|
|
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)
|
|
Title of each class
|
|
Trading
Symbol
|
|
Name of each exchange on which registered
|
Common stock, par value $0.01
|
|
QUMU
|
|
The NASDAQ Stock Market LLC
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Software licenses and appliances
|
$
|
4,903
|
|
|
$
|
5,814
|
|
|
$
|
5,982
|
|
|
$
|
(911
|
)
|
|
$
|
(168
|
)
|
|
(16
|
)%
|
|
(3
|
)%
|
Service
|
20,459
|
|
|
19,199
|
|
|
22,185
|
|
|
1,260
|
|
|
(2,986
|
)
|
|
7
|
%
|
|
(13
|
)%
|
|||||
Total revenues
|
$
|
25,362
|
|
|
$
|
25,013
|
|
|
$
|
28,167
|
|
|
$
|
349
|
|
|
$
|
(3,154
|
)
|
|
1
|
%
|
|
(11
|
)%
|
•
|
Outside of the firewall as a cloud-based solution
|
•
|
As a hybrid solution, providing the flexibility of cloud, combined with Qumu’s intelligent delivery technology
|
•
|
Inside the firewall as an on-premise enterprise-grade solution
|
•
|
Video Capture
|
•
|
Video Content Management
|
•
|
Intelligent Delivery
|
•
|
Extensions and Add-Ons
|
•
|
Gartner named Qumu a leader in the most recent Magic Quadrant for Enterprise Video Content Management.
|
•
|
Aragon Research named Qumu a leader in the most recent Globe Report for Enterprise Video Content Management, as well as a new contender in the most recent Globe Report for Web and Video Conferencing.
|
•
|
Frost & Sullivan named Qumu as the industry leader by honoring the company with the Competitive Strategy Innovation and Leadership Award over 20 total firms it covers in the Enterprise Video space.
|
•
|
Wainhouse Research has positioned Qumu as a leader in the Enterprise Streaming Market on multiple occasions.
|
•
|
Qumu and Synacor employees may experience uncertainty about their future roles with the combined company, which might adversely affect Qumu’s and Synacor’s ability to retain and hire key personnel and other employees;
|
•
|
the attention of Qumu’s and Synacor’s management may be directed toward completion of the merger and transaction-related considerations and may be diverted from the day-to-day operations and pursuit of other opportunities that could have been beneficial to the businesses of Qumu and Synacor; and
|
•
|
customers, channel partners, vendors or suppliers may seek to modify or terminate their business relationships with Qumu or Synacor, or delay or defer decisions concerning Qumu’s or Synacor’s products or services or seek alternatives to the products or services offered by Qumu or Synacor.
|
•
|
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;
|
•
|
public health emergencies, such as the recent coronavirus outbreak and the subsequent public health measures, may affect our employees, suppliers, customers and our ability to provide services and maintenance in the affected regions;
|
•
|
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.
|
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
|
$
|
20,000
|
|
(1)
|
13,000
|
|
|
January 2023
|
Burlingame, California
|
Engineering, service, sales, marketing and administration
|
$
|
16,000
|
|
(2)
|
3,800
|
|
|
September 2022
|
London, England
|
Engineering, service, sales, marketing and administration
|
$
|
21,000
|
|
|
2,900
|
|
|
July 2024
|
Hyderabad, India
|
Software development and testing
|
$
|
2,000
|
|
(3)
|
3,300
|
|
|
July 2024
|
(1)
|
The agreement has escalating lease payments ranging from approximately $20,000 to $21,000 per month during the course of the lease.
|
(2)
|
The agreement has escalating lease payments ranging from approximately $16,000 to $17,000 per month during the course of the lease.
|
(3)
|
The agreement has escalating lease payments ranging from approximately $2,000 to $3,000 per month during the course of the lease.
|
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 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
778,365
|
|
November 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
778,365
|
|
December 2019
|
|
7,723
|
|
|
$
|
2.62
|
|
|
—
|
|
|
778,365
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Software licenses and appliances
|
$
|
4,903
|
|
|
$
|
5,814
|
|
|
$
|
5,982
|
|
|
$
|
(911
|
)
|
|
$
|
(168
|
)
|
|
(16
|
)%
|
|
(3
|
)%
|
Service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subscription, maintenance and support
|
18,249
|
|
|
17,132
|
|
|
19,374
|
|
|
1,117
|
|
|
(2,242
|
)
|
|
7
|
|
|
(12
|
)
|
|||||
Professional services and other
|
2,210
|
|
|
2,067
|
|
|
2,811
|
|
|
143
|
|
|
(744
|
)
|
|
7
|
|
|
(26
|
)
|
|||||
Total service
|
20,459
|
|
|
19,199
|
|
|
22,185
|
|
|
1,260
|
|
|
(2,986
|
)
|
|
7
|
|
|
(13
|
)
|
|||||
Total revenues
|
$
|
25,362
|
|
|
$
|
25,013
|
|
|
$
|
28,167
|
|
|
$
|
349
|
|
|
$
|
(3,154
|
)
|
|
1
|
%
|
|
(11
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software licenses and appliances
|
$
|
2,992
|
|
|
$
|
3,537
|
|
|
$
|
3,575
|
|
|
$
|
(545
|
)
|
|
$
|
(38
|
)
|
|
(15
|
)%
|
|
(1
|
)%
|
Service
|
15,311
|
|
|
12,983
|
|
|
14,330
|
|
|
2,328
|
|
|
(1,347
|
)
|
|
18
|
|
|
(9
|
)
|
|||||
Total gross profit
|
$
|
18,303
|
|
|
$
|
16,520
|
|
|
$
|
17,905
|
|
|
$
|
1,783
|
|
|
$
|
(1,385
|
)
|
|
11
|
%
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software licenses and appliances
|
61.0
|
%
|
|
60.8
|
%
|
|
59.8
|
%
|
|
0.2
|
%
|
|
1.0
|
%
|
|
|
|
|
|||||||
Service
|
74.8
|
%
|
|
67.6
|
%
|
|
64.6
|
%
|
|
7.2
|
%
|
|
3.0
|
%
|
|
|
|
|
|||||||
Total gross margin
|
72.2
|
%
|
|
66.0
|
%
|
|
63.6
|
%
|
|
6.2
|
%
|
|
2.4
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and development
|
$
|
7,360
|
|
|
$
|
7,013
|
|
|
$
|
7,279
|
|
|
$
|
347
|
|
|
$
|
(266
|
)
|
|
5
|
%
|
|
(4
|
)%
|
Sales and marketing
|
8,709
|
|
|
8,394
|
|
|
10,026
|
|
|
315
|
|
|
(1,632
|
)
|
|
4
|
|
|
(16
|
)
|
|||||
General and administrative
|
6,787
|
|
|
7,122
|
|
|
8,567
|
|
|
(335
|
)
|
|
(1,445
|
)
|
|
(5
|
)
|
|
(17
|
)
|
|||||
Amortization of purchased intangibles
|
757
|
|
|
904
|
|
|
904
|
|
|
(147
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|||||
Total operating expenses
|
$
|
23,613
|
|
|
$
|
23,433
|
|
|
$
|
26,776
|
|
|
$
|
180
|
|
|
$
|
(3,343
|
)
|
|
1
|
%
|
|
(12
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Compensation and employee-related
|
$
|
5,123
|
|
|
$
|
5,215
|
|
|
$
|
5,475
|
|
|
$
|
(92
|
)
|
|
$
|
(260
|
)
|
|
(2
|
)%
|
|
(5
|
)%
|
Overhead and other expenses
|
1,516
|
|
|
1,211
|
|
|
1,064
|
|
|
305
|
|
|
147
|
|
|
25
|
|
|
14
|
|
|||||
Outside services and consulting
|
589
|
|
|
409
|
|
|
473
|
|
|
180
|
|
|
(64
|
)
|
|
44
|
|
|
(14
|
)
|
|||||
Depreciation and amortization
|
2
|
|
|
28
|
|
|
133
|
|
|
(26
|
)
|
|
(105
|
)
|
|
(93
|
)
|
|
(79
|
)
|
|||||
Equity-based compensation
|
130
|
|
|
150
|
|
|
134
|
|
|
(20
|
)
|
|
16
|
|
|
(13
|
)
|
|
12
|
|
|||||
Total research and development expenses
|
$
|
7,360
|
|
|
$
|
7,013
|
|
|
$
|
7,279
|
|
|
$
|
347
|
|
|
$
|
(266
|
)
|
|
5
|
%
|
|
(4
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Compensation and employee-related
|
$
|
6,822
|
|
|
$
|
6,199
|
|
|
$
|
7,806
|
|
|
$
|
623
|
|
|
$
|
(1,607
|
)
|
|
10
|
%
|
|
(21
|
)%
|
Overhead and other expenses
|
1,022
|
|
|
1,230
|
|
|
1,046
|
|
|
(208
|
)
|
|
184
|
|
|
(17
|
)
|
|
18
|
|
|||||
Outside services and consulting
|
781
|
|
|
802
|
|
|
935
|
|
|
(21
|
)
|
|
(133
|
)
|
|
(3
|
)
|
|
(14
|
)
|
|||||
Depreciation and amortization
|
11
|
|
|
12
|
|
|
58
|
|
|
(1
|
)
|
|
(46
|
)
|
|
(8
|
)
|
|
(79
|
)
|
|||||
Equity-based compensation
|
73
|
|
|
151
|
|
|
181
|
|
|
(78
|
)
|
|
(30
|
)
|
|
(52
|
)
|
|
(17
|
)
|
|||||
Total sales and marketing expenses
|
$
|
8,709
|
|
|
$
|
8,394
|
|
|
$
|
10,026
|
|
|
$
|
315
|
|
|
$
|
(1,632
|
)
|
|
4
|
%
|
|
(16
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Compensation and employee-related
|
$
|
3,147
|
|
|
$
|
2,797
|
|
|
$
|
3,525
|
|
|
$
|
350
|
|
|
$
|
(728
|
)
|
|
13
|
%
|
|
(21
|
)%
|
Overhead and other expenses
|
1,127
|
|
|
1,028
|
|
|
1,078
|
|
|
99
|
|
|
(50
|
)
|
|
10
|
|
|
(5
|
)
|
|||||
Outside services and consulting
|
1,584
|
|
|
2,159
|
|
|
2,404
|
|
|
(575
|
)
|
|
(245
|
)
|
|
(27
|
)
|
|
(10
|
)
|
|||||
Depreciation and amortization
|
301
|
|
|
391
|
|
|
724
|
|
|
(90
|
)
|
|
(333
|
)
|
|
(23
|
)
|
|
(46
|
)
|
|||||
Equity-based compensation
|
628
|
|
|
747
|
|
|
836
|
|
|
(119
|
)
|
|
(89
|
)
|
|
(16
|
)
|
|
(11
|
)
|
|||||
Total general and administrative expenses
|
$
|
6,787
|
|
|
$
|
7,122
|
|
|
$
|
8,567
|
|
|
$
|
(335
|
)
|
|
$
|
(1,445
|
)
|
|
(5
|
)%
|
|
(17
|
)%
|
|
Year Ended December 31,
|
|
Increase (Decrease)
|
|
Percent Increase (Decrease)
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018 to 2019
|
|
2017 to 2018
|
|
2018 to 2019
|
|
2017 to 2018
|
||||||||||||
Interest expense, net
|
$
|
(754
|
)
|
|
$
|
(1,809
|
)
|
|
$
|
(2,852
|
)
|
|
$
|
1,055
|
|
|
$
|
1,043
|
|
|
(58
|
)%
|
|
(37
|
)%
|
Decrease (increase) in fair value of warrant liability
|
(141
|
)
|
|
368
|
|
|
74
|
|
|
(509
|
)
|
|
294
|
|
|
(138
|
)
|
|
397
|
|
|||||
Gain on sale of BriefCam, Ltd.
|
41
|
|
|
6,602
|
|
|
—
|
|
|
(6,561
|
)
|
|
6,602
|
|
|
(99
|
)
|
|
n/a
|
|
|||||
Loss on extinguishment of debt
|
(348
|
)
|
|
(1,189
|
)
|
|
—
|
|
|
841
|
|
|
(1,189
|
)
|
|
(71
|
)
|
|
n/a
|
|
|||||
Other expense, net
|
(125
|
)
|
|
(378
|
)
|
|
(433
|
)
|
|
253
|
|
|
55
|
|
|
(67
|
)
|
|
(13
|
)
|
|||||
Total other income (expense), net
|
$
|
(1,327
|
)
|
|
$
|
3,594
|
|
|
$
|
(3,211
|
)
|
|
$
|
(4,921
|
)
|
|
$
|
6,805
|
|
|
(137
|
)%
|
|
(212
|
)%
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
10,639
|
|
|
$
|
8,636
|
|
Working capital
|
$
|
829
|
|
|
$
|
865
|
|
Financing obligations
|
$
|
240
|
|
|
$
|
209
|
|
Term loan
|
—
|
|
|
3,431
|
|
||
Financing obligations and term loan
|
$
|
240
|
|
|
$
|
3,640
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from (used in):
|
|
|
|
|
|
|
|
|
|||
Operating activities
|
$
|
(1,538
|
)
|
|
$
|
(2,843
|
)
|
|
$
|
(2,012
|
)
|
Investing activities
|
(127
|
)
|
|
9,651
|
|
|
(24
|
)
|
|||
Financing activities
|
3,602
|
|
|
(5,743
|
)
|
|
(747
|
)
|
|||
Effect of exchange rate changes on cash
|
66
|
|
|
(119
|
)
|
|
109
|
|
|||
Net change in cash and cash equivalents
|
$
|
2,003
|
|
|
$
|
946
|
|
|
$
|
(2,674
|
)
|
(In thousands)
|
Payments Due by Period
|
||||||||||||||||||||||||||
Contractual Obligations
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
$
|
764
|
|
|
$
|
712
|
|
|
$
|
672
|
|
|
$
|
294
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
2,556
|
|
Capital leases and other financing obligations (1)
|
91
|
|
|
80
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|||||||
Purchase obligations (2)
|
524
|
|
|
124
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
718
|
|
|||||||
Income tax liabilities under ASC 740 (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total contractual cash obligations
|
$
|
1,379
|
|
|
$
|
916
|
|
|
$
|
747
|
|
|
$
|
294
|
|
|
$
|
114
|
|
|
$
|
—
|
|
|
$
|
3,450
|
|
(1)
|
Amounts include principal and interest.
|
(2)
|
Purchase obligations include all commitments to purchase goods or services that meet one or both of the following criteria: (1) they are non-cancellable 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-cancellable, the entire value of the contract is included in the table.
|
(3)
|
The Company does not currently expect any income tax liabilities accrued under ASC 740 as of December 31, 2019 to be paid to the applicable tax authorities in 2020. The full balance of unrecognized tax benefits under ASC 740 of $1.8 million at December 31, 2019, 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.
|
|
Page in Annual
Report on Form 10-K
For Year Ended
December 31, 2019
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
10,639
|
|
|
$
|
8,636
|
|
Receivables, net
|
4,586
|
|
|
6,278
|
|
||
Contract assets
|
1,089
|
|
|
485
|
|
||
Income tax receivable
|
338
|
|
|
327
|
|
||
Prepaid expenses and other current assets
|
1,981
|
|
|
2,192
|
|
||
Total current assets
|
18,633
|
|
|
17,918
|
|
||
Property and equipment, net
|
596
|
|
|
545
|
|
||
Right of use assets – operating leases
|
1,746
|
|
|
—
|
|
||
Intangible assets, net
|
3,075
|
|
|
4,247
|
|
||
Goodwill
|
7,203
|
|
|
6,971
|
|
||
Deferred income taxes, non-current
|
21
|
|
|
55
|
|
||
Other assets, non-current
|
442
|
|
|
544
|
|
||
Total assets
|
$
|
31,716
|
|
|
$
|
30,280
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and other accrued liabilities
|
$
|
2,816
|
|
|
$
|
2,838
|
|
Accrued compensation
|
1,165
|
|
|
1,548
|
|
||
Operating lease liabilities
|
587
|
|
|
—
|
|
||
Deferred revenue
|
10,140
|
|
|
9,672
|
|
||
Deferred rent
|
—
|
|
|
45
|
|
||
Financing obligations
|
157
|
|
|
152
|
|
||
Warrant liability
|
2,939
|
|
|
2,798
|
|
||
Total current liabilities
|
17,804
|
|
|
17,053
|
|
||
Long-term liabilities:
|
|
|
|
|
|
||
Deferred revenue, non-current
|
1,449
|
|
|
1,672
|
|
||
Income taxes payable, non-current
|
585
|
|
|
563
|
|
||
Deferred tax liability, non-current
|
—
|
|
|
2
|
|
||
Operating lease liabilities, non-current
|
1,587
|
|
|
—
|
|
||
Deferred rent, non-current
|
—
|
|
|
302
|
|
||
Financing obligations, non-current
|
83
|
|
|
57
|
|
||
Term loan, non-current
|
—
|
|
|
3,431
|
|
||
Other non-current liabilities
|
—
|
|
|
195
|
|
||
Total long-term liabilities
|
3,704
|
|
|
6,222
|
|
||
Total liabilities
|
21,508
|
|
|
23,275
|
|
||
Commitments and contingencies (Note 4 and Note 14)
|
|
|
|
||||
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 13,553,409 and 9,624,060, respectively
|
136
|
|
|
96
|
|
||
Additional paid-in capital
|
78,061
|
|
|
69,072
|
|
||
Accumulated deficit
|
(65,128
|
)
|
|
(58,875
|
)
|
||
Accumulated other comprehensive loss
|
(2,861
|
)
|
|
(3,288
|
)
|
||
Total stockholders’ equity
|
10,208
|
|
|
7,005
|
|
||
Total liabilities and stockholders’ equity
|
$
|
31,716
|
|
|
$
|
30,280
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Software licenses and appliances
|
$
|
4,903
|
|
|
$
|
5,814
|
|
|
$
|
5,982
|
|
Service
|
20,459
|
|
|
19,199
|
|
|
22,185
|
|
|||
Total revenues
|
25,362
|
|
|
25,013
|
|
|
28,167
|
|
|||
Cost of revenues:
|
|
|
|
|
|
|
|
|
|||
Software licenses and appliances
|
1,911
|
|
|
2,277
|
|
|
2,407
|
|
|||
Service
|
5,148
|
|
|
6,216
|
|
|
7,855
|
|
|||
Total cost of revenues
|
7,059
|
|
|
8,493
|
|
|
10,262
|
|
|||
Gross profit
|
18,303
|
|
|
16,520
|
|
|
17,905
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||
Research and development
|
7,360
|
|
|
7,013
|
|
|
7,279
|
|
|||
Sales and marketing
|
8,709
|
|
|
8,394
|
|
|
10,026
|
|
|||
General and administrative
|
6,787
|
|
|
7,122
|
|
|
8,567
|
|
|||
Amortization of purchased intangibles
|
757
|
|
|
904
|
|
|
904
|
|
|||
Total operating expenses
|
23,613
|
|
|
23,433
|
|
|
26,776
|
|
|||
Operating loss
|
(5,310
|
)
|
|
(6,913
|
)
|
|
(8,871
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|||
Interest expense, net
|
(754
|
)
|
|
(1,809
|
)
|
|
(2,852
|
)
|
|||
Decrease (increase) in fair value of warrant liability
|
(141
|
)
|
|
368
|
|
|
74
|
|
|||
Gain on sale of BriefCam, Ltd.
|
41
|
|
|
6,602
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
(348
|
)
|
|
(1,189
|
)
|
|
—
|
|
|||
Other expense, net
|
(125
|
)
|
|
(378
|
)
|
|
(433
|
)
|
|||
Total other income (expense), net
|
(1,327
|
)
|
|
3,594
|
|
|
(3,211
|
)
|
|||
Loss before income taxes
|
(6,637
|
)
|
|
(3,319
|
)
|
|
(12,082
|
)
|
|||
Income tax expense (benefit)
|
(194
|
)
|
|
298
|
|
|
(358
|
)
|
|||
Net loss
|
$
|
(6,443
|
)
|
|
$
|
(3,617
|
)
|
|
$
|
(11,724
|
)
|
|
|
|
|
|
|
||||||
Net loss per share – basic:
|
|
|
|
|
|
||||||
Net loss per share – basic
|
$
|
(0.62
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(1.25
|
)
|
Weighted average shares outstanding – basic
|
10,395
|
|
|
9,499
|
|
|
9,347
|
|
|||
Net loss per share – diluted:
|
|
|
|
|
|
||||||
Loss attributable to common shareholders
|
$
|
(6,548
|
)
|
|
$
|
(3,778
|
)
|
|
$
|
(11,724
|
)
|
Net loss per share – diluted
|
$
|
(0.63
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(1.25
|
)
|
Weighted average shares outstanding – diluted
|
10,414
|
|
|
9,606
|
|
|
9,347
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(6,443
|
)
|
|
$
|
(3,617
|
)
|
|
$
|
(11,724
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Net change in foreign currency translation adjustments
|
427
|
|
|
(543
|
)
|
|
1,167
|
|
|||
Total other comprehensive income (loss)
|
427
|
|
|
(543
|
)
|
|
1,167
|
|
|||
Total comprehensive loss
|
$
|
(6,016
|
)
|
|
$
|
(4,160
|
)
|
|
$
|
(10,557
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
(Accum
Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
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 stock under employee stock plan, net of forfeitures
|
144
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Redemption of stock related to tax withholdings on employee stock plan issuances
|
(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
|
|
Adoption of ASC Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
939
|
|
|
(5
|
)
|
|
934
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,617
|
)
|
|
—
|
|
|
(3,617
|
)
|
|||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(543
|
)
|
|
(543
|
)
|
|||||
Issuance of stock under employee stock plan, net of forfeitures
|
277
|
|
|
2
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Redemption of stock related to tax withholdings on employee stock plan issuances
|
(18
|
)
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,082
|
|
|
—
|
|
|
—
|
|
|
1,082
|
|
|||||
Balance at December 31, 2018
|
9,624
|
|
|
$
|
96
|
|
|
$
|
69,072
|
|
|
$
|
(58,875
|
)
|
|
$
|
(3,288
|
)
|
|
$
|
7,005
|
|
Adoption of ASC Topic 842
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
|
190
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,443
|
)
|
|
—
|
|
|
(6,443
|
)
|
|||||
Other comprehensive income, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
427
|
|
|
427
|
|
|||||
Issuance of common stock, net of issuance costs
|
3,652
|
|
|
37
|
|
|
8,164
|
|
|
—
|
|
|
—
|
|
|
8,201
|
|
|||||
Issuance of stock under employee stock plan, net of forfeitures
|
304
|
|
|
3
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Redemption of stock related to tax withholdings on employee stock plan issuances
|
(27
|
)
|
|
—
|
|
|
(75
|
)
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
857
|
|
|
—
|
|
|
—
|
|
|
857
|
|
|||||
Balance at December 31, 2019
|
13,553
|
|
|
$
|
136
|
|
|
$
|
78,061
|
|
|
$
|
(65,128
|
)
|
|
$
|
(2,861
|
)
|
|
$
|
10,208
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|||
Net loss
|
$
|
(6,443
|
)
|
|
$
|
(3,617
|
)
|
|
$
|
(11,724
|
)
|
Adjustments to reconcile net loss to net cash used in continuing operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
1,526
|
|
|
2,366
|
|
|
3,045
|
|
|||
Stock-based compensation
|
857
|
|
|
1,082
|
|
|
1,190
|
|
|||
Accretion of debt discount and issuance costs
|
471
|
|
|
1,321
|
|
|
2,013
|
|
|||
Gain on sale of BriefCam, Ltd.
|
(41
|
)
|
|
(6,602
|
)
|
|
—
|
|
|||
Loss on debt extinguishment
|
348
|
|
|
1,189
|
|
|
—
|
|
|||
Gain on lease modification
|
(21
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on lease contract termination
|
—
|
|
|
177
|
|
|
72
|
|
|||
Increase (decrease) in fair value of warrant liability
|
141
|
|
|
(368
|
)
|
|
(74
|
)
|
|||
Deferred income taxes
|
31
|
|
|
(131
|
)
|
|
(166
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
1,720
|
|
|
(786
|
)
|
|
2,101
|
|
|||
Contract assets
|
(604
|
)
|
|
65
|
|
|
—
|
|
|||
Income taxes receivable / payable
|
13
|
|
|
375
|
|
|
167
|
|
|||
Prepaid expenses and other assets
|
522
|
|
|
449
|
|
|
1,166
|
|
|||
Accounts payable and other accrued liabilities
|
174
|
|
|
(1,196
|
)
|
|
1,656
|
|
|||
Accrued compensation
|
(389
|
)
|
|
(263
|
)
|
|
(574
|
)
|
|||
Deferred revenue
|
181
|
|
|
3,092
|
|
|
(573
|
)
|
|||
Deferred rent
|
—
|
|
|
(144
|
)
|
|
(311
|
)
|
|||
Other non-current liabilities
|
(24
|
)
|
|
148
|
|
|
—
|
|
|||
Net cash used in operating activities
|
(1,538
|
)
|
|
(2,843
|
)
|
|
(2,012
|
)
|
|||
Investing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of BriefCam, Ltd.
|
41
|
|
|
9,778
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(168
|
)
|
|
(127
|
)
|
|
(24
|
)
|
|||
Net cash provided by (used in) investing activities
|
(127
|
)
|
|
9,651
|
|
|
(24
|
)
|
|||
Financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from common stock issuance
|
8,201
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of common stock under employee stock plans
|
46
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from term loan and warrant issuance
|
—
|
|
|
10,000
|
|
|
—
|
|
|||
Principal payments on term loans
|
(4,000
|
)
|
|
(14,000
|
)
|
|
—
|
|
|||
Payments for term loan, warrant issuance and debt extinguishment costs
|
(250
|
)
|
|
(1,308
|
)
|
|
(225
|
)
|
|||
Principal payments on financing obligations
|
(320
|
)
|
|
(402
|
)
|
|
(505
|
)
|
|||
Common stock repurchases to settle employee tax withholding liability
|
(75
|
)
|
|
(33
|
)
|
|
(17
|
)
|
|||
Net cash provided by (used in) financing activities
|
3,602
|
|
|
(5,743
|
)
|
|
(747
|
)
|
|||
Effect of exchange rate changes on cash
|
66
|
|
|
(119
|
)
|
|
109
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
2,003
|
|
|
946
|
|
|
(2,674
|
)
|
|||
Cash and cash equivalents, beginning of year
|
8,636
|
|
|
7,690
|
|
|
10,364
|
|
|||
Cash and cash equivalents, end of year
|
$
|
10,639
|
|
|
$
|
8,636
|
|
|
$
|
7,690
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental disclosures of net cash paid (received) during the year:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
(293
|
)
|
|
$
|
52
|
|
|
$
|
(190
|
)
|
Interest
|
$
|
546
|
|
|
$
|
505
|
|
|
$
|
853
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Financing obligations related to prepaid expenses and other assets
|
$
|
203
|
|
|
$
|
264
|
|
|
$
|
73
|
|
Financing obligations related to property and equipment
|
$
|
148
|
|
|
$
|
97
|
|
|
$
|
—
|
|
Term loan debt issuance costs included in accrued liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
800
|
|
|
|
Year Ended December 31,
|
||||||||||
Allowance for Doubtful Accounts:
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of year
|
|
$
|
61
|
|
|
$
|
21
|
|
|
$
|
34
|
|
Write-offs
|
|
(6
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Change in provision
|
|
(10
|
)
|
|
40
|
|
|
(2
|
)
|
|||
Balance at end of year
|
|
$
|
45
|
|
|
$
|
61
|
|
|
$
|
21
|
|
–
|
ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s information. Therefore, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms.
|
–
|
The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor.
|
–
|
Lease payments included in the measurement of the lease liability include the fixed payments owed over the lease term, termination penalties, amounts expected to be payable under a residual-value guarantee, and the exercise price of an option to purchase the asset if the Company is reasonably certain to exercise the option.
|
|
December 31,
2018 |
|
Adjustments
|
|
January 1,
2019 |
||||||
Assets:
|
|
|
|
|
|
||||||
Property and equipment
|
$
|
545
|
|
|
$
|
124
|
|
|
$
|
669
|
|
Right of use assets – operating leases
|
—
|
|
|
1,367
|
|
|
1,367
|
|
|||
Liabilities:
|
|
|
|
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
2,838
|
|
|
$
|
(211
|
)
|
|
$
|
2,627
|
|
Operating lease liabilities
|
—
|
|
|
759
|
|
|
759
|
|
|||
Deferred rent
|
45
|
|
|
(45
|
)
|
|
—
|
|
|||
Operating lease liabilities, non-current
|
—
|
|
|
1,100
|
|
|
1,100
|
|
|||
Deferred rent, non-current
|
302
|
|
|
(302
|
)
|
|
—
|
|
|||
Stockholders’ equity:
|
|
|
|
|
|
|
|
||||
Accumulated deficit
|
$
|
(58,875
|
)
|
|
$
|
190
|
|
|
$
|
(58,685
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Computer, network equipment and furniture
|
$
|
2,381
|
|
|
$
|
2,565
|
|
Leasehold improvements
|
735
|
|
|
789
|
|
||
Total property and equipment
|
3,116
|
|
|
3,354
|
|
||
Less accumulated depreciation and amortization
|
(2,520
|
)
|
|
(2,809
|
)
|
||
Total property and equipment, net
|
$
|
596
|
|
|
$
|
545
|
|
|
December 31, 2019
|
||||||||||||||
|
Customer Relationships
|
|
Developed Technology
|
|
Trademarks / Trade-Names
|
|
Total
|
||||||||
Original cost
|
$
|
4,878
|
|
|
$
|
8,135
|
|
|
$
|
2,182
|
|
|
$
|
15,195
|
|
Accumulated amortization
|
(3,293
|
)
|
|
(7,741
|
)
|
|
(1,086
|
)
|
|
(12,120
|
)
|
||||
Net identifiable intangible assets
|
$
|
1,585
|
|
|
$
|
394
|
|
|
$
|
1,096
|
|
|
$
|
3,075
|
|
|
December 31, 2018
|
||||||||||||||
|
Customer Relationships
|
|
Developed Technology
|
|
Trademarks / Trade-Names
|
|
Total
|
||||||||
Original cost
|
$
|
4,818
|
|
|
$
|
8,023
|
|
|
$
|
2,180
|
|
|
$
|
15,021
|
|
Accumulated amortization
|
(2,721
|
)
|
|
(7,110
|
)
|
|
(943
|
)
|
|
(10,774
|
)
|
||||
Net identifiable intangible assets
|
$
|
2,097
|
|
|
$
|
913
|
|
|
$
|
1,237
|
|
|
$
|
4,247
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization expense associated with the developed technology included in cost of revenues
|
$
|
455
|
|
|
$
|
1,024
|
|
|
$
|
1,197
|
|
Amortization expense associated with other acquired intangible assets included in operating expenses
|
757
|
|
|
904
|
|
|
904
|
|
|||
Total amortization expense
|
$
|
1,212
|
|
|
$
|
1,928
|
|
|
$
|
2,101
|
|
|
|
Year Ended
December 31, 2019 |
||
Operating lease cost
|
|
$
|
526
|
|
Finance lease cost:
|
|
|
||
Amortization of right of use assets
|
|
106
|
|
|
Interest on lease liabilities
|
|
11
|
|
|
Total finance cost
|
|
117
|
|
|
Total lease cost
|
|
$
|
643
|
|
Leases
|
Classification on Balance Sheet
|
December 31,
2019 |
||
Assets
|
|
|
||
Operating
|
Right of use assets – operating leases
|
$
|
1,746
|
|
Finance
|
Property and equipment
|
130
|
|
|
Total lease assets
|
|
$
|
1,876
|
|
Liabilities
|
|
|
||
Current
|
|
|
||
Operating
|
Operating lease liabilities
|
$
|
587
|
|
Finance
|
Financing obligations
|
83
|
|
|
Non-current
|
|
|
||
Operating
|
Operating lease liabilities, non-current
|
1,587
|
|
|
Finance
|
Financing obligations, non-current
|
83
|
|
|
Total lease liabilities
|
|
$
|
2,340
|
|
|
Operating
leases
|
|
Finance
leases
|
||||
2020
|
$
|
764
|
|
|
$
|
91
|
|
2021
|
712
|
|
|
80
|
|
||
2022
|
672
|
|
|
5
|
|
||
2023
|
294
|
|
|
—
|
|
||
2024
|
114
|
|
|
—
|
|
||
Thereafter
|
—
|
|
|
—
|
|
||
Total undiscounted lease payments
|
2,556
|
|
|
176
|
|
||
Less amount representing interest
|
(382
|
)
|
|
(10
|
)
|
||
Present value of lease liabilities
|
$
|
2,174
|
|
|
$
|
166
|
|
|
|
London, England
|
|
Minneapolis, Minnesota
|
|
Total
|
||||||
Contract termination obligation, January 1, 2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Lease termination costs incurred
|
|
72
|
|
|
—
|
|
|
72
|
|
|||
Sublease payment received
|
|
122
|
|
|
—
|
|
|
122
|
|
|||
Contract termination obligation, December 31, 2017
|
|
194
|
|
|
—
|
|
|
194
|
|
|||
Lease termination costs incurred
|
|
—
|
|
|
224
|
|
|
224
|
|
|||
Accretion expense
|
|
14
|
|
|
19
|
|
|
33
|
|
|||
Payments on obligations
|
|
(189
|
)
|
|
(40
|
)
|
|
(229
|
)
|
|||
Change in currency exchange rate
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Contract termination obligation, December 31, 2018
|
|
15
|
|
|
203
|
|
|
218
|
|
|||
Adjustment and reclassification upon adoption of Topic 842 (see Note 1)
|
|
(15
|
)
|
|
(203
|
)
|
|
(218
|
)
|
|||
Contract termination obligation, December 31, 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Term loan, remaining principal balance
|
$
|
—
|
|
|
$
|
4,000
|
|
Unamortized original issue discount
|
—
|
|
|
(481
|
)
|
||
Unamortized debt issuance costs
|
—
|
|
|
(88
|
)
|
||
Term loan
|
$
|
—
|
|
|
$
|
3,431
|
|
•
|
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, 2019 |
|
Quoted Prices in
Active Markets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative warrant liability - ESW warrant
|
$
|
2,149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,149
|
|
Derivative warrant liability - Hale warrant
|
645
|
|
|
—
|
|
|
—
|
|
|
645
|
|
||||
Derivative warrant liability - iStudy
|
145
|
|
|
—
|
|
|
—
|
|
|
145
|
|
||||
Derivative warrant liability
|
$
|
2,939
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,939
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
Total Fair
Value at December 31, 2018 |
|
Quoted Prices in
Active Markets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative warrant liability - ESW warrant
|
$
|
2,015
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,015
|
|
Derivative warrant liability - Hale warrant
|
750
|
|
|
—
|
|
|
—
|
|
|
750
|
|
||||
Derivative warrant liability - iStudy
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||
Derivative warrant liability
|
$
|
2,798
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,798
|
|
Balance at December 31, 2018
|
|
$
|
2,798
|
|
Change in fair value
|
|
141
|
|
|
Balance at December 31, 2019
|
|
$
|
2,939
|
|
|
Year Ended
December 31, |
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Software licenses and appliances
|
$
|
4,903
|
|
|
$
|
5,814
|
|
|
$
|
5,982
|
|
Service
|
|
|
|
|
|
||||||
Subscription, maintenance and support
|
18,249
|
|
|
17,132
|
|
|
19,374
|
|
|||
Professional services and other
|
2,210
|
|
|
2,067
|
|
|
2,811
|
|
|||
Total service
|
20,459
|
|
|
19,199
|
|
|
22,185
|
|
|||
Total revenues
|
$
|
25,362
|
|
|
$
|
25,013
|
|
|
$
|
28,167
|
|
|
Year Ended
December 31, |
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
North America
|
$
|
16,588
|
|
|
$
|
16,639
|
|
|
$
|
20,494
|
|
Europe
|
7,527
|
|
|
6,453
|
|
|
6,914
|
|
|||
Asia
|
1,247
|
|
|
1,921
|
|
|
759
|
|
|||
Total
|
$
|
25,362
|
|
|
$
|
25,013
|
|
|
$
|
28,167
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Stock-based compensation cost charged against loss, before income tax benefit
|
|
|
|
|
|
||||||
Stock options
|
$
|
331
|
|
|
$
|
326
|
|
|
$
|
366
|
|
Restricted stock and restricted stock units
|
521
|
|
|
566
|
|
|
765
|
|
|||
Performance stock units
|
5
|
|
|
190
|
|
|
59
|
|
|||
Total stock-based compensation costs
|
$
|
857
|
|
|
$
|
1,082
|
|
|
$
|
1,190
|
|
Stock-based compensation cost included in:
|
|
|
|
|
|
||||||
Cost of revenues
|
$
|
26
|
|
|
$
|
34
|
|
|
$
|
39
|
|
Operating expenses
|
831
|
|
|
1,048
|
|
|
1,151
|
|
|||
Total stock-based compensation costs
|
$
|
857
|
|
|
$
|
1,082
|
|
|
$
|
1,190
|
|
|
Year Ended December 31,
|
||||
|
2019
|
|
2018
|
|
2017
|
Expected life of options in years
|
4.70 - 4.75
|
|
4.54 - 4.75
|
|
4.75
|
Risk-free interest rate
|
1.8% - 2.5%
|
|
2.6% - 2.9%
|
|
1.7% - 2.0%
|
Expected volatility
|
69.7% - 73.6%
|
|
69.6% - 70.5%
|
|
64.2% - 66.2%
|
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, 2016
|
1,508
|
|
|
$
|
7.03
|
|
|
|
|
|
|
|
Granted
|
165
|
|
|
2.16
|
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Canceled
|
(385
|
)
|
|
7.81
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2017
|
1,288
|
|
|
6.18
|
|
|
|
|
|
|||
Granted
|
758
|
|
|
2.24
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled
|
(604
|
)
|
|
7.60
|
|
|
|
|
|
|||
Options outstanding at December 31, 2018
|
1,442
|
|
|
3.51
|
|
|
|
|
|
|||
Granted
|
39
|
|
|
3.11
|
|
|
|
|
|
|
||
Exercised
|
(40
|
)
|
|
2.55
|
|
|
|
|
|
|
||
Canceled
|
(381
|
)
|
|
5.20
|
|
|
|
|
|
|
||
Options outstanding at December 31, 2019
|
1,060
|
|
|
2.93
|
|
|
4.6
|
|
$
|
275
|
|
|
Total vested and expected to vest as of December 31, 2019
|
1,060
|
|
|
2.93
|
|
|
4.6
|
|
$
|
275
|
|
|
Options exercisable as of:
|
|
|
|
|
|
|
|
|||||
December 31, 2017
|
838
|
|
|
$
|
7.85
|
|
|
|
|
|
||
December 31, 2018
|
572
|
|
|
5.29
|
|
|
|
|
|
|||
December 31, 2019
|
540
|
|
|
3.51
|
|
|
3.9
|
|
$
|
92
|
|
(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,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Fair value of options granted
|
$
|
71
|
|
|
$
|
982
|
|
|
$
|
193
|
|
Per share weighted average fair value of options granted
|
$
|
1.83
|
|
|
$
|
1.30
|
|
|
$
|
1.17
|
|
Total intrinsic value of stock options exercised
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Number of Shares
|
|
Weighted Average
Grant-Date Fair Value
|
|||
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
|
|
|
Granted
|
279
|
|
|
2.17
|
|
|
Vested
|
(186
|
)
|
|
3.66
|
|
|
Canceled
|
(3
|
)
|
|
14.78
|
|
|
Nonvested at December 31, 2018
|
308
|
|
|
2.38
|
|
|
Granted
|
230
|
|
|
3.16
|
|
|
Vested
|
(198
|
)
|
|
2.53
|
|
|
Canceled
|
(31
|
)
|
|
2.25
|
|
|
Nonvested at December 31, 2019
|
309
|
|
|
$
|
2.87
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Per share weighted average grant-date fair value of restricted stock and restricted stock units granted
|
$
|
3.16
|
|
|
$
|
2.17
|
|
|
$
|
2.44
|
|
Total fair value of restricted stock and restricted stock units vested
|
$
|
749
|
|
|
$
|
377
|
|
|
$
|
392
|
|
|
Number of Units
|
|||||||
|
2018 Performance Stock Units
|
|
2017 Performance Stock Units
|
|
Total Performance Stock Units
|
|||
Nonvested at December 31, 2016
|
—
|
|
|
—
|
|
|
—
|
|
Granted
|
—
|
|
|
166
|
|
|
166
|
|
Vested
|
—
|
|
|
—
|
|
|
—
|
|
Canceled
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
Nonvested at December 31, 2017
|
—
|
|
|
140
|
|
|
140
|
|
Granted
|
169
|
|
|
—
|
|
|
169
|
|
Vested
|
—
|
|
|
(116
|
)
|
|
(116
|
)
|
Canceled
|
(21
|
)
|
|
(24
|
)
|
|
(45
|
)
|
Nonvested at December 31, 2018
|
148
|
|
|
—
|
|
|
148
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
Vested
|
(98
|
)
|
|
—
|
|
|
(98
|
)
|
Canceled
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
Nonvested at December 31, 2019
|
41
|
|
|
—
|
|
|
41
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Loss before income taxes:
|
|
|
|
|
|
|
|
|
|||
Domestic
|
$
|
(5,466
|
)
|
|
$
|
(1,631
|
)
|
|
$
|
(11,524
|
)
|
Foreign
|
(1,171
|
)
|
|
(1,688
|
)
|
|
(558
|
)
|
|||
Total loss before income taxes
|
$
|
(6,637
|
)
|
|
$
|
(3,319
|
)
|
|
$
|
(12,082
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
(175
|
)
|
State
|
17
|
|
|
591
|
|
|
35
|
|
|||
Foreign
|
(246
|
)
|
|
(314
|
)
|
|
(211
|
)
|
|||
Total current
|
(229
|
)
|
|
269
|
|
|
(351
|
)
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
—
|
|
|
—
|
|
|
—
|
|
|||
State
|
8
|
|
|
11
|
|
|
(12
|
)
|
|||
Foreign
|
27
|
|
|
18
|
|
|
5
|
|
|||
Total deferred
|
35
|
|
|
29
|
|
|
(7
|
)
|
|||
Total provision for income tax expense (benefit)
|
$
|
(194
|
)
|
|
$
|
298
|
|
|
$
|
(358
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Expected income tax benefit
|
$
|
(1,393
|
)
|
|
$
|
(697
|
)
|
|
$
|
(4,107
|
)
|
Federal R&D credit
|
(54
|
)
|
|
(32
|
)
|
|
(24
|
)
|
|||
Refundable AMT credit
|
—
|
|
|
(12
|
)
|
|
(172
|
)
|
|||
Effect of deferred rate change
|
—
|
|
|
8
|
|
|
11,851
|
|
|||
Foreign tax
|
27
|
|
|
38
|
|
|
(87
|
)
|
|||
Non-deductible stock issuance costs
|
3
|
|
|
85
|
|
|
186
|
|
|||
Foreign unremitted earnings
|
—
|
|
|
130
|
|
|
(20
|
)
|
|||
Change in valuation allowance
|
1,379
|
|
|
408
|
|
|
(7,764
|
)
|
|||
State income taxes, net of federal tax effect
|
(219
|
)
|
|
455
|
|
|
(306
|
)
|
|||
Other, net
|
63
|
|
|
(85
|
)
|
|
85
|
|
|||
Total provision for income tax expense (benefit)
|
$
|
(194
|
)
|
|
$
|
298
|
|
|
$
|
(358
|
)
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
|
||
Inventory provisions and uniform capitalization
|
$
|
—
|
|
|
$
|
1
|
|
Accounts receivable allowances
|
8
|
|
|
13
|
|
||
Non-qualified stock option and restricted stock expense
|
220
|
|
|
184
|
|
||
Deferred revenue
|
218
|
|
|
101
|
|
||
Lease liabilities
|
290
|
|
|
—
|
|
||
Loss and credit carryforwards of U.S. subsidiary
|
24,717
|
|
|
24,101
|
|
||
Loss carryforward of foreign subsidiaries
|
145
|
|
|
283
|
|
||
Excess interest expense
|
496
|
|
|
298
|
|
||
Other accruals and reserves
|
101
|
|
|
169
|
|
||
Total deferred tax assets before valuation allowance
|
26,195
|
|
|
25,150
|
|
||
Less valuation allowance
|
(25,406
|
)
|
|
(24,153
|
)
|
||
Total deferred tax assets
|
$
|
789
|
|
|
$
|
997
|
|
Deferred tax liabilities:
|
|
|
|
|
|
||
Acquired intangibles
|
$
|
(465
|
)
|
|
$
|
(901
|
)
|
Right of use assets
|
(207
|
)
|
|
—
|
|
||
Fixed assets
|
(26
|
)
|
|
3
|
|
||
Other
|
(70
|
)
|
|
(46
|
)
|
||
Total deferred tax liabilities
|
$
|
(768
|
)
|
|
$
|
(944
|
)
|
Total net deferred tax assets
|
$
|
21
|
|
|
$
|
53
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Gross unrecognized tax benefits at beginning of year
|
$
|
1,724
|
|
|
$
|
1,136
|
|
Increases related to:
|
|
|
|
|
|
||
Prior year income tax positions
|
7
|
|
|
2
|
|
||
Current year income tax positions
|
49
|
|
|
586
|
|
||
Gross unrecognized tax benefits at end of year
|
$
|
1,780
|
|
|
$
|
1,724
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss per share – basic
|
|
|
|
|
|
||||||
Net loss
|
$
|
(6,443
|
)
|
|
$
|
(3,617
|
)
|
|
$
|
(11,724
|
)
|
Weighted average shares outstanding – basic
|
10,395
|
|
|
9,499
|
|
|
9,347
|
|
|||
Net loss per share – basic
|
$
|
(0.62
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(1.25
|
)
|
|
|
|
|
|
|
||||||
Net loss per share – diluted
|
|
|
|
|
|
||||||
Loss attributable to common shareholders:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(6,443
|
)
|
|
$
|
(3,617
|
)
|
|
$
|
(11,724
|
)
|
Numerator effect of dilutive securities
|
|
|
|
|
|
||||||
Warrants
|
(105
|
)
|
|
(161
|
)
|
|
—
|
|
|||
Loss attributable to common shareholders
|
$
|
(6,548
|
)
|
|
$
|
(3,778
|
)
|
|
$
|
(11,724
|
)
|
Weighted averages shares outstanding – diluted:
|
|
|
|
|
|
||||||
Weighted average shares outstanding – basic
|
10,395
|
|
|
9,499
|
|
|
9,347
|
|
|||
Denominator effect of dilutive securities
|
|
|
|
|
|
||||||
Warrants
|
19
|
|
|
107
|
|
|
—
|
|
|||
Weighted average shares outstanding – diluted
|
10,414
|
|
|
9,606
|
|
|
9,347
|
|
|||
Net loss per share – diluted
|
$
|
(0.63
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(1.25
|
)
|
|
Year Ended
December 31, |
||||
|
2019
|
|
2018
|
||
Stock options
|
1,299
|
|
|
1,273
|
|
Warrants
|
1,025
|
|
|
348
|
|
Restricted stock units
|
124
|
|
|
150
|
|
Total anti-dilutive
|
2,448
|
|
|
1,771
|
|
|
|
December 31,
|
||||||
Accounts Receivable
|
|
2019
|
|
2018
|
||||
Customer B
|
|
*
|
|
|
$
|
841
|
|
|
Customer C
|
|
$
|
677
|
|
|
$
|
782
|
|
Customer D
|
|
*
|
|
|
$
|
692
|
|
|
Customer E
|
|
$
|
550
|
|
|
*
|
|
|
Customer F
|
|
$
|
471
|
|
|
*
|
|
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
|
•
|
Vern Hanzlik, who served as President and Chief Executive Officer in 2019; and
|
•
|
David G. Ristow, who served as Chief Financial Officer in 2019.
|
•
|
Executive base compensation levels should be established by comparison of job responsibility to similar positions in comparable companies and be adequate to retain highly-qualified personnel; and
|
•
|
Variable compensation should be established by comparison of job responsibility to similar positions in comparable companies and be adequate to retain highly-qualified personnel and should provide incentives to improve performance and shareholder value.
|
•
|
Base salary;
|
•
|
Short-term incentive compensation delivered through the 2019 Company Bonus Plan, the annual cash incentive plan for 2019; and
|
•
|
Long-term equity compensation.
|
•
|
Our long-term equity incentives are at the discretion of the Compensation Committee and are granted pursuant to a disciplined process.
|
•
|
Stock options become exercisable over a four-year period and remain exercisable for up to seven years from the date of grant, and restricted shares vest over periods up to four years, encouraging executives to look to long-term appreciation in equity values.
|
•
|
The performance stock units granted in 2018 have multi-year performance goals and after the shares are earned, they are issued as restricted stock with an additional one-year vesting. These features encourage executives to drive long-term performance.
|
•
|
We balance short- and long-term decision-making with our annual cash incentive program, equity awards that vest over four years, and multi-year performance periods for our performance stock units.
|
•
|
Because of our stock ownership guidelines, our executive officers could lose significant value if our stock price were exposed to inappropriate or unnecessary risks.
|
•
|
The metrics used to determine the incentive pay to a named executive officer under the 2019 Company Bonus Plan balanced annual revenue, adjusted EBITDA and customer retention percentage, which were each weighted one-third. In this way, we incentivize disciplined growth and prudent expense management.
|
•
|
The incentive pay amounts under the 2019 Company Bonus Plan cannot exceed 150% of the executive officer’s target amount, no matter how much performance exceeds the maximum levels of the performance goals. This feature was designed to limit windfalls.
|
•
|
Through our 2007 Plan, the Compensation Committee has the right to “claw back” stock incentives or cash incentives from a participant or to seek repayment from a participant through a variety of means in certain circumstances such as certain restatements of our financial statements, certain terminations of employment, and breach of an agreement between us and the executive officer. These “claw back” features are applicable to the 2019 Company Bonus Plan and to all equity awards granted in 2019.
|
•
|
Our corporate compliance systems and policies, which are overseen by the Audit Committee, further mitigate against excessive or inappropriate risk taking. For example, our insider trading policy prohibits executive officers from purchasing Qumu securities on margin, hedging Qumu securities, borrowing against any account in which Qumu securities are held, pledging Qumu securities as collateral for a loan, or engaging in monetization transactions.
|
Name and Position
|
Year
|
Salary
|
Stock Awards (1)
|
Option Awards (1)
|
Non-Equity Incentive Plan Compensation
(2) |
All Other Compensation
(3)
|
Total
|
||||||||||||||||||
Vern Hanzlik,
President and Chief Executive Officer |
2019
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136,990
|
|
|
$
|
14,565
|
|
|
$
|
501,555
|
|
|
2018
|
|
390,800
|
|
|
|
234,934
|
|
|
|
92,755
|
|
|
|
—
|
|
|
|
15,463
|
|
|
|
733,952
|
|
|
|
2017
|
|
390,800
|
|
|
|
109,618
|
|
|
|
76,773
|
|
|
|
—
|
|
|
|
17,745
|
|
|
|
594,936
|
|
|
|
David G. Ristow (4),
Chief Financial Officer
|
2019
|
$
|
300,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,710
|
|
|
$
|
23,510
|
|
|
$
|
382,220
|
|
|
2018
|
|
275,000
|
|
|
|
53,143
|
|
|
|
61,837
|
|
|
|
43,052
|
|
|
|
21,089
|
|
|
|
454,121
|
|
|
|
2017
|
|
12,516
|
|
|
|
68,400
|
|
|
|
194,611
|
|
|
|
—
|
|
|
|
—
|
|
|
|
275,527
|
|
|
(1)
|
Valuation of awards based on the grant date fair value of those awards computed in accordance with FASB ASC Topic 718 utilizing assumptions discussed in Note 8 to our consolidated financial statements for the year ended December 31, 2019 included in this Annual Report on Form 10-K for the year ended December 31, 2019. For 2018, includes $78,555 in stock issued to Mr. Hanzlik in lieu of a cash payment of under the short-term cash incentive compensation program for 2018.
|
(2)
|
Represents the amounts paid in cash to the named executive officers under the short-term cash incentive compensation program for the year noted, except as noted in the footnote above. All amounts are reported for the year in which the related services were performed, although may be paid in the following year.
|
(3)
|
Represents the following amounts:
|
(4)
|
Effective December 15, 2017, Mr. Ristow was hired as our Chief Financial Officer after serving as our Interim Chief Financial Officer on a consulting basis beginning November 7, 2017. Accordingly, information for 2017 represents a partial year. Salary information does not include amounts paid to Salo, LLC for the provision of Mr. Ristow’s services as Interim Chief Financial Officer. We paid Salo, LLC $245 per hour for Mr. Ristow’s services or $109,117 in the aggregate for his consulting services prior to being hired.
|
|
Option Awards
|
Stock Awards
|
||||||||||||||||
Name
|
Number of Securities Underlying Unexercised Options
Exercisable |
Number of Securities Underlying Unexercised Options Unexer-cisable (1)
|
Option Exercise Price ($)
|
Option Expiration Date (1)
|
Number of Shares or Units of Stock That Have Not Vested
|
Market Value of Shares or Units of Stock That Have Not Vested (2)
|
Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (3)
|
Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested (2)
|
||||||||||
Vern Hanzlik
|
60,000
|
|
—
|
|
$
|
3.11
|
|
11/11/2022
|
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
37,500
|
|
37,500
|
|
$
|
1.90
|
|
3/8/2024
|
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
|
18,750
|
|
56,250
|
|
$
|
2.1257
|
|
12/10/2025
|
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
$
|
—
|
|
—
|
|
80,208
|
|
$
|
209,343
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
$
|
—
|
|
16,667
|
|
43,501
|
|
|
David G. Ristow
|
75,000
|
|
75,000
|
|
$
|
2.28
|
|
12/15/2024
|
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
12,500
|
|
37,500
|
|
$
|
2.1257
|
|
12/10/2025
|
|
—
|
|
$
|
—
|
|
|
|
|||
—
|
|
—
|
|
$
|
—
|
|
—
|
|
53,932
|
|
$
|
140,763
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
$
|
—
|
|
—
|
|
—
|
|
$
|
—
|
|
10,092
|
|
26,340
|
|
(1)
|
Options vest and become exercisable in equal installments on the first four anniversaries of the date of grant or hire date and the expiration date of each option is the seven-year anniversary of the date of grant of such option.
|
(2)
|
Value based on a share price of $2.61, which was the closing sales price for a share of our common stock on the Nasdaq Capital Market on December 31, 2019.
|
(3)
|
Represents performance stock units approved by the Compensation Committee on March 23, 2018. For the 2018 performance period, the Company issued 33,333 shares of restricted stock to Mr. Hanzlik on March 5, 2019 in settlement of his award of 50,000 performance stock units and issued 20,182 shares of restricted to Mr. Ristow on March 5, 2019 in settlement of his award of 30,274 performance stock units. As provided in and subject to the terms of the award agreements, the shares issued will be restricted from transfer for a period of 364 days following issuance and are subject to forfeiture for termination of employment. As of December 31, 2019, Mr. Hanzlik held 16,667 performance stock units and Mr. Ristow held 10,092 performance stock units. Effective February 10, 2020, the Compensation Committee determined that the performance goal for the 2019 performance period was not met and accordingly, the outstanding performance stock units were forfeited to the Company without payment of any consideration therefor as of February 10, 2020. Accordingly, as of February 10, 2020, none of the performance stock unit awards were outstanding.
|
Term
|
Definition
|
Cause
|
• The failure by the executive officer to use his or her best efforts to perform the material duties and responsibilities of his or her position or to comply with any material policy or directive Qumu has in effect from time to time, provided the executive officer shall have received notice of such failure and have failed to cure the same within thirty days of such notice.
• Any act on the part of the executive officer which is harmful to the reputation, financial condition, business or business relationships of Qumu, including, but not limited to, conduct which is inconsistent with federal or state law respecting harassment of, or discrimination against, any Qumu employee or harmful to the reputation or business relationships of the executive officer.
• A material breach of the executive officer’s fiduciary responsibilities to Qumu, such as embezzlement or misappropriation of Qumu funds, business opportunities or properties, or to any of our customers, vendors, agents or employees.
• Conviction of, or guilty plea or nolo contendere plea by the executive officer to a felony or any crime involving moral turpitude, fraud or misrepresentation.
• A material breach of the executive officer’s Nondisclosure and Noncompetition Agreement with Qumu.
|
Good Reason
|
Good Reason for the twelve-month period following a Change in Control shall mean, without your express written consent, any of the following:
(i) a material diminution of your authority, duties or responsibilities with respect to your position immediately prior to the Change in Control, or
(ii) a material reduction in your base compensation as in effect immediately prior to the Change in Control;
(iii) a material reduction in your opportunity to earn a cash bonus under the annual short-term incentive compensation plan of Qumu in which you participate as in effect immediately prior to the Change in Control (for the avoidance of doubt, specifically excluding any reduction in your opportunity to earn a cash bonus under any long-term incentive compensation plan of Qumu in which you participate);
(iv) a material reduction in the authority of the person to whom you report (or a change in your reporting directly to the Board of Directors, if applicable);
(v) a material change in the geographic location at which you must perform services for Qumu; and
(vi) any other action or inaction that constitutes a material violation of this Agreement by Qumu;
provided that no such termination for Good Reason shall be effective unless: (A) you provide written notice to the Chair of the Board of Directors of the existence of a condition specified in paragraphs (i) through (v) above within 90 days of the initial existence of the condition; (B) Qumu does not remedy such condition within 30 days of the date of such notice; and (C) you terminate your employment within 90 days following the last day of the remedial period described above.
|
Term
|
Definition
|
Change in Control
|
Change in Control of Qumu shall mean a change in control which would be required to be reported in response to Item 5.01 of Form 8-K promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether or not Qumu is then subject to such reporting requirement, including without limitation, if:
• any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly of securities of Qumu representing 20% or more of the combined voting power of Qumu’s then outstanding securities (other than an entity owned 50% or greater by Qumu or an employee pension plan for the benefit of the employees of Qumu);
• there ceases to be a majority of the Board of Directors comprised of (A) individuals who, on the date of this letter agreement, constituted the Board of Directors of Qumu; and (B) any new director who subsequently was elected or nominated for election by a majority of the directors who held such office prior to a Change in Control; or
• Qumu disposes of at least 75% of its assets, other than (X) to an entity owned 50% or greater by Qumu or any of its subsidiaries, or to an entity in which at least 50% of the voting equity securities are owned by the shareholders of Qumu immediately prior to the disposition in substantially the same percentage or (Y) as a result of a bankruptcy proceeding, dissolution or liquidation of Qumu.
|
•
|
an annual retainer of $38,000;
|
•
|
an additional retainer of $16,000 for our non-executive Chairman of the Board, Robert F. Olson;
|
•
|
an annual retainer of $6,000, $4,000 and $3,000 for members of the Audit, Compensation and Governance Committees, respectively; and
|
•
|
an additional annual retainer of $8,000, $8,000 and $3,000 for the chairs of the Audit, Compensation and Governance Committees, respectively.
|
Name
|
Fees Earned or Paid in Cash
(1)
|
Stock Awards
(2)
|
Total
|
||||||
Robert F. Olson
|
$
|
59,175
|
|
$
|
79,998
|
|
$
|
139,173
|
|
Mary E. Chowning
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Neil E. Cox
|
$
|
48,525
|
|
$
|
79,998
|
|
$
|
128,523
|
|
Daniel R. Fishback
|
$
|
52,700
|
|
$
|
79,998
|
|
$
|
132,698
|
|
Edward Horowitz
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Kenan Lucas
|
$
|
50,134
|
|
$
|
79,998
|
|
$
|
130,132
|
|
Thomas F. Madison (3)
|
$
|
26,389
|
|
$
|
—
|
|
$
|
26,389
|
|
Kimberly K. Nelson (4)
|
$
|
33,458
|
|
$
|
—
|
|
$
|
33,458
|
|
(1)
|
Represents cash retainer and meeting fees for 2019 as described above.
|
(2)
|
Valuation of awards based on the grant date fair value of those awards computed in accordance with FASB ASC Topic 718 utilizing assumptions discussed in Note 8 to our consolidated financial statements for the year ended December 31, 2019 included in this Annual Report on Form 10-K.
|
(3)
|
Thomas F. Madison passed away on April 10, 2019 and ceased serving as a director.
|
(4)
|
Ms. Nelson was not nominated for re-election at the 2019 Annual Meeting of Shareholders and accordingly, ceased serving as a director on May 9, 2019.
|
|
|
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
|
|
1,060,250
|
|
$
|
2.93
|
|
|
604,950
|
Name and Address of Beneficial Owner
|
|
Number of Shares
Beneficially Owned (1) |
Percent of Outstanding
|
Harbert Discovery Fund, LP (2)
2100 Third Avenue North, Suite 600 Birmingham, AL 35203 |
|
1,392,522
|
10.3%
|
BLR Partners LP (3)
1177 West Loop South, Suite 1625
Houston, Texas 77027
|
|
1,020,000
|
7.5%
|
ESW Capital, LLC (4)
401 Congress Avenue, Suite 2650 Austin, TX 78701 |
|
925,000
|
6.8%
|
Renaissance Technologies LLC (5)
800 Third Avenue New York, NY 10022 |
|
772,856
|
5.7%
|
Vern Hanzlik (6)(7)
|
|
377,148
|
2.8%
|
Robert F. Olson (6)(8)
|
|
139,405
|
1.0%
|
Mary E. Chowning (6)
|
|
10,000
|
0.1%
|
Neil E. Cox (6)
|
|
33,000
|
0.2%
|
Daniel R. Fishback (6)(9)
|
|
101,560
|
0.7%
|
Edward Horowitz (6)
|
|
10,000
|
0.1%
|
Kenan Lucas (6)(10)
|
|
1,392,522
|
10.3%
|
David G. Ristow (7)
|
|
162,180
|
1.2%
|
All current executive officers and directors
as a group (8 persons) |
|
2,225,815
|
16.4%
|
(1)
|
Includes the following number of shares that could be acquired within 60 days of March 2, 2020 upon the exercise of stock options: Mr. Hanzlik, 135,000 shares and Mr. Ristow, 87,500 shares; and all current directors and executive officers as a group, 222,500 shares. No director held any stock option as of March 2, 2020.
|
(2)
|
Based on an Amendment No. 7 to Schedule 13D filed on February 13, 2020 by the following reporting persons: (i) Harbert Discovery Fund, LP (the “Harbert Fund”), (ii) Harbert Discovery Fund GP, LLC (the “Fund GP”), (iii) Harbert Fund Advisors, Inc. (“HFA”), (iv) Harbert Management Corporation (“HMC”), (v) Jack Bryant, (vi) Kenan Lucas, and (vii) Raymond Harbert. Kenan Lucas is the Managing Director and Portfolio Manager of the Fund GP, which serves as the general partner of the Fund. Jack Bryant is a Senior Advisor to the Fund, and a Vice President and Senior Managing Director of HMC. Raymond Harbert is the controlling shareholder, Chairman and Chief Executive Officer of HMC, an alternative asset investment management firm that is the managing member of the Fund GP. Mr. Harbert also serves as the Chairman, Chief Executive Officer and Director of HFA, an indirect, wholly owned subsidiary of HMC, which provides the Harbert Fund with certain operational and administrative services. The reporting persons report that they have shared voting and dispositive power over the shares indicated above as of February 11, 2020 in accordance with the following: HFA, HMC, and Raymond Harbert have shared voting and dispositive power over 1,392,522 shares and may be deemed to be the beneficial owners of such shares. The Fund GP, the Harbert Fund, Jack Bryant, and Kenan Lucas have shared voting and dispositive power over 1,367,522 shares and may be deemed to be the beneficial owners of such shares.
|
(3)
|
Based upon a Schedule 13G dated February 28, 2020 and filed on March 3, 2019 by the following reporting persons: BLR Partners LP, a Texas limited partnership (“BLR Partners”), BLRPart, LP, a Texas limited partnership (“BLRPart GP”), BLRGP Inc., a Texas S corporation (“BLRGP”), Fondren Management, LP, a Texas limited partnership (“Fondren Management”), FMLP Inc., a Texas S corporation (“FMLP”) and Bradley L. Radoff. BLRPart GP serves as the general partner of BLR Partners. BLRGP serves as the general partner of BLRPart GP. Fondren Management serves as the investment manager of BLR Partners. FMLP serves as the general partner
|
(4)
|
Based upon a Schedule 13G dated and filed on March 8, 2018 in which the reporting person indicates that ESW Capital, LLC has beneficial ownership over 925,000 shares of common stock issuable upon the exercise of an outstanding warrant and Joseph A. Liemandt is the sole voting member of ESW Capital, LLC as of February 28, 2018.
|
(5)
|
Based on an Amendment No. 6 to Schedule 13G filed on February 13, 2020 in which Renaissance Technologies LLC reports sole voting power over 748,072 shares, sole dispositive power over 761,426 shares and shared dispositive power over 11,430 shares as of December 31, 2019. Renaissance Technologies Holdings Corporation is the majority owner of Renaissance Technologies LLC.
|
(6)
|
Director.
|
(7)
|
Named executive officer.
|
(8)
|
Includes 47,845 shares held by the Robert F. Olson Revocable Trust of which Mr. Olson and his spouse are trustees.
|
(9)
|
Includes 101,560 shares held by the Fishback Family Revocable Trust, of which Mr. Fishback is a trustee.
|
(10)
|
Includes shares held by Harbert Fund (see footnote 2 for a description of the relationship between Mr. Lucas and Harbert Fund). Mr. Lucas specifically disclaims beneficial ownership of the shares held by Harbert Fund, except to the extent of his pecuniary interest therein.
|
•
|
Audit Committee. Kenan Lucas (Chair), Mary E. Chowning, and Neil E. Cox.
|
•
|
Compensation Committee. Daniel R. Fishback (Chair), Robert F. Olson, and Neil E. Cox.
|
•
|
Governance Committee. Neil E. Cox (Chair), Robert F. Olson, and Edward Horowitz.
|
Category
|
|
Fees
2018
|
||
Audit Fees (1)
|
|
$
|
301,400
|
|
Audit-Related Fees (2)
|
|
5,000
|
|
|
Tax Fees (3)
|
|
114,300
|
|
|
All Other Fees (4)
|
|
—
|
|
|
Total
|
|
$
|
420,700
|
|
Category
|
|
Fees
2019
|
||
Audit Fees (1)
|
|
$
|
283,600
|
|
Audit-Related Fees (2)
|
|
32,000
|
|
|
Tax Fees (3)
|
|
—
|
|
|
All Other Fees (4)
|
|
—
|
|
|
Total
|
|
$
|
315,600
|
|
|
|
|
|
|
Dated: March 6, 2020
|
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 6, 2020
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Vernon J. Hanzlik
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(Principal Executive Officer), Director
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/s/ David G. Ristow
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Chief Financial Officer (Principal
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March 6, 2020
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David G. Ristow
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Financial and Accounting Officer)
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/s/ Mary E. Chowning
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Director
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March 6, 2020
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Mary E. Chowning
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/s/ Neil E. Cox
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Director
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March 6, 2020
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Neil E. Cox
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/s/ Daniel R. Fishback
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Director
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March 6, 2020
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Daniel R. Fishback
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/s/ Edward Horowitz
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Director
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March 6, 2020
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Edward Horowitz
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/s/ Kenan Lucas
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Director
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March 6, 2020
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Kenan Lucas
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/s/ Robert F. Olson
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Director
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March 6, 2020
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Robert F. Olson
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COMPANY:
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QUMU CORPORATION
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By:
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/s/ Vern Hanzlik
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Its:
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Chief Executive Officer
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EMPLOYEE:
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/s/ David G. Ristow
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David G. Ristow
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Department
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Job Title
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Age
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Offered Stay Bonus
(Y/N)
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Dated:
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[Signature]
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Name
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Jurisdiction of Incorporation
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Percent Owned
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Qumu, Inc.
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California
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100.0%
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Qumu UK Holdings, Ltd.
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United Kingdom
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100.0%
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Qumu UK Limited
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United Kingdom
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100.0%
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(1)
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Qumu Middle East FZ-LLC
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Dubai
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100.0%
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(1)
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Qumu Ltd.
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United Kingdom
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100.0%
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(1)
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Qumu Japan Co., Ltd.
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Japan
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100.0%
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Qumu (Singapore) Pte. Ltd
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Singapore
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100.0%
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(1)
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100% owned by Qumu UK Holdings, Ltd.
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Minneapolis, Minnesota
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March 6, 2020
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Minneapolis, Minnesota
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March 6, 2020
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1.
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I have reviewed this Form 10-K of Qumu Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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 6, 2020
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/s/ Vernon J. Hanzlik
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Chief Executive Officer
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1.
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I have reviewed this Form 10-K of Qumu Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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 6, 2020
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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, 2019, 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 6, 2020
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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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