Guarantor and Non-Guarantor Financial Statements (Tables)

9 Months Ended

Dec. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Balance Sheet

Consolidated Balance Sheet

as of December 31, 2017 (Unaudited)

(in thousands, except par value and share amounts)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated Total
ASSETS
Current assets
Cash	$	176		$	6,094		$	613		$	6,883
Restricted cash	156			175			—			331
Accounts receivable, net of allowance of $841	—			31,857			637			32,494
Deposits	34			117			4			155
Prepaid expenses and other current assets	299			239			13			551
Total current assets	665			38,482			1,267			40,414
Property and equipment, net	64			2,614			15			2,693
Deferred tax assets	593									593
Intangible assets, net	1			1,565			1,278			2,844
Goodwill	—			70,377			6,244			76,621
TOTAL ASSETS	$	1,323		$	113,038		$	8,804		$	123,165
INTERCOMPANY
Intercompany payable/receivable, net	120,223			(104,874		)	(15,349		)	—
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	791		$	27,307		$	306		$	28,404
Accrued license fees and revenue share	—			12,369			488			12,857
Accrued compensation	2,057			1,393			6			3,456
Short-term debt, net of debt issuance costs and discounts of $247	1,653			—			—			1,653
Other current liabilities	1,002			(516		)	1,358			1,844
Total current liabilities	5,503			40,553			2,158			48,214
Convertible notes, net of debt issuance costs and discounts of $3,491	5,751			—			—			5,751
Convertible note embedded derivative liability	5,896			—			—			5,896
Warrant liability	3,602			—			—			3,602
Other non-current liabilities	—			51			—			51
Total liabilities	20,752			40,604			2,158			63,514
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; 74,079,153 issued and 73,344,697 outstanding at December 31, 2017.	10			—			—			10
Additional paid-in capital	311,621			—			—			311,621
Treasury stock (754,599 shares at December 31, 2017)	(71		)	—			—			(71		)
Accumulated other comprehensive loss	(18		)	(1,443		)	1,135			(326		)
Accumulated deficit	(210,848		)	(30,997		)	(9,838		)	(251,683		)
Total stockholders' equity	100,794			(32,440		)	(8,703		)	59,651
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	121,546		$	8,164		$	(6,545	)	$	123,165

Consolidated Balance Sheet

as of March 31, 2017 (Unaudited)

(in thousands, except par value and share amounts)

	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 Income Statement

Consolidated Statement of Operations and Comprehensive Loss

for the three months ended December 31, 2017 (Unaudited)

(in thousands, except par value and share amounts)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated Total
Net revenues	$	—		$	56,730		$	470		$	(19,169	)	$	38,031
Cost of revenues
License fees and revenue share	—			46,598			290			(19,169		)	27,719
Other direct cost of revenues	—			437			214			—			651
Total cost of revenues	—			47,035			504			(19,169		)	28,370
Gross profit	—			9,695			(34		)	—			9,661
Operating expenses
Product development	2			3,560			61			—			3,623
Sales and marketing	75			1,860			107			—			2,042
General and administrative	3,769			700			123			—			4,592
Total operating expenses	3,846			6,120			291			—			10,257
Income / (loss) from operations	(3,846		)	3,575			(325		)	—			(596		)
Interest and other expense, net
Interest expense, net	(446		)	—			—			—			(446		)
Foreign exchange transaction gain / (loss)	—			34			1			—			35
Change in fair value of convertible note embedded derivative liability	(1,658		)	—			—			—			(1,658		)
Change in fair value of warrant liability	(898		)	—			—			—			(898		)
Loss on extinguishment of debt	(284		)	—			—			—			(284		)
Other income / (expense)	27			(63		)				—			(36		)
Total interest and other expense, net	(3,259		)	(29		)	1			—			(3,287		)
Income / (loss) from operations before income taxes	(7,105		)	3,546			(324		)	—			(3,883		)
Income tax benefit	(88		)	6			(2		)	—			(84		)
Net income / (loss)	$	(7,017	)	$	3,540		$	(322	)	$	—		$	(3,799	)
Other comprehensive income / (loss)
Foreign currency translation adjustment	—			—			—			—			—
Comprehensive income / (loss)	$	(7,017	)	$	3,540		$	(322	)	$	—		$	(3,799	)

Consolidated Statement of Operations and Comprehensive Loss

for the nine months ended December 31, 2017 (Unaudited)

(in thousands, except par value and share amounts)

