x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2017. |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware (State or Other Jurisdiction of Incorporation or Organization) | 77-0312442 (I.R.S. Employer Identification No.) |
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer o | Smaller reporting company x |
Emerging growth company o | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
PART I - FINANCIAL INFORMATION | ||
Item 1. Financial Statements | ||
Condensed Consolidated Balance Sheets at September 30, 2017 (unaudited) and December 31, 2016 | ||
Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016 | ||
Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2017 | ||
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 | ||
Notes to unaudited Condensed Consolidated Financial Statements | ||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | ||
Item 4. Controls and Procedures | ||
PART II - OTHER INFORMATION | ||
Item 1. Legal Proceedings | ||
Item 1A. Risk Factors | ||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 3. Defaults Upon Senior Securities | ||
Item 4. Mine Safety Disclosures | ||
Item 5. Other Information | ||
Item 6. Exhibits | ||
Signatures |
September 30, 2017 | December 31, 2016 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 1,439 | $ | 1,140 | |||
Accounts receivable, net | 1,367 | 1,635 | |||||
Prepaid expenses and other current assets | 767 | 978 | |||||
Total current assets | 3,573 | 3,753 | |||||
Property and equipment, net | 1,339 | 2,203 | |||||
Goodwill | 7,750 | 9,225 | |||||
Intangibles, net | 658 | 1,309 | |||||
Other assets | 10 | 10 | |||||
Total assets | $ | 13,330 | $ | 16,500 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 1,298 | $ | 10,660 | |||
Accounts payable | 202 | 75 | |||||
Accrued expenses and other liabilities | 846 | 1,165 | |||||
Accrued dividends | 56 | 47 | |||||
Liability for common stock warrants | 165 | — | |||||
Accrued sales taxes and regulatory fees | 310 | 395 | |||||
Total current liabilities | 2,877 | 12,342 | |||||
Long term liabilities: | |||||||
Deferred tax liability | — | 230 | |||||
Long term debt, net of current portion | 490 | — | |||||
Total long term liabilities | 490 | 230 | |||||
Total liabilities | 3,367 | 12,572 | |||||
Commitments and contingencies (see Note 13) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, Series A-2, convertible; $.0001 par value; $7,500 stated value; 7,500 shares authorized, 32 shares issued and outstanding and liquidation preference of $237 at September 30, 2017 and December 31, 2016 | 100 | 100 | |||||
Common stock, $.0001 par value; 150,000,000 shares authorized; 36,782,000 issued and 36,130,000 outstanding at September 30, 2017 and 36,659,000 issued and 36,455,000 outstanding at December 31, 2016 | 4 | 4 | |||||
Treasury stock, 652,000 and 204,000 shares at September 30, 2017 and December 31, 2016, respectively | (353 | ) | (219 | ) | |||
Additional paid-in capital | 180,656 | 180,333 | |||||
Accumulated deficit | (170,444 | ) | (176,290 | ) | |||
Total stockholders’ equity | 9,963 | 3,928 | |||||
Total liabilities and stockholders’ equity | $ | 13,330 | $ | 16,500 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | $ | 3,481 | $ | 4,344 | $ | 11,417 | $ | 14,950 | |||||||
Operating expenses: | |||||||||||||||
Cost of revenue (exclusive of depreciation and amortization) | 1,988 | 2,609 | 6,697 | 9,187 | |||||||||||
Research and development | 296 | 229 | 875 | 817 | |||||||||||
Sales and marketing | 69 | 70 | 369 | 576 | |||||||||||
General and administrative | 970 | 1,664 | 2,843 | 4,009 | |||||||||||
Impairment charges | 1,707 | 605 | 1,712 | 630 | |||||||||||
Depreciation and amortization | 451 | 455 | 1,370 | 1,509 | |||||||||||
