ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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22-2267658
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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1300 Guadalupe Street, Suite 302, Austin TX
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78701
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(Address of Principal Executive Offices)
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(Zip Code)
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Common Stock, Par Value $0.0001 Per Share
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The Nasdaq Stock Market LLC
(NASDAQ Capital Market)
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(Title of Class)
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(Name of Each Exchange on Which Registered)
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Large Accelerated Filer
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¨
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Accelerated Filer
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ý
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Non-Accelerated Filer
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¨
(do not check if smaller reporting company)
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Smaller Reporting Company
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¨
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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•
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a decline in general economic conditions nationally and internationally;
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•
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decreased market demand for our products and services;
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•
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market acceptance and brand awareness of our products;
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•
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risks associated with the level of our secured and unsecured indebtedness;
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•
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ability to comply with financial covenants in outstanding indebtedness;
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•
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the ability to protect our intellectual property rights;
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•
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impact of any litigation or infringement actions brought against us;
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•
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competition from other providers and products based on pricing and other activities;
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•
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risks and costs in product development;
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•
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the potential for unforeseen or underestimated cash requirements or liabilities;
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•
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risks associated with adoption of our products among existing customers (including the impact of possible delays with major carrier and OEM partners in the roll out for mobile phones deploying our products);
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•
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risks associated with delays in major mobile phone launches, or the failure of such launches to achieve the scale and customer adoption that either we or the market may expect;
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•
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the impact of currency exchange rate fluctuations on our reported GAAP financial statements, particularly in regard to the Australian dollar;
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•
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the challenges, given the Company’s comparatively small size, to expand the combined Company's global reach, accelerate growth and create a scalable, low-capex business model that drives EBITDA (as well as Adjusted EBITDA);
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•
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varying and often unpredictable levels of orders;
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•
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the challenges inherent in technology development necessary to maintain the Company’s competitive advantage such as adherence to release schedules and the costs and time required for finalization and gaining market acceptance in new products;
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•
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technology management risk as the Company needs to adapt to complex specifications of different carriers and the management of a complex technology platform given the Company's relatively limited resources;
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•
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new customer adoption and time to revenue with new carrier and OEM partners is subject to delays and factors out of our control;
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•
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inability to raise capital to fund continuing operations;
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•
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changes in government regulation;
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•
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volatility in the price of our common stock and ability to satisfy exchange continued listing requirements;
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•
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rapid and complex changes occurring in the mobile marketplace, and
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•
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other risks described in the risk factors in Item 1A of this Form 10-K under the heading “Risk Factors.”
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ITEM 1.
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BUSINESS
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•
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Operator and OEM ("O&O"), an advertiser solution for unique and exclusive carrier and OEM inventory which is comprised of services including:
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◦
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Ignite™ ("Ignite"), a mobile device management platform with targeted application distribution capabilities, and
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◦
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Other professional services directly related to the Ignite platform.
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•
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Advertiser and Publisher ("A&P"), a worldwide mobile user acquisition network which is comprised of the Syndicated network service.
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•
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Marketplace™ ("Marketplace"), an application and content store, and
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•
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Pay™ ("Pay"), a content management and mobile payment solution.
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ITEM 1A.
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RISK FACTORS
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•
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inadequate network infrastructure to support advanced features beyond just mobile web access;
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•
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users’ concerns about the security of these devices;
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•
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inconsistent quality of cellular or wireless connection;
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•
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unavailability of cost-effective, high-speed Internet service; and
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•
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changes in network carrier pricing plans that charge device users based on the amount of data consumed.
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•
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new technology which is not compatible with our products and offerings.
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•
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business consolidations;
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•
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revenue recognition;
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•
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leases;
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•
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stock-based compensation;
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•
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disclosure of uncertainties about an entity's ability to continue as a going concern; and
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•
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accounting for goodwill and other intangible assets.
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•
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the carrier or OEM's preference for our competitors’ products and services rather than ours;
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•
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the carrier or OEM's decision not to include or highlight our products and services on the deck of its mobile handsets;
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•
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the carrier or OEM's decision to discontinue the sale of some or all of products and services;
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•
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the carrier’s decision to offer similar products and services to its subscribers without charge or at reduced prices;
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•
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the carrier or OEM's decision to require market development funds from publishers;
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•
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the carrier or OEM's decision to restrict or alter subscription or other terms for downloading our products and services;
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•
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a failure of the carrier or OEM's merchandising, provisioning or billing systems;
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•
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the carrier or OEM's decision to offer its own competing products and services;
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•
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the carrier or OEM's decision to transition to different platforms and revenue models; and
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•
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consolidation among carriers or OEMs.
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•
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significantly greater revenues and financial resources;
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•
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stronger brand and consumer recognition regionally or worldwide;
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•
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the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products;
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•
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more substantial intellectual property of their own from which they can develop products and services without having to pay royalties;
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•
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pre-existing relationships with brand owners or carriers that afford them access to intellectual property while blocking the access of competitors to that same intellectual property;
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•
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greater resources to make acquisitions;
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•
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lower labor and development costs; and
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•
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broader global distribution and presence.
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•
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develop and improve our operational, financial and management controls;
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•
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enhance our reporting systems and procedures;
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•
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recruit, train and retain highly skilled personnel;
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•
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maintain our quality standards; and
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•
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maintain branded content owner, wireless carrier and end-user satisfaction.
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•
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challenges caused by distance, language and cultural differences;
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•
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multiple and conflicting laws and regulations, including complications due to unexpected changes in these laws and regulations;
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•
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the burdens of complying with a wide variety of foreign laws and regulations;
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•
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higher costs associated with doing business internationally;
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•
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difficulties in staffing and managing international operations;
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•
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greater fluctuations in sales to end users and through carriers in developing countries, including longer payment cycles and greater difficulty collecting accounts receivable;
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•
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protectionist laws and business practices that favor local businesses in some countries;
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•
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foreign tax consequences;
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•
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foreign exchange controls that might prevent us from repatriating income earned in countries outside the United States;
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•
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price controls;
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•
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the servicing of regions by many different carriers;
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•
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imposition of public sector controls;
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•
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political, economic and social instability, including relating to the current European sovereign debt crisis;
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•
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restrictions on the export or import of technology;
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•
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trade and tariff restrictions;
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•
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variations in tariffs, quotas, taxes and other market barriers; and
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•
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difficulties in enforcing intellectual property rights in countries other than the United States.
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•
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changes in international regulatory and compliance requirements that could restrict our ability to develop, market and sell our products;
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•
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social, political or economic instability or recessions;
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•
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diminished protection of intellectual property in some countries outside of the United States;
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•
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difficulty in hiring, staffing and managing qualified and proficient local employees and advisors to run international operations;
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•
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the difficulty of managing and operating an international enterprise, including difficulties in maintaining effective communications with employees and customers due to distance, language and cultural barriers;
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•
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differing labor regulations and business practices;
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•
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higher operating costs due to local laws or regulations;
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•
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fluctuations in foreign economies and currency exchange rates;
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•
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difficulty in enforcing agreements; and
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•
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potentially negative consequences from changes in or interpretations of tax laws, post-acquisition.
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•
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increasing the Company’s vulnerability to general adverse economic and industry conditions;
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•
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limiting the Company’s ability to obtain additional financing;
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•
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violating a financial covenant, resulting in the indebtedness to be paid back immediately and thus negatively impacting our liquidity;
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•
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requiring additional financial covenant measurement consents or default waivers without enhanced financial performance in the short term;
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•
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requiring the use of a substantial portion of any cash flow from operations to service indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures;
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•
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limiting the Company’s flexibility in planning for, or reacting to, changes in the Company’s business and the industry in which it competes, including by virtue of the requirement that the Company remain in compliance with certain negative operating covenants included in the credit arrangements under which the Company will be obligated as well as meeting certain reporting requirements; and
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•
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placing the Company at a possible competitive disadvantage to less leveraged competitors that are larger and may have better access to capital resources.
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•
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quarterly variations in our revenues and operating expenses;
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•
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developments in the financial markets, and the worldwide or regional economies;
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•
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announcements of innovations or new products or services by us or our competitors;
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•
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significant sales of our common stock or other securities in the open market; and
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•
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changes in accounting principles.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURE
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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High
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Low
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||||
Fiscal Year Ended March 31, 2017
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First quarter
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$
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1.15
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$
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0.75
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Second quarter
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$
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1.47
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$
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0.97
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Third quarter
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$
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1.08
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$
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0.59
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Fourth quarter
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$
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0.96
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$
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0.66
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Fiscal Year Ended March 31, 2016
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|
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||||
First quarter
|
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$
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4.28
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$
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3.02
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Second quarter
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$
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2.96
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$
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1.71
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Third quarter
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$
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1.92
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$
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1.25
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Fourth quarter
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$
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1.39
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$
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0.99
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Plan Category
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Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a)
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Weighted average exercise price of outstanding options, warrants, and rights
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Number of securities remaining available for future issuance under equity compensation plans (excluding securities
reflected in column (a))
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||||
Equity compensation plan approved by security holders
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Amended and Restated 2011 Equity Incentive Plan
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8,889,897
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$
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1.84
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9,665,123
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2007 Employee, Director and Consultant Stock Plan
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719,678
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|
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$
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11.58
|
|
|
—
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Appia, Inc. 2008 Stock Incentive Plan
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126,203
|
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$
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0.62
|
|
|
—
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Equity compensation plan not approved by security holders
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|
—
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|
|
—
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|
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—
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Total
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9,735,778
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|
|
|
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9,665,123
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ITEM 6.
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SELECTED FINANCIAL DATA
|
|
|
Year ended March 31,
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||||||||||||||||||
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2017
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2016
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2015
|
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2014
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2013
|
|||||||||||
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(in thousands, except per share amounts)
|
|||||||||||||||||||
Results of Operations
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|
||||||||||||||||||
Net revenues
|
|
$
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91,553
|
|
|
$
|
86,541
|
|
|
$
|
28,252
|
|
|
$
|
24,404
|
|
|
$
|
3,855
|
|
Loss from operations
|
|
(22,020
|
)
|
|
(25,936
|
)
|
|
(23,737
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)
|
|
(15,524
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)
|
|
(11,029
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)
|
|||||
Net loss from operations, net of taxes
|
|
(24,264
|
)
|
|
(28,032
|
)
|
|
(24,647
|
)
|
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(17,202
|
)
|
|
(12,658
|
)
|
|||||
Basic and diluted net loss per common share from continuing operations
|
|
$
|
(0.36
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.63
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)
|
|
$
|
(0.63
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)
|
|
$
|
(0.72
|
)
|
Weighted-average common shares outstanding from continuing operations, basic and diluted
|
|
66,511
|
|
|
61,763
|
|
|
38,967
|
|
|
27,478
|
|
|
17,631
|
|
|||||
Balance Sheet Data
|
|
|
||||||||||||||||||
Cash
|
|
$
|
6,149
|
|
|
$
|
11,231
|
|
|
$
|
7,069
|
|
|
$
|
21,805
|
|
|
$
|
1,149
|
|
Working capital
|
|
(7,109
|
)
|
|
(9,308
|
)
|
|
(3,678
|
)
|
|
15,575
|
|
|
(5,663
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)
|
|||||
Total assets
|
|
$
|
107,580
|
|
|
$
|
121,940
|
|
|
$
|
122,571
|
|
|
$
|
45,095
|
|
|
$
|
12,485
|
|
Long-term obligations
|
|
14,761
|
|
|
815
|
|
|
7,090
|
|
|
238
|
|
|
2,093
|
|
|||||
Total stockholders' equity
|
|
$
|
62,045
|
|
|
$
|
82,271
|
|
|
$
|
91,529
|
|
|
$
|
32,951
|
|
|
$
|
737
|
|
ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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•
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Operator and OEM ("O&O"), an advertiser solution for unique and exclusive carrier and OEM inventory which is comprised of services including:
|
◦
|
Ignite™ ("Ignite"), a mobile device management platform with targeted application distribution capabilities, and
|
◦
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Other professional services directly related to the Ignite platform.
|
•
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Advertiser and Publisher ("A&P"), a worldwide mobile user acquisition network which is comprised of the Syndicated network service.
|
•
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Marketplace™ ("Marketplace"), an application and content store, and
|
•
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Pay™ ("Pay"), a content management and mobile payment solution.