(dollars in thousands)	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elimination			Consolidated Total
Net revenues	$	—		$	135,442		$	1,321		$	(44,721	)	$	92,042
Cost of revenues
License fees and revenue share	—			110,458			748			(44,721		)	66,485
Other direct cost of revenues	—			1,276			641			—			1,917
Total cost of revenues	—			111,734			1,389			(44,721		)	68,402
Gross profit	—			23,708			(68		)	—			23,640
Operating expenses
Product development	14			9,113			91			—			9,218
Sales and marketing	249			4,810			229			—			5,288
General and administrative	8,487			3,700			317			—			12,504
Total operating expenses	8,750			17,623			637			—			27,010
Income / (loss) from operations	(8,750		)	6,085			(705		)	—			(3,370		)
Interest and other expense, net
Interest expense, net	(1,815		)	—			—			—			(1,815		)
Foreign exchange transaction gain / (loss)	—			(183		)	1			—			(182		)
Change in fair value of convertible note embedded derivative liability	(6,310		)	—			—			—			(6,310		)
Change in fair value of warrant liability	(2,526		)	—			—			—			(2,526		)
Loss on extinguishment of debt	(1,166		)	—			—			—			(1,166		)
Other income / (expense)	6			(6		)	—			—			—
Total interest and other expense, net	(11,811		)	(189		)	1			—			(11,999		)
Income / (loss) from operations before income taxes	(20,561		)	5,896			(704		)	—			(15,369		)
Income tax benefit	(941		)	6			(2		)	—			(937		)
Net income / (loss)	$	(19,620	)	$	5,890		$	(702	)	$	—		$	(14,432	)
Other comprehensive income / (loss)
Foreign currency translation adjustment	—			(5		)	—			—			(5		)
Comprehensive income / (loss)	$	(19,620	)	$	5,885		$	(702	)	$	—		$	(14,437	)

Consolidated Statement of Operations and Comprehensive Loss

for the three months ended December 31, 2016 (Unaudited)

(in thousands, except par value and share amounts)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Elimination			Consolidated Total
Net revenues	$	—		$	30,897		$	751	$	(9,363	)	$	22,285
Cost of revenues
License fees and revenue share	—			26,176			226		(9,363		)	17,039
Other direct cost of revenues	—			1,589			289		—			1,878
Total cost of revenues	—			27,765			515		(9,363		)	18,917
Gross profit	—			3,132			236		—			3,368
Operating expenses
Product development	15			3,082			16		—			3,113
Sales and marketing	77			1,558			48		—			1,683
General and administrative	2,468			1,444			70		—			3,982
Total operating expenses	2,560			6,084			134		—			8,778
Loss from operations	(2,560		)	(2,952		)	102		—			(5,410		)
Interest and other expense, net
Interest expense, net	(674		)	(51		)	—		—			(725		)
Foreign exchange transaction gain / (loss)	—			(9		)	—		—			(9		)
Change in fair value of convertible note embedded derivative liability	2,853			—			—		—			2,853
Change in fair value of warrant liability	937			—			—		—			937
Loss on extinguishment of debt	—			—			—		—			—
Other income / (expense)	22			46			—		—			68
Total interest and other expense, net	3,138			(14		)	—		—			3,124
Loss from operations before income taxes	578			(2,966		)	102		—			(2,286		)
Income tax provision / (benefit)	300			—			—		—			300
Net loss	$	278		$	(2,966	)	$	102	$	—		$	(2,586	)
Other comprehensive income / (loss)
Foreign currency translation adjustment	5			—			—		—			5
Comprehensive loss	$	283		$	(2,966	)	$	102	$	—		$	(2,581	)

Consolidated Statement of Operations and Comprehensive Loss

for the nine months ended December 31, 2016 (Unaudited)

(in thousands, except par value and share amounts)

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elimination		Consolidated Total
Net revenues	—		90,839		1,331		(23,014	)	69,156
Cost of revenues
License fees and revenue share	—		76,600		474		(23,014	)	54,060
Other direct cost of revenues	—		4,774		866				5,640
Total cost of revenues	—		81,374		1,340		(23,014	)	59,700
Gross profit	—		9,465		(9	)	—		9,456
Operating expenses
Product development	24		8,967		74		—		9,065
Sales and marketing	159		4,468		28		—		4,655
General and administrative	9,562		4,516		(176	)	—		13,902
Total operating expenses	9,745		17,951		(74	)	—		27,622
Loss from operations	(9,745	)	(8,486	)	65		—		(18,166	)
Interest and other expense, net
Interest expense, net	(680	)	(1,349	)	—		—		(2,029	)
Foreign exchange transaction gain / (loss)	—		(9	)	(4	)	—		(13	)
Change in fair value of convertible note embedded derivative liability	2,423		—		—		—		2,423
Change in fair value of warrant liability	797		—		—		—		797
Loss on extinguishment of debt	(293	)	—		—		—		(293	)
Other income / (expense)	52		49		—		—		101
Total interest and other expense, net	2,299		(1,309	)	(4	)	—		986
Loss from operations before income taxes	(7,446	)	(9,795	)	61		—		(17,180	)
Income tax provision / (benefit)	159		—		—		—		159
Net loss	(7,605	)	(9,795	)	61		—		(17,339	)
Other comprehensive income / (loss)
Foreign currency translation adjustment	(48	)	—		—		—		(48	)
Comprehensive loss	(7,653	)	(9,795	)	61		—		(17,387	)

Condensed Cash Flow Statement

Consolidated Statement of Cash Flows

for the nine months ended December 31, 2017 (Unaudited)

(in thousands, except par value and share amounts)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated Total
Cash flows from operating activities
Net loss	$	(19,620	)	$	5,890		$	(702	)	$	(14,432	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	—			2,093			614			2,707
Change in allowance for doubtful accounts	—			252			(8		)	244
Amortization of debt discount and debt issuance costs	875			—			—			875
Accrued interest	165			—			—			165
Stock-based compensation	2,296			—			—			2,296
Stock-based compensation for services rendered	224			—			—			224
Change in fair value of convertible note embedded derivative liability	6,310			—			—			6,310
Change in fair value of warrant liability	2,526			—			—			2,526
Loss on extinguishment of debt	1,166			—			—			1,166
(Increase) / decrease in assets:
Accounts receivable	—			(16,370		)	186			(16,184		)
Deposits	(34		)	4			(4		)	(34		)
Deferred tax assets	(241		)	—			—			(241		)
Prepaid expenses and other current assets	(54		)	24			(11		)	(41		)
Increase / (decrease) in liabilities:
Accounts payable	(232		)	8,611			157			8,536
Accrued license fees and revenue share	—			4,055			273			4,328
Accrued compensation	2,024			353			6			2,383
Other current liabilities	3,666			(2,831		)	(450		)	385
Other non-current liabilities	(692		)	(39		)	—			(731		)
Intercompany movement of cash	(16		)	18			(2		)	—
Net cash provided by (used in) operating activities	(1,637		)	2,060			59			482
Cash flows from investing activities
Capital expenditures	(13		)	(1,294		)	(5		)	(1,312		)
Net cash used in investing activities	(13		)	(1,294		)	(5		)	(1,312		)
Cash flows from financing activities
Proceeds from short-term borrowings	2,500			—			—			2,500
Payment of debt issuance costs	(346		)	—			—			(346		)
Options exercised	261			—			—			261
Stock issued for cash in stock offering, net	(847		)	—			—			(847		)
Net cash provided by financing activities	1,568			—			—			1,568
Effect of exchange rate changes on cash	—			(5		)	1			(4		)
Net change in cash	(82		)	761			55			734
Cash, beginning of period	258			5,333			558			6,149
Cash, end of period	$	176		$	6,094		$	613		$	6,883

Consolidated Statement of Cash Flows

for the nine months ended December 31, 2016 (Unaudited)

(in thousands, except par value and share amounts)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidated Total
Cash flows from operating activities
Net loss	$	(7,605	)	$	(9,795	)	$	61		$	(17,339	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9			5,518			798			6,325
Change in allowance for doubtful accounts	—			130			—			130
Amortization of debt discount and debt issuance costs	287			682			—			969
Accrued interest	388			(91		)	—			297
Stock-based compensation	3,335			—			—			3,335
Stock-based compensation for services rendered	276			—			—			276
Change in fair value of convertible note embedded derivative liability	(2,423		)	—			—			(2,423		)
Change in fair value of warrant liability	(797		)	—			—			(797		)
Loss on extinguishment of debt	293			—			—			293
(Increase) / decrease in assets:
Restricted cash transferred from operating cash	—			(323		)	—			(323		)
Accounts receivable	19			(976		)	(920		)	(1,877		)
Deposits	—			(34		)	117			83
Deferred tax assets	212			—			—			212
Prepaid expenses and other current assets	(86		)	104			12			30
Increase / (decrease) in liabilities:
Accounts payable	340			4,003			166			4,509
Accrued license fees and revenue share	—			(830		)	118			(712		)
Accrued compensation	576			(720		)	(97		)	(241		)
Other current liabilities	(34		)	(862		)	78			(818		)
Other non-current liabilities	1,927			(1,370		)	(274		)	283
Net cash provided by (used in) operating activities	(3,283		)	(4,564		)	59			(7,788		)
Cash flows from investing activities
Capital expenditures	(3		)	(1,358		)	(20		)	(1,381		)
Net cash proceeds from cost method investment in Sift	—			999			—			999
Net cash used in investing activities	(3		)	(359		)	(20		)	(382		)
Cash flows from financing activities
Cash received from issuance of convertible notes	—			16,000			—			16,000
Proceeds from short-term borrowings	—			(11,000		)	—			(11,000		)
Payment of debt issuance costs	(1,912		)	(407		)	—			(2,319		)
Options exercised	11			—			—			11
Net cash provided by financing activities	(1,901		)	4,593			—			2,692
Effect of exchange rate changes on cash	(48		)	—			—			(48		)
Net change in cash	(5,235		)	(330		)	39			(5,526		)
Cash, beginning of period	6,712			4,466			53			11,231
Cash, end of period	$	1,477		$	4,136		$	92		$	5,705