Total operating expenses | 5,481 | 5,632 | 13,866 | 16,728 | |||||||||||
Loss from operations | (2,000 | ) | (1,288 | ) | (2,449 | ) | (1,778 | ) | |||||||
Interest expense and other, net | (197 | ) | (362 | ) | (916 | ) | (1,081 | ) | |||||||
Gain on extinguishment of debt | 9,045 | — | 9,045 | — | |||||||||||
Amortization of debt discount | (28 | ) | (18 | ) | (64 | ) | (54 | ) | |||||||
Interest and other income (expense), net | 8,820 | (380 | ) | 8,065 | (1,135 | ) | |||||||||
Income (loss) before income taxes | 6,820 | (1,668 | ) | 5,616 | (2,913 | ) | |||||||||
Income tax benefit (expense) | 284 | (37 | ) | 230 | (108 | ) | |||||||||
Net income (loss) | 7,104 | (1,705 | ) | 5,846 | (3,021 | ) | |||||||||
Preferred stock dividends | 3 | 3 | 9 | 9 | |||||||||||
Net income (loss) attributable to common stockholders | $ | 7,101 | $ | (1,708 | ) | $ | 5,837 | $ | (3,030 | ) | |||||
Net income (loss) attributable to common stockholders per share: | |||||||||||||||
Basic net income (loss) per share | $ | 0.19 | $ | (0.05 | ) | $ | 0.16 | $ | (0.09 | ) | |||||
Diluted net income (loss) per share | $ | 0.19 | $ | (0.05 | ) | $ | 0.15 | $ | (0.09 | ) | |||||
Weighted-average number of shares of common stock: | |||||||||||||||
Basic | 36,897 | 35,492 | 37,078 | 35,480 | |||||||||||
Diluted | 37,897 | 35,492 | 38,078 | 35,480 |
Series A-2 Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||
Balance at December 31, 2016 | 32 | $ | 100 | 36,659 | $ | 4 | 204 | $ | (219 | ) | $ | 180,333 | $ | (176,290 | ) | $ | 3,928 | |||||||||||||||
Net income | — | — | — | — | — | — | — | 5,846 | 5,846 | |||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | 377 | — | 377 | |||||||||||||||||||||||
Issuance of stock on vested restricted stock units | — | — | 123 | — | — | — | — | — | — | |||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | (9 | ) | — | (9 | ) | |||||||||||||||||||||
Issuance of shares from treasury | (7,307 | ) | 2,191 | (45 | ) | 2,146 | ||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | 7,755 | (2,325 | ) | — | — | (2,325 | ) | |||||||||||||||||||||
Balance at September 30, 2017 | 32 | $ | 100 | 36,782 | $ | 4 | 652 | $ | (353 | ) | $ | 180,656 | $ | (170,444 | ) | $ | 9,963 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 5,846 | $ | (3,021 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 1,370 | 1,509 | |||||
Bad debt expense (recovery) | (8 | ) | 6 | ||||
Amortization of debt discount | 64 | 54 | |||||
Non-cash interest expense | 213 | — | |||||
Stock-based compensation expense | 377 | 748 | |||||
Gain on debt extinguishment | (9,045 | ) | — | ||||
Accrued non-cash stock-based expense | — | 168 | |||||
Impairment charges | 1,712 | 630 | |||||
Deferred tax provision (benefit) | (230 | ) | 111 | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | 276 | 953 | |||||
Prepaid expenses and other current assets | 211 | (342 | ) | ||||
Other assets | — | 1 | |||||
Accounts payable | 126 | (271 | ) | ||||
Accrued expenses and other liabilities | 246 | (281 | ) | ||||
Accrued sales taxes and regulatory fees | (85 | ) | — | ||||
Net cash provided by operating activities | 1,073 | 265 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (93 | ) | (273 | ) | |||
Net cash used in investing activities | (93 | ) | (273 | ) | |||
Cash flows from financing activities: | |||||||
Principal payments under borrowing arrangements | (341 | ) | (400 | ) | |||
Proceeds from new loan agreements, net of expenses of $170 | 2,030 | — | |||||
Payment of equity issuance costs | (45 | ) | — | ||||
Purchase of treasury stock | (2,325 | ) | (13 | ) | |||
Net cash used in financing activities | (681 | ) | (413 | ) | |||
Increase (decrease) in cash and cash equivalents | 299 | (421 | ) | ||||
Cash at beginning of period | 1,140 | 1,764 | |||||