|
|
|
Years Ended March 31,
|
|
|
|
Years Ended March 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% of
Change
|
|
2016
|
|
2015
|
|
% of
Change
|
|||||||||||
|
(in thousands, except per share amounts)
|
|
|
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(in thousands, except per share amounts)
|
|
|
|||||||||||||||
Net revenues
|
|
$
|
91,553
|
|
|
$
|
86,541
|
|
|
5.8
|
%
|
|
$
|
86,541
|
|
|
$
|
28,252
|
|
|
206.3
|
%
|
License fees and revenue share
|
|
70,252
|
|
|
66,185
|
|
|
6.1
|
%
|
|
66,185
|
|
|
20,110
|
|
|
229.1
|
%
|
||||
Other direct cost of revenues
|
|
7,938
|
|
|
10,537
|
|
|
(24.7
|
)%
|
|
10,537
|
|
|
2,010
|
|
|
424.2
|
%
|
||||
Gross profit
|
|
13,363
|
|
|
9,819
|
|
|
36.1
|
%
|
|
9,819
|
|
|
6,132
|
|
|
60.1
|
%
|
||||
Total operating expenses
|
|
35,383
|
|
|
35,755
|
|
|
(1.0
|
)%
|
|
35,755
|
|
|
29,869
|
|
|
19.7
|
%
|
||||
Loss from operations
|
|
(22,020
|
)
|
|
(25,936
|
)
|
|
(15.1
|
)%
|
|
(25,936
|
)
|
|
(23,737
|
)
|
|
9.3
|
%
|
||||
Interest expense, net
|
|
(2,628
|
)
|
|
(1,816
|
)
|
|
44.7
|
%
|
|
(1,816
|
)
|
|
(234
|
)
|
|
676.1
|
%
|
||||
Foreign exchange transaction gain / (loss)
|
|
(88
|
)
|
|
(29
|
)
|
|
203.4
|
%
|
|
(29
|
)
|
|
32
|
|
|
(190.6
|
)%
|
||||
Change in fair value of convertible note embedded derivative liability
|
|
475
|
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Change in fair value of warrant liability
|
|
147
|
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
(100.0
|
)%
|
|
—
|
|
|
(9
|
)
|
|
(100.0
|
)%
|
||||
Gain / (loss) on disposal of fixed assets
|
|
—
|
|
|
(37
|
)
|
|
(100.0
|
)%
|
|
(37
|
)
|
|
2
|
|
|
(1,950.0
|
)%
|
||||
Other income / (expense)
|
|
(1
|
)
|
|
—
|
|
|
(100.0
|
)%
|
|
—
|
|
|
46
|
|
|
(100.0
|
)%
|
||||
Loss from operations before income taxes
|
|
(24,408
|
)
|
|
(27,818
|
)
|
|
(12.3
|
)%
|
|
(27,818
|
)
|
|
(23,900
|
)
|
|
16.4
|
%
|
||||
Income tax provision
|
|
(144
|
)
|
|
214
|
|
|
(167.3
|
)%
|
|
214
|
|
|
747
|
|
|
(71.4
|
)%
|
||||
Net loss from operations, net of taxes
|
|
$
|
(24,264
|
)
|
|
$
|
(28,032
|
)
|
|
(13.4
|
)%
|
|
$
|
(28,032
|
)
|
|
$
|
(24,647
|
)
|
|
13.7
|
%
|
Basic and diluted net loss per common share
|
|
$
|
(0.36
|
)
|
|
$
|
(0.46
|
)
|
|
(21.7
|
)%
|
|
$
|
(0.46
|
)
|
|
$
|
(0.63
|
)
|
|
(27.0
|
)%
|
Weighted-average common shares outstanding, basic and diluted
|
|
66,511
|
|
|
61,763
|
|
|
7.7
|
%
|
|
61,763
|
|
|
38,967
|
|
|
58.5
|
%
|
|
|
Years ended March 31,
|
|
|
|
Years ended March 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
|||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||||||||
Revenues by type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Content
|
|
$
|
32,114
|
|
|
$
|
28,765
|
|
|
11.6
|
%
|
|
$
|
28,765
|
|
|
$
|
22,009
|
|
|
30.7
|
%
|
Advertising
|
|
59,439
|
|
|
57,776
|
|
|
2.9
|
%
|
|
57,776
|
|
|
6,243
|
|
|
825.5
|
%
|
||||
Total
|
|
$
|
91,553
|
|
|
$
|
86,541
|
|
|
5.8
|
%
|
|
$
|
86,541
|
|
|
$
|
28,252
|
|
|
206.3
|
%
|
|
|
Years ended March 31,
|
|
|
|
Years ended March 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
|||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||||||||
Gross margin by type:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Content gross margin $
|
|
$
|
3,229
|
|
|
$
|
1,231
|
|
|
162.3
|
%
|
|
$
|
1,231
|
|
|
$
|
4,272
|
|
|
(71.2
|
)%
|
Content gross margin %
|
|
10.1
|
%
|
|
4.3
|
%
|
|
|
|
4.3
|
%
|
|
19.4
|
%
|
|
|
||||||
Advertising gross margin $
|
|
$
|
10,134
|
|
|
$
|
8,588
|
|
|
18.0
|
%
|
|
$
|
8,588
|
|
|
$
|
1,860
|
|
|
361.7
|
%
|
Advertising gross margin %
|
|
17.0
|
%
|
|
14.9
|
%
|
|
|
|
14.9
|
%
|
|
29.8
|
%
|
|
|
||||||
Total gross margin $
|
|
$
|
13,363
|
|
|
$
|
9,819
|
|
|
36.1
|
%
|
|
$
|
9,819
|
|
|
$
|
6,132
|
|
|
60.1
|
%
|
Total gross margin %
|
|
14.6
|
%
|
|
11.3
|
%
|
|
|
|
11.3
|
%
|
|
21.7
|
%
|
|
|
|
|
Years ended March 31,
|
|
|
|
Years ended March 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
|||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||||||||
Product development
|
|
$
|
12,035
|
|
|
$
|
10,983
|
|
|
9.6
|
%
|
|
$
|
10,983
|
|
|
$
|
7,905
|
|
|
38.9
|
%
|
Sales and marketing
|
|
6,537
|
|
|
6,067
|
|
|
7.7
|
%
|
|
6,067
|
|
|
2,933
|
|
|
106.9
|
%
|
||||
General and administrative
|
|
16,811
|
|
|
18,705
|
|
|
(10.1
|
)%
|
|
18,705
|
|
|
19,031
|
|
|
(1.7
|
)%
|
||||
Total operating expenses
|
|
$
|
35,383
|
|
|
$
|
35,755
|
|
|
(1.0
|
)%
|
|
$
|
35,755
|
|
|
$
|
29,869
|
|
|
19.7
|
%
|
|
|
Years ended March 31,
|
|
|
|
Years ended March 31,
|
|
|
||||||||||||||
|
2017
|
|
2016
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
|||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||||||||
Interest expense, net
|
|
$
|
(2,628
|
)
|
|
$
|
(1,816
|
)
|
|
44.7
|
%
|
|
$
|
(1,816
|
)
|
|
$
|
(234
|
)
|
|
676.1
|
%
|
Foreign exchange transaction gain / (loss)
|
|
(88
|
)
|
|
(29
|
)
|
|
203.4
|
%
|
|
(29
|
)
|
|
32
|
|
|
(190.6
|
)%
|
||||
Change in fair value of convertible note embedded derivative liability
|
|
475
|
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Change in fair value of warrant liability
|
|
147
|
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
(100.0
|
)%
|
|
—
|
|
|
(9
|
)
|
|
(100.0
|
)%
|
||||
Gain / (loss) on disposal of fixed assets
|
|
—
|
|
|
(37
|
)
|
|
(100.0
|
)%
|
|
(37
|
)
|
|
2
|
|
|
(1,950.0
|
)%
|
||||
Other income / (expense)
|
|
(1
|
)
|
|
—
|
|
|
(100.0
|
)%
|
|
—
|
|
|
46
|
|
|
(100.0
|
)%
|
||||
Total interest and other income / (expense), net
|
|
$
|
(2,388
|
)
|
|
$
|
(1,882
|
)
|
|
26.9
|
%
|
|
$
|
(1,882
|
)
|
|
$
|
(163
|
)
|
|
1,054.6
|
%
|
|
|
Year Ended March 31,
|
|
|
|
Year Ended March 31,
|
|
|
|
Year Ended March 31,
|
|||||||||||||||||
|
2017
|
|
|
|
2016
|
|
|
|
2015
|
||||||||||||||||||
|
Dollars
|
|
% of Net Revenues
|
|
%
Change
|
|
Dollars
|
|
% of Net Revenues
|
|
%
Change
|
|
Dollars
|
|
% of Net Revenues
|
||||||||||||
Net revenues
|
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|
|
|||||||||||
Pay
|
|
$
|
30,540
|
|
|
33.4
|
%
|
|
34.4
|
%
|
|
$
|
22,727
|
|
|
26.3
|
%
|
|
78.6
|
%
|
|
$
|
12,724
|
|
|
45.0
|
%
|
Ignite
|
|
39,235
|
|
|
42.9
|
%
|
|
81.8
|
%
|
|
21,577
|
|
|
24.9
|
%
|
|
647.6
|
%
|
|
2,886
|
|
|
10.2
|
%
|
|||
Syndicated Network
|
|
18,990
|
|
|
20.7
|
%
|
|
(46.6
|
)%
|
|
35,593
|
|
|
41.1
|
%
|
|
1,067.4
|
%
|
|
3,049
|
|
|
10.8
|
%
|
|||
Marketplace
|
|
1,575
|
|
|
1.7
|
%
|
|
(73.9
|
)%
|
|
6,038
|
|
|
7.0
|
%
|
|
(35.0
|
)%
|
|
9,286
|
|
|
32.9
|
%
|
|||
Other
|
|
1,213
|
|
|
1.3
|
%
|
|
100.2
|
%
|
|
606
|
|
|
0.7
|
%
|
|
97.4
|
%
|
|
307
|
|
|
1.1
|
%
|
|||
Total net revenues
|
|
$
|
91,553
|
|
|
100.0
|
%
|
|
5.8
|
%
|
|
$
|
86,541
|
|
|
100.0
|
%
|
|
206.3
|
%
|
|
$
|
28,252
|
|
|
100.0
|
%
|
|
|
Years ended March 31,
|
||||||
|
2017
|
|
2016
|
|||||
|
(in thousands)
|
|||||||
Cash
|
|
$
|
6,149
|
|
|
$
|
11,231
|
|
Restricted cash
|
|
331
|
|
|
—
|
|
||
|
|
|
|
|
||||
Short-term debt
|
|
|
|
|
||||
Term loan, principal
|
|
—
|
|
|
—
|
|
||
Revolving line of credit, principal
|
|
—
|
|
|
3,000
|
|
||
Secured debenture, net of issuance costs and discounts of $0 and $568, respectively
|
|
—
|
|
|
7,432
|
|
||
Total short-term debt
|
|
—
|
|
|
10,432
|
|
||
|
|
|
|
|
||||
Long-term debt
|
|
|
|
|
||||
Convertible notes, net of issuance costs and discounts of $6,315 and $0, respectively
|
|
9,685
|
|
|
—
|
|
||
Total long-term debt
|
|
9,685
|
|
|
—
|
|
||
|
|
|
|
|
||||
Working capital
|
|
|
|
|
||||
Current assets
|
|
23,665
|
|
|
29,546
|
|
||
Current liabilities
|
|
30,774
|
|
|
38,854
|
|
||
Working capital
|
|
$
|
(7,109
|
)
|
|
$
|
(9,308
|
)
|
|
|
Year ended March 31,
|
|
|
|
Year ended March 31,
|
|
|
||||||||||
|
2017
|
|
2016
|
|
% of Change
|
|
2016
|
|
2015
|
|
% of Change
|
|||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|||||||||||
Consolidated Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net cash used in operating activities
|
|
(6,995
|
)
|
|
(7,069
|
)
|
|
(1.0
|
)%
|
|
(7,069
|
)
|
|
(14,500
|
)
|
|
(51.2
|
)%
|
Capital expenditures
|
|
(1,595
|
)
|
|
(1,549
|
)
|
|
3.0
|
%
|
|
(1,549
|
)
|
|
(67
|
)
|
|
2,211.9
|
%
|
Cash used in acquisition of assets
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(2,125
|
)
|
|
(100.0
|
)%
|
Proceeds from sale of cost method investment in Sift
|
|
999
|
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Net cash proceeds from cost method investment in Sift
|
|
—
|
|
|
875
|
|
|
(100.0
|
)%
|
|
875
|
|
|
—
|
|
|
100.0
|
%
|
Settlement of contingent liability
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(49
|
)
|
|
(100.0
|
)%
|
Warrants exercised
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
375
|
|
|
(100.0
|
)%
|
Cash acquired with acquisition of subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
1,363
|
|
|
(100.0
|
)%
|
Cash received from issuance of convertible notes
|
|
16,000
|
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Options exercised
|
|
11
|
|
|
51
|
|
|
(78.4
|
)%
|
|
51
|
|
|
136
|
|
|
(62.5
|
)%
|
Stock issued for cash in stock offering, net
|
|
—
|
|
|
12,627
|
|
|
(100.0
|
)%
|
|
12,627
|
|
|
—
|
|
|
100.0
|
%
|
Payment of debt issuance costs
|
|
(2,383
|
)
|
|
—
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
Repayment of debt obligations
|
|
(11,000
|
)
|
|
(600
|
)
|
|
1,733.3
|
%
|
|
(600
|
)
|
|
—
|
|
|
100.0
|
%
|
Effect of exchange rate changes on cash
|
|
(119
|
)
|
|
(173
|
)
|
|
(31.2
|
)%
|
|
(173
|
)
|
|
131
|
|
|
(232.1
|
)%
|
|
|
Payments Due by Period
|
|||||||||||||
Contractual cash obligations
|
|
Total
|
|
Less Than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than 5 Years
|
|||||
Convertible notes (a)
|
|
16,000
|
|
|
—
|
|
|
—
|
|
|
16,000
|
|
|
—
|
|
Operating leases (b)
|
|
5,693
|
|
|
943
|
|
|
1,763
|
|
|
1,640
|
|
|
1,347
|
|
Employment agreements and other obligations (c)
|
|
950
|
|
|
800
|
|
|
150
|
|
|
—
|
|
|
—
|
|
Interest
|
|
4,900
|
|
|
1,400
|
|
|
2,800
|
|
|
700
|
|
|
—
|
|
Uncertain tax positions (d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total contractual cash obligations
|
|
27,543
|
|
|
3,143
|
|
|
4,713
|
|
|
18,340
|
|
|
1,347
|
|
(a)
|
Convertible notes maturing on September 23, 2020 (the “Notes”), unless converted, repurchased or redeemed within their terms prior to such date
|
(b)
|
Consists of operating leases for our office facilities
|
(c)
|
Consists of various employment agreements and severance agreements
|
(d)
|
We have approximately $1,025 in additional liabilities associated with uncertain tax positions that are not expected to be liquidated within the next twelve months. We are unable to reliably estimate the expected payment dates for these additional non-current liabilities.
|
•
|
The Company has the contractual relationship with the application developers or advertising aggregators (collectively, the advertisers), and we have the performance obligation to these parties;
|
•
|
Through our Ignite and Discover software, we provide application installation and management as well as detailed reporting to advertisers and carriers. We are responsible for billing the advertisers, and for reporting revenues and revenue share to the carriers;
|
•
|
As part of the application management process, we use our data, and post-install event data provided back to us by the advertisers, to match applications to end users. We currently target end users based on carrier, geography, demographics (including by handset type), among other attributes, by leveraging carrier data. We have discretion as to which applications are delivered to each end user;
|
•
|
Pricing is established in our agreements with advertisers. We negotiate pricing with the advertisers, based on prevailing rates typical in the industry; and
|
•
|
The Company is responsible for billing and collecting the gross amount from the advertiser. Our carrier agreements do not include any specific provisions that allow us to mitigate our credit risk by reducing the revenue share payable to the carrier.
|
•
|
End users directly contract with the carriers, which have most of the service interaction and are generally viewed as the primary obligor by the subscribers;
|
•
|
Carriers generally have significant control over the types of content that they offer to their subscribers; the Company has the content provider relationships and has discretion, within the parameters set by the carriers, regarding the actual offerings;
|
•
|
Carriers are directly responsible for billing and collecting fees from their subscribers, including the resolution of billing disputes;
|
•
|
Carriers generally pay the Company a fixed percentage of their revenues or a fixed fee for each content sale;
|
•
|
Carriers generally must approve the price of the Company’s content in advance of their sale to subscribers, and the Company’s more significant carriers generally have the ability to set the ultimate price charged to their subscribers; and
|
•
|
The Company has limited risks, including no inventory risk and limited credit risk.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
Consolidated Financial Statements:
|
|
The supplementary financial information required by this Item 8 is set forth in Note 19 of the Notes to the Consolidated Financial Statements under the caption "Supplemental Consolidated Financial Information".
