|
|
Minnesota
|
|
41-1577970
|
State or other jurisdiction of incorporation or organization
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
510 1st Avenue North, Suite 305, Minneapolis, MN 55403
|
||
(Address of principal executive offices)
|
||
|
||
(612) 638 - 9100
|
||
(Registrant's telephone number, including area code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
Common Stock, $.01 par value
|
|
|
Preferred Stock Purchase Rights
|
Securities registered pursuant to Section 12(g) of the Act:
|
|
None
|
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Software licenses and appliances
|
$
|
5,982
|
|
|
$
|
5,839
|
|
|
$
|
9,456
|
|
|
$
|
143
|
|
|
$
|
(3,617
|
)
|
|
2
|
%
|
|
(38
|
)%
|
Service
|
22,185
|
|
|
25,843
|
|
|
24,998
|
|
|
(3,658
|
)
|
|
845
|
|
|
(14
|
)%
|
|
3
|
%
|
|||||
Total revenues
|
$
|
28,167
|
|
|
$
|
31,682
|
|
|
$
|
34,454
|
|
|
$
|
(3,515
|
)
|
|
$
|
(2,772
|
)
|
|
(11
|
)%
|
|
(8
|
)%
|
•
|
Inside the firewall as an on-premise enterprise-grade solution for high quality, secure internal communication over existing networks
|
•
|
Outside of the firewall as a cloud-based solution for flexible, external communication applications, and
|
•
|
As a hybrid solution, providing the flexibility of cloud, combined with Qumu’s intelligent delivery technology.
|
•
|
Video Capture
|
•
|
Video Content Management
|
•
|
Intelligent Delivery
|
•
|
Extensions and Add-Ons
|
•
|
Gartner’s Critical Capabilities reports focuses on a group of competing products or services based on a set of use cases that match typical client deployment scenarios. These use cases are based on the real-world problems that clients need to solve, as well as how they intend to use the technology or service within their enterprises. Out of 15 competitors outlined in the current Gartner report, Qumu received a #1 ranking in both Internal Executive Messaging and Internal Collaboration, a #2 ranking in Internal Training and a #3 ranking in External Video for Sales.
|
•
|
Aragon Research named Qumu a leader in its Video Content Management report.
|
•
|
Wainhouse Research positioned Qumu as a leader in Enterprise Streaming Market.
|
•
|
Frost & Sullivan identified Qumu as the
2018 Competitive Strategy Innovation and Leadership Award
winner, among 20 total companies the firm covers in the Enterprise Video space.
|
•
|
competitive dynamics may cause pricing levels to change as the market matures and cause customers to seek out lower priced alternatives to our video content management software or force us to reduce the prices we charge for our products or services; or
|
•
|
existing and new market participants may introduce new types of solutions and different approaches to enable enterprises to address their enterprise communications or video communications needs and these disruptive technologies may reduce demand for our video content management software.
|
•
|
technologically advanced products and solutions that anticipate and satisfy the demands of end-users;
|
•
|
continuing advancements or innovations in our product offerings, including products with price-performance advantages or value-added features in security, reliability or other key areas of customer interest;
|
•
|
innovations in video content creation, management, delivery and user experience;
|
•
|
a responsive and effective sales force;
|
•
|
a dependable and efficient sales distribution network;
|
•
|
superior customer service; and
|
•
|
high levels of quality and reliability.
|
•
|
undetected errors or unauthorized use of another person’s code in the third-party’s software;
|
•
|
disagreement over the scope of the license and other key terms, such as royalties payable;
|
•
|
infringement actions brought by third-party licensees;
|
•
|
that third parties will create solutions that directly compete with our products; and
|
•
|
termination or expiration of the license.
|
•
|
international governments may impose tariffs, quotas and taxes;
|
•
|
the demand for our products will depend, in part, on local economic health;
|
•
|
political and economic instability may reduce demand for our products;
|
•
|
restrictions on the export or import of technology may reduce or eliminate our ability to sell in certain markets;
|
•
|
potentially limited intellectual property protection in certain countries may limit our recourse against infringing products or cause us to refrain from selling in certain markets;
|
•
|
potential difficulties in managing our international operations;
|
•
|
the burden and cost of complying with a variety of international laws, including those relating to data security and privacy;
|
•
|
we may decide to price our products in foreign currency denominations;
|
•
|
our contracts with international channel partners cannot fully protect us against political and economic instability;
|
•
|
potential difficulties in collecting receivables; and
|
•
|
we may not be able to control our international channel partners’ efforts on our behalf.
|
•
|
the number and mix of products and solutions sold in the period;
|
•
|
the timing and amount of our recorded revenue, which will depend upon the mix of products and solutions selected by our customers with revenue from paid-up perpetual software licenses being recognized upon delivery, revenue from term software licenses recognized over the term of the contract, and revenue from cloud-hosted services recognized over the term of the subscription agreement;
|
•
|
timing of customer purchase commitments, including the impact of long sales cycles and seasonal buying patterns;
|
•
|
variability in the size of customer purchases and the impact of large customer orders on a particular period;
|
•
|
the timing of major development projects and market launch of new products or improvements to existing products;
|
•
|
reductions in our customers’ budgets for information technology purchases and delays in their purchasing cycles, due to changing global economic or market conditions;
|
•
|
the impact to the marketplace of competitive products and pricing;
|
•
|
the timing and level of operating expenses;
|
•
|
the impact on revenue and expenses of acquisitions by us or by our competitors;
|
•
|
future accounting pronouncements or changes in our accounting policies; and
|
•
|
the impact of a recession or any other adverse global economic conditions on our business, including uncertainties that may cause a delay in entering into or a failure to enter into significant customer agreements.
|
•
|
the provisions of Minnesota law relating to business combinations and control share acquisitions;
|
•
|
the provisions of our bylaws regarding the business properly brought before shareholders;
|
•
|
the right of our board of directors to establish more than one class or series of shares and to fix the relative rights and preferences of any such different classes or series;
|
•
|
the provisions of our stock incentive plans allowing for the acceleration of vesting or payments of awards granted under the plans in the event of specified events that result in a “change in control”;
|
•
|
the provisions of our agreements provide for severance payments to our executive officers in the event of certain terminations following a “change in control”; and
|
•
|
the provisions of our credit agreement requiring prepayment in full of our term loan upon a change in control.
|
Location of Property
|
Use of Property
|
Approximate Monthly Rent (USD)
|
|
Approximate Leased Square Footage
|
|
Lease Expiration Date
|
|||
Minneapolis, Minnesota (Headquarters)
|
Engineering, service, sales, marketing and administration
|
$
|
23,000
|
|
(1)
|
16,500
|
|
|
January 2023
|
San Bruno, California
|
Engineering, service, sales, marketing and administration
|
$
|
37,000
|
|
(2)
|
13,900
|
|
|
June 2018
|
London, England
|
Engineering, service, sales, marketing and administration
|
$
|
34,000
|
|
(3)
|
5,500
|
|
|
September 2019
|
Hyderabad, India
|
Software development and testing
|
$
|
8,000
|
|
|
4,800
|
|
|
September 2018
|
(1)
|
The agreement has escalating lease payments ranging from approximately $23,000 to $26,000 per month during the course of the lease.
|
(2)
|
The agreement has escalating lease payments ranging from approximately $33,000 to $38,000 per month during the course of the lease.
|
(3)
|
Effective January 1, 2018, approximately 2,750 square feet of the leased space was sublet for approximately $12,000 per month through September 2019.
|
|
|
Year Ended December 31,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
Low
|
|
High
|
|
Low
|
|
High
|
||||||||
First Quarter
|
|
$
|
1.80
|
|
|
$
|
2.97
|
|
|
$
|
2.10
|
|
|
$
|
5.48
|
|
Second Quarter
|
|
$
|
2.45
|
|
|
$
|
3.23
|
|
|
$
|
3.53
|
|
|
$
|
5.50
|
|
Third Quarter
|
|
$
|
2.50
|
|
|
$
|
3.12
|
|
|
$
|
2.19
|
|
|
$
|
4.84
|
|
Fourth Quarter
|
|
$
|
2.08
|
|
|
$
|
3.28
|
|
|
$
|
2.20
|
|
|
$
|
3.77
|
|
Monthly Period
|
|
Total Number of
Shares Purchased |
|
Average Price
Paid per Share |
|
Total Number of Shares
Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum Number of
Shares That May Yet Be purchased Under the Plans or Programs (at end of period) |
|||||
October 2017
|
|
1,680
|
|
|
$
|
3.14
|
|
|
—
|
|
|
778,365
|
|
November 2017
|
|
446
|
|
|
$
|
2.40
|
|
|
—
|
|
|
778,365
|
|
December 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
778,365
|
|
|
|
Securities Authorized for Issuance Under Equity Compensation Plans
|
||||||||
Plan category
|
|
Number of Shares of
Common Stock to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Shares of
Common Stock Remaining
Available for Future
Issuance Under Equity
Compensation Plans
(1)
|
||||
Equity compensation plans approved by shareholders
|
|
1,122,875
|
|
|
$
|
5.94
|
|
|
582,188
|
|
Equity compensation plans not approved by shareholders
(2)
|
|
165,000
|
|
|
$
|
7.78
|
|
|
—
|
|
Total
|
|
1,287,875
|
|
|
$
|
6.18
|
|
|
582,188
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Total revenues
|
$
|
28,167
|
|
|
$
|
31,682
|
|
|
$
|
34,454
|
|
|
$
|
26,521
|
|
|
$
|
17,736
|
|
Gross profit
|
$
|
17,905
|
|
|
$
|
19,322
|
|
|
$
|
16,955
|
|
|
$
|
12,049
|
|
|
$
|
10,402
|
|
Operating loss
|
$
|
(8,871
|
)
|
|
$
|
(11,361
|
)
|
|
$
|
(29,404
|
)
|
|
$
|
(28,726
|
)
|
|
$
|
(19,605
|
)
|
Net loss from continuing operations
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,689
|
)
|
|
$
|
(22,343
|
)
|
|
$
|
(16,221
|
)
|
Net loss
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,699
|
)
|
|
$
|
(8,520
|
)
|
|
$
|
(9,694
|
)
|
Net loss from continuing operations per share – basic
|
$
|
(1.25
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(3.11
|
)
|
|
$
|
(2.53
|
)
|
|
$
|
(1.87
|
)
|
Net loss from continuing operations per share – diluted
|
$
|
(1.25
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(3.11
|
)
|
|
$
|
(2.53
|
)
|
|
$
|
(1.87
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|
8,836
|
|
|
8,691
|
|
|||||
Diluted
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|
8,836
|
|
|
8,691
|
|
|
December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Cash and cash equivalents
|
$
|
7,690
|
|
|
$
|
10,364
|
|
|
$
|
7,072
|
|
|
$
|
11,684
|
|
|
$
|
37,725
|
|
Marketable securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,249
|
|
|
$
|
23,486
|
|
|
$
|
13,233
|
|
Current assets
|
$
|
15,205
|
|
|
$
|
20,646
|
|
|
$
|
28,629
|
|
|
$
|
52,752
|
|
|
$
|
71,774
|
|
Total assets
|
$
|
34,276
|
|
|
$
|
42,229
|
|
|
$
|
54,412
|
|
|
$
|
80,177
|
|
|
$
|
89,146
|
|
Current liabilities
|
$
|
16,672
|
|
|
$
|
15,431
|
|
|
$
|
19,113
|
|
|
$
|
19,377
|
|
|
$
|
23,028
|
|
Long-term liabilities
|
$
|
8,412
|
|
|
$
|
8,222
|
|
|
$
|
4,542
|
|
|
$
|
2,527
|
|
|
$
|
3,537
|
|
Stockholders’ equity
|
$
|
9,192
|
|
|
$
|
18,576
|
|
|
$
|
30,757
|
|
|
$
|
58,273
|
|
|
$
|
62,581
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Software licenses and appliances
|
$
|
5,982
|
|
|
$
|
5,839
|
|
|
$
|
9,456
|
|
|
$
|
143
|
|
|
$
|
(3,617
|
)
|
|
2
|
%
|
|
(38
|
)%
|
Service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription, maintenance and support
|
19,374
|
|
|
21,443
|
|
|
18,804
|
|
|
(2,069
|
)
|
|
2,639
|
|
|
(10
|
)
|
|
14
|
|
|||||
Professional services and other
|
2,811
|
|
|
4,400
|
|
|
6,194
|
|
|
(1,589
|
)
|
|
(1,794
|
)
|
|
(36
|
)
|
|
(29
|
)
|
|||||
Total service
|
22,185
|
|
|
25,843
|
|
|
24,998
|
|
|
(3,658
|
)
|
|
845
|
|
|
(14
|
)
|
|
3
|
|
|||||
Total revenues
|
$
|
28,167
|
|
|
$
|
31,682
|
|
|
$
|
34,454
|
|
|
$
|
(3,515
|
)
|
|
$
|
(2,772
|
)
|
|
(11
|
)%
|
|
(8
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software licenses and appliances
|
$
|
3,575
|
|
|
$
|
3,365
|
|
|
$
|
6,507
|
|
|
$
|
210
|
|
|
$
|
(3,142
|
)
|
|
6
|
%
|
|
(48
|
)%
|
Service
|
14,330
|
|
|
15,957
|
|
|
10,448
|
|
|
(1,627
|
)
|
|
5,509
|
|
|
(10
|
)
|
|
53
|
|
|||||
Total gross profit
|
$
|
17,905
|
|
|
$
|
19,322
|
|
|
$
|
16,955
|
|
|
$
|
(1,417
|
)
|
|
$
|
2,367
|
|
|
(7
|
)%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software licenses and appliances
|
59.8
|
%
|
|
57.6
|
%
|
|
68.8
|
%
|
|
2.2
|
%
|
|
(11.2
|
)%
|
|
|
|
|
|||||||
Service
|
64.6
|
%
|
|
61.7
|
%
|
|
41.8
|
%
|
|
2.9
|
%
|
|
19.9
|
%
|
|
|
|
|
|||||||
Total gross margin
|
63.6
|
%
|
|
61.0
|
%
|
|
49.2
|
%
|
|
2.6
|
%
|
|
11.8
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and development
|
$
|
7,279
|
|
|
$
|
8,541
|
|
|
$
|
10,689
|
|
|
$
|
(1,262
|
)
|
|
$
|
(2,148
|
)
|
|
(15
|
)%
|
|
(20
|
)%
|
Sales and marketing
|
10,026
|
|
|
11,529
|
|
|
17,994
|
|
|
(1,503
|
)
|
|
(6,465
|
)
|
|
(13
|
)
|
|
(36
|
)
|
|||||
General and administrative
|
8,567
|
|
|
9,722
|
|
|
16,878
|
|
|
(1,155
|
)
|
|
(7,156
|
)
|
|
(12
|
)
|
|
(42
|
)
|
|||||
Amortization of purchased intangibles
|
904
|
|
|
891
|
|
|
798
|
|
|
13
|
|
|
93
|
|
|
1
|
|
|
12
|
|
|||||
Total operating expenses
|
$
|
26,776
|
|
|
$
|
30,683
|
|
|
$
|
46,359
|
|
|
$
|
(3,907
|
)
|
|
$
|
(15,676
|
)
|
|
(13
|
)%
|
|
(34
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Compensation and employee-related
|
$
|
5,475
|
|
|
$
|
6,238
|
|
|
$
|
6,738
|
|
|
$
|
(763
|
)
|
|
$
|
(500
|
)
|
|
(12
|
)%
|
|
(7
|
)%
|
Overhead and other expenses
|
1,064
|
|
|
1,201
|
|
|
1,067
|
|
|
(137
|
)
|
|
134
|
|
|
(11
|
)
|
|
13
|
|
|||||
Outside services and consulting
|
473
|
|
|
685
|
|
|
2,349
|
|
|
(212
|
)
|
|
(1,664
|
)
|
|
(31
|
)
|
|
(71
|
)
|
|||||
Depreciation and amortization
|
133
|
|
|
210
|
|
|
273
|
|
|
(77
|
)
|
|
(63
|
)
|
|
(37
|
)
|
|
(23
|
)
|
|||||
Equity-based compensation
|
134
|
|
|
207
|
|
|
262
|
|
|
(73
|
)
|
|
(55
|
)
|
|
(35
|
)
|
|
(21
|
)
|
|||||
Total research and development expenses
|
$
|
7,279
|
|
|
$
|
8,541
|
|
|
$
|
10,689
|
|
|
$
|
(1,262
|
)
|
|
$
|
(2,148
|
)
|
|
(15
|
)%
|
|
(20
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Compensation and employee-related
|
$
|
7,806
|
|
|
$
|
9,175
|
|
|
$
|
14,293
|
|
|
$
|
(1,369
|
)
|
|
$
|
(5,118
|
)
|
|
(15
|
)%
|
|
(36
|
)%
|
Overhead and other expenses
|
1,046
|
|
|
1,172
|
|
|
1,691
|
|
|
(126
|
)
|
|
(519
|
)
|
|
(11
|
)
|
|
(31
|
)
|
|||||
Outside services and consulting
|
935
|
|
|
844
|
|
|
1,521
|
|
|
91
|
|
|
(677
|
)
|
|
11
|
|
|
(45
|
)
|
|||||
Depreciation and amortization
|
58
|
|
|
128
|
|
|
130
|
|
|
(70
|
)
|
|
(2
|
)
|
|
(55
|
)
|
|
(2
|
)
|
|||||
Equity-based compensation
|
181
|
|
|
210
|
|
|
359
|
|
|
(29
|
)
|
|
(149
|
)
|
|
(14
|
)
|
|
(42
|
)
|
|||||
Total sales and marketing expenses
|
$
|
10,026
|
|
|
$
|
11,529
|
|
|
$
|
17,994
|
|
|
$
|
(1,503
|
)
|
|
$
|
(6,465
|
)
|
|
(13
|
)%
|
|
(36
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Compensation and employee-related
|
$
|
3,525
|
|
|
$
|
3,920
|
|
|
$
|
7,522
|
|
|
$
|
(395
|
)
|
|
$
|
(3,602
|
)
|
|
(10
|
)%
|
|
(48
|
)%
|
Overhead and other expenses
|
1,078
|
|
|
1,708
|
|
|
3,607
|
|
|
(630
|
)
|
|
(1,899
|
)
|
|
(37
|
)
|
|
(53
|
)
|
|||||
Outside services and consulting
|
2,404
|
|
|
2,383
|
|
|
4,146
|
|
|
21
|
|
|
(1,763
|
)
|
|
1
|
|
|
(43
|
)
|
|||||
Depreciation and amortization
|
724
|
|
|
756
|
|
|
549
|
|
|
(32
|
)
|
|
207
|
|
|
(4
|
)
|
|
38
|
|
|||||
Equity-based compensation
|
836
|
|
|
955
|
|
|
1,054
|
|
|
(119
|
)
|
|
(99
|
)
|
|
(12
|
)
|
|
(9
|
)
|
|||||
Total general and administrative expenses
|
$
|
8,567
|
|
|
$
|
9,722
|
|
|
$
|
16,878
|
|
|
$
|
(1,155
|
)
|
|
$
|
(7,156
|
)
|
|
(12
|
)%
|
|
(42
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2016 to 2017
|
|
2015 to 2016
|
|
2016 to 2017
|
|
2015 to 2016
|
||||||||||||
Interest income (expense), net
|
$
|
(2,852
|
)
|
|
$
|
(287
|
)
|
|
$
|
7
|
|
|
$
|
(2,565
|
)
|
|
$
|
(294
|
)
|
|
894
|
%
|
|
(4,200
|
)%
|
Change in fair value of warrant liability
|
74
|
|
|
137
|
|
|
—
|
|
|
(63
|
)
|
|
137
|
|
|
(46
|
)
|
|
n/m
|
|
|||||
Other, net
|
(433
|
)
|
|
84
|
|
|
(131
|
)
|
|
(517
|
)
|
|
215
|
|
|
(615
|
)
|
|
(164
|
)
|
|||||
Total other expense, net
|
$
|
(3,211
|
)
|
|
$
|
(66
|
)
|
|
$
|
(124
|
)
|
|
$
|
(3,145
|
)
|
|
$
|
58
|
|
|
4,765
|
%
|
|
(47
|
)%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash and cash equivalents
|
$
|
7,690
|
|
|
$
|
10,364
|
|
Working capital
|
$
|
(1,467
|
)
|
|
$
|
5,215
|
|
Financing obligations
|
$
|
1,050
|
|
|
$
|
678
|
|
Term loan
|
7,605
|
|
|
6,617
|
|
||
Financing obligations and term loan
|
$
|
8,655
|
|
|
$
|
7,295
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from (used in):
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
$
|
(2,012
|
)
|
|
$
|
(9,484
|
)
|
|
$
|
(23,227
|
)
|
Investing activities
|
(24
|
)
|
|
6,174
|
|
|
18,923
|
|
|||
Financing activities
|
(747
|
)
|
|
6,956
|
|
|
(228
|
)
|
|||
Effect of exchange rate changes on cash
|
109
|
|
|
(354
|
)
|
|
(80
|
)
|
|||
Net change in cash and cash equivalents
|
$
|
(2,674
|
)
|
|
$
|
3,292
|
|
|
$
|
(4,612
|
)
|
Net change in marketable securities and restricted cash
|
$
|
—
|
|
|
$
|
(6,249
|
)
|
|
$
|
(19,537
|
)
|
(In thousands)
|
Payments Due by Period
|
||||||||||||||||||||||||||
Contractual Obligations
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Term loan
(1)
|
$
|
2,727
|
|
|
$
|
5,273
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,000
|
|
Pre-payment penalty on term loan
(2)
|
273
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
273
|
|
|||||||
Operating leases
|
889
|
|
|
538
|
|
|
298
|
|
|
300
|
|
|
306
|
|
|
26
|
|
|
2,357
|
|
|||||||
Capital leases and other financing obligations
(3)
|
255
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
258
|
|
|||||||
Purchase obligations
(4)
|
455
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|||||||
Income tax liabilities under ASC 740
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total contractual cash obligations
|
$
|
4,599
|
|
|
$
|
5,849
|
|
|
$
|
298
|
|
|
$
|
300
|
|
|
$
|
306
|
|
|
$
|
26
|
|
|
$
|
11,378
|
|
(1)
|
Amounts include principal payments as set forth in Amendment No. 2 to the Company's credit agreement with Hale Capital Partners, LP ("Amendment No. 2").
|
(2)
|
Amount for 2018 consists of a pre-payment penalty contractually required under the payment schedule set forth in Amendment No. 2.
|
(3)
|
Amounts include principal and interest.
|
(4)
|
Purchase obligations include all commitments to purchase goods or services that meet one or both of the following criteria: (1) they are non-cancelable or (2) the Company must make specified minimum payments even if it does not take delivery of the contracted products or services. If the obligation is non-cancelable, the entire value of the contract is included in the table.
|
(5)
|
The Company does not currently expect any income tax liabilities accrued under ASC 740 as of
December 31, 2017
to be paid to the applicable tax authorities in
2018
. The full balance of unrecognized tax benefits under ASC 740 of
$1.1 million
at
December 31, 2017
, has been excluded from the above table as the period of payment or reversal cannot be reasonably estimated. This amount is before reduction for deferred federal benefits of uncertain tax positions and also excludes potential interest and penalties.
|
•
|
Software revenue associated with non-cancellable subscription or, term-based, software license arrangements will generally be recognized upon delivery of the license. Historically, these arrangements have been material, and the Company currently recognizes this revenue ratably over the term of the software license; and
|
•
|
The Company expects that the accounting for software revenue derived from perpetual based licensing arrangements and associated services revenues will not be materially impacted.
|
|
Page in Annual
Report on Form 10-K
For Year Ended
December 31, 2017
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,690
|
|
|
$
|
10,364
|
|
Receivables, net
|
5,529
|
|
|
7,495
|
|
||
Income tax receivable
|
156
|
|
|
317
|
|
||
Prepaid expenses and other current assets
|
1,830
|
|
|
2,470
|
|
||
Total current assets
|
15,205
|
|
|
20,646
|
|
||
Property and equipment, net
|
911
|
|
|
1,827
|
|
||
Intangible assets, net
|
6,295
|
|
|
8,110
|
|
||
Goodwill
|
7,390
|
|
|
6,749
|
|
||
Deferred income taxes, non-current
|
77
|
|
|
70
|
|
||
Other assets, non-current
|
4,398
|
|
|
4,827
|
|
||
Total assets
|
$
|
34,276
|
|
|
$
|
42,229
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and other accrued liabilities
|
$
|
3,878
|
|
|
$
|
2,394
|
|
Accrued compensation
|
1,824
|
|
|
2,361
|
|
||
Deferred revenue
|
8,923
|
|
|
8,992
|
|
||
Deferred rent
|
181
|
|
|
283
|
|
||
Financing obligations
|
1,047
|
|
|
508
|
|
||
Warrant liability
|
819
|
|
|
893
|
|
||
Total current liabilities
|
16,672
|
|
|
15,431
|
|
||
Long-term liabilities:
|
|
|
|
|
|
||
Deferred revenue, non-current
|
141
|
|
|
423
|
|
||
Income taxes payable, non-current
|
3
|
|
|
6
|
|
||
Deferred tax liability, non-current
|
153
|
|
|
294
|
|
||
Deferred rent, non-current
|
507
|
|
|
712
|
|
||
Financing obligations, non-current
|
3
|
|
|
170
|
|
||
Term loan, non-current
|
7,605
|
|
|
6,617
|
|
||
Total long-term liabilities
|
8,412
|
|
|
8,222
|
|
||
Total liabilities
|
25,084
|
|
|
23,653
|
|
||
Commitments and contingencies (Note 4)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.01 par value, authorized 250,000 shares, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, authorized 29,750,000 shares, issued and outstanding 9,364,804 and 9,227,247, respectively
|
94
|
|
|
92
|
|
||
Additional paid-in capital
|
68,035
|
|
|
66,864
|
|
||
Accumulated deficit
|
(56,197
|
)
|
|
(44,473
|
)
|
||
Accumulated other comprehensive loss
|
(2,740
|
)
|
|
(3,907
|
)
|
||
Total stockholders’ equity
|
9,192
|
|
|
18,576
|
|
||
Total liabilities and stockholders’ equity
|
$
|
34,276
|
|
|
$
|
42,229
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Software licenses and appliances
|
$
|
5,982
|
|
|
$
|
5,839
|
|
|
$
|
9,456
|
|
Service
|
22,185
|
|
|
25,843
|
|
|
24,998
|
|
|||
Total revenues
|
28,167
|
|
|
31,682
|
|
|
34,454
|
|
|||
Cost of revenues:
|
|
|
|
|
|
|
|
|
|||
Software licenses and appliances
|
2,407
|
|
|
2,474
|
|
|
2,949
|
|
|||
Service
|
7,855
|
|
|
9,886
|
|
|
14,550
|
|
|||
Total cost of revenues
|
10,262
|
|
|
12,360
|
|
|
17,499
|
|
|||
Gross profit
|
17,905
|
|
|
19,322
|
|
|
16,955
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Research and development
|
7,279
|
|
|
8,541
|
|
|
10,689
|
|
|||
Sales and marketing
|
10,026
|
|
|
11,529
|
|
|
17,994
|
|
|||
General and administrative
|
8,567
|
|
|
9,722
|
|
|
16,878
|
|
|||
Amortization of purchased intangibles
|
904
|
|
|
891
|
|
|
798
|
|
|||
Total operating expenses
|
26,776
|
|
|
30,683
|
|
|
46,359
|
|
|||
Operating loss
|
(8,871
|
)
|
|
(11,361
|
)
|
|
(29,404
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Interest income (expense), net
|
(2,852
|
)
|
|
(287
|
)
|
|
7
|
|
|||
Change in fair value of warrant liability
|
74
|
|
|
137
|
|
|
—
|
|
|||
Other, net
|
(433
|
)
|
|
84
|
|
|
(131
|
)
|
|||
Total other expense, net
|
(3,211
|
)
|
|
(66
|
)
|
|
(124
|
)
|
|||
Loss before income taxes
|
(12,082
|
)
|
|
(11,427
|
)
|
|
(29,528
|
)
|
|||
Income tax benefit
|
(358
|
)
|
|
(252
|
)
|
|
(839
|
)
|
|||
Net loss from continuing operations
|
(11,724
|
)
|
|
(11,175
|
)
|
|
(28,689
|
)
|
|||
Net loss from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Net loss
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,699
|
)
|
Net loss per share – basic:
|
|
|
|
|
|
||||||
Net loss from continuing operations per share – basic
|
$
|
(1.25
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(3.11
|
)
|
Net loss from discontinued operations per share – basic
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss per share – basic
|
$
|
(1.25
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(3.11
|
)
|
Weighted average shares outstanding – basic
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|||
Net loss per share – diluted:
|
|
|
|
|
|
||||||
Net loss from continuing operations per share – diluted
|
$
|
(1.25
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(3.11
|
)
|
Net loss from discontinued operations per share – diluted
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net loss per share – diluted
|
$
|
(1.25
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(3.11
|
)
|
Weighted average shares outstanding – diluted
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,699
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustments
|
1,167
|
|
|
(2,387
|
)
|
|
(749
|
)
|
|||
Change in net unrealized loss on marketable securities, net of tax
|
—
|
|
|
1
|
|
|
13
|
|
|||
Total other comprehensive income (loss)
|
1,167
|
|
|
(2,386
|
)
|
|
(736
|
)
|
|||
Total comprehensive loss
|
$
|
(10,557
|
)
|
|
$
|
(13,561
|
)
|
|
$
|
(29,435
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
(Accum
Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2014
|
9,127
|
|
|
$
|
91
|
|
|
$
|
63,566
|
|
|
$
|
(4,599
|
)
|
|
$
|
(785
|
)
|
|
$
|
58,273
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,699
|
)
|
|
—
|
|
|
(28,699
|
)
|
|||||
Other comprehensive loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(736
|
)
|
|
(736
|
)
|
|||||
Issuance of restricted stock
|
48
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock issued in stock option exercise
|
20
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|||||
Redemption of stock to cover tax withholding for employee stock plans
|
(6
|
)
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||
Net tax reductions relating to exercise and expiration of stock options
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,834
|
|
|
—
|
|
|
—
|
|
|
1,834
|
|
|||||
Balance at December 31, 2015
|
9,189
|
|
|
$
|
92
|
|
|
$
|
65,484
|
|
|
$
|
(33,298
|
)
|
|
$
|
(1,521
|
)
|
|
$
|
30,757
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,175
|
)
|
|
—
|
|
|
(11,175
|
)
|
|||||
Other comprehensive loss, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,386
|
)
|
|
(2,386
|
)
|
|||||
Issuance of restricted stock
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Redemption of stock to cover tax withholding for employee stock plans
|
(7
|
)
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|||||
Net tax reductions relating to expiration of stock options
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,421
|
|
|
—
|
|
|
—
|
|
|
1,421
|
|
|||||
Balance at December 31, 2016
|
9,227
|
|
|
$
|
92
|
|
|
$
|
66,864
|
|
|
$
|
(44,473
|
)
|
|
$
|
(3,907
|
)
|
|
$
|
18,576
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,724
|
)
|
|
—
|
|
|
(11,724
|
)
|
|||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,167
|
|
|
1,167
|
|
|||||
Issuance of restricted stock
|
144
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Redemption of stock to cover tax withholding for employee stock plans
|
(6
|
)
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,190
|
|
|
—
|
|
|
—
|
|
|
1,190
|
|
|||||
Balance at December 31, 2017
|
9,365
|
|
|
$
|
94
|
|
|
$
|
68,035
|
|
|
$
|
(56,197
|
)
|
|
$
|
(2,740
|
)
|
|
$
|
9,192
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|||
Net loss
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,699
|
)
|
Net income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||
Net loss from continuing operations
|
(11,724
|
)
|
|
(11,175
|
)
|
|
(28,689
|
)
|
|||
Adjustments to reconcile net loss to net cash used in continuing operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
3,045
|
|
|
3,303
|
|
|
3,118
|
|
|||
Stock-based compensation
|
1,190
|
|
|
1,421
|
|
|
1,834
|
|
|||
Accretion of debt discount and issuance costs
|
2,013
|
|
|
152
|
|
|
—
|
|
|||
Loss on disposal of property and equipment
|
—
|
|
|
4
|
|
|
108
|
|
|||
Loss on lease contract termination
|
72
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of warrant liability
|
(74
|
)
|
|
(137
|
)
|
|
—
|
|
|||
Deferred income taxes
|
(166
|
)
|
|
(229
|
)
|
|
(564
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
2,101
|
|
|
3,244
|
|
|
(1,331
|
)
|
|||
Income taxes receivable / payable
|
167
|
|
|
266
|
|
|
(378
|
)
|
|||
Prepaid expenses and other assets
|
1,166
|
|
|
(138
|
)
|
|
748
|
|
|||
Accounts payable and other accrued liabilities
|
1,656
|
|
|
(1,406
|
)
|
|
443
|
|
|||
Accrued compensation
|
(574
|
)
|
|
(1,575
|
)
|
|
(2,184
|
)
|
|||
Deferred revenue
|
(573
|
)
|
|
(2,673
|
)
|
|
2,729
|
|
|||
Deferred rent
|
(311
|
)
|
|
(265
|
)
|
|
48
|
|
|||
Other non-current liabilities
|
—
|
|
|
(226
|
)
|
|
226
|
|
|||
Net cash used in continuing operating activities
|
(2,012
|
)
|
|
(9,434
|
)
|
|
(23,892
|
)
|
|||
Net cash provided by (used in) discontinued operating activities
|
—
|
|
|
(50
|
)
|
|
665
|
|
|||
Net cash used in operating activities
|
(2,012
|
)
|
|
(9,484
|
)
|
|
(23,227
|
)
|
|||
Investing activities:
|
|
|
|
|
|
|
|
|
|||
Sales and maturities of marketable securities
|
—
|
|
|
6,250
|
|
|
27,465
|
|
|||
Purchases of marketable securities
|
—
|
|
|
—
|
|
|
(10,250
|
)
|
|||
Purchases of property and equipment
|
(24
|
)
|
|
(76
|
)
|
|
(635
|
)
|
|||
Proceeds from sale of property and equipment
|
—
|
|
|
—
|
|
|
43
|
|
|||
Net cash provided by (used in) continuing investing activities
|
(24
|
)
|
|
6,174
|
|
|
16,623
|
|
|||
Net cash provided by discontinued investing activities, including proceeds from sale of business
|
—
|
|
|
—
|
|
|
2,300
|
|
|||
Net cash provided by (used in) investing activities
|
(24
|
)
|
|
6,174
|
|
|
18,923
|
|
|||
Financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from term loan and warrant issuance
|
—
|
|
|
8,000
|
|
|
—
|
|
|||
Payments for term loan and warrant issuance costs
|
(225
|
)
|
|
(505
|
)
|
|
—
|
|
|||
Principal payments on capital lease obligations
|
(505
|
)
|
|
(513
|
)
|
|
(320
|
)
|
|||
Common stock repurchases to settle employee withholding liability
|
(17
|
)
|
|
(26
|
)
|
|
(50
|
)
|
|||
Proceeds from employee stock plans
|
—
|
|
|
—
|
|
|
142
|
|
|||
Net cash provided by (used in) financing activities
|
(747
|
)
|
|
6,956
|
|
|
(228
|
)
|
|||
Effect of exchange rate changes on cash
|
109
|
|
|
(354
|
)
|
|
(80
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(2,674
|
)
|
|
3,292
|
|
|
(4,612
|
)
|
|||
Cash and cash equivalents, beginning of year
|
10,364
|
|
|
7,072
|
|
|
11,684
|
|
|||
Cash and cash equivalents, end of year
|
$
|
7,690
|
|
|
$
|
10,364
|
|
|
$
|
7,072
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Supplemental disclosures of net cash paid (received) during the year:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
(190
|
)
|
|
$
|
22
|
|
|
$
|
(22
|
)
|
Interest
|
$
|
853
|
|
|
$
|
211
|
|
|
$
|
33
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Term loan debt issuance costs included in accrued liabilities
|
$
|
800
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financing obligations related to prepaid expenses and other assets
|
$
|
73
|
|
|
$
|
182
|
|
|
$
|
402
|
|
Financing obligations related to property and equipment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
927
|
|
Accrued liabilities and other non-current liabilities related to leasehold improvements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
689
|
|
•
|
Revenue from perpetual software licenses and hardware are generally recognized when the product has been delivered.
|
•
|
Revenue from subscription, maintenance and support, which includes term software licenses, cloud-hosted software as a service and maintenance and support, are generally recognized ratably over the contract term beginning on the commencement date of each contract, which is the date the Company’s product has been delivered or service is made available to customers.
|
•
|
Revenue from professional and other services, which are not essential to the functionality of the software, are generally recognized as the services are provided to customers.
|
•
|
Revenue for each of the non-software elements is allocated based on the selling price hierarchy and recognized as noted above provided all other criteria required for revenue recognition have been met.
|
•
|
Revenue for each of the software-related elements is allocated based on the VSOE of each element and recognized as noted above provided all other criteria required for revenue recognition have been met. In software-related arrangements for which the Company does not have the VSOE of the fair value for all elements, revenue is deferred until the earlier of when the VSOE is determined for the undelivered elements (residual method) or when all elements for which the Company does not have the VSOE of the fair value have been delivered, unless the only undelivered element is maintenance and support, in which case the entire amount of revenue is recognized over the maintenance and support period.
|
•
|
Shipping and handling charges collected from customers as part of the Company's sales transactions are included in revenues and the associated costs are included in cost of revenues.
|
•
|
Sales taxes charged to and collected from customers as part of the Company’s sales transactions are excluded from revenues and recorded as a liability to the applicable governmental taxing authority.
|
|
|
Year Ended December 31,
|
||||||||||
Allowance for Doubtful Accounts:
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
|
$
|
34
|
|
|
$
|
24
|
|
|
$
|
55
|
|
Write-offs
|
|
(11
|
)
|
|
(11
|
)
|
|
—
|
|
|||
Change in provision
|
|
(2
|
)
|
|
21
|
|
|
(31
|
)
|
|||
Balance at end of year
|
|
$
|
21
|
|
|
$
|
34
|
|
|
$
|
24
|
|
•
|
Software revenue associated with non-cancellable subscription or, term-based, software license arrangements will generally be recognized upon delivery of the license. Historically, these arrangements have been material, and the Company currently recognizes this revenue ratably over the term of the software license; and
|
•
|
The Company expects that the accounting for software revenue derived from perpetual based licensing arrangements and associated services revenues will not be materially impacted.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Computer, network equipment and furniture
|
$
|
3,681
|
|
|
$
|
3,639
|
|
Leasehold improvements
|
1,908
|
|
|
1,899
|
|
||
Total property and equipment
|
5,589
|
|
|
5,538
|
|
||
Less accumulated depreciation and amortization
|
(4,678
|
)
|
|
(3,711
|
)
|
||
Total property and equipment, net
|
$
|
911
|
|
|
$
|
1,827
|
|
|
December 31, 2017
|
||||||||||||||
|
Customer Relationships
|
|
Developed Technology
|
|
Trademarks / Trade-Names
|
|
Total
|
||||||||
Original cost
|
$
|
4,928
|
|
|
$
|
8,225
|
|
|
$
|
2,184
|
|
|
$
|
15,337
|
|
Accumulated amortization
|
(2,194
|
)
|
|
(6,043
|
)
|
|
(805
|
)
|
|
(9,042
|
)
|
||||
Net identifiable intangible assets
|
$
|
2,734
|
|
|
$
|
2,182
|
|
|
$
|
1,379
|
|
|
$
|
6,295
|
|
Weighted-average useful lives (years)
|
10
|
|
|
6
|
|
|
15
|
|
|
9
|
|
|
December 31, 2016
|
||||||||||||||
|
Customer Relationships
|
|
Developed Technology
|
|
Trademarks / Trade-Names
|
|
Total
|
||||||||
Original cost
|
$
|
4,759
|
|
|
$
|
7,917
|
|
|
$
|
2,178
|
|
|
$
|
14,854
|
|
Accumulated amortization
|
(1,577
|
)
|
|
(4,509
|
)
|
|
(658
|
)
|
|
(6,744
|
)
|
||||
Net identifiable intangible assets
|
$
|
3,182
|
|
|
$
|
3,408
|
|
|
$
|
1,520
|
|
|
$
|
8,110
|
|
Weighted-average useful lives (years)
|
10
|
|
|
6
|
|
|
15
|
|
|
9
|
|
|
Year Ended
December 31, 2017 |
||
Balance, beginning of year
|
$
|
8,110
|
|
Amortization expense
|
(2,101
|
)
|
|
Currency translation
|
286
|
|
|
Balance, end of year
|
$
|
6,295
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Amortization expense associated with the developed technology included in cost of revenues
|
$
|
1,197
|
|
|
$
|
1,251
|
|
|
$
|
1,268
|
|
Amortization expense associated with other acquired intangible assets included in operating expenses
|
904
|
|
|
891
|
|
|
798
|
|
|||
Total amortization expense
|
$
|
2,101
|
|
|
$
|
2,142
|
|
|
$
|
2,066
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Computer and network equipment
|
$
|
511
|
|
|
$
|
511
|
|
Furniture
|
287
|
|
|
287
|
|
||
Assets acquired under capital lease obligations
|
798
|
|
|
798
|
|
||
Accumulated depreciation
|
(613
|
)
|
|
(372
|
)
|
||
Assets acquired under capital lease obligations, net
|
$
|
185
|
|
|
$
|
426
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Capital leases and other financing obligations, current
|
$
|
1,047
|
|
|
$
|
508
|
|
Capital leases and other financing obligations, noncurrent
|
3
|
|
|
170
|
|
||
Total capital leases and other financing obligations
|
$
|
1,050
|
|
|
$
|
678
|
|
|
Capital leases and other financing obligations
|
|
Operating leases
|
|
Total
|
||||||
Years ending December 31,
|
|
|
|
|
|
||||||
2018
|
$
|
255
|
|
|
$
|
889
|
|
|
$
|
1,144
|
|
2019
|
3
|
|
|
538
|
|
|
541
|
|
|||
2020
|
—
|
|
|
298
|
|
|
298
|
|
|||
2021
|
—
|
|
|
300
|
|
|
300
|
|
|||
2022
|
—
|
|
|
306
|
|
|
306
|
|
|||
Thereafter
|
—
|
|
|
26
|
|
|
26
|
|
|||
Total minimum lease payments
|
258
|
|
|
$
|
2,357
|
|
|
$
|
2,615
|
|
|
Less amount representing interest
|
(8
|
)
|
|
|
|
|
|||||
Present value of net minimum lease payments
|
250
|
|
|
|
|
|
|||||
Prepayment fee on term note payable with Hale Capital Partners, LP
|
800
|
|
|
|
|
|
|||||
Total capital leases and other financing obligations
|
$
|
1,050
|
|
|
|
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Term loan, at face value
|
$
|
8,000
|
|
|
$
|
8,000
|
|
Unamortized original issue discount
|
(121
|
)
|
|
(967
|
)
|
||
Unamortized debt issuance costs
|
(274
|
)
|
|
(416
|
)
|
||
Term loan
|
$
|
7,605
|
|
|
$
|
6,617
|
|
•
|
Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities.
|
•
|
Level 2: Inputs include data points that are observable such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) such as interest rates and yield curves that are observable for the asset or liability, either directly or indirectly.
|
•
|
Level 3: Inputs are generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect an entity’s own estimates of assumptions that market participants would use in pricing the asset or liability.
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
Total Fair
Value at December 31, 2017 |
|
Quoted Prices in
Active Markets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative warrant liability
|
$
|
819
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
819
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
Total Fair
Value at December 31, 2016 |
|
Quoted Prices in
Active Markets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative warrant liability
|
$
|
893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
893
|
|
Balance at December 31, 2016
|
|
$
|
893
|
|
Change in fair value
|
|
(74
|
)
|
|
Balance at December 31, 2017
|
|
$
|
819
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation cost charged against loss, before income tax benefit
|
|
|
|
|
|
||||||
Stock options
|
$
|
366
|
|
|
$
|
554
|
|
|
$
|
686
|
|
Restricted stock and restricted stock units
|
765
|
|
|
867
|
|
|
1,148
|
|
|||
Performance stock units
|
59
|
|
|
—
|
|
|
—
|
|
|||
Total expense included in continuing operations
|
$
|
1,190
|
|
|
$
|
1,421
|
|
|
$
|
1,834
|
|
Stock-based compensation cost included in:
|
|
|
|
|
|
||||||
Cost of revenues
|
$
|
39
|
|
|
$
|
49
|
|
|
$
|
159
|
|
Operating expenses
|
1,151
|
|
|
1,372
|
|
|
1,675
|
|
|||
Total expense included in continuing operations
|
$
|
1,190
|
|
|
$
|
1,421
|
|
|
$
|
1,834
|
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Expected life of options in years
|
4.75
|
|
4.75
|
|
4.75
|
Risk-free interest rate
|
1.7% - 2.0%
|
|
1.1% - 1.4%
|
|
1.3% - 1.6%
|
Expected volatility
|
64.2% - 66.2%
|
|
57.4% - 63.7%
|
|
34.5% - 53.2%
|
Expected dividend yield
|
—%
|
|
—%
|
|
—%
|
(In thousands, except per share data)
|
Shares
|
|
Weighted Average Exercise Price
|
|
Weighted
Average
Remaining
Contractual Term
(in years)
|
|
Aggregate
Intrinsic Value
(1)
|
|||||
Options outstanding at December 31, 2014
|
1,635
|
|
|
$
|
12.84
|
|
|
|
|
|
|
|
Granted
|
617
|
|
|
4.73
|
|
|
|
|
|
|
||
Exercised
|
(20
|
)
|
|
7.27
|
|
|
|
|
|
|
||
Canceled
|
(419
|
)
|
|
13.45
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2015
|
1,813
|
|
|
10.00
|
|
|
|
|
|
|||
Granted
|
374
|
|
|
2.86
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled
|
(679
|
)
|
|
12.66
|
|
|
|
|
|
|||
Options outstanding at December 31, 2016
|
1,508
|
|
|
7.03
|
|
|
|
|
|
|||
Granted
|
165
|
|
|
2.16
|
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Canceled
|
(385
|
)
|
|
7.81
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2017
|
1,288
|
|
|
6.18
|
|
|
3.4
|
|
$
|
—
|
|
|
Total vested and expected to vest as of December 31, 2017
|
1,288
|
|
|
6.18
|
|
|
3.4
|
|
$
|
35
|
|
|
Options exercisable as of:
|
|
|
|
|
|
|
|
|||||
December 31, 2015
|
969
|
|
|
$
|
13.09
|
|
|
|
|
|
||
December 31, 2016
|
703
|
|
|
10.06
|
|
|
|
|
|
|||
December 31, 2017
|
838
|
|
|
7.85
|
|
|
2.3
|
|
$
|
—
|
|
(1)
|
Aggregate intrinsic value includes only those options with intrinsic value (options where the exercise price is below the market value).
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Fair value of options granted
|
$
|
193
|
|
|
$
|
556
|
|
|
$
|
1,119
|
|
Per share weighted average fair value of options granted
|
$
|
1.17
|
|
|
$
|
1.49
|
|
|
$
|
1.81
|
|
Total intrinsic value of stock options exercised
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
131
|
|
|
Number of Shares
|
|
Weighted Average
Grant-Date Fair Value
|
|||
Nonvested at December 31, 2014
|
214
|
|
|
$
|
14.59
|
|
Granted
|
129
|
|
|
9.96
|
|
|
Vested
|
(92
|
)
|
|
14.52
|
|
|
Canceled
|
(76
|
)
|
|
12.64
|
|
|
Nonvested at December 31, 2015
|
175
|
|
|
12.05
|
|
|
Granted
|
120
|
|
|
4.00
|
|
|
Vested
|
(76
|
)
|
|
11.27
|
|
|
Canceled
|
(29
|
)
|
|
13.03
|
|
|
Nonvested at December 31, 2016
|
190
|
|
|
7.13
|
|
|
Granted
|
213
|
|
|
2.44
|
|
|
Vested
|
(146
|
)
|
|
5.67
|
|
|
Canceled
|
(39
|
)
|
|
5.21
|
|
|
Nonvested at December 31, 2017
|
218
|
|
|
$
|
3.87
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Per share weighted average grant-date fair value of restricted stock and restricted stock units granted
|
$
|
2.44
|
|
|
$
|
4.00
|
|
|
$
|
9.96
|
|
Total fair value of restricted stock and restricted stock units vested
|
$
|
392
|
|
|
$
|
294
|
|
|
$
|
667
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Loss before income taxes:
|
|
|
|
|
|
|
|
|
|||
Domestic
|
$
|
(11,524
|
)
|
|
$
|
(10,834
|
)
|
|
$
|
(26,889
|
)
|
Foreign
|
(558
|
)
|
|
(593
|
)
|
|
(2,639
|
)
|
|||
Total loss before income taxes
|
$
|
(12,082
|
)
|
|
$
|
(11,427
|
)
|
|
$
|
(29,528
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
$
|
(175
|
)
|
|
$
|
(6
|
)
|
|
$
|
(3
|
)
|
State
|
35
|
|
|
50
|
|
|
27
|
|
|||
Foreign
|
(211
|
)
|
|
(249
|
)
|
|
(817
|
)
|
|||
Total current
|
(351
|
)
|
|
(205
|
)
|
|
(793
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
—
|
|
|
—
|
|
|
1
|
|
|||
State
|
(12
|
)
|
|
12
|
|
|
(47
|
)
|
|||
Foreign
|
5
|
|
|
(59
|
)
|
|
—
|
|
|||
Total deferred
|
(7
|
)
|
|
(47
|
)
|
|
(46
|
)
|
|||
Total provision for income tax benefit
|
$
|
(358
|
)
|
|
$
|
(252
|
)
|
|
$
|
(839
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Expected income tax benefit
|
$
|
(4,107
|
)
|
|
$
|
(3,885
|
)
|
|
$
|
(10,040
|
)
|
State income taxes, net of federal tax effect
|
(306
|
)
|
|
(789
|
)
|
|
(830
|
)
|
|||
Effect of deferred rate change
|
11,851
|
|
|
(162
|
)
|
|
48
|
|
|||
Foreign tax
|
(87
|
)
|
|
(105
|
)
|
|
80
|
|
|||
Non-deductible stock issuance costs
|
186
|
|
|
(24
|
)
|
|
—
|
|
|||
Federal R&D credit
|
(24
|
)
|
|
(17
|
)
|
|
(82
|
)
|
|||
Foreign unremitted earnings
|
(20
|
)
|
|
58
|
|
|
—
|
|
|||
Change in valuation allowance
|
(7,764
|
)
|
|
4,566
|
|
|
9,906
|
|
|||
Refundable AMT credit
|
(172
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
85
|
|
|
106
|
|
|
79
|
|
|||
Total provision for income tax benefit
|
$
|
(358
|
)
|
|
$
|
(252
|
)
|
|
$
|
(839
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
Inventory provisions and uniform capitalization
|
$
|
42
|
|
|
$
|
—
|
|
Accounts receivable allowances
|
3
|
|
|
12
|
|
||
Non-qualified stock option and restricted stock expense
|
447
|
|
|
961
|
|
||
Deferred revenue
|
147
|
|
|
408
|
|
||
Loss and credit carryforwards of U.S. subsidiary
|
23,996
|
|
|
33,673
|
|
||
Loss carryforward of foreign subsidiaries
|
430
|
|
|
1
|
|
||
Other accruals and reserves
|
407
|
|
|
674
|
|
||
Other
|
58
|
|
|
(349
|
)
|
||
Total deferred tax assets before valuation allowance
|
25,530
|
|
|
35,380
|
|
||
Less valuation allowance
|
(24,285
|
)
|
|
(32,930
|
)
|
||
Total deferred tax assets
|
$
|
1,245
|
|
|
$
|
2,450
|
|
Deferred tax liabilities:
|
|
|
|
|
|
||
Acquired intangibles
|
$
|
(1,321
|
)
|
|
$
|
(2,526
|
)
|
Fixed Assets
|
—
|
|
|
(148
|
)
|
||
Total deferred tax liabilities
|
$
|
(1,321
|
)
|
|
$
|
(2,674
|
)
|
Total net deferred tax assets (liabilities)
|
$
|
(76
|
)
|
|
$
|
(224
|
)
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Gross unrecognized tax benefits at beginning of year
|
$
|
1,042
|
|
|
$
|
970
|
|
Increases related to:
|
|
|
|
|
|
||
Prior year income tax positions
|
70
|
|
|
58
|
|
||
Current year income tax positions
|
24
|
|
|
14
|
|
||
Gross unrecognized tax benefits at end of year
|
$
|
1,136
|
|
|
$
|
1,042
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss per share from continuing operations – basic
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,689
|
)
|
Weighted average shares outstanding – basic
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|||
Net loss per share from continuing operations – basic
|
$
|
(1.25
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(3.11
|
)
|
|
|
|
|
|
|
||||||
Net loss per share from continuing operations – diluted
|
|
|
|
|
|
||||||
Loss from continuing operations attributable to common shareholders:
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
$
|
(11,724
|
)
|
|
$
|
(11,175
|
)
|
|
$
|
(28,689
|
)
|
Numerator effect of dilutive securities
|
|
|
|
|
|
||||||
Warrant
|
—
|
|
|
(137
|
)
|
|
—
|
|
|||
Loss from continuing operations attributable to common shareholders
|
$
|
(11,724
|
)
|
|
$
|
(11,312
|
)
|
|
$
|
(28,689
|
)
|
Weighted averages shares outstanding – diluted:
|
|
|
|
|
|
||||||
Weighted average shares outstanding – basic
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|||
Denominator effect of dilutive securities
|
|
|
|
|
|
||||||
Warrant
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average shares outstanding – diluted
|
9,347
|
|
|
9,232
|
|
|
9,235
|
|
|||
Net loss per share from continuing operations – diluted
|
$
|
(1.25
|
)
|
|
$
|
(1.23
|
)
|
|
$
|
(3.11
|
)
|
|
Year Ended
December 31, |
||||
|
2017
|
|
2016
|
||
Stock options
|
1,507
|
|
|
1,420
|
|
Warrant
|
314
|
|
|
—
|
|
Restricted stock units
|
139
|
|
|
91
|
|
Total anti-dilutive
|
1,960
|
|
|
1,511
|
|
|
|
Years Ended December 31,
|
||||||||||
Revenues
|
|
2017
|
|
2016
|
|
2015
|
||||||
Customer A
|
|
$
|
4,945
|
|
|
$
|
4,402
|
|
|
$
|
4,375
|
|
|
|
December 31,
|
||||||||||
Accounts Receivable
|
|
2017
|
|
2016
|
|
2015
|
||||||
Customer A
|
|
*
|
|
|
$
|
1,099
|
|
|
*
|
|
||
Customer B
|
|
$
|
814
|
|
|
$
|
748
|
|
|
*
|
|
|
Customer C
|
|
*
|
|
|
*
|
|
|
$
|
1,173
|
|
||
Customer D
|
|
*
|
|
|
*
|
|
|
$
|
1,144
|
|
|
2016
|
|
2017
|
||||||||||||||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||||||||||
Revenues
|
$
|
8,736
|
|
|
$
|
6,515
|
|
|
$
|
7,110
|
|
|
$
|
9,321
|
|
|
$
|
6,711
|
|
|
$
|
6,654
|
|
|
$
|
7,573
|
|
|
$
|
7,229
|
|
Cost of revenues
|
3,818
|
|
|
2,954
|
|
|
2,857
|
|
|
2,731
|
|
|
2,584
|
|
|
2,286
|
|
|
2,911
|
|
|
2,481
|
|
||||||||
Gross profit
|
4,918
|
|
|
3,561
|
|
|
4,253
|
|
|
6,590
|
|
|
4,127
|
|
|
4,368
|
|
|
4,662
|
|
|
4,748
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Research and development
|
2,350
|
|
|
2,410
|
|
|
1,986
|
|
|
1,795
|
|
|
2,109
|
|
|
1,798
|
|
|
1,769
|
|
|
1,603
|
|
||||||||
Sales and marketing
|
3,532
|
|
|
2,978
|
|
|
2,435
|
|
|
2,584
|
|
|
2,451
|
|
|
2,524
|
|
|
2,509
|
|
|
2,542
|
|
||||||||
General and administrative
|
2,970
|
|
|
2,265
|
|
|
2,109
|
|
|
2,378
|
|
|
2,460
|
|
|
2,009
|
|
|
2,083
|
|
|
2,015
|
|
||||||||
Amortization of intangibles
|
226
|
|
|
227
|
|
|
221
|
|
|
217
|
|
|
223
|
|
|
226
|
|
|
226
|
|
|
229
|
|
||||||||
Total operating expenses
|
9,078
|
|
|
7,880
|
|
|
6,751
|
|
|
6,974
|
|
|
7,243
|
|
|
6,557
|
|
|
6,587
|
|
|
6,389
|
|
||||||||
Operating loss
|
(4,160
|
)
|
|
(4,319
|
)
|
|
(2,498
|
)
|
|
(384
|
)
|
|
(3,116
|
)
|
|
(2,189
|
)
|
|
(1,925
|
)
|
|
(1,641
|
)
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest income (expense), net
|
(12
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|
(247
|
)
|
|
(317
|
)
|
|
(334
|
)
|
|
(343
|
)
|
|
(1,858
|
)
|
||||||||
Change in fair value of warrant liability
|
—
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|
(78
|
)
|
|
11
|
|
|
15
|
|
|
126
|
|
||||||||
Other, net
|
36
|
|
|
(47
|
)
|
|
(13
|
)
|
|
108
|
|
|
(55
|
)
|
|
(124
|
)
|
|
(166
|
)
|
|
(88
|
)
|
||||||||
Total other income (loss), net
|
24
|
|
|
(62
|
)
|
|
(26
|
)
|
|
(2
|
)
|
|
(450
|
)
|
|
(447
|
)
|
|
(494
|
)
|
|
(1,820
|
)
|
||||||||
Loss before income taxes
|
(4,136
|
)
|
|
(4,381
|
)
|
|
(2,524
|
)
|
|
(386
|
)
|
|
(3,566
|
)
|
|
(2,636
|
)
|
|
(2,419
|
)
|
|
(3,461
|
)
|
||||||||
Income tax benefit
|
(4
|
)
|
|
(90
|
)
|
|
(39
|
)
|
|
(119
|
)
|
|
(4
|
)
|
|
(25
|
)
|
|
(110
|
)
|
|
(219
|
)
|
||||||||
Net loss
|
$
|
(4,132
|
)
|
|
$
|
(4,291
|
)
|
|
$
|
(2,485
|
)
|
|
$
|
(267
|
)
|
|
$
|
(3,562
|
)
|
|
$
|
(2,611
|
)
|
|
$
|
(2,309
|
)
|
|
$
|
(3,242
|
)
|
Net loss per share – basic
(1)
|
$
|
(0.45
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.35
|
)
|
Net loss per share – diluted
(1)
|
$
|
(0.45
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.35
|
)
|
(1)
|
Due to the averaging of shares, quarterly earnings per share may not add to the total for the full year.
|
a)
|
Evaluation of Disclosure Controls and Procedures
|
b)
|
Management’s Report on Internal Control Over Financial Reporting
|
(i)
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
(ii)
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
(iii)
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
|
c)
|
Changes in Internal Control Over Financial Reporting
|
▪
|
Ownership of Voting Securities by Principal Holders and Management;
|
▪
|
Proposal 1—Election of Directors;
|
▪
|
Executive Officers;
|
▪
|
Executive Compensation;
|
▪
|
Section 16(a) Beneficial Ownership Reporting Compliance;
|
▪
|
Corporate Governance; and
|
▪
|
Code of Ethics.
|
(a)
|
|
(1)
Financial Statements
. See Part II, Item 8 of this report
|
|
|
|
|
|
(2) Exhibits. See Index to Exhibits on page 69 of this report
|
|
|
|
(b)
|
|
See Index to Exhibits on page 69 of this report
|
|
|
|
|
|
Dated: March 23, 2018
|
QUMU CORPORATION
|
|||
|
|
By:
|
/s/ Vernon J. Hanzlik
|
|
|
|
|
Vernon J. Hanzlik
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
By:
|
/s/ David G. Ristow
|
|
|
|
|
David G. Ristow
|
|
|
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|||
|
|
|
|
|
|||
/s/ Vernon J. Hanzlik
|
|
Chief Executive Officer
|
|
March 23, 2018
|
|||
Vernon J. Hanzlik
|
|
(Principal Executive Officer), Director
|
|
|
|||
|
|
|
|
|
|||
/s/ David G. Ristow
|
|
Chief Financial Officer (Principal
|
|
March 23, 2018
|
|||
David G. Ristow
|
|
Financial and Accounting Officer)
|
|
|
|||
|
|
|
|
|
|||
/s/ Neil E. Cox
|
|
Director
|
|
March 23, 2018
|
|||
Neil E. Cox
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Daniel R. Fishback
|
|
Director
|
|
March 23, 2018
|
|||
Daniel R. Fishback
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Kenan Lucas
|
|
Director
|
|
March 23, 2018
|
|||
Kenan Lucas
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Thomas F. Madison
|
|
Director
|
|
March 23, 2018
|
|||
Thomas F. Madison
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Kimberly K. Nelson
|
|
Director
|
|
March 23, 2018
|
|||
Kimberly K. Nelson
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
Director
|
|
|
|||
Donald T. Netter
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Robert F. Olson
|
|
Director
|
|
March 23, 2018
|
|||
Robert F. Olson
|
|
|
|
|
|||
|
|
|
|
|
|||
/s/ Justin A. Orlando
|
|
Director
|
|
March 23, 2018
|
|||
Justin A. Orlando
|
|
|
|
|
Participant: __________________________
|
Grant: ________ Performance Stock Units
|
|
Grant Date: _________________, 2018
|
a.
|
As used in this Agreement, the following terms shall have the respective meanings:
|
i.
|
“Determination Date” means the date of determination and certification by the Committee of achievement of the Percentage Achievement of the Performance Goals for Performance Period 1 or Performance Period 2.
|
ii.
|
“Percentage Achievement” means the respective percentage achievement (which shall not be more than 100%) of the Performance Goals for Performance Period 1 and Performance Period 2, as determined by the Committee.
|
iii.
|
“Performance Goals” mean those performance goals set forth on Exhibit A.
|
iv.
|
“Performance Period 1” shall mean the period from January 1, 2018 to and including December 31, 2018.
|
v.
|
“Performance Period 2” shall mean the period from January 1, 2019 to and including December 31, 2019.
|
b.
|
For Performance Period 1, two-thirds (2/3) of the Performance Stock Units will vest and no longer be subject to the restrictions of and risk of forfeiture under this Agreement on the Determination Date as to such number of Performance Stock Units multiplied by the Percentage Achievement, rounded down to the nearest whole Share.
|
c.
|
For Performance Period 2, one-third (1/3) of the Performance Stock Units will vest and no longer be subject to the restrictions of and risk of forfeiture under this Agreement on the Determination Date as to such number of Performance Stock Units multiplied by the Percentage Achievement, rounded down to the nearest whole Share.
|
d.
|
If Participant’s employment with the Company and/or a subsidiary of the Company terminates for any reason, including, but not limited to death, Disability or Retirement, all Performance Stock Units at that time not vested shall be forfeited to the Company without payment of any consideration therefor as of the date of such termination unless the Committee determines that all or any part of the Performance Stock Units shall vest as of the date of such termination.
|
e.
|
Notwithstanding any other provision of this Agreement, if there is a Change in Control of the Company, the Performance Stock Units will fully (100%) vest and no longer be subject to the restrictions of, and risk of forfeiture under, this Agreement.
|
QUMU CORPORATION
|
|
|
|
By:
|
|
|
|
Its:
|
|
PARTICIPANT:
|
|
[NAME OF PARTICIPANT]
|
Performance Goals
|
Performance Period 1
|
Performance Period 2
|
Revenue
|
|
|
Renewal Retention Percentage
|
|
|
Free Cash Flow From Operations
|
|
|
Name
|
|
Jurisdiction of Incorporation
|
|
Percent Owned
|
|
Qumu, Inc.
|
|
California
|
|
100.0%
|
|
Qumu UK Holdings, Ltd.
|
|
United Kingdom
|
|
100.0%
|
|
Qumu UK Limited
|
|
United Kingdom
|
|
100.0%
|
(1)
|
Qumu Middle East FZ-LLC
|
|
Dubai
|
|
100.0%
|
(1)
|
Qumu Ltd.
|
|
United Kingdom
|
|
100.0%
|
|
Qumu Japan Co., Ltd.
|
|
Japan
|
|
100.0%
|
|
Qumu (Singapore) Pte. Ltd
|
|
Singapore
|
|
100.0%
|
|
(1)
|
100% owned by Qumu UK Holdings, Ltd.
|
Minneapolis, Minnesota
|
|
March 23, 2018
|
|
1.
|
I have reviewed this Form 10-K of Qumu Corporation;
|
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(s) 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;
|
(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(s) 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.
|
Dated: March 23, 2018
|
/s/ Vernon J. Hanzlik
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Form 10-K of Qumu Corporation;
|
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(s) 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;
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(b)
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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;
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(c)
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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;
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(d)
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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
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5.
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The registrant's other certifying officer(s) 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):
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(a)
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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
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(b)
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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.
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Dated: March 23, 2018
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/s/ David G. Ristow
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Chief Financial Officer
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(1)
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The accompanying Qumu Corporation Annual Report on Form 10-K for the year ended December 31, 2017, 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 accompanying report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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March 23, 2018
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/s/ Vernon J. Hanzlik
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Chief Executive Officer
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/s/ David G. Ristow
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Chief Financial Officer
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