Cash at end of period | $ | 1,439 | $ | 1,343 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for interest | $ | 777 | $ | 841 | |||
Non-cash investing and financing activities: | |||||||
Accrued preferred stock dividends | $ | 9 | $ | 9 | |||
Retired debt and accrued interest obligations in exchange for treasury stock | $ | 2,191 | $ | — | |||
Recognition of prepaid equity issuance costs as additional paid-in capital | $ | — | $ | 18 |
September 30, 2017 | December 31, 2016 | ||||||
Accrued interest | $ | 19 | $ | 658 | |||
Accrued compensation | 285 | 133 | |||||
Deferred rent expense | 52 | — | |||||
Other accrued expenses | 490 | 374 | |||||
Accrued expenses and other liabilities | $ | 846 | $ | 1,165 |
September 30, 2017 | December 31, 2016 | ||||||
Main Street Term Loan | $ | — | $ | 9,000 | |||
SRS Note | — | 1,785 | |||||
Western Alliance Bank A/R Revolver | 1,000 | — | |||||
Super G Loan | 1,096 | — | |||||
Unamortized debt discounts | (308 | ) | (125 | ) | |||
Net carrying value | 1,788 | 10,660 | |||||
Less: current maturities | (1,298 | ) | (10,660 | ) | |||
Long-term obligations, net of debt discount | $ | 490 | $ | — |
Former Debt Obligations as of July 31, 2017 * | Debt Obligations Extinguished on July 31, 2017 * | New Outstanding Debt Obligations as of July 31, 2017** | ||||||||||
Main Street Term Loan: principal | $ | 9,000,000 | $ | (9,000,000 | ) | — | ||||||
SRS Note: principal | 1,784,692 | (1,784,692 | ) | — | ||||||||
SRS Note: accrued interest | 777,568 | (777,568 | ) | — | ||||||||
Western Alliance Bank: principal | $ | 1,100,000 | ||||||||||
Super G Capital: principal | 1,100,000 | |||||||||||
Total | $ | 11,562,260 | $ | (11,562,260 | ) | $ | 2,200,000 | |||||
* The amounts presented herein represent the gross outstanding principal amounts and exclude approximately $89,000 of unamortized debt discounts. | ||||||||||||
** The amounts presented herein represent the gross outstanding principal amounts and exclude approximately $335,000 of unamortized debt discounts. |
Outstanding Shares of Common Stock on July 31, 2017 prior to the Debt Recapitalization | 36,534,840 | |
Shares of common stock purchased in connection with the Main Street Payoff | (7,711,517 | ) |
Shares of common stock issued in connection with the SRS Note Exchange | 7,306,930 | |
Outstanding Shares of Common Stock on July 31, 2017 after the Debt Recapitalization | 36,130,253 |
• | On July 31, 2017, the Company and Main Street entered into (i) a payoff letter (the “Main Street Payoff Letter”) that terminated the $9,000,000 Main Street Term Loan and (ii) a Redemption Agreement (“the Main Street Redemption Agreement”) whereby the Company purchased 7,711,517 shares of the Company’s common stock held by Main Street, in exchange for total cash payments from the Company of $2,550,000 (together the “Main Street Payoff”). On July 31, 2017, the Company funded the Main Street Payoff using $350,000 of the Company’s existing cash plus cash proceeds of $2,200,000 borrowed under loan agreements with Western Alliance Bank and Super G (each defined below). |
• | On July 31, 2017, the Company and SRS entered into a Note Exchange Agreement (the “SRS Note Exchange Agreement’) to extinguish the $2,562,000 of obligations on the SRS Note (including accrued interest for July 2017 of $32,000) in exchange for 7,306,930 shares of the Company’s common stock (the “SRS Note Exchange”). Our President, Chief Executive Officer, and Director, Peter Holst, held a 27.3% interest in the SRS Note (or $699,528 as of July 31, 2017 including accrued interest) and received 1,806,087 shares of the Company’s common stock in connection with the SRS Note Exchange (representing |
Year Ending December 31, | Western Alliance Bank | Super G | Total | ||||||
Remaining 2017 | $ | 200 | $ | 64 | $ | 264 | |||
2018 | 400 | 570 | 970 | ||||||
Seven months ended July 31, 2019 | 400 | 462 | 862 | ||||||
$ | 1,000 | $ | 1,096 | $ | 2,096 |
Outstanding | Exercisable | ||||||||||||
Number of Shares Underlying Options | Weighted Average Exercise Price | Number of Shares Underlying Options | Weighted Average Exercise Price | ||||||||||
Options outstanding, December 31, 2016 | 1,222 | $ | 1.99 | 1,198 | $ | 1.99 | |||||||
Granted | — | — | |||||||||||
Exercised | — | — | |||||||||||
Expired | (10 | ) | 2.37 | ||||||||||
Forfeited | (6 | ) | 1.93 | ||||||||||
Options outstanding, September 30, 2017 | 1,206 | $ | 1.99 | 1,206 | $ | 1.99 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
General and administrative | $ | — | $ | 89 | $ | 18 | $ | 272 |
Restricted Shares | Weighted Average Grant Price | |||||
Unvested restricted shares outstanding, December 31, 2016 | 363 | $ | 1.08 | |||
Granted | — | — | ||||
Vested | (9 | ) | 1.47 | |||
Forfeited | — | — | ||||
Unvested restricted shares outstanding, September 30, 2017 | 354 | $ | 1.07 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of revenue | $ | 2 | $ | 2 | $ | 5 | $ | 5 | |||||||
Research and development | 1 | 1 | 4 | 4 | |||||||||||
General and administrative | 12 | 24 | 36 | 165 | |||||||||||
$ | 15 | $ | 27 | $ | 45 | $ | 174 |
RSUs | Weighted Average Grant Price | |||||
Unvested RSUs outstanding, December 31, 2016 | 3,196 | $ | 0.62 | |||
Granted | — | — | ||||
Vested | (724 | ) | 0.42 | |||
Forfeited | (85 | ) | 0.61 | |||
Unvested RSUs outstanding, September 30, 2017 | 2,387 | $ | 0.68 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of revenue | $ | 10 | $ | 9 | $ | 29 | $ | 26 | |||||||
Research and development | 14 | 10 | 43 | 29 | |||||||||||
Sales and marketing | 2 | 3 | 6 | 4 | |||||||||||
General and administrative | 55 | 82 | 236 | 243 | |||||||||||
$ | 81 | $ | 104 | $ | 314 | $ | 302 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Numerator: | |||||||||||||||
Net income (loss) | $ | 7,104 | $ | (1,705 | ) | $ | 5,846 | $ | (3,021 | ) | |||||
Less: preferred stock dividends | 3 | 3 | 9 | 9 | |||||||||||
Net income (loss) attributable to common stockholders | $ | 7,101 | $ | (1,708 | ) | $ | 5,837 | $ | (3,030 | ) | |||||
Denominator: | |||||||||||||||
Weighted-average shares outstanding - basic | 36,897 | 35,492 | 37,078 | 35,480 | |||||||||||
Add effect of dilutive securities: | |||||||||||||||
Unvested restricted stock units | 672 | — | 672 | — | |||||||||||
Stock options outstanding | — | — | — | — | |||||||||||
Unvested restricted stock | 249 | — | 249 | — | |||||||||||
Shares of common stock issuable upon conversion of preferred stock | 79 | — | 79 | — | |||||||||||
Weighted-average shares outstanding - diluted | 37,897 | 35,492 | 38,078 | 35,480 | |||||||||||
Basic net income (loss) per share | $ | 0.19 | $ | (0.05 | ) | $ | 0.16 | $ | (0.09 | ) | |||||
Diluted net income (loss) per share | $ | 0.19 | $ | (0.05 | ) | $ | 0.15 | $ | (0.09 | ) |
Three and Nine Months Ended September 30, | |||||
2017 | 2016 | ||||
Unvested restricted stock units | 1,715 | 3,208 | |||
Unvested restricted stock awards | 105 | 363 | |||
Outstanding stock options | 1,206 | 1,222 | |||
Shares of common stock issuable upon conversion of preferred stock, Series A-2 | — | 79 | |||
Warrants | 550 | — |
Year Ending December 31, | |||
Remaining 2017 | $ | 75 | |
2018 | 308 | ||
2019 | 88 | ||
2020 | 23 | ||
$ | 494 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Domestic | $ | 2,408 | $ | 3,158 | $ | 8,059 | $ | 10,971 | |||||||
Foreign | 1,073 | 1,186 | 3,358 | 3,979 | |||||||||||
Total Revenue | $ | 3,481 | $ | 4,344 | $ | 11,417 | $ | 14,950 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Video collaboration services | $ | 2,085 | $ | 2,494 | $ | 6,876 | $ | 8,403 | |||||||
Network services | 1,325 | 1,805 | 4,288 | 6,168 | |||||||||||
Professional and other services | 71 | 45 | 253 | 379 | |||||||||||
Total revenue | $ | 3,481 | $ | 4,344 | $ | 11,417 | $ | 14,950 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | 7,104 | $ | (1,705 | ) | $ | 5,846 | $ | (3,021 | ) | |||||
Depreciation and amortization | 451 | 455 | 1,370 | 1,509 | |||||||||||
Interest and other (income) expense, net | (8,820 | ) | 380 | (8,065 | ) | 1,135 | |||||||||
Income tax (benefit) expense | (284 | ) | 37 | (230 | ) | 108 | |||||||||
EBITDA * | (1,549 | ) | (833 | ) | (1,079 | ) | (269 | ) | |||||||
Stock-based compensation | 96 | 221 | 377 | 748 | |||||||||||
Stock-based expense | — | 168 | — | 168 | |||||||||||
Impairment charges | 1,707 | 605 | 1,712 | 630 | |||||||||||
Adjusted EBITDA | $ | 254 | $ | 161 | $ | 1,010 | $ | 1,277 | |||||||
* Represents a loss |
Exhibit Number | Description | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
GLOWPOINT, INC. | ||
11/14/2017 | By: | /s/ Peter Holst |
Peter Holst | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
11/14/2017 | By: | /s/ David Clark |
David Clark | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Glowpoint, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1. | I have reviewed this quarterly report on Form 10-Q of Glowpoint, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1. | The accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2017 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 14, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | GLOWPOINT, INC. | |
Entity Central Index Key | 0000746210 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 36,130,195 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Stockholders’ equity: | ||
Preferred stock Series A-2, convertible, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock Series A-2, convertible, stated value | $ 7,500 | $ 7,500 |
Preferred stock Series A-2, convertible, shares authorized (in shares) | 7,500 | 7,500 |
Preferred stock Series A-2, convertible, shares issued (in shares) | 32 | 32 |
Preferred stock Series A-2, convertible, shares outstanding (in shares) | 32 | 32 |
Preferred stock Series A-2, convertible, liquidation value | $ 237,000 | $ 237,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 36,782,000 | 36,659,000 |
Common stock, shares outstanding (in shares) | 36,130,000 | 36,455,000 |
Treasury stock, shares (in shares) | 652,000 | 204,000 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands |
9 Months Ended |
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Sep. 30, 2017
USD ($)
| |
Statement of Cash Flows [Abstract] | |
New loan agreements, expenses | $ 170 |
Business Description and Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Business Description and Significant Accounting Policies | Business Description and Significant Accounting Policies Business Description Glowpoint, Inc. (“Glowpoint,” “we,” “us,” or the “Company”) is a managed service provider of video collaboration and network applications. Our services are designed to provide a comprehensive suite of automated and concierge applications to simplify the user experience and expedite the adoption of video as the primary means of collaboration. Our customers include Fortune 1000 companies, along with small and medium enterprises in a variety of industries. We market our services globally through a multi-channel sales approach that includes direct sales and channel partners. The Company was formed as a Delaware corporation in May 2000. The Company operates in one segment. Principles of Consolidation The condensed consolidated financial statