment
|
8
|
|
|
—
|
|
||
Net cash used in investing activities
|
(1,873
|
)
|
|
(3,242
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from stock plans
|
16
|
|
|
104
|
|
||
Tax withholding paid on behalf of employees for stock-based awards
|
(724
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
(708
|
)
|
|
104
|
|
||
Effect of exchange rate changes on foreign currency
|
15
|
|
|
352
|
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(4,521
|
)
|
|
(2,127
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
68,754
|
|
|
64,870
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
64,233
|
|
|
$
|
62,743
|
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
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Cash paid during the period for interest
|
$
|
16
|
|
|
$
|
20
|
|
Cash paid during the period for income taxes
|
$
|
33
|
|
|
$
|
2
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES
|
|
|
|
||||
Changes in accounts payable related to purchases of equipment
|
$
|
(176
|
)
|
|
$
|
(455
|
)
|
NOTE 1.
|
Description of Business
|
NOTE 2.
|
Recent Accounting Pronouncements and U.S. Tax Reform
|
•
|
In May 2017, the
Financial Accounting Standards Board (“FASB”)
issued
Accounting Standards Update (“ASU”)
2017-09,
Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting
. ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance is intended to reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as a modification. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The new guidance is effective for annual periods, beginning after December 15, 2017 and interim periods within those annual periods. The Company does not expect the adoption of ASU 2017-09 will have a material impact on the Company’s consolidated financial statements.
|
•
|
I
n February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842)
. ASU 2016-02 introduces a lessee model that requires recognition of assets and liabilities arising from qualified leases on the consolidated balance sheets and disclosure of qualitative and quantitative information about lease transactions. This guidance is effective for fiscal years beginning after December 15, 2018 and interim periods within those years. The new standard will be effective for our fiscal year beginning October 1, 2019 and early adoption is permitted.
|
•
|
In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330):
Simplifying the Measurement of Inventory
. This standard requires inventory to be measured at the lower of cost and net realizable value. The guidance clarifies that net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance was effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. The new standard was effective for our fiscal year beginning October 1, 2017, but there was no significant impact on our condensed consolidated financial statements.
|
•
|
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers
which
will supersede most current U.S. GAAP guidance on this topic.
I
n April 2016, the FASB issued ASU No. 2016-10
,
R
evenue from Contracts
with Customers (Topic 606): Identifying Performance Obligations and Licensing
to
clarify two aspects of the guidance within ASU No. 2014-09 on identifying performance obligations and the licensing implementation guidance. Under the new standards, recognition of revenue occurs when the seller satisfies a performance obligation by transferring to the customer promised goods or services in an amount that reflects the consideration the entity expects to receive for those goods or services. The new standard, as amended through December 2016, will be effective for our fiscal year beginning October 1, 2018 and early adoption is permitted as of October 1, 2017. The standard permits the use of either the full retrospective or modified retrospective method. We have established a cross-functional coordinated implementation team to implement ASU 2014-09. We are in the process of identifying and implementing changes to our systems, processes and internal controls to meet the reporting and disclosure requirements.
|
•
|
On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act significantly revises the future ongoing U.S. corporate income tax by, among other things, lowering U. S. corporate income tax rates and implementing a territorial tax system. As the Company has a September 30 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately
25%
for our fiscal year ending September 30, 2018, and
21%
for subsequent fiscal years. However, the Tax Act provides for a credit for historical Alternative Minimum Taxes (“AMT”) paid against future taxes. As a result, the Company has taken a tax benefit of
$0.5 million
in the three months ended
December 31, 2017
for historical AMT payments. In addition, the Tax Act eliminates the domestic manufacturing deduction and moves to a territorial system, which also eliminates the ability to credit certain foreign taxes that existed prior to enactment of the Tax Act. For the three months ended
December 31, 2017
, the elimination of the manufacturing deduction and credit for certain foreign taxes paid did not result in a significant impact on our financial statements.
|
NOTE 3.
|
Cash, Cash Equivalents and Restricted Cash
|
|
As of
|
|
As of
|
|
As of
|
||||||
(in thousands)
|
December 31, 2017
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||
Cash
|
$
|
3,769
|
|
|
$
|
8,054
|
|
|
$
|
2,215
|
|
Cash equivalents
|
$
|
60,431
|
|
|
$
|
60,279
|
|
|
$
|
59,966
|
|
Restricted cash
|
33
|
|
|
421
|
|
|
562
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
64,233
|
|
|
68,754
|
|
|
62,743
|
|
NOTE 4.
|
Fair Value Accounting
|
•
|
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly, through market corroboration, for substantially the full term of the financial instrument.
|
•
|
Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets or liabilities at fair value.
|
NOTE 5.
|
Accounts Receivable
|
|
|
As of
|
|
As of
|
||||
(in thousands)
|
|
December 31, 2017
|
|
September 30, 2017
|
||||
Accounts receivable, gross
|
|
$
|
23,169
|
|
|
$
|
22,287
|
|
Allowance for doubtful accounts
|
|
(39
|
)
|
|
(22
|
)
|
||
Accounts receivable, net
|
|
$
|
23,130
|
|
|
$
|
22,265
|
|
Allowance for Doubtful Accounts
(in thousands)
|
|
For the three months ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
|
$
|
22
|
|
|
$
|
36
|
|
Provision adjustment - expense, net of recoveries
|
|
17
|
|
|
—
|
|
||
Write-offs and other adjustments - deductions to receivable balances
|
|
—
|
|
|
(3
|
)
|
||
Balance at end of period
|
|
$
|
39
|
|
|
$
|
33
|
|
NOTE 6.
|
Inventory
|
|
As of
|
|
As of
|
||||
(in thousands)
|
December 31, 2017
|
|
September 30, 2017
|
||||
Raw materials
|
$
|
13,663
|
|
|
$
|
15,826
|
|
Work in-process
|
6,015
|
|
|
6,586
|
|
||
Finished goods
|
6,233
|
|
|
5,413
|
|
||
Inventory balance at end of period
|
$
|
25,911
|
|
|
$
|
27,825
|
|
Current portion
|
$
|
23,401
|
|
|
$
|
25,139
|
|
Non-Current portion
|
$
|
2,510
|
|
|
$
|
2,686
|
|
NOTE 7.
|
Property, Plant, and Equipment, net
|
|
As of
|
|
As of
|
||||
(in thousands)
|
December 31, 2017
|
|
September 30, 2017
|
||||
Equipment
|
$
|
31,622
|
|
|
$
|
31,507
|
|
Furniture and fixtures
|
1,109
|
|
|
1,109
|
|
||
Computer hardware and software
|
2,927
|
|
|
2,974
|
|
||
Leasehold improvements
|
2,444
|
|
|
2,330
|
|
||
Construction in progress
|
4,339
|
|
|
4,539
|
|
||
Property, plant, and equipment, gross
|
$
|
42,441
|
|
|
42,459
|
|
|
Accumulated depreciation
|
(25,284
|
)
|
|
(25,824
|
)
|
||
Property, plant, and equipment, net
|
$
|
17,157
|
|
|
$
|
16,635
|
|
NOTE 8.
|
Accrued Expenses and Other Current Liabilities
|
|
As of
|
|
As of
|
||||
(in thousands)
|
December 31, 2017
|
|
September 30, 2017
|
||||
Compensation
|
$
|
2,537
|
|
|
$
|
3,904
|
|
Warranty
|
713
|
|
|
684
|
|
||
Professional fees
|
395
|
|
|
653
|
|
||
Customer deposits
|
16
|
|
|
20
|
|
||
Income and other taxes
|
4,309
|
|
|
2,920
|
|
||
Severance and restructuring accruals
|
488
|
|
|
628
|
|
||
Other
|
748
|
|
|
1,016
|
|
||
Accrued expenses and other current liabilities
|
$
|
9,206
|
|
|
$
|
9,825
|
|
(in thousands)
|
Severance-related accruals
|
||
Balance as of September 30, 2017
|
$
|
628
|
|
Expense - charged to accrual
|
41
|
|
|
Payments and accrual adjustments
|
(181
|
)
|
|
Balance as of December 31, 2017
|
$
|
488
|
|
Product Warranty Accruals
|
For the three months ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
684
|
|
|
$
|
871
|
|
Provision for product warranty - expense
|
58
|
|
|
88
|
|
||
Adjustments and utilization of warranty accrual
|
(29
|
)
|
|
(168
|
)
|
||
Balance at end of period
|
$
|
713
|
|
|
$
|
791
|
|
NOTE 9.
|
Credit Facilities
|
NOTE 10.
|
Income and other Taxes
|
NOTE 11.
|
Commitments and Contingencies
|
NOTE 12.
|
Equity
|
•
|
the 2000 Stock Option Plan,
|
•
|
the 2010 Equity Incentive Plan (“2010 Plan”), and
|
•
|
the 2012 Equity Incentive Plan (“2012 Plan”).
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|
Weighted Average
Remaining Contractual Life
(in years)
|
|
Aggregate Intrinsic Value (*) (in thousands)
|
||||
Outstanding as of September 30, 2017
|
326,798
|
|
|
$19.54
|
|
|
|
|
|||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
||
Exercised
|
(3,479
|
)
|
|
$4.50
|
|
|
|
$
|
13
|
|
|
Forfeited
|
(780
|
)
|
|
$4.22
|
|
|
|
|
|||
Expired
|
(12,941
|
)
|
|
$27.59
|
|
|
|
|
|||
Outstanding as of December 31, 2017
|
309,598
|
|
|
$19.41
|
|
1.70
|
|
$
|
143
|
|
|
Exercisable as of December 31, 2017
|
267,946
|
|
|
$21.71
|
|
0.76
|
|
$
|
67
|
|
|
Vested and expected to vest as of December 31, 2017
|
309,598
|
|
|
$19.41
|
|
1.70
|
|
$
|
143
|
|
Restricted Stock Activity
|
|
Restricted Stock Units
|
|
Restricted Stock Awards
|
||||||
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Non-vested as of September 30, 2017
|
|
778,084
|
|
|
$5.91
|
|
8,154
|
|
|
$8.20
|
Granted
|
|
224,600
|
|
|
$6.73
|
|
—
|
|
|
$0.00
|
Vested
|
|
(40,095
|
)
|
|
$7.09
|
|
—
|
|
|
$0.00
|
Forfeited
|
|
(7,580
|
)
|
|
$4.02
|
|
—
|
|
|
$0.00
|
Non-vested as of December 31, 2017
|
|
955,009
|
|
|
$6.07
|
|
8,154
|
|
|
$8.20
|
Performance Stock Activity
|
|
Performance Stock Units
|
|
Performance Stock Awards
|
||||||
|
Number of Shares (at Target)
|
|
Weighted Average Grant Date Fair Value
|
|
Number of Shares (at Target)
|
|
Weighted Average Grant Date Fair Value
|
|||
Non-vested as of September 30, 2017
|
|
328,708
|
|
|
$8.36
|
|
33,333
|
|
|
$12.25
|
Granted
|
|
240,164
|
|
|
$7.62
|
|
—
|
|
|
$0.00
|
Vested
|
|
(166,058
|
)
|
|
$6.86
|
|
—
|
|
|
$0.00
|
Non-vested as of December 31, 2017
|
|
402,814
|
|
|
$8.54
|
|
33,333
|
|
|
$12.25
|
Stock-based Compensation Expense - by award type
|
For the three months ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Employee stock options
|
$
|
10
|
|
|
$
|
11
|
|
Restricted stock units and awards
|
451
|
|
|
354
|
|
||
Performance stock units and awards
|
289
|
|
|
268
|
|
||
Employee stock purchase plan
|
86
|
|
|
52
|
|
||
Outside director fees in common stock
|
79
|
|
|
78
|
|
||
Total stock-based compensation expense
|
$
|
915
|
|
|
$
|
763
|
|
Basic and Diluted Net (Loss) Income Per Share
|
|
For the three months ended December 31,
|
||||||
(in thousands, except per share)
|
|
2017
|
|
2016
|
||||
Numerator:
|
|
|
|
|
||||
(Loss) income from continuing operations
|
|
$
|
(82
|
)
|
|
$
|
1,766
|
|
Loss from discontinued operations
|
|
—
|
|
|
(9
|
)
|
||
Undistributed earnings allocated to common shareholders for basic and diluted net income per share
|
|
(82
|
)
|
|
1,757
|
|
||
Denominator:
|
|
|
|
|
||||
Denominator for basic net income per share - weighted average shares outstanding
|
|
27,032
|
|
|
26,279
|
|
||
Dilutive options outstanding, unvested stock units, unvested stock awards and ESPP
|
|
—
|
|
|
760
|
|
||
Denominator for diluted net income per share - adjusted weighted average shares outstanding
|
|
27,032
|
|
|
27,039
|
|
||
|
|
|
|
|
||||
Net (loss) income per basic share:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
Discontinued operations
|
|
0.00
|
|
|
(0.00
|
)
|
||
Net (loss) income per basic share
|
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
|
|
|
|
|
||||
Net (loss) income per diluted share:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
Discontinued operations
|
|
0.00
|
|
|
0.00
|
|
||
Net (loss) income per diluted share
|
|
$
|
(0.00
|
)
|
|
$
|
0.07
|
|
Weighted average antidilutive options, unvested restricted stock units and awards, unvested performance stock units and ESPP shares excluded from the computation
|
|
911
|
|
|
529
|
|
||
|
|
|
|
|
||||
Average market price of common stock
|
|
$
|
7.50
|
|
|
$
|
6.88
|
|
Future Issuances
|
Number of Common Stock Shares Available for Future Issuances
|
|
Exercise of outstanding stock options
|
309,598
|
|
Unvested restricted stock units
|
955,009
|
|
Unvested performance stock units
|
805,628
|
|
Purchases under the employee stock purchase plan
|
911,071
|
|
Issuance of stock-based awards under the Equity Plans
|
1,882,779
|
|
Purchases under the officer and director share purchase plan
|
88,741
|
|
Total reserved
|
4,952,826
|
|
NOTE 13.
|
Geographical Information
|
Revenue by Geographic Region
|
|
For the three months ended December 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
United States
|
|
$
|
20,079
|
|
|
$
|
24,754
|
|
Asia
|
|
2,657
|
|
|
3,719
|
|
||
Europe
|
|
1,227
|
|
|
1,630
|
|
||
Other
|
|
73
|
|
|
73
|
|
||
Total revenue
|
|
$
|
24,036
|
|
|
$
|
30,176
|
|
|
For the three months ended December 31,
|
||||
|
2017
|
|
2016
|
||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenue
|
67.1
|
|
|
66.7
|
|
Gross profit
|
32.9
|
|
|
33.3
|
|
Operating expense:
|
|
|
|
||
Selling, general, and administrative
|
20.0
|
|
|
18.5
|
|
Research and development
|
15.8
|
|
|
7.3
|
|
Loss on sale of assets
|
0.5
|
|
|
—
|
|
Total operating expense
|
36.3
|
|
|
25.8
|
|
Operating (loss) income
|
(3.4
|
)
|
|
7.5
|
|
Other income (expense):
|
|
|
|
||
Interest income, net
|
0.5
|
|
|
0.1
|
|
Foreign exchange gain (loss)
|
1.2
|
|
|
(1.3
|
)
|
Total other income (expense)
|
1.7
|
|
|
(1.2
|
)
|
(Loss) income from continuing operations before income tax benefit (expense)
|
(1.7
|
)
|
|
6.3
|
|
Income tax benefit (expense)
|
1.4
|
|
|
(0.4
|
)
|
(Loss) income from continuing operations
|
(0.3
|
)
|
|
5.9
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
Net (loss) income
|
(0.3
|
)%
|
|
5.9
|
%
|
(in thousands, except percentages)
|
For the three months ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Revenue
|
$
|
24,036
|
|
|
$
|
30,176
|
|
|
$
|
(6,140
|
)
|
|
(20.3)%
|
Cost of revenue
|
16,122
|
|
|
20,133
|
|
|
(4,011
|
)
|
|
(19.9)%
|
|||
Gross profit
|
7,914
|
|
|
10,043
|
|
|
(2,129
|
)
|
|
(21.2)%
|
|||
Operating expense:
|
|
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
4,819
|
|
|
5,578
|
|
|
(759
|
)
|
|
(13.6)%
|
|||
Research and development
|
3,800
|
|
|
2,199
|
|
|
1,601
|
|
|
72.8%
|
|||
Loss on sale of assets
|
107
|
|
|
—
|
|
|
107
|
|
|
N/A
|
|||
Total operating expense
|
8,726
|
|
|
7,777
|
|
|
949
|
|
|
12.2%
|
|||
Operating (loss) income
|
(812
|
)
|
|
2,266
|
|
|
(3,078
|
)
|
|
(135.8)%
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
||||||
Interest income, net
|
111
|
|
|
23
|
|
|
88
|
|
|
382.6%
|
|||
Foreign exchange gain (loss)
|
286
|
|
|
(403
|
)
|
|
689
|
|
|
171.0%
|
|||
Total other income (expense)
|
397
|
|
|
(380
|
)
|
|
777
|
|
|
204.5%
|
|||
(Loss) income from continuing operations before income tax expense
|
(415
|
)
|
|
1,886
|
|
|
(2,301
|
)
|
|
(122.0)%
|
|||
Income tax expense
|
333
|
|
|
(120
|
)
|
|
453
|
|
|
377.5%
|
|||
(Loss) income from continuing operations
|
(82
|
)
|
|
1,766
|
|
|
(1,848
|
)
|
|
(104.6)%
|
|||
Loss from discontinued operations, net of tax
|
—
|
|
|
(9
|
)
|
|
9
|
|
|
100.0%
|
|||
Net (loss) income
|
$
|
(82
|
)
|
|
$
|
1,757
|
|
|
$
|
(1,839
|
)
|
|
(104.7)%
|
•
|
Mirasol Settlements
: In
January 2017
, we entered into an agreement to settle all outstanding claims of the Mirasol class action lawsuit for
$0.3 million
and the wrongful termination lawsuit for
$50,000
and recorded a charge during the three months ended December 31, 2016 of
$0.2 million
. We currently expect to pay the settlement amount in the fiscal year ending September 30, 2018. See
Note 11- Commitments and Contingencies
.
|
•
|
Credit Facility
: On November 11, 2010, we entered into a Credit and Security Agreement (“Credit Facility”) with Wells Fargo Bank, N.A. (“Wells Fargo”). The Credit Facility, as amended by its seventh amendment on
November 10, 2015
, currently provides us with a revolving credit of up to
$15.0 million
through
November 2018
that can be used for working capital requirements, letters of credit, and other general corporate purposes. The Credit Facility is secured by the Company's assets and is subject to a borrowing base formula based on the Company's eligible accounts receivable, inventory, and machinery and equipment accounts. See
Note 9 - Credit Facilities
in the notes to the condensed consolidated financial statements for additional disclosures. As of
January 31, 2018
, there was no outstanding balance under this Credit Facility,
$0.5 million
reserved for
one
outstanding stand-by letter of credit and
$9.8 million
available for borrowing.
|
Operating Activities
(in thousands, except percentages)
|
For the three months ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(1,955
|
)
|
|
$
|
659
|
|
|
$
|
(2,614
|
)
|
|
(396.7)%
|
Investing Activities
(in thousands, except percentages)
|
For the three months ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Net cash used in investing activities
|
$
|
(1,873
|
)
|
|
$
|
(3,242
|
)
|
|
$
|
1,369
|
|
|
42.2%
|
Financing Activities
(in thousands, except percentages)
|
For the three months ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||
Net cash (used in) provided by financing activities
|
$
|
(708
|
)
|
|
$
|
104
|
|
|
$
|
(812
|
)
|
|
(780.8)%
|
(in thousands)
|
|
|
|
||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
Over 5 years
|
||||||||||
Purchase obligations
|
$
|
13,383
|
|
|
$
|
13,246
|
|
|
$
|
137
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Asset retirement obligations
|
1,860
|
|
|
—
|
|
|
40
|
|
|
59
|
|
|
1,761
|
|
|||||
Operating lease obligations
|
4,120
|
|
|
632
|
|
|
1,592
|
|
|
1,254
|
|
|
642
|
|
|||||
Total contractual obligations and commitments
|
$
|
19,363
|
|
|
$
|
13,878
|
|
|
$
|
1,769
|
|
|
$
|
1,313
|
|
|
$
|
2,403
|
|
10.1**†
|
|
10.2†
|
|
31.1**
|
|
31.2**
|
|
32.1***
|
|
32.2***
|
|
101.INS**
|
XBRL Instance Document.
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
EMCORE CORPORATION
|
|
|
|
|
|
Date:
|
February 6, 2018
|
By:
|
/s/ Jeffrey Rittichier
|
|
|
|
Jeffrey Rittichier
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Date:
|
February 6, 2018
|
By:
|
/s/ Jikun Kim
|
|
|
|
Jikun Kim
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Total Shareholder Return for the Performance Period Relative to the Total Shareholder Return for the Index
|
% of Target Number of Units Becoming Vested and Nonforfeitable
|
<50% of Index
|
0%
|
50% of Index
|
0%
|
60% of Index
|
20%
|
80% of Index
|
60%
|
100% of Index
|
100%
|
120% of Index
|
140%
|
140% of Index
|
180%
|
150% of Index
|
200%
|
>150 of Index%
|
200%
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of EMCORE Corporation ("Report");
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
d.
|
Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 6, 2018
|
By:
/s/ Jeffrey Rittichier
|
|
|
Jeffrey Rittichier
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this
Quarterly
Report on Form
10-Q
of EMCORE Corporation ("Report");
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
d.
|
Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 6, 2018
|
By:
/s/ Jikun Kim
|
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Jikun Kim
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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February 6, 2018
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By:
/s/ Jeffrey Rittichier
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Jeffrey Rittichier
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Chief Executive Officer
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(Principal Executive Officer)
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1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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February 6, 2018
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By:
/s/ Jikun Kim
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Jikun Kim
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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