|
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash
|
|
$
|
6,149
|
|
|
$
|
11,231
|
|
Restricted cash
|
|
331
|
|
|
—
|
|
||
Accounts receivable, net of allowances of $597 and $464, respectively
|
|
16,554
|
|
|
17,519
|
|
||
Deposits
|
|
121
|
|
|
213
|
|
||
Prepaid expenses and other current assets
|
|
510
|
|
|
583
|
|
||
Total current assets
|
|
23,665
|
|
|
29,546
|
|
||
Property and equipment, net
|
|
2,377
|
|
|
1,784
|
|
||
Cost method investment
|
|
—
|
|
|
999
|
|
||
Deferred tax assets
|
|
352
|
|
|
500
|
|
||
Intangible assets, net
|
|
4,565
|
|
|
12,490
|
|
||
Goodwill
|
|
76,621
|
|
|
76,621
|
|
||
TOTAL ASSETS
|
|
$
|
107,580
|
|
|
$
|
121,940
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
19,868
|
|
|
$
|
15,300
|
|
Accrued license fees and revenue share
|
|
8,529
|
|
|
9,622
|
|
||
Accrued compensation
|
|
1,073
|
|
|
1,353
|
|
||
Short-term debt, net of debt issuance costs and discounts of $0 and $568, respectively
|
|
—
|
|
|
10,432
|
|
||
Other current liabilities
|
|
1,304
|
|
|
2,147
|
|
||
Total current liabilities
|
|
30,774
|
|
|
38,854
|
|
||
Convertible notes, net of debt issuance costs and discounts of $6,315 and $0, respectively
|
|
9,685
|
|
|
—
|
|
||
Convertible note embedded derivative liability
|
|
3,218
|
|
|
—
|
|
||
Warrant liability
|
|
1,076
|
|
|
—
|
|
||
Other non-current liabilities
|
|
782
|
|
|
815
|
|
||
Total liabilities
|
|
45,535
|
|
|
39,669
|
|
||
Stockholders' equity
|
|
|
|
|
||||
Preferred stock
|
|
|
|
|
||||
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000)
|
|
100
|
|
|
100
|
|
||
Common stock
|
|
|
|
|
||||
$0.0001 par value: 200,000,000 shares authorized; 67,329,262 issued and 66,594,807 outstanding at March 31, 2017; 67,019,703 issued and 66,284,606 outstanding at March 31, 2016;
|
|
8
|
|
|
8
|
|
||
Additional paid-in capital
|
|
299,580
|
|
|
295,423
|
|
||
Treasury stock (754,599 shares at March 31, 2017 and 2016)
|
|
(71
|
)
|
|
(71
|
)
|
||
Accumulated other comprehensive loss
|
|
(321
|
)
|
|
(202
|
)
|
||
Accumulated deficit
|
|
(237,251
|
)
|
|
(212,987
|
)
|
||
Total stockholders' equity
|
|
62,045
|
|
|
82,271
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
107,580
|
|
|
$
|
121,940
|
|
|
|
Years ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues
|
|
$
|
91,553
|
|
|
$
|
86,541
|
|
|
$
|
28,252
|
|
Cost of revenues
|
|
|
|
|
|
|
||||||
License fees and revenue share
|
|
70,252
|
|
|
66,185
|
|
|
20,110
|
|
|||
Other direct cost of revenues
|
|
7,938
|
|
|
10,537
|
|
|
2,010
|
|
|||
Total cost of revenues
|
|
78,190
|
|
|
76,722
|
|
|
22,120
|
|
|||
Gross profit
|
|
13,363
|
|
|
9,819
|
|
|
6,132
|
|
|||
Operating expenses
|
|
|
|
|
|
|
||||||
Product development
|
|
12,035
|
|
|
10,983
|
|
|
7,905
|
|
|||
Sales and marketing
|
|
6,537
|
|
|
6,067
|
|
|
2,933
|
|
|||
General and administrative
|
|
16,811
|
|
|
18,705
|
|
|
19,031
|
|
|||
Total operating expenses
|
|
35,383
|
|
|
35,755
|
|
|
29,869
|
|
|||
Loss from operations
|
|
(22,020
|
)
|
|
(25,936
|
)
|
|
(23,737
|
)
|
|||
Interest and other income / (expense), net
|
|
|
|
|
|
|
||||||
Interest expense, net
|
|
(2,628
|
)
|
|
(1,816
|
)
|
|
(234
|
)
|
|||
Foreign exchange transaction gain / (loss)
|
|
(88
|
)
|
|
(29
|
)
|
|
32
|
|
|||
Change in fair value of convertible note embedded derivative liability
|
|
475
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of warrant liability
|
|
147
|
|
|
—
|
|
|
|
||||
Loss on extinguishment of debt
|
|
(293
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Gain / (loss) on disposal of fixed assets
|
|
—
|
|
|
(37
|
)
|
|
2
|
|
|||
Other income / (expense)
|
|
(1
|
)
|
|
—
|
|
|
46
|
|
|||
Total interest and other income / (expense), net
|
|
(2,388
|
)
|
|
(1,882
|
)
|
|
(163
|
)
|
|||
Loss from operations before income taxes
|
|
(24,408
|
)
|
|
(27,818
|
)
|
|
(23,900
|
)
|
|||
Income tax provision
|
|
(144
|
)
|
|
214
|
|
|
747
|
|
|||
Net loss
|
|
(24,264
|
)
|
|
(28,032
|
)
|
|
(24,647
|
)
|
|||
Other comprehensive income / (loss)
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
(119
|
)
|
|
(150
|
)
|
|
147
|
|
|||
Comprehensive loss
|
|
$
|
(24,383
|
)
|
|
$
|
(28,182
|
)
|
|
$
|
(24,500
|
)
|
Basic and diluted net loss per common share
|
|
$
|
(0.36
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.63
|
)
|
Net loss
|
|
(0.36
|
)
|
|
(0.46
|
)
|
|
(0.63
|
)
|
|||
Weighted-average common shares outstanding, basic and diluted
|
|
66,511
|
|
|
61,763
|
|
|
38,967
|
|
|
|
Common Stock
Shares
|
|
Amount
|
|
Preferred Stock
Shares
|
|
Amount
|
|
Treasury Stock
Shares
|
|
Amount
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Accumulated
Deficit
|
|
Total
|
|||||||||||||||||
Balance at March 31, 2014
|
|
37,388,429
|
|
|
$
|
7
|
|
|
100,000
|
|
|
$
|
100
|
|
|
754,599
|
|
|
$
|
(71
|
)
|
|
$
|
193,422
|
|
|
$
|
(199
|
)
|
|
$
|
(160,308
|
)
|
|
$
|
32,951
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(24,647
|
)
|
|
(24,647
|
)
|
|||||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147
|
|
|
|
|
147
|
|
|||||||||||||||
Vesting of shares issued to employees
|
|
80,064
|
|
|
|
|
|
|
|
|
|
|
|
|
576
|
|
|
|
|
|
|
576
|
|
||||||||||||||
Shares vested in connection with separation agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,967
|
|
|
|
|
|
|
1,967
|
|
|||||||||||||||
Cancellation of shares issued to employee
|
|
(8,131
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(27
|
)
|
|
|
|
|
|
(27
|
)
|
||||||||||||||
Vesting of options issued to employees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,292
|
|
|
|
|
|
|
3,292
|
|
|||||||||||||||
Vesting of restricted stock for services
|
|
119,305
|
|
|
|
|
|
|
|
|
|
|
|
|
490
|
|
|
|
|
|
|
490
|
|
||||||||||||||
Shares issued as settlement of debt
|
|
65,000
|
|
|
|
|
|
|
|
|
|
|
|
|
248
|
|
|
|
|
|
|
248
|
|
||||||||||||||
Issuance of common stock related to debt
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
788
|
|
|
|
|
|
|
788
|
|
||||||||||||||
Shares issued to employees assumed in acquisition
|
|
67,827
|
|
|
|
|
|
|
|
|
|
|
|
|
42
|
|
|
|
|
|
|
42
|
|
||||||||||||||
Options assumed in acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
633
|
|
|
|
|
|
|
633
|
|
|||||||||||||||
Warrants issued in connection with issuance of debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
156
|
|
|
|
|
|
|
156
|
|
|||||||||||||||
Issuance of common stock related to acquisition
|
|
18,883,723
|
|
|
|
|
|
|
|
|
|
|
|
|
74,402
|
|
|
|
|
|
|
74,402
|
|
||||||||||||||
Options exercised
|
|
53,333
|
|
|
|
|
|
|
|
|
|
|
|
|
136
|
|
|
|
|
|
|
136
|
|
||||||||||||||
Warrant exercised
|
|
313,417
|
|
|
|
|
|
|
|
|
|
|
|
|
375
|
|
|
|
|
|
|
375
|
|
||||||||||||||
Balance at March 31, 2015
|
|
57,162,967
|
|
|
7
|
|
|
100,000
|
|
|
100
|
|
|
754,599
|
|
|
(71
|
)
|
|
276,500
|
|
|
(52
|
)
|
|
(184,955
|
)
|
|
$
|
91,529
|
|
||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28,032
|
)
|
|
(28,032
|
)
|
|||||||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(150
|
)
|
|
|
|
(150
|
)
|
|||||||||||||||
Cancellation of shares issued to employees
|
|
(454,164
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,096
|
|
|
|
|
|
|
5,096
|
|
|||||||||||||||
Stock-based compensation related to vesting of restricted stock for services
|
|
233,928
|
|
|
|
|
|
|
|
|
|
|
|
|
867
|
|
|
|
|
|
|
867
|
|
||||||||||||||
Options exercised
|
|
66,682
|
|
|
|
|
|
|
|
|
|
|
|
|
51
|
|
|
|
|
|
|
51
|
|
||||||||||||||
Cashless exercise of a warrant
|
|
452,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||
Cancellation of shares held in escrow related to Appia acquisition
|
|
(10,874
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||
Stock issued for settlement of liability
|
|
117,000
|
|
|
|
|
|
|
|
|
|
|
|
|
283
|
|
|
|
|
|
|
283
|
|
||||||||||||||
Shares cancelled
|
|
(23,907
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||||||||
Stock issued for cash in stock offering
|
|
8,740,000
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
12,626
|
|
|
|
|
|
|
12,627
|
|
|||||||||||||
Balance at March 31, 2016
|
|
66,284,606
|
|
|
8
|
|
|
100,000
|
|
|
100
|
|
|
754,599
|
|
|
(71
|
)
|
|
295,423
|
|
|
(202
|
)
|
|
(212,987
|
)
|
|
$
|
82,271
|
|
||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(24,264
|
)
|
|
(24,264
|
)
|
|||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(119
|
)
|
|
|
|
|
(119
|
)
|
|||||||
Stock-based compensation
|
|
331,363
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,748
|
|
|
|
|
|
|
|
|
3,748
|
|
|||||||
Compensation related to restricted shares and warrants issued for services rendered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
408
|
|
|
|
|
|
|
|
|
408
|
|
|||||||
Options exercised
|
|
18,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
|
|
11
|
|
|||||||
Shares cancelled
|
|
(39,545
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
(10
|
)
|
|||||||
Balance at March 31, 2017
|
|
66,594,807
|
|
|
$
|
8
|
|
|
100,000
|
|
|
$
|
100
|
|
|
754,599
|
|
|
$
|
(71
|
)
|
|
$
|
299,580
|
|
|
$
|
(321
|
)
|
|
$
|
(237,251
|
)
|
|
$
|
62,045
|
|
|
|
Year ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|||
Net loss
|
|
(24,264
|
)
|
|
(28,032
|
)
|
|
(24,647
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
|
8,170
|
|
|
10,974
|
|
|
2,108
|
|
|||
Change in allowance for doubtful accounts
|
|
133
|
|
|
(234
|
)
|
|
698
|
|
|||
Amortization of debt discount and debt issuance costs
|
|
1,256
|
|
|
470
|
|
|
34
|
|
|||
Accrued interest
|
|
36
|
|
|
12
|
|
|
77
|
|
|||
Stock-based compensation
|
|
3,748
|
|
|
5,095
|
|
|
5,850
|
|
|||
Restricted shares and warrants compensation for services rendered
|
|
398
|
|
|
867
|
|
|
490
|
|
|||
Change in fair value of convertible note embedded derivative liability
|
|
(475
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of warrant liability
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
|
293
|
|
|
—
|
|
|
—
|
|
|||
Impairment of intangible assets
|
|
757
|
|
|
—
|
|
|
—
|
|
|||
Stock issued for settlement of liability
|
|
—
|
|
|
283
|
|
|
—
|
|
|||
(Increase) / decrease in assets:
|
|
|
|
|
|
|
|
|
||||
Restricted cash transferred to / (from) operating cash
|
|
(331
|
)
|
|
200
|
|
|
—
|
|
|||
Accounts receivable
|
|
833
|
|
|
(5,111
|
)
|
|
(406
|
)
|
|||
Deposits
|
|
92
|
|
|
(104
|
)
|
|
(63
|
)
|
|||
Deferred tax assets
|
|
148
|
|
|
(418
|
)
|
|
3,156
|
|
|||
Prepaid expenses and other current assets
|
|
73
|
|
|
57
|
|
|
(142
|
)
|
|||
Increase / (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
4,568
|
|
|
7,308
|
|
|
(379
|
)
|
|||
Accrued license fees and revenue share
|
|
(1,093
|
)
|
|
2,789
|
|
|
2,988
|
|
|||
Accrued compensation
|
|
(280
|
)
|
|
(831
|
)
|
|
325
|
|
|||
Other current liabilities
|
|
(879
|
)
|
|
(394
|
)
|
|
(4,589
|
)
|
|||
Other non-current liabilities
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in operating activities
|
|
(6,995
|
)
|
|
(7,069
|
)
|
|
(14,500
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
|
(1,595
|
)
|
|
(1,549
|
)
|
|
(67
|
)
|
|||
Settlement of contingent liability
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||
Cash used in acquisition of assets
|
|
—
|
|
|
—
|
|
|
(2,125
|
)
|
|||
Proceeds from sale of cost method investment in Sift
|
|
999
|
|
|
—
|
|
|
—
|
|
|||
Net cash proceeds from cost method investment in Sift
|
|
—
|
|
|
875
|
|
|
—
|
|
|||
Cash acquired with acquisition of subsidiary
|
|
—
|
|
|
—
|
|
|
1,363
|
|
|||
Net cash used in investing activities
|
|
(596
|
)
|
|
(674
|
)
|
|
(878
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|||
Cash received from issuance of convertible notes
|
|
16,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment of debt obligations
|
|
(11,000
|
)
|
|
(600
|
)
|
|
—
|
|
|||
Payment of debt issuance costs
|
|
(2,383
|
)
|
|
—
|
|
|
—
|
|
|||
Options exercised
|
|
11
|
|
|
51
|
|
|
136
|
|
|||
Warrants exercised
|
|
—
|
|
|
—
|
|
|
375
|
|
|||
Stock issued for cash in stock offering, net
|
|
—
|
|
|
12,627
|
|
|
—
|
|
|||
Net cash provided in financing activities
|
|
2,628
|
|
|
12,078
|
|
|
511
|
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
|
(119
|
)
|
|
(173
|
)
|
|
131
|
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash
|
|
(5,082
|
)
|
|
4,162
|
|
|
(14,736
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash, beginning of period
|
|
11,231
|
|
|
7,069
|
|
|
21,805
|
|
|||
|
|
|
|
|
|
|
||||||
Cash, end of period
|
|
$
|
6,149
|
|
|
$
|
11,231
|
|
|
$
|
7,069
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
1,406
|
|
|
$
|
1,011
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||||
Common stock of the Company issued for acquisition of subsidiary
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,035
|
|
Cashless exercise of warrants to purchase common stock of the Company
|
|
$
|
—
|
|
|
$
|
566
|
|
|
$
|
—
|
|
Cash
|
|
$
|
1,363
|
|
Accounts receivable
|
|
7,364
|
|
|
Prepaid expenses and other assets
|
|
171
|
|
|
Property, plant and equipment
|
|
229
|
|
|
Developed technology
|
|
7,700
|
|
|
Advertiser relationships
|
|
6,500
|
|
|
Publisher relationships
|
|
3,200
|
|
|
Trade names/trademarks
|
|
380
|
|
|
Goodwill
|
|
69,312
|
|
|
Accounts payable
|
|
(5,179
|
)
|
|
Accrued expenses
|
|
(4,531
|
)
|
|
Debt
|
|
(11,600
|
)
|
|
Purchase price
|
|
$
|
74,909
|
|
|
|
Useful Life
|
Developed technology
|
|
4 years
|
Trade names/trademarks
|
|
2 years
|
Publisher relationships
|
|
2 years
|
Advertiser relationships
|
|
2 years
|
Goodwill
|
|
Indefinite
|
|
|
Unaudited
|
||
|
|
Year Ended March 31, 2015
|
||
Revenues
|
|
$
|
57,978
|
|
Cost of goods sold
|
|
45,580
|
|
|
Gross profit
|
|
12,398
|
|
|
Operating expenses
|
|
43,644
|
|
|
Loss from operations
|
|
31,246
|
|
|
Non-operating expense
|
|
3,372
|
|
|
Provision for income taxes
|
|
541
|
|
|
Net loss
|
|
$
|
35,159
|
|
Basic and diluted loss per share
|
|
$
|
0.90
|
|
|
|
Unaudited
|
||
Revenues
|
|
$
|
3,251
|
|
Cost of goods sold
|
|
3,227
|
|
|
Gross profit
|
|
24
|
|
|
Operating expenses
|
|
1,194
|
|
|
Loss from operations
|
|
1,170
|
|
|
Non-operating expense
|
|
113
|
|
|
Provision for income taxes
|
|
—
|
|
|
Net loss
|
|
$
|
1,283
|
|
•
|
The Company has the contractual relationship with the application developers or advertising aggregators (collectively, the advertisers), and we have the performance obligation to these parties;
|
•
|
Through our Ignite and Discover software, we provide application installation and management as well as detailed reporting to advertisers and carriers. We are responsible for billing the advertisers, and for reporting revenues and revenue share to the carriers;
|
•
|
As part of the application management process, we use our data, and post-install event data provided back to us by the advertisers, to match applications to end users. We currently target end users based on carrier, geography, demographics (including by handset type), among other attributes, by leveraging carrier data. We have discretion as to which applications are delivered to each end user;
|
•
|
Pricing is established in our agreements with advertisers. We negotiate pricing with the advertisers, based on prevailing rates typical in the industry; and
|
•
|
The Company is responsible for billing and collecting the gross amount from the advertiser. Our carrier agreements do not include any specific provisions that allow us to mitigate our credit risk by reducing the revenue share payable to the carrier.
|
•
|
End users directly contract with the carriers, which have most of the service interaction and are generally viewed as the primary obligor by the subscribers;
|
•
|
Carriers generally have significant control over the types of content that they offer to their subscribers; the Company has the content provider relationships and has discretion, within the parameters set by the carriers, regarding the actual offerings;
|
•
|
Carriers are directly responsible for billing and collecting fees from their subscribers, including the resolution of billing disputes;
|
•
|
Carriers generally pay the Company a fixed percentage of their revenues or a fixed fee for each content sale;
|
•
|
Carriers generally must approve the price of the Company’s content in advance of their sale to subscribers, and the Company’s more significant carriers generally have the ability to set the ultimate price charged to their subscribers; and
|
•
|
The Company has limited risks, including no inventory risk and limited credit risk.
|
•
|
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of September 28, 2016
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Convertible note embedded derivative liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,693
|
|
|
$
|
3,693
|
|
Warrant liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,223
|
|
|
$
|
1,223
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,916
|
|
|
$
|
4,916
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Balance as of March 31, 2017
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Convertible note embedded derivative liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,218
|
|
|
$
|
3,218
|
|
Warrant liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,076
|
|
|
$
|
1,076
|
|
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,294
|
|
|
$
|
4,294
|
|
|
|
Level 3
|
||
Balance at September 28, 2016 (inception of issuance of the Notes)
|
|
$
|
3,693
|
|
Change in fair value of convertible note embedded derivative liability
|
|
(475
|
)
|
|
Balance at March 31, 2017
|
|
$
|
3,218
|
|
|
March 31, 2017
|
|
Stock price volatility
|
70
|
%
|
Probability of change in control
|
1.75
|
%
|
Stock price (per share)
|
$0.94
|
|
Expected term
|
3.50 years
|
|
Risk-free rate (1)
|
1.59
|
%
|
Assumed early conversion/exercise price (per share)
|
$2.73
|
|
|
Level 3
|
||
Balance at September 28, 2016 (inception of issuance of the Notes)
|
|
$
|
1,223
|
|
Change in fair value of warrant liability
|
|
$
|
(147
|
)
|
Balance at March 31, 2017
|
|
$
|
1,076
|
|
|
March 31, 2017
|
|
Stock price volatility
|
70
|
%
|
Probability of change in control
|
1.75
|
%
|
Stock price (per share)
|
$0.94
|
|
Expected term
|
3.5 years
|
|
Risk-free rate (1)
|
1.59
|
%
|
Assumed early conversion/exercise price (per share)
|
$2.73
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
Billed
|
|
$
|
9,367
|
|
|
$
|
13,220
|
|
Unbilled
|
|
7,784
|
|
|
4,763
|
|
||
Allowance for doubtful accounts
|
|
(597
|
)
|
|
(464
|
)
|
||
Accounts receivable, net
|
|
$
|
16,554
|
|
|
$
|
17,519
|
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
Computer-related equipment
|
|
$
|
4,133
|
|
|
$
|
2,775
|
|
Furniture and fixtures
|
|
116
|
|
|
33
|
|
||
Leasehold improvements
|
|
143
|
|
|
74
|
|
||
|
|
4,392
|
|
|
2,882
|
|
||
Accumulated depreciation
|
|
(2,015
|
)
|
|
(1,098
|
)
|
||
Property and equipment, net
|
|
$
|
2,377
|
|
|
$
|
1,784
|
|
|
|
Number of
Shares
|
|
Weighted Average
Exercise Price
(per share)
|
|
Weighted Average
Remaining Contractual
Life (in years)
|
|
Aggregate Intrinsic
Value
(in thousands)
|
|||
Options Outstanding, March 31, 2015
|
|
5,789,758
|
|
|
4.65
|
|
|
8.35
|
|
1,319
|
|
Granted
|
|
3,959,150
|
|
|
2.05
|
|
|
|
|
|
|
Forfeited / Canceled
|
|
(1,857,830
|
)
|
|
3.37
|
|
|
|
|
|
|
Exercised
|
|
(66,683
|
)
|
|
0.77
|
|
|
|
|
|
|
Options Outstanding, March 31, 2016
|
|
7,824,395
|
|
|
3.61
|
|
|
8.24
|
|
110
|
|
Granted
|
|
4,271,523
|
|
|
0.82
|
|
|
|
|
|
|
Forfeited / Canceled
|
|
(2,378,523
|
)
|
|
2.90
|
|
|
|
|
|
|
Exercised
|
|
18,383
|
|
|
0.64
|
|
|
|
|
|
|
Options Outstanding, March 31, 2017
|
|
9,735,778
|
|
|
2.56
|
|
|
7.95
|
|
801
|
|
Vested and expected to vest (net of estimated forfeitures) at March 31, 2017 (a)
|
|
7,167,283
|
|
|
3.09
|
|
|
7.44
|
|
422
|
|
Exercisable, March 31, 2017
|
|
3,557,304
|
|
|
4.75
|
|
|
5.79
|
|
57
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Life (Years)
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
||||||
$0.00 - 0.50
|
|
7,652
|
|
|
$
|
0.24
|
|
|
2.99
|
|
7,652
|
|
|
$
|
0.24
|
|
$0.51 - 1.00
|
|
3,286,153
|
|
|
0.70
|
|
|
9.49
|
|
184,995
|
|
|
0.66
|
|
||
$1.01 - 1.50
|
|
2,501,351
|
|
|
1.32
|
|
|
8.97
|
|
333,315
|
|
|
1.24
|
|
||
$1.51 - 2.00
|
|
223,834
|
|
|
1.51
|
|
|
8.09
|
|
101,000
|
|
|
1.51
|
|
||
$2.01 - 2.50
|
|
253,779
|
|
|
2.43
|
|
|
3.83
|
|
203,779
|
|
|
2.42
|
|
||
$2.51 - 3.00
|
|
994,616
|
|
|
2.61
|
|
|
7.15
|
|
758,799
|
|
|
2.63
|
|
||
$3.51 - 4.00
|
|
1,062,661
|
|
|
3.95
|
|
|
6.77
|
|
792,893
|
|
|
3.95
|
|
||
$4.01 - 4.50
|
|
875,732
|
|
|
4.14
|
|
|
6.22
|
|
663,621
|
|
|
4.14
|
|
||
$4.51 - 5.00
|
|
60,000
|
|
|
4.65
|
|
|
5.99
|
|
60,000
|
|
|
4.65
|
|
||
$5.01 and over
|
|
470,000
|
|
|
$
|
16.32
|
|
|
1.76
|
|
451,250
|
|
|
$
|
16.75
|
|
|
|
9,735,778
|
|
|
|
|
|
|
3,557,304
|
|
|
|
|
|
Year Ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total fair value of options vested
|
|
$
|
3,519
|
|
|
$
|
5,288
|
|
|
$
|
3,155
|
|
Total intrinsic value of options exercised (a)
|
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
71
|
|
(a)
|
The total intrinsic value of options exercised represents the total pre-tax intrinsic value (the difference between the stock price at exercise and the exercise price multiplied by the number of options exercised) that was received by the option holders who exercised their options during the fiscal year.
|
|
|
Year Ended March 31,
|
||||
|
|
2017
|
|
2016
|
|
2015
|
Risk-free interest rate
|
|
1.34% to 2.38%
|
|
1.37% to 2.27%
|
|
1.37% to 1.79%
|
Expected life of the options
|
|
5.69 to 9.84 years
|
|
5.73 to 10 years
|
|
5.73 to 6 years
|
Expected volatility
|
|
73% to 130%
|
|
78% to 145%
|
|
115% to 145%
|
Expected dividend yield
|
|
—%
|
|
—%
|
|
—%
|
Expected forfeitures
|
|
10% to 35%
|
|
10% to 35%
|
|
10% to 35%
|
|
|
Year Ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Product development
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sales and marketing
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
General and administrative
|
|
4,156
|
|
|
5,963
|
|
|
6,340
|
|
|||
Total
|
|
$
|
4,156
|
|
|
$
|
5,963
|
|
|
$
|
6,340
|
|
|
|
Content
|
|
O&O
|
|
A&P
|
|
Total
|
||||||||
Goodwill as of March 31, 2014
|
|
$
|
3,772
|
|
|
$
|
1,065
|
|
|
$
|
—
|
|
|
$
|
4,837
|
|
Adjustments
|
|
1,472
|
|
|
41,203
|
|
|
29,235
|
|
|
71,910
|
|
||||
Goodwill as of March 31, 2015
|
|
$
|
5,244
|
|
|
$
|
42,268
|
|
|
$
|
29,235
|
|
|
$
|
76,747
|
|
Adjustments
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
(126
|
)
|
||||
Goodwill as of March 31, 2016
|
|
5,244
|
|
|
42,268
|
|
|
29,109
|
|
|
76,621
|
|
||||
Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Goodwill as of March 31, 2017
|
|
$
|
5,244
|
|
|
$
|
42,268
|
|
|
$
|
29,109
|
|
|
$
|
76,621
|
|
|
|
As of March 31, 2017
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Software
|
|
$
|
11,544
|
|
|
$
|
(8,191
|
)
|
|
$
|
3,353
|
|
Trade name / trademark
|
|
380
|
|
|
(380
|
)
|
|
—
|
|
|||
Customer list
|
|
11,300
|
|
|
(10,152
|
)
|
|
1,148
|
|
|||
License agreements
|
|
355
|
|
|
(291
|
)
|
|
64
|
|
|||
Total
|
|
$
|
23,579
|
|
|
$
|
(19,014
|
)
|
|
$
|
4,565
|
|
|
|
As of March 31, 2016
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Software
|
|
$
|
11,544
|
|
|
$
|
(4,949
|
)
|
|
$
|
6,595
|
|
Trade name / trademark
|
|
380
|
|
|
(380
|
)
|
|
—
|
|
|||
Customer list
|
|
11,300
|
|
|
(5,534
|
)
|
|
5,766
|
|
|||
License agreements
|
|
355
|
|
|
(226
|
)
|
|
129
|
|
|||
Total
|
|
$
|
23,579
|
|
|
$
|
(11,089
|
)
|
|
$
|
12,490
|
|
|
|
Intangible Assets
|
||
Balance as of March 31, 2014
|
|
9,074
|
|
|
Amortization of intangibles
|
|
(2,010
|
)
|
|
Purchase price allocation adjustment
|
|
(1,472
|
)
|
|
Acquisition of XYO
|
|
1,500
|
|
|
Acquisition of Appia
|
|
17,780
|
|
|
Capitalized developed software
|
|
64
|
|
|
Balance as of March 31, 2015
|
|
24,936
|
|
|
Amortization of intangibles
|
|
(8,168
|
)
|
|
Customer relationship intangible asset write-off
|
|
(2,404
|
)
|
|
Reduction in software intangibles related to Sift transaction
|
|
(1,874
|
)
|
|
Balance as of March 31, 2016
|
|
12,490
|
|
|
Amortization of intangibles
|
|
(7,168
|
)
|
|
XYO intangible asset impairment
|
|
(757
|
)
|
|
Balance as of March 31, 2017
|
|
$
|
4,565
|
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
Short-term debt
|
|
|
|
|
||||
Revolving line of credit, principal
|
|
—
|
|
|
3,000
|
|
||
Secured debenture, net of issuance costs and discounts of $0 and $568, respectively
|
|
—
|
|
|
7,432
|
|
||
Total short-term debt
|
|
$
|
—
|
|
|
$
|
10,432
|
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||
Long-term debt
|
|
|
|
|
||||
Convertible notes, net of issuance costs and discounts of $6,315 and $0, respectively
|
|
$
|
9,685
|
|
|
$
|
—
|
|
•
|
a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, the Company’s Subsidiaries or the Company’s or the Company’s Subsidiaries’ employee benefit plans files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s common equity representing more than
50%
of the voting power of all outstanding classes of the Company’s common equity entitled to vote generally in the election of the Company’s directors;
|
•
|
consummation of (A) any share exchange, consolidation or merger involving the Company pursuant to which the Common Stock will be converted into cash, securities or other property or (B) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, to any person other than one or more of the Company’s Subsidiaries; provided, however, that a share exchange, consolidation or merger transaction described in clause (A) above in which the holders of more than
50%
of all shares of Common Stock entitled to vote generally in the election of the Company’s directors immediately prior to such transaction own, directly or indirectly, more than
50%
of all shares of Common Stock entitled to vote generally in the election of the directors of the continuing or surviving entity or the parent entity thereof immediately after such transaction in substantially the same proportions (relative to each other) as such ownership immediately prior to such transaction will not, in either case, be a Fundamental Change;
|
•
|
the Company’s shareholders approve any plan or proposal for the liquidation or dissolution of the Company; or
|
•
|
the Common Stock (or other Capital Stock into which the Notes are then convertible pursuant to the terms of this Indenture) ceases to be listed on any of The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market or The NYSE MKT (or their respective successors) (each, an “Eligible Market ”).
|
|
|
Number of Warrants Outstanding
|
|
Weighted-Average Exercise Price
|
||
Outstanding as of March 31, 2016
|
|
2,085,356
|
|
|
2.78
|
|
Issued
|
|
4,385,600
|
|
|
1.36
|
|
Expired
|
|
(1,467,143
|
)
|
|
2.49
|
|
Outstanding as of March 31, 2017
|
|
5,003,813
|
|
|
1.62
|
|
|
|
Number of Shares
|
|
Weighted-Average Grant Date Fair Value
|
|||
Unvested restricted stock outstanding as of March 31, 2015
|
|
642,343
|
|
|
$
|
3.04
|
|
Granted
|
|
233,928
|
|
|
1.47
|
|
|
Vested
|
|
(288,220
|
)
|
|
2.97
|
|
|
Cancelled
|
|
(478,005
|
)
|
|
2.82
|
|
|
Unvested restricted stock outstanding as of March 31, 2016
|
|
110,046
|
|
|
1.45
|
|
|
Granted
|
|
331,363
|
|
|
1.10
|
|
|
Vested
|
|
(262,546
|
)
|
|
1.23
|
|
|
Cancelled
|
|
(39,545
|
)
|
|
1.10
|
|
|
Unvested restricted stock outstanding as of March 31, 2017
|
|
139,318
|
|
|
$
|
1.10
|
|
|
|
Years Ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net loss from operations, net of taxes
|
|
$
|
(24,264
|
)
|
|
$
|
(28,032
|
)
|
|
$
|
(24,647
|
)
|
Weighted-average common shares outstanding, basic and diluted
|
|
66,511
|
|
|
61,763
|
|
|
38,967
|
|
|||
Basic and diluted net loss per common share
|
|
$
|
(0.36
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.63
|
)
|
Common stock equivalents excluded from net loss per diluted share because their effect would have been anti-dilutive
|
|
825,675
|
|
|
1,438,355
|
|
|
1,574,372
|
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Year Ended March 31, 2015
|
||||||
Current U.S. federal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current state and local
|
|
17
|
|
|
—
|
|
|
25
|
|
|||
Current non-U.S.
|
|
(24
|
)
|
|
270
|
|
|
324
|
|
|||
Total current
|
|
(7
|
)
|
|
270
|
|
|
349
|
|
|||
Deferred U.S. federal
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Deferred state and local
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Deferred non-U.S.
|
|
(137
|
)
|
|
(56
|
)
|
|
398
|
|
|||
Total deferred
|
|
(137
|
)
|
|
(56
|
)
|
|
398
|
|
|||
Total income tax provision
|
|
$
|
(144
|
)
|
|
$
|
214
|
|
|
$
|
747
|
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Year Ended March 31, 2015
|
||||||
Statutory federal income taxes
|
|
$
|
(8,545
|
)
|
|
$
|
(9,736
|
)
|
|
$
|
(8,365
|
)
|
State income taxes, net of federal benefit
|
|
15
|
|
|
—
|
|
|
17
|
|
|||
Non-deductible expenses
|
|
(350
|
)
|
|
821
|
|
|
2,171
|
|
|||
Rate change
|
|
(88
|
)
|
|
(224
|
)
|
|
—
|
|
|||
Change in uncertain tax liability
|
|
158
|
|
|
(123
|
)
|
|
324
|
|
|||
Change in valuation allowance
|
|
8,896
|
|
|
10,106
|
|
|
6,600
|
|
|||
Return-to-provision adjustments
|
|
(230
|
)
|
|
(630
|
)
|
|
—
|
|
|||
Income tax provision / (benefit)
|
|
$
|
(144
|
)
|
|
$
|
214
|
|
|
$
|
747
|
|
|
|
Year Ended March 31, 2017
|
|
Year Ended March 31, 2016
|
|
Year Ended March 31, 2015
|
||||||
Deferred income tax assets
|
|
|
|
|
|
|
||||||
Net operating loss carryforward
|
|
$
|
38,012
|
|
|
$
|
31,840
|
|
|
$
|
25,668
|
|
Stock-based compensation
|
|
3,806
|
|
|
1,965
|
|
|
1,270
|
|
|||
Credit carryforwards
|
|
98
|
|
|
129
|
|
|
123
|
|
|||
Other
|
|
1,502
|
|
|
1,469
|
|
|
1,324
|
|
|||
Gross deferred income tax assets
|
|
43,418
|
|
|
35,403
|
|
|
28,385
|
|
|||
Valuation allowance
|
|
(40,922
|
)
|
|
(32,026
|
)
|
|
(21,920
|
)
|
|||
Net deferred income tax assets
|
|
$
|
2,496
|
|
|
$
|
3,377
|
|
|
$
|
6,465
|
|
Deferred income tax liabilities
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
$
|
(1,523
|
)
|
|
$
|
(754
|
)
|
|
$
|
(751
|
)
|
Intangibles and goodwill
|
|
(75
|
)
|
|
(1,947
|
)
|
|
(5,069
|
)
|
|||
Convertible Debt
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
|
(318
|
)
|
|
(175
|
)
|
|
(780
|
)
|
|||
Net deferred income tax assets / (liabilities)
|
|
$
|
352
|
|
|
$
|
501
|
|
|
$
|
(135
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at April 1
|
|
$
|
783
|
|
|
$
|
905
|
|
|
$
|
61
|
|
Additions for tax position of prior years
|
|
158
|
|
|
—
|
|
|
844
|
|
|||
Reductions for tax positions of prior years
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
|||
Balance at March 31
|
|
$
|
941
|
|
|
$
|
783
|
|
|
$
|
905
|
|
|
|
Content
|
|
Advertising
|
|
Total
|
||||||
Year Ended March 31, 2017
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
32,114
|
|
|
$
|
59,439
|
|
|
$
|
91,553
|
|
Loss from operations
|
|
$
|
(4,882
|
)
|
|
$
|
(17,138
|
)
|
|
$
|
(22,020
|
)
|
Year Ended March 31, 2016
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
28,765
|
|
|
$
|
57,776
|
|
|
$
|
86,541
|
|
Loss from operations
|
|
$
|
(7,603
|
)
|
|
$
|
(18,333
|
)
|
|
$
|
(25,936
|
)
|
Year Ended March 31, 2015
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
22,009
|
|
|
$
|
6,243
|
|
|
$
|
28,252
|
|
Loss from operations
|
|
$
|
(13,300
|
)
|
|
$
|
(10,437
|
)
|
|
$
|
(23,737
|
)
|
|
|
Year ended March 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net revenues
|
|
|
|
|
|
|
||||||
United States and Canada
|
|
$
|
31,158
|
|
|
$
|
28,813
|
|
|
$
|
5,976
|
|
Europe, Middle East, and Africa
|
|
13,843
|
|
|
15,587
|
|
|
2,202
|
|
|||
Asia Pacific and China
|
|
44,189
|
|
|
41,661
|
|
|
20,074
|
|
|||
Mexico, Central America, and South America
|
|
2,363
|
|
|
480
|
|
|
—
|
|
|||
Consolidated net revenues
|
|
$
|
91,553
|
|
|
$
|
86,541
|
|
|
$
|
28,252
|
|
|
|
|
|
|
|
|
||||||
Property and equipment, net
|
|
|
|
|
|
|
||||||
United States & Canada
|
|
$
|
1,916
|
|
|
$
|
1,376
|
|
|
$
|
289
|
|
Europe, Middle East, & Africa
|
|
73
|
|
|
94
|
|
|
32
|
|
|||
Asia Pacific & China
|
|
388
|
|
|
314
|
|
|
293
|
|
|||
Mexico, Central America, & South America
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Consolidated property and equipment, net
|
|
$
|
2,377
|
|
|
$
|
1,784
|
|
|
$
|
614
|
|
•
|
The parent company;
|
•
|
The subsidiary guarantors on a combined basis;
|
•
|
Any other subsidiaries of the parent company on a combined basis;
|
•
|
Consolidating adjustments; and
|
•
|
The total consolidated amounts.
|
Digital Turbine, Inc.
|
||||||||||
Notes to Consolidated Financial Statements
|
||||||||||
(Unaudited)
|
Condensed Consolidated Balance Sheet
|
||||||||||||
as of March 31, 2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidated Total
|
||||
ASSETS
|
|
|
|
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
|
|
|
||||
Cash
|
|
258
|
|
|
5,333
|
|
|
558
|
|
|
6,149
|
|
Restricted cash
|
|
156
|
|
|
175
|
|
|
—
|
|
|
331
|
|
Accounts receivable, net of allowance of $597
|
|
—
|
|
|
15,740
|
|
|
814
|
|
|
16,554
|
|
Deposits
|
|
—
|
|
|
121
|
|
|
—
|
|
|
121
|
|
Prepaid expenses and other current assets
|
|
282
|
|
|
226
|
|
|
2
|
|
|
510
|
|
Total current assets
|
|
696
|
|
|
21,595
|
|
|
1,374
|
|
|
23,665
|
|
Property and equipment, net
|
|
64
|
|
|
2,296
|
|
|
17
|
|
|
2,377
|
|
Deferred tax assets
|
|
352
|
|
|
—
|
|
|
—
|
|
|
352
|
|
Intangible assets, net
|
|
—
|
|
|
2,647
|
|
|
1,918
|
|
|
4,565
|
|
Goodwill
|
|
—
|
|
|
70,377
|
|
|
6,244
|
|
|
76,621
|
|
TOTAL ASSETS
|
|
1,112
|
|
|
96,915
|
|
|
9,553
|
|
|
107,580
|
|
INTERCOMPANY
|
|
|
|
|
|
|
|
|
||||
Intercompany payable/receivable, net
|
|
123,800
|
|
|
(107,348
|
)
|
|
(16,452
|
)
|
|
—
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
1,023
|
|
|
18,697
|
|
|
148
|
|
|
19,868
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
8,312
|
|
|
217
|
|
|
8,529
|
|
Accrued compensation
|
|
32
|
|
|
1,041
|
|
|
—
|
|
|
1,073
|
|
Other current liabilities
|
|
794
|
|
|
510
|
|
|
—
|
|
|
1,304
|
|
Total current liabilities
|
|
1,849
|
|
|
28,560
|
|
|
365
|
|
|
30,774
|
|
Convertible notes, net of debt issuance costs and discounts of $6,315
|
|
9,685
|
|
|
—
|
|
|
—
|
|
|
9,685
|
|
Convertible note embedded derivative liability
|
|
3,218
|
|
|
—
|
|
|
—
|
|
|
3,218
|
|
Warrant liability
|
|
1,076
|
|
|
—
|
|
|
—
|
|
|
1,076
|
|
Other non-current liabilities
|
|
695
|
|
|
87
|
|
|
—
|
|
|
782
|
|
Total liabilities
|
|
16,523
|
|
|
28,647
|
|
|
365
|
|
|
45,535
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
||||
Preferred stock
|
|
|
|
|
|
|
|
|
||||
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000)
|
|
100
|
|
|
—
|
|
|
—
|
|
|
100
|
|
Common stock
|
|
|
|
|
|
|
|
|
||||
$0.0001 par value: 200,000,000 shares authorized; 67,329,262 issued and 66,594,806 outstanding at March 31, 2017
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
Additional paid-in capital
|
|
299,580
|
|
|
—
|
|
|
—
|
|
|
299,580
|
|
Treasury stock (754,599 shares at March 31, 2017)
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
Accumulated other comprehensive loss
|
|
—
|
|
|
(1,704
|
)
|
|
1,383
|
|
|
(321
|
)
|
Accumulated deficit
|
|
(191,228
|
)
|
|
(37,376
|
)
|
|
(8,647
|
)
|
|
(237,251
|
)
|
Total stockholders' equity
|
|
108,389
|
|
|
(39,080
|
)
|
|
(7,264
|
)
|
|
62,045
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
124,912
|
|
|
(10,433
|
)
|
|
(6,899
|
)
|
|
107,580
|
|
Condensed Consolidated Balance Sheet
|
|||||||||||||
as of March 31, 2016
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidated Total
|
|||||
ASSETS
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
|
|
|
|
|
|
|
|
|||||
Cash
|
|
6,712
|
|
|
4,466
|
|
|
53
|
|
|
11,231
|
|
|
Accounts receivable, net of allowance of $464
|
|
24
|
|
|
17,369
|
|
|
126
|
|
|
17,519
|
|
|
Deposits
|
|
—
|
|
|
80
|
|
|
133
|
|
|
213
|
|
|
Prepaid expenses and other current assets
|
|
331
|
|
|
239
|
|
|
13
|
|
|
583
|
|
|
Total current assets
|
|
7,067
|
|
|
22,154
|
|
|
325
|
|
|
29,546
|
|
|
Property and equipment, net
|
|
53
|
|
|
1,690
|
|
|
41
|
|
|
1,784
|
|
|
Cost method investment
|
|
—
|
|
|
999
|
|
|
—
|
|
|
999
|
|
|
Deferred tax assets
|
|
500
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|
Intangible assets, net
|
|
—
|
|
|
8,660
|
|
|
3,830
|
|
|
12,490
|
|
|
Goodwill
|
|
—
|
|
|
70,377
|
|
|
6,244
|
|
|
76,621
|
|
|
TOTAL ASSETS
|
|
7,620
|
|
|
103,880
|
|
|
10,440
|
|
|
121,940
|
|
|
INTERCOMPANY
|
|
|
|
|
|
|
|
|
|||||
Intercompany payable/receivable, net
|
|
111,909
|
|
|
(95,732
|
)
|
|
(16,177
|
)
|
|
—
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|||||
Current liabilities
|
|
|
|
|
|
|
|
|
|||||
Accounts payable
|
|
1,255
|
|
|
13,997
|
|
|
48
|
|
|
15,300
|
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
9,549
|
|
|
73
|
|
|
9,622
|
|
|
Accrued compensation
|
|
455
|
|
|
801
|
|
|
97
|
|
|
1,353
|
|
|
Short-term debt, net of debt issuance costs and discounts of $568
|
|
—
|
|
—
|
|
10,432
|
|
|
—
|
|
|
10,432
|
|
Other current liabilities
|
|
910
|
|
|
1,237
|
|
|
—
|
|
|
2,147
|
|
|
Total current liabilities
|
|
2,620
|
|
|
36,016
|
|
|
218
|
|
|
38,854
|
|
|
Other non-current liabilities
|
|
815
|
|
|
—
|
|
|
—
|
|
|
815
|
|
|
Total liabilities
|
|
3,435
|
|
|
36,016
|
|
|
218
|
|
|
39,669
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|||||
Preferred stock
|
|
|
|
|
|
|
|
|
|||||
Series A convertible preferred stock at $0.0001 par value; 2,000,000 shares authorized, 100,000 issued and outstanding (liquidation preference of $1,000)
|
|
100
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|
Common stock
|
|
|
|
|
|
|
|
|
|||||
$0.0001 par value: 200,000,000 shares authorized; 67,019,703 issued and 66,284,606 outstanding at March 31, 2016;
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
Additional paid-in capital
|
|
295,423
|
|
|
—
|
|
|
—
|
|
|
295,423
|
|
|
Treasury stock (754,599 shares at March 31, 2016)
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
|
Accumulated other comprehensive loss
|
|
—
|
|
|
(1,368
|
)
|
|
1,166
|
|
|
(202
|
)
|
|
Accumulated deficit
|
|
(179,366
|
)
|
|
(26,500
|
)
|
|
(7,121
|
)
|
|
(212,987
|
)
|
|
Total stockholders' equity
|
|
116,094
|
|
|
(27,868
|
)
|
|
(5,955
|
)
|
|
82,271
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
119,529
|
|
|
8,148
|
|
|
(5,737
|
)
|
|
121,940
|
|
Consolidated Statement of Operations and Comprehensive Loss
|
|||||||||||||||
For the year ended March 31, 2017
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
|||||
Net revenues
|
|
—
|
|
|
121,396
|
|
|
1,779
|
|
|
(31,622
|
)
|
|
91,553
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
License fees and revenue share
|
|
—
|
|
|
101,271
|
|
|
603
|
|
|
(31,622
|
)
|
|
70,252
|
|
Other direct cost of revenues
|
|
—
|
|
|
6,027
|
|
|
1,911
|
|
|
—
|
|
|
7,938
|
|
Total cost of revenues
|
|
—
|
|
|
107,298
|
|
|
2,514
|
|
|
(31,622
|
)
|
|
78,190
|
|
Gross profit
|
|
—
|
|
|
14,098
|
|
|
(735
|
)
|
|
—
|
|
|
13,363
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Product development
|
|
30
|
|
|
11,923
|
|
|
82
|
|
|
—
|
|
|
12,035
|
|
Sales and marketing
|
|
452
|
|
|
5,980
|
|
|
105
|
|
|
—
|
|
|
6,537
|
|
General and administrative
|
|
11,009
|
|
|
5,887
|
|
|
(85
|
)
|
|
—
|
|
|
16,811
|
|
Total operating expenses
|
|
11,491
|
|
|
23,790
|
|
|
102
|
|
|
—
|
|
|
35,383
|
|
Loss from operations
|
|
(11,491
|
)
|
|
(9,692
|
)
|
|
(837
|
)
|
|
—
|
|
|
(22,020
|
)
|
Interest and other income / (expense), net
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense, net
|
|
(1,329
|
)
|
|
(1,299
|
)
|
|
—
|
|
|
—
|
|
|
(2,628
|
)
|
Foreign exchange transaction gain / (loss)
|
|
—
|
|
|
(85
|
)
|
|
(3
|
)
|
|
—
|
|
|
(88
|
)
|
Change in fair value of convertible note embedded derivative liability
|
|
475
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
Change in fair value of warrant liability
|
|
147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147
|
|
Loss on extinguishment of debt
|
|
—
|
|
|
(293
|
)
|
|
—
|
|
|
—
|
|
|
(293
|
)
|
Other income / (expense)
|
|
74
|
|
|
(67
|
)
|
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
Total interest and other income / (expense), net
|
|
(633
|
)
|
|
(1,744
|
)
|
|
(11
|
)
|
|
—
|
|
|
(2,388
|
)
|
Loss from operations before income taxes
|
|
(12,124
|
)
|
|
(11,436
|
)
|
|
(848
|
)
|
|
—
|
|
|
(24,408
|
)
|
Income tax provision
|
|
(144
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
Net loss
|
|
(11,980
|
)
|
|
(11,436
|
)
|
|
(848
|
)
|
|
—
|
|
|
(24,264
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
|
—
|
|
|
(336
|
)
|
|
217
|
|
|
—
|
|
|
(119
|
)
|
Comprehensive loss
|
|
(11,980
|
)
|
|
(11,772
|
)
|
|
(631
|
)
|
|
—
|
|
|
(24,383
|
)
|
Consolidated Statement of Operations and Comprehensive Loss
|
|||||||||||||||
For the year ended March 31, 2016
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elimination
|
|
Consolidated Total
|
|||||
Net revenues
|
|
—
|
|
|
103,630
|
|
|
216
|
|
|
(17,305
|
)
|
|
86,541
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
|||||
License fees and revenue share
|
|
—
|
|
|
83,386
|
|
|
104
|
|
|
(17,305
|
)
|
|
66,185
|
|
Other direct cost of revenues
|
|
—
|
|
|
9,775
|
|
|
762
|
|
|
—
|
|
|
10,537
|
|
Total cost of revenues
|
|
—
|
|
|
93,161
|
|
|
866
|
|
|
(17,305
|
)
|
|
76,722
|
|
Gross profit
|
|
—
|
|
|
10,469
|
|
|
(650
|
)
|
|
—
|
|
|
9,819
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|||||
Product development
|
|
(582
|
)
|
|
11,043
|
|
|
522
|
|
|
—
|
|
|
10,983
|
|
Sales and marketing
|
|
46
|
|
|
5,876
|
|
|
145
|
|
|
—
|
|
|
6,067
|
|
General and administrative
|
|
11,457
|
|
|
6,670
|
|
|
578
|
|
|
—
|
|
|
18,705
|
|
Total operating expenses
|
|
10,921
|
|
|
23,589
|
|
|
1,245
|
|
|
—
|
|
|
35,755
|
|
Loss from operations
|
|
(10,921
|
)
|
|
(13,120
|
)
|
|
(1,895
|
)
|
|
—
|
|
|
(25,936
|
)
|
Interest and other income / (expense), net
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest income / (expense), net
|
|
1
|
|
|
(1,722
|
)
|
|
(95
|
)
|
|
—
|
|
|
(1,816
|
)
|
Foreign exchange transaction gain / (loss)
|
|
(5
|
)
|
|
(18
|
)
|
|
(6
|
)
|
|
—
|
|
|
(29
|
)
|
Gain / (loss) on disposal of fixed assets
|
|
(24
|
)
|
|
(47
|
)
|
|
34
|
|
|
—
|
|
|
(37
|
)
|
Other income / (expense)
|
|
41
|
|
|
(105
|
)
|
|
64
|
|
|
—
|
|
|
—
|
|
Total interest and other income / (expense), net
|
|
13
|
|
|
(1,892
|
)
|
|
(3
|
)
|
|
—
|
|
|
(1,882
|
)
|
Loss from operations before income taxes
|
|
(10,908
|
)
|
|
(15,012
|
)
|
|
(1,898
|
)
|
|
—
|
|
|
(27,818
|
)
|
Income tax provision
|
|
130
|
|
|
(27
|
)
|
|
111
|
|
|
—
|
|
|
214
|
|
Net loss
|
|
(11,038
|
)
|
|
(14,985
|
)
|
|
(2,009
|
)
|
|
—
|
|
|
(28,032
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustment
|
|
|
|
|
(69
|
)
|
|
(81
|
)
|
|
—
|
|
|
(150
|
)
|
Comprehensive loss
|
|
(11,038
|
)
|
|
(15,054
|
)
|
|
(2,090
|
)
|
|
—
|
|
|
(28,182
|
)
|
Consolidated Statement of Operations and Comprehensive Loss
|
||||||||||||
For the year ended March 31, 2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidated Total
|
||||
Net revenues
|
|
—
|
|
|
28,028
|
|
|
224
|
|
|
28,252
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
||||
License fees and revenue share
|
|
—
|
|
|
20,047
|
|
|
63
|
|
|
20,110
|
|
Other direct cost of revenues
|
|
—
|
|
|
1,020
|
|
|
990
|
|
|
2,010
|
|
Total cost of revenues
|
|
—
|
|
|
21,067
|
|
|
1,053
|
|
|
22,120
|
|
Gross profit
|
|
—
|
|
|
6,961
|
|
|
(829
|
)
|
|
6,132
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||||
Product development
|
|
232
|
|
|
7,013
|
|
|
660
|
|
|
7,905
|
|
Sales and marketing
|
|
32
|
|
|
2,436
|
|
|
465
|
|
|
2,933
|
|
General and administrative
|
|
13,683
|
|
|
5,053
|
|
|
295
|
|
|
19,031
|
|
Total operating expenses
|
|
13,947
|
|
|
14,502
|
|
|
1,420
|
|
|
29,869
|
|
Loss from operations
|
|
(13,947
|
)
|
|
(7,541
|
)
|
|
(2,249
|
)
|
|
(23,737
|
)
|
Interest and other income / (expense), net
|
|
|
|
|
|
|
|
|
||||
Interest income / (expense), net
|
|
(117
|
)
|
|
286
|
|
|
(403
|
)
|
|
(234
|
)
|
Foreign exchange transaction gain / (loss)
|
|
4
|
|
|
29
|
|
|
(1
|
)
|
|
32
|
|
Loss on settlement of debt
|
|
(247
|
)
|
|
238
|
|
|
—
|
|
|
(9
|
)
|
Gain on disposal of fixed assets
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Other income / (expense)
|
|
42
|
|
|
(20
|
)
|
|
24
|
|
|
46
|
|
Total interest and other income / (expense), net
|
|
(318
|
)
|
|
535
|
|
|
(380
|
)
|
|
(163
|
)
|
Loss from operations before income taxes
|
|
(14,265
|
)
|
|
(7,006
|
)
|
|
(2,629
|
)
|
|
(23,900
|
)
|
Income tax provision
|
|
(147
|
)
|
|
(774
|
)
|
|
1,668
|
|
|
747
|
|
Net loss
|
|
(14,118
|
)
|
|
(6,232
|
)
|
|
(4,297
|
)
|
|
(24,647
|
)
|
Other comprehensive income / (loss)
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustment
|
|
—
|
|
|
147
|
|
|
—
|
|
|
147
|
|
Comprehensive loss
|
|
(14,118
|
)
|
|
(6,085
|
)
|
|
(4,297
|
)
|
|
(24,500
|
)
|
Condensed Consolidated Statement of Cash Flows
|
||||||||||||
For the year ended March 31, 2017
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidated Total
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
(11,980
|
)
|
|
(11,436
|
)
|
|
(848
|
)
|
|
(24,264
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
14
|
|
|
6,227
|
|
|
1,929
|
|
|
8,170
|
|
Change in allowance for doubtful accounts
|
|
—
|
|
|
68
|
|
|
65
|
|
|
133
|
|
Amortization of debt discount
|
|
1,256
|
|
|
—
|
|
|
—
|
|
|
1,256
|
|
Amortization of debt issuance costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Accrued interest
|
|
133
|
|
|
(97
|
)
|
|
—
|
|
|
36
|
|
Stock-based compensation
|
|
3,748
|
|
|
—
|
|
|
—
|
|
|
3,748
|
|
Stock-based compensation for services rendered
|
|
398
|
|
|
—
|
|
|
—
|
|
|
398
|
|
Impairment of intangible assets
|
|
—
|
|
|
—
|
|
|
757
|
|
|
757
|
|
Change in fair value of convertible note embedded derivative liability
|
|
(475
|
)
|
|
—
|
|
|
—
|
|
|
(475
|
)
|
Change in fair value of warrant liability
|
|
(147
|
)
|
|
—
|
|
|
—
|
|
|
(147
|
)
|
Loss on extinguishment of debt
|
|
—
|
|
|
293
|
|
|
—
|
|
|
293
|
|
(Increase) / decrease in assets:
|
|
|
|
|
|
|
|
|
||||
Restricted cash transferred to / (from) operating cash
|
|
(156
|
)
|
|
(177
|
)
|
|
2
|
|
|
(331
|
)
|
Accounts receivable
|
|
25
|
|
|
1,533
|
|
|
(725
|
)
|
|
833
|
|
Deposits
|
|
—
|
|
|
12
|
|
|
80
|
|
|
92
|
|
Deferred tax assets
|
|
148
|
|
|
—
|
|
|
—
|
|
|
148
|
|
Prepaid expenses and other current assets
|
|
(80
|
)
|
|
142
|
|
|
11
|
|
|
73
|
|
Increase / (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
(233
|
)
|
|
4,701
|
|
|
100
|
|
|
4,568
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
(1,236
|
)
|
|
143
|
|
|
(1,093
|
)
|
Accrued compensation
|
|
575
|
|
|
(759
|
)
|
|
(96
|
)
|
|
(280
|
)
|
Other current liabilities
|
|
(1,091
|
)
|
|
714
|
|
|
(502
|
)
|
|
(879
|
)
|
Other non-current liabilities
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
Intercompany movement of cash
|
|
(15,161
|
)
|
|
15,789
|
|
|
(628
|
)
|
|
—
|
|
Net cash used in operating activities
|
|
(23,057
|
)
|
|
15,774
|
|
|
288
|
|
|
(6,995
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
—
|
|
|
(1,595
|
)
|
|
—
|
|
|
(1,595
|
)
|
Proceeds from sale of cost method investment in Sift
|
|
999
|
|
|
—
|
|
|
—
|
|
|
999
|
|
Net cash used in investing activities
|
|
999
|
|
|
(1,595
|
)
|
|
—
|
|
|
(596
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
||||
Cash received from issuance of convertible notes
|
|
16,000
|
|
|
—
|
|
|
—
|
|
|
16,000
|
|
Repayment of debt obligations
|
|
—
|
|
|
(11,000
|
)
|
|
—
|
|
|
(11,000
|
)
|
Payment of debt issuance costs
|
|
(407
|
)
|
|
(1,976
|
)
|
|
—
|
|
|
(2,383
|
)
|
Options exercised
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
Net cash provided in financing activities
|
|
15,604
|
|
|
(12,976
|
)
|
|
—
|
|
|
2,628
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
(336
|
)
|
|
217
|
|
|
(119
|
)
|
|
|
|
|
|
|
|
|
|
||||
Net change in cash
|
|
(6,454
|
)
|
|
867
|
|
|
505
|
|
|
(5,082
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash, beginning of period
|
|
6,712
|
|
|
4,466
|
|
|
53
|
|
|
11,231
|
|
|
|
|
|
|
|
|
|
|
||||
Cash, end of period
|
|
258
|
|
|
5,333
|
|
|
558
|
|
|
6,149
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||||||
For the year ended March 31, 2016
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidated Total
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
(11,038
|
)
|
|
(14,985
|
)
|
|
(2,009
|
)
|
|
(28,032
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
9
|
|
|
10,203
|
|
|
762
|
|
|
10,974
|
|
Change in allowance for doubtful accounts
|
|
—
|
|
|
(234
|
)
|
|
—
|
|
|
(234
|
)
|
Amortization of debt discount
|
|
470
|
|
|
—
|
|
|
—
|
|
|
470
|
|
Accrued interest
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Stock-based compensation
|
|
5,095
|
|
|
—
|
|
|
—
|
|
|
5,095
|
|
Stock-based compensation for services rendered
|
|
867
|
|
|
—
|
|
|
—
|
|
|
867
|
|
Stock issued as settlement of a liability
|
|
283
|
|
|
—
|
|
|
—
|
|
|
283
|
|
(Increase) / decrease in assets:
|
|
|
|
|
|
|
|
|
||||
Restricted cash transferred to / (from) operating cash
|
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
Accounts receivable
|
|
(24
|
)
|
|
(5,044
|
)
|
|
(43
|
)
|
|
(5,111
|
)
|
Deposits
|
|
9
|
|
|
5
|
|
|
(118
|
)
|
|
(104
|
)
|
Deferred tax assets
|
|
(418
|
)
|
|
—
|
|
|
—
|
|
|
(418
|
)
|
Deferred financing costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Prepaid expenses and other current assets
|
|
(171
|
)
|
|
188
|
|
|
40
|
|
|
57
|
|
Increase / (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
(797
|
)
|
|
11,789
|
|
|
(3,684
|
)
|
|
7,308
|
|
Accrued license fees and revenue share
|
|
—
|
|
|
2,789
|
|
|
—
|
|
|
2,789
|
|
Accrued compensation
|
|
(1,071
|
)
|
|
1,619
|
|
|
(1,379
|
)
|
|
(831
|
)
|
Other liabilities and other items
|
|
(398
|
)
|
|
675
|
|
|
(671
|
)
|
|
(394
|
)
|
Intercompany movement of cash
|
|
(4,013
|
)
|
|
(3,054
|
)
|
|
7,067
|
|
|
—
|
|
Net cash used in operating activities
|
|
(10,997
|
)
|
|
3,963
|
|
|
(35
|
)
|
|
(7,069
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
—
|
|
|
(1,549
|
)
|
|
—
|
|
|
(1,549
|
)
|
Net cash proceeds from investment in Sift
|
|
875
|
|
|
—
|
|
|
—
|
|
|
875
|
|
Net cash used in investing activities
|
|
875
|
|
|
(1,549
|
)
|
|
—
|
|
|
(674
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
||||
Repayment of debt obligations
|
|
—
|
|
|
(600
|
)
|
|
—
|
|
|
(600
|
)
|
Options exercised
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
Stock issued for cash in stock offering, net
|
|
12,627
|
|
|
—
|
|
|
—
|
|
|
12,627
|
|
Net cash provided in financing activities
|
|
12,678
|
|
|
(600
|
)
|
|
—
|
|
|
12,078
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
(173
|
)
|
|
—
|
|
|
(173
|
)
|
|
|
|
|
|
|
|
|
|
||||
Net change in cash
|
|
2,556
|
|
|
1,641
|
|
|
(35
|
)
|
|
4,162
|
|
|
|
|
|
|
|
|
|
|
||||
Cash, beginning of period
|
|
4,156
|
|
|
2,825
|
|
|
88
|
|
|
7,069
|
|
|
|
|
|
|
|
|
|
|
||||
Cash, end of period
|
|
6,712
|
|
|
4,466
|
|
|
53
|
|
|
11,231
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||||||
For the year ended March 31, 2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||
(dollars in thousands)
|
|
Parent
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidated Total
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
||||
Net loss
|
|
(14,118
|
)
|
|
(6,232
|
)
|
|
(4,297
|
)
|
|
(24,647
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
12
|
|
|
1,100
|
|
|
996
|
|
|
2,108
|
|
Change in allowance for doubtful accounts
|
|
—
|
|
|
698
|
|
|
—
|
|
|
698
|
|
Amortization of debt discount
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
Accrued interest
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
Fair value of financing costs related to conversion options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Stock-based compensation
|
|
5,850
|
|
|
—
|
|
|
—
|
|
|
5,850
|
|
Stock-based compensation for services rendered
|
|
490
|
|
|
—
|
|
|
—
|
|
|
490
|
|
(Increase) / decrease in assets:
|
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
—
|
|
|
(350
|
)
|
|
(56
|
)
|
|
(406
|
)
|
Deposits
|
|
(9
|
)
|
|
(96
|
)
|
|
42
|
|
|
(63
|
)
|
Deferred tax assets
|
|
3,156
|
|
|
—
|
|
|
—
|
|
|
3,156
|
|
Prepaid expenses and other current assets
|
|
(27
|
)
|
|
(142
|
)
|
|
27
|
|
|
(142
|
)
|
Increase / (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
||||
Accounts payable
|
|
1,323
|
|
|
(1,924
|
)
|
|
222
|
|
|
(379
|
)
|
Accrued license fees and revenue share
|
|
—
|
|
|
3,033
|
|
|
(45
|
)
|
|
2,988
|
|
Accrued compensation
|
|
136
|
|
|
278
|
|
|
(89
|
)
|
|
325
|
|
Other current liabilities
|
|
2,319
|
|
|
(7,227
|
)
|
|
319
|
|
|
(4,589
|
)
|
Intercompany movement of cash
|
|
(14,565
|
)
|
|
11,600
|
|
|
2,965
|
|
|
—
|
|
Net cash used in operating activities
|
|
(15,433
|
)
|
|
849
|
|
|
84
|
|
|
(14,500
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
Settlement of contingent liability
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
Cash used in acquisition of assets
|
|
(2,125
|
)
|
|
—
|
|
|
—
|
|
|
(2,125
|
)
|
Cash acquired with acquisition of subsidiary
|
|
1,363
|
|
|
—
|
|
|
—
|
|
|
1,363
|
|
Net cash used in investing activities
|
|
(811
|
)
|
|
(67
|
)
|
|
—
|
|
|
(878
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
||||
Options exercised
|
|
136
|
|
|
—
|
|
|
—
|
|
|
136
|
|
Warrants exercised
|
|
375
|
|
|
—
|
|
|
—
|
|
|
375
|
|
Net cash provided in financing activities
|
|
511
|
|
|
—
|
|
|
—
|
|
|
511
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
131
|
|
|
—
|
|
|
131
|
|
|
|
|
|
|
|
|
|
|
||||
Net change in cash
|
|
(15,733
|
)
|
|
913
|
|
|
84
|
|
|
(14,736
|
)
|
|
|
|
|
|
|
|
|
|
||||
Cash, beginning of period
|
|
19,889
|
|
|
1,912
|
|
|
4
|
|
|
21,805
|
|
|
|
|
|
|
|
|
|
|
||||
Cash, end of period
|
|
4,156
|
|
|
2,825
|
|
|
88
|
|
|
7,069
|
|
Year ending March 31,
|
|
|
||
2018
|
|
$
|
943
|
|
2019
|
|
804
|
|
|
2020
|
|
959
|
|
|
2021
|
|
923
|
|
|
2022
|
|
717
|
|
|
Thereafter
|
|
1,347
|
|
|
Total Minimum Lease Payments
|
|
$
|
5,693
|
|
Year ending March 31,
|
|
|
||
2018
|
|
$
|
800
|
|
2019
|
|
150
|
|
|
Total Minimum Payments
|
|
$
|
950
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
March 31, 2016
|
|
December 31, 2015
|
|
September 30, 2015
|
|
June 30, 2015
|
|||||||||||||||||
|
(in thousands, except per share amounts)
|
|||||||||||||||||||||||||||||||
Net revenues
|
|
$
|
22,397
|
|
|
$
|
22,285
|
|
|
$
|
22,832
|
|
|
$
|
24,039
|
|
|
$
|
23,032
|
|
|
$
|
24,089
|
|
|
$
|
20,734
|
|
|
$
|
18,686
|
|
License fees and revenue share
|
|
16,192
|
|
|
17,039
|
|
|
17,797
|
|
|
19,224
|
|
|
17,296
|
|
|
18,569
|
|
|
16,099
|
|
|
14,221
|
|
||||||||
Other direct cost of revenues
|
|
2,298
|
|
|
1,878
|
|
|
1,882
|
|
|
1,880
|
|
|
2,084
|
|
|
1,704
|
|
|
4,558
|
|
|
2,191
|
|
||||||||
Gross profit
|
|
3,907
|
|
|
3,368
|
|
|
3,153
|
|
|
2,935
|
|
|
3,652
|
|
|
3,816
|
|
|
77
|
|
|
2,274
|
|
||||||||
Total operating expenses
|
|
7,761
|
|
|
8,778
|
|
|
9,460
|
|
|
9,384
|
|
|
9,028
|
|
|
9,081
|
|
|
8,221
|
|
|
9,425
|
|
||||||||
Loss from operations
|
|
(3,854
|
)
|
|
(5,410
|
)
|
|
(6,307
|
)
|
|
(6,449
|
)
|
|
(5,376
|
)
|
|
(5,265
|
)
|
|
(8,144
|
)
|
|
(7,151
|
)
|
||||||||
Interest income / (expense), net
|
|
(599
|
)
|
|
(725
|
)
|
|
(622
|
)
|
|
(682
|
)
|
|
(449
|
)
|
|
(471
|
)
|
|
(405
|
)
|
|
(491
|
)
|
||||||||
Foreign exchange transaction gain / (loss)
|
|
(75
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(8
|
)
|
|
(13
|
)
|
|
1
|
|
||||||||
Change in fair value of convertible note embedded derivative liability
|
|
(1,948
|
)
|
|
2,853
|
|
|
(430
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Change in fair value of convertible note embedded derivative liability
|
|
(650
|
)
|
|
937
|
|
|
(140
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Loss on extinguishment of debt
|
|
|
|
—
|
|
|
(293
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Gain / (loss) on disposal of fixed assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(8
|
)
|
|
—
|
|
|
(23
|
)
|
||||||||
Other income / (expense)
|
|
(102
|
)
|
|
68
|
|
|
15
|
|
|
18
|
|
|
(20
|
)
|
|
(8
|
)
|
|
11
|
|
|
17
|
|
||||||||
Loss from operations before income taxes
|
|
(7,228
|
)
|
|
(2,286
|
)
|
|
(7,778
|
)
|
|
(7,116
|
)
|
|
(5,860
|
)
|
|
(5,760
|
)
|
|
(8,551
|
)
|
|
(7,647
|
)
|
||||||||
Income tax provision
|
|
(303
|
)
|
|
300
|
|
|
(437
|
)
|
|
296
|
|
|
(32
|
)
|
|
3
|
|
|
(229
|
)
|
|
472
|
|
||||||||
Net loss, net of taxes
|
|
(6,925
|
)
|
|
(2,586
|
)
|
|
(7,341
|
)
|
|
(7,412
|
)
|
|
(5,828
|
)
|
|
(5,763
|
)
|
|
(8,322
|
)
|
|
(8,119
|
)
|
||||||||
Basic and diluted net loss per common share
|
|
$
|
(0.10
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.14
|
)
|
Weighted-average common shares outstanding, basic and diluted
|
|
66,595
|
|
|
66,634
|
|
|
66,457
|
|
|
66,286
|
|
|
66,278
|
|
|
65,979
|
|
|
57,274
|
|
|
57,388
|
|
Fiscal Year
|
|
Description
|
|
Balance at Beginning of Period
|
|
Charged to Income Statement
|
|
Charged to Allowance
|
|
Balance at End of Period
|
||||||||
|
|
|
|
(in thousands)
|
||||||||||||||
Trade receivables
|
|
|
|
|
|
|
|
|
|
|
||||||||
2017
|
|
Allowance for doubtful accounts
|
|
$
|
464
|
|
|
$
|
494
|
|
|
$
|
361
|
|
|
$
|
597
|
|
2016
|
|
Allowance for doubtful accounts
|
|
698
|
|
|
132
|
|
|
366
|
|
|
$
|
464
|
|
|||
2015
|
|
Allowance for doubtful accounts
|
|
—
|
|
|
505
|
|
|
(193
|
)
|
|
$
|
698
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
•
|
Hired a Chief Financial Officer, "CFO," on September 12, 2016 with a strong background in internal control design and implementation in a public company environment
|
•
|
Completed the evaluation and hiring of additional accounting and finance headcount resources globally to ensure that resources are sufficient to meet the accounting and finance requirements of the Company
|
•
|
Finalized the system implementation for the Company's new ERP accounting system
|
•
|
Finalized the system implementation related to the Company's new stock option tracking, accounting, and disclosure tool
|
•
|
Implemented a billing and disbursements system that is integrated with the Company's ERP system
|
•
|
Completed documentation of internal control procedures, inclusive of new controls with an emphasis on additional documented review and approval procedures, for significant accounting areas
|
•
|
Completed documentation of internal control procedures, inclusive of new controls, around information technology that have an impact on financial reporting
|
•
|
Engaged an independent third party consulting firm to conduct internal control testing and to provide assistance with control remediation
|
•
|
Develop and execute a plan to fully implement and effectively operate the key controls identified through the completion of the documentation of internal control procedures over all significant accounting areas and information technology that have an impact on financial reporting
|
•
|
Implement a cyclical process for evaluating and testing the control environment to help ensure any future key control failures will be identified on a timely basis, and allow for the possibility of immediate detection and remediation
|
•
|
Conduct formal training related to key accounting policies, internal controls, and SEC compliance for all key personnel who have an impact on the transactions underlying the financial statements
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
Consolidated Financial Statements:
|
|
The supplementary financial information required by this Item 8 is set forth in Note 20 of the Notes to the Consolidated Financial Statements under the caption "Supplemental Consolidated Financial Information".
|
|
|
|
Digital Turbine, Inc.
|
||
Dated: June 14, 2017
|
|
|
||
|
|
By:
|
|
/s/ William Stone
|
|
|
|
|
William Stone
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Robert Deutschman
|
|
Chairman of the Board
|
|
June 14, 2017
|
Robert Deutschman
|
|
|
||
|
|
|
|
|
/s/ Barrett Garrison
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
June 14, 2017
|
Barrett Garrison
|
|
|
||
|
|
|
|
|
/s/ David Wesch
|
|
Chief Accounting Officer
(Principal Accounting Officer)
|
|
June 14, 2017
|
David Wesch
|
|
|
||
|
|
|
|
|
/s/ Mohan Gyani
|
|
Director
|
|
June 14, 2017
|
Mohan Gyani
|
|
|
||
|
|
|
|
|
/s/ Christopher Rogers
|
|
Director
|
|
June 14, 2017
|
Christopher Rogers
|
|
|
||
|
|
|
|
|
/s/ Jeffrey Karish
|
|
Director
|
|
June 14, 2017
|
Jeffrey Karish
|
|
|
||
|
|
|
|
|
/s/ Paul Schaeffer
|
|
Director
|
|
June 14, 2017
|
Paul Schaeffer
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated November 13, 2014, by and among Mandalay Digital Group, Inc., DTM Merger Sub, Inc., and Appia, Inc., incorporated by reference to our Amended Current Report on Form 8-K/A (File No. 001-35958), filed with the Commission on November 18, 2014.
|
|
|
|
3.1
|
|
Certificate of Incorporation, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on November 14, 2007.
|
|
|
|
3.2
|
|
Certificate of Merger merging Mediavest, Inc., a New Jersey corporation, with and into NeuMedia Media, Inc., a Delaware corporation, as filed with the Secretary of State of the State of Delaware, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on November 14, 2007.
|
|
|
|
3.3
|
|
Certificate of Ownership merging Mandalay Digital Group, Inc. into Neumedia, Inc., dated February 2, 2012, incorporated by reference to our Annual Report on Form 10-K (File No. 000-10039), filed with the Commission on June 29, 2012.
|
|
|
|
3.4
|
|
Certificate of Amendment of Certificate of Incorporation, dated August 14, 2012, incorporated by reference to Appendix B of the Registrant’s Definitive Information Statement on Form 14-C (File No. 000-10039), filed with the Commission on July 10, 2012.
|
|
|
|
3.5
|
|
Certificate of Amendment of Certificate of Incorporation, dated March 28, 2013, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on April 18, 2013.
|
|
|
|
3.6
|
|
Certificate of Correction of Certificate of Amendment, dated April 9, 2013, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on April 18, 2013
|
|
|
|
3.7
|
|
Certificate of Amendment of Certificate of Incorporation, as amended, filed with the Secretary of State of the State of Delaware on January 13, 2015, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on January 16, 2015.
|
|
|
|
3.8
|
|
Bylaws, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on November 14, 2007.
|
|
|
|
3.9
|
|
Certificate of Amendment of the Bylaws of NeuMedia, Inc., dated February 2, 2012, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on February 7, 2012.
|
|
|
|
3.10
|
|
Certificate of Amendment of the Bylaws dated March 6, 2015 (incorporated by reference to our Current Report on Form 8-K (File No. 001-10039) filed with the Commission on March 11, 2015).
|
|
|
|
3.11
|
|
Amendment of Bylaws of Digital Turbine, Inc., adopted March 17, 2015, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on March 20, 2015.
|
|
|
|
4.1
|
|
Form of Warrant Relating to Equity Financing Binding Term Sheet, dated as of March 1, 2012, incorporated by reference to our Annual Report on Form 10-K (File No. 000-10039), filed with the Commission on June 29, 2012.
|
|
|
|
4.2
|
|
Form of Warrant Relating to Equity Financing Binding Term Sheets, dated as of March 5, 2012, incorporated by reference to our Annual Report on Form 10-K (File No. 000-10039), filed with the Commission on June 29, 2012.
|
|
|
|
4.3
|
|
Common Stock Purchase Warrant dated March 6, 2015 issued to North Atlantic SBIC IV, L.P., incorporated by reference to our Current Report on Form 8-K (File No. 001-35958) filed with the Commission on March 11, 2015.
|
|
|
|
4.3.1
|
|
Amendment to Common Stock Purchase Warrant dated as of February 17, 2016 issued to North Atlantic SBIC IV, L.P.
|
|
|
|
4.3.2
|
|
Second Amendment to Common Stock Purchase Warrant dated as of May 6, 2016 issued North Atlantic SBIC IV, L.P.
|
|
|
|
4.4
|
|
Indenture for 8.75% Convertible Notes, due 2020, dated as of September 28, 2016, between the Company, certain guarantors and U.S. Bank National Association as trustee, incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on September 29, 2016.
|
|
|
|
4.4.1
|
|
First Supplemental Indenture for 8.75% Convertible Notes, due 2020, dated as of January 12, 2017, between the Company, certain guarantors and U.S. Bank National Association as trustee, incorporated by reference to Exhibit 4.4 of our Registration Statement on Form S-1/A (File No. 333-214321), filed with the Commission on January 23, 2017.
|
|
|
|
4.4.2
|
|
Second Supplemental Indenture for 8.75% Convertible Notes, due 2020, dated as of May 23, 2017, between the Company, certain guarantors and U.S. Bank National Association as trustee, incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on May 24, 2017.
|
|
|
|
4.5
|
|
Warrant Agreement, dated as of September 28, 2016, between the Company and U.S. Bank National Association as warrant agent, incorporated by reference to Exhibit 4.2 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on September 29, 2016.
|
|
|
|
4.5.1
|
|
First Amendment to Warrant Agreement, dated as of May 23, 2017, between the Company and U.S. Bank National Association as warrant agent, incorporated by reference to Exhibit 4.2 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on May 24, 2017.
|
|
|
|
4.6
|
|
Registration Rights Agreement, dated as of September 28, 2016, by the Company and certain guarantors entities, incorporated by reference to Exhibit 4.3 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on September 29, 2016.
|
|
|
|
4.7
|
|
Form of Common Stock Certificate, incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-1/A (File No. 333-214321) filed with the Commission on December 23, 2016
|
|
|
|
10.1
|
|
2007 Employee, Director and Consultant Stock Plan, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on November 14, 2007. †
|
|
|
|
10.1.1
|
|
Form of Non-Qualified Stock Option Agreement, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on November 14, 2007†
|
|
|
|
10.1.2
|
|
Amendment to 2007 Employee, Director and Consultant Stock Plan, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on February 12, 2008. †
|
|
|
|
10.1.3
|
|
Second Amendment to 2007 Employee, Director and Consultant Stock Plan., incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on March 28, 2008. †
|
|
|
|
10.2
|
|
Warrant, dated December 23, 2011, made by NeuMedia, Inc. in favor of Adage Capital Management L.P., incorporated by reference to our Quarterly Report on Form 10-Q (File No. 000-10039 ), filed with the Commission on February 24, 2012. †
|
|
|
|
10.3
|
|
Form of Indemnification with Directors and Executive Officers, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039 ), filed with the Commission on May 10, 2012. †
|
|
|
|
10.4
|
|
Amended and Restated 2011 Equity Incentive Plan of Mandalay Digital Group, Inc., incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on May 30, 2012.
|
|
|
|
10.4.1
|
|
Amended and Restated 2011 Equity Incentive Plan Notice of Grant and Restricted Stock Agreement of Mandalay Digital Group, Inc, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on May 30, 2012.
|
|
|
|
10.4.2
|
|
Amended and Restated 2011 Equity Incentive Plan Notice of Grant and Stock Option Agreement of Mandalay Digital Group, Inc., incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on May 30, 2012.
|
|
|
|
10.5
|
|
Share Purchase Agreement, dated August 11, 2012, as amended by a first amendment thereto, dated September 13, 2012 among Mandalay Digital Group, Inc., MDG Logia Holdings, Ltd., Logia Group, Ltd., and S.M.B.P. IGLOO Ltd. ., incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-10039), filed with the Commission on November 19, 2012.
|
|
|
|
10.6
|
|
Share Sale Agreement, dated April 12, 2013, among Digital Turbine Australia Pty Ltd, Digital Turbine, Inc., the Company, and certain other parties set forth therein, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039) filed with the Commission on April 17, 2013.
|
|
|
|
10.7
|
|
Registration Rights & Lock Up Agreement, dated April 12, 2013 between the Company and various shareholders set forth therein, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039) filed with the Commission on April 17, 2013.
|
|
|
|
10.8
|
|
Form of Equity Financing Binding Term Sheet dated May 23, 2013 with Windsor Media, Inc., incorporated by reference to our Current Report on Form 10-Q (File No. 001-35958) filed with the Commission on August 14, 2013.
|
|
|
|
10.9
|
|
Support Agreement, dated November 13, 2014, between Mandalay Digital Group, Inc. and its Stockholders, incorporated by reference Registrant’s Amended Current Report on Form 8-K/A (File No. 001-35958), filed with the Commission on November 18, 2014.
|
|
|
|
10.10
|
|
Securities Purchase Agreement by and among Appia, Inc., Digital Turbine, Inc., and North Atlantic SBIC IV, L.P., dated March 6, 2015, incorporated by reference to our Current Report on Form 8-K (File No. 001-35958) filed with the Commission on March 11, 2015.
|
|
|
|
10.10.1
|
|
Amendment to Securities Purchase Agreement by and among Digital Turbine Media, Inc. (f/k/a
Appia, Inc.),, Digital Turbine, Inc., and North Atlantic SBIC IV, L.P., dated as of February 17, 2016.
|
|
|
|
10.10.2
|
|
Second Amendment to Securities Purchase Agreement by and among Digital Turbine Media, Inc. (f/k/a
Appia, Inc.),, Digital Turbine, Inc., and North Atlantic SBIC IV, L.P., dated as of May 7, 2016.
|
|
|
|
10.11
|
|
Unconditional Secured Guaranty and Pledge Agreement entered into by Digital Turbine, Inc. in favor of North Atlantic SBIC IV, L.P. as of March 6, 2015, incorporated by reference to our Current Report on Form 8-K (File No. 001-35958) filed with the Commission on March 11, 2015.
|
|
|
|
10.12
|
|
Unconditional Secured Guaranty and Pledge Agreement entered into by Digital Turbine, Inc. in favor of Silicon Valley Bank as of March 6, 2015, incorporated by reference to our Current Report on Form 8-K (File No. 001-35958) filed with the Commission on March 11, 2015.
|
|
|
|
10.13
|
|
API Service Agreement dated July 5, 2011 with Vodafone Hutchison Australia Pty Limited incorporated by reference to Amendment No. 2 to our Registration Statement on Form S-4/A (File No. 333-200695) filed with the Commission on January 27, 2015.
|
|
|
|
10.14
|
|
IT & Content Services Agreement dated October 11, 2011 with Telstra Corporation Limited incorporated by reference to Amendment No. 2 to our Registration Statement on Form S-4/A (File No. 333-200695) filed with the Commission on January 27, 2015.
|
|
|
|
10.15
|
|
Employment Agreement, effective July 8, 2014, between the Company and Andrew Schleimer, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039 ), filed with the Commission on July 9, 2014. †
|
|
|
|
10.16
|
|
Employment Agreement, effective September 9, 2014, between the Company and Bill Stone, incorporated by reference to our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on September 15, 2014. †
|
|
|
|
10.16.1
|
|
Amendment, effective May 26, 2016, to Employment Agreement between the Company and William Stone, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039 ), filed with the Commission on June 1, 2016. †
|
|
|
|
10.17
|
|
Employment Agreement, effective February 10, 2015, between the Company and James Alejandro, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on February 11, 2015. †
|
|
|
|
10.18
|
|
Separation Agreement between Mandalay Digital Group, Inc. and Peter A. Adderton, dated January 15, 2015, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039), filed with the Commission on January 16, 2015.
|
|
|
|
10.19
|
|
Board Equity Ownership Policy, as amended, incorporated by reference to our Current Report on Form 8-K (File No. 001-35958) filed with the Commission on June 25, 2014. †
|
|
|
|
10.20
|
|
Corporate office lease agreement commencing on October 1, 2015, and ending on December 31, 2022 between Thomas C. Calhoon (Landlord) and Digital Turbine, Inc. (Tenant). Incorporated by reference to our Annual Report on Form 10-K (File No. 001-35958), filed with the Commission on June 15, 2015.
|
|
|
|
10.21
|
|
Third Amended and Restated Loan and Security Agreement effective June 11, 2015 between Digital Turbine Media and Silicon Valley Bank. Incorporated by reference to our Annual Report on Form 10-K (File No. 001-35958), filed with the Commission on June 15, 2015.
|
|
|
|
10.21.1
|
|
First Amendment dated November 30, 2015 to Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank, incorporated by reference to our Current Report on Form 8-K (File No. 000-10039 ), filed with the Commission on December 4, 2015.
|
|
|
|
10.22
|
|
Intellectual Property License Agreement dated as of December 28, 2015 between Digital Turbine Media, Inc. and Sift Media, Inc., incorporated by reference to our Quarterly Report on Form 10-Q (File No. 000-10039 ), filed with the Commission on February 9, 2016.
|
|
|
|
10.23
|
|
Publisher Agreement dated as of December 28, 2015 between Digital Turbine Media, Inc. and Sift Media, Inc., incorporated by reference to our Quarterly Report on Form 10-Q (File No. 000-10039 ), filed with the Commission on February 9, 2016.
|
|
|
|
10.24
|
|
Sift Media, Inc. Series Seed Convertible Preferred Stock Purchase Agreement dated as of December 28, 2015, incorporated by reference to our Quarterly Report on Form 10-Q (File No. 000-10039 ), filed with the Commission on February 9, 2016.
|
|
|
|
10.25
|
|
Employment Agreement between Sift Media, Inc. and Judson S. Bowman dated as of December 28, 2015, incorporated by reference to our Quarterly Report on Form 10-Q (File No. 000-10039 ), filed with the Commission on February 9, 2016.
|
|
|
|
10.26
|
|
Restricted Stock Agreement between Sift Media, Inc. and Judson S. Bowman dated as of December 28, 2015, incorporated by reference to our Quarterly Report on Form 10-Q (File No. 000-10039 ), filed with the Commission on February 9, 2016.
|
10.27
|
|
2008 Equity Incentive Plan for Appia, Inc., incorporated by reference to our Registration Statement on Form S-8 (File No. 333-202863), filed with the Commission on March 19,2015.
|
|
|
|
10.28
|
|
Third Amendment to Third Amended and Restated Loan and Security Agreement effective June 28, 2016 between the Company and Silicon Valley Bank, incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No.001-35958) filed with the Commission on June 30, 2016.
|
|
|
|
10.29
|
|
Initial Purchaser Agreement, dated as of September 28, 2016, between the Company and BTIG, LLC, incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on September 29, 2016.
|
|
|
|
10.30
|
|
Letter Agreement with Silicon Valley Bank, dated August 12, 2016 *
|
|
|
|
10.31
|
|
Security Agreement (Cash) with Silicon Valley Bank, dated August 12, 2016 *
|
|
|
|
10.32
|
|
Software as a Service Agreement between Cellco Partnership d/b/a Verizon Wireless and the Company, incorporated by reference to Exhibit 10.28 to our Registration Statement on Form S-1/A (File No. 333-214321), filed January 6, 2017††
|
|
|
|
10.33
|
|
Business Financing Agreement, dated May 23, 2017, between the Company, Digital Turbine USA, Inc., Digital Turbine Media, Inc. and Western Alliance Bank, incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on May 24, 2017.
|
|
|
|
10.34
|
|
Employment Agreement between the Company and Barrett Garrison, dated September 12, 2016, incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K (File No. 001-35958), filed with the Commission on August 31, 2016.†
|
|
|
|
12.1
|
|
Ratio of Earnings to Fixed Charges *
|
|
|
|
21.1
|
|
List of Subsidiaries. *
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm. *
|
|
|
|
31.1
|
|
Certification of William Stone, Principal Executive Officer. *
|
|
|
|
31.2
|
|
Certification of Barrett Garrison, Principal Financial Officer. *
|
|
|
|
32.1
|
|
Certification of William Stone, Principal Executive Officer pursuant to U.S.C. Section 1350. **
|
|
|
|
32.2
|
|
Certification of Barrett Garrison, Principal Financial Officer pursuant to U.S.C. Section 1350. **
|
|
|
|
101
|
|
INS XBRL Instance Document. *
|
|
|
|
101
|
|
SCH XBRL Schema Document. *
|
|
|
|
101
|
|
CAL XBRL Taxonomy Extension Calculation Linkbase Document. *
|
|
|
|
101
|
|
DEF XBRL Taxonomy Extension Definition Linkbase Document. *
|
|
|
|
101
|
|
LAB XBRL Taxonomy Extension Label Linkbase Document. *
|
|
|
|
101
|
|
PRE XBRL Taxonomy Extension Presentation Linkbase Document. *
|
*
|
Filed herewith
|
**
|
The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Digital Turbine Inc under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.
|
†
|
Management contract or compensatory plan or arrangement
|
|
Historical
|
|
Pro Forma
|
|||||||||||||||||||||||||
|
Year Ended March 31,
|
|
Year Ended March 31,
|
|||||||||||||||||||||||||
|
|
Unaudited
|
|
Unaudited
|
||||||||||||||||||||||||
Fixed Charges
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||||||||
Interest, including amortization of debt discount and capitalized expenses
|
|
$
|
1,144
|
|
|
$
|
1,407
|
|
|
$
|
234
|
|
|
$
|
1,816
|
|
|
$
|
2,628
|
|
|
$
|
2,556
|
|
|
$
|
2,556
|
|
Interest element of rentals*
|
|
83
|
|
|
83
|
|
|
210
|
|
|
268
|
|
|
273
|
|
|
268
|
|
|
273
|
|
|||||||
Total Fixed Charges
|
|
$
|
1,227
|
|
|
$
|
1,490
|
|
|
$
|
444
|
|
|
$
|
2,084
|
|
|
$
|
2,901
|
|
|
$
|
2,824
|
|
|
$
|
2,829
|
|
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Pre-tax income (loss)
|
|
$
|
(14,022
|
)
|
|
$
|
(18,976
|
)
|
|
$
|
(23,900
|
)
|
|
$
|
(27,818
|
)
|
|
$
|
(24,408
|
)
|
|
$
|
(30,374
|
)
|
|
$
|
(26,964
|
)
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income(loss) from discontinued operations
|
|
(1,502)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Fixed charges
|
|
1,227
|
|
|
1,490
|
|
|
444
|
|
|
2,084
|
|
|
2,901
|
|
|
2,824
|
|
|
2,829
|
|
|||||||
Total Earnings
|
|
$
|
(11,292
|
)
|
|
$
|
(15,984
|
)
|
|
$
|
(23,456
|
)
|
|
$
|
(25,734
|
)
|
|
$
|
(21,507
|
)
|
|
$
|
(27,550
|
)
|
|
$
|
(24,135
|
)
|
Ratio of Earnings to Fixed Charges
|
|
(9.2x)
|
|
|
(10.7x)
|
|
|
(52.9x)
|
|
|
(12.3x)
|
|
|
(7.4x)
|
|
|
(9.8x)
|
|
|
(8.5x)
|
|
|||||||
Additional earnings required to achieve a 1.0x ratio
|
|
$
|
12,519
|
|
|
$
|
17,474
|
|
|
$
|
23,900
|
|
|
$
|
27,818
|
|
|
$
|
24,408
|
|
|
$
|
30,374
|
|
|
$
|
26,964
|
|
*
|
Interest component of rental expense is estimated to equal 1/3 of such expense, which is considered a reasonable approximation of the interest factor.
|
(1)
|
Interest, including amortization of debt discounts and capitalized expenses, is calculated as the net change in interest from the refinancing assuming the refinancing took place as of April 1, 2015 during the year ended March 31, 2016 and April 1, 2016 during the year ended March 31, 2017. The net change in interest is calculated at $2,556 for both periods.
|
Entity
|
|
Chief Executive Offices or
Principal Places of Business
|
|
Jurisdiction of
Organization
|
|
FEIN
|
|
Company
Organizational Numbers |
|
|
|
|
|
|
|
|
|
Digital Turbine, Inc.
|
|
1300 Guadalupe Street
Suite 302
Austin, TX 78701 - USA
|
|
USA
|
|
|
|
22-2267658
|
|
|
|
|
|
|
|
|
|
Digital Turbine USA, Inc.
|
|
1300 Guadalupe Street
Suite 302
Austin, TX 78701 - USA
|
|
USA
|
|
|
|
45-3982329
|
|
|
|
|
|
|
|
|
|
Digital Turbine (EMEA) Ltd.
|
|
3 Hasadnaot St.
Herzliya Pituach – 46140, Israel
|
|
Israel
|
|
|
|
514802875
|
|
|
|
|
|
|
|
|
|
Logia Content Development and Management Ltd
|
|
3 Hasadnaot St.
Herzliya Pituach – 46140, Israel
|
|
Israel
|
|
|
|
513540245
|
|
|
|
|
|
|
|
|
|
Volas Entertainment Ltd.
|
|
3 Hasadnaot St.
Herzliya Pituach – 46140, Israel
|
|
Israel
|
|
|
|
513881607
|
|
|
|
|
|
|
|
|
|
Mailbit Logia (2008) Ltd.
|
|
3 Hasadnaot St.
Herzliya Pituach – 46140, Israel
|
|
Israel
|
|
|
|
514121953
|
|
|
|
|
|
|
|
|
|
Digital Turbine Germany GmbH
|
|
Westendstr. 28
60325 Frankfurt am Main, Germany
|
|
Germany
|
|
|
|
HRB 100847
|
|
|
|
|
|
|
|
|
|
Digital Turbine Luxembourg S.a.r.l.
|
|
121 Avenue De La Faiencerie
L-1511 Luxembourg
|
|
Luxembourg
|
|
|
|
Section B, 173 016
|
|
|
|
|
|
|
|
|
|
DTM Merger Sub, Inc.
|
|
1300 Guadalupe Street
Suite 302
Austin, TX 78701 - USA
|
|
USA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Turbine Media, Inc.
|
|
406 Blackwell Street
Suite 500
Durham, NC 27701 - USA
|
|
USA
|
|
|
|
26-2346340
|
|
|
|
|
|
|
|
|
|
PocketGear Deutschland GmbH
|
|
SchleiBheimer Str. 439,80935
Munchen, Germany
|
|
Germany
|
|
|
|
DE165412455
|
|
|
|
|
|
|
|
|
|
Digital Turbine Group Pty Ltd
|
|
283 Young St
WATERLOO – NSW 2017 Australia
|
|
Australia
|
|
|
|
ACN 163 117 253
|
|
|
|
|
|
|
|
|
|
Digital Turbine Holdings Pty Ltd
|
|
Level 2, 221 Miller Street,
North Sydney – NSW 2060 Australia
|
|
Australia
|
|
|
|
TAX 847599909
|
|
|
|
|
|
|
|
|
|
Digital Turbine Asia Pacific Pty Ltd
|
|
Level 2, 221 Miller Street,
North Sydney – NSW 2060 Australia
|
|
Australia
|
|
|
|
TAX 791741061
|
|
|
|
|
|
|
|
|
|
Digital Turbine Technology (IP) Pty Ltd
|
|
Level 2, 221 Miller Street,
North Sydney – NSW 2060 Australia
|
|
Australia
|
|
|
|
TAX 949745512
|
|
|
|
|
|
|
|
|
|
Digital Turbine IP Pty Ltd
|
|
Level 2, 221 Miller Street,
North Sydney – NSW 2060 Australia
|
|
Australia
|
|
|
|
TAX 949301761
|
|
|
|
|
|
|
|
|
|
Digital Turbine Singapore Pte Ltd
|
|
128 Tanjong Pagar Road, Singapore 088535
|
|
Singapore
|
|
|
|
201407526R
|
Date: June 14, 2017
|
|
|
|
|
|
|
By:
|
/s/William Stone
|
|
|
William Stone
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Date: June 14, 2017
|
|
|
|
|
|
|
By:
|
/s/ Barrett Garrison
|
|
|
Barrett Garrison
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Date: June 14, 2017
|
|
|
|
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By:
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/s/William Stone
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William Stone
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Chief Executive Officer
(Principal Executive Officer)
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Date: June 14, 2017
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By:
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/s/ Barrett Garrison
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Barrettt Garrison
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Chief Financial Officer
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(Principal Financial Officer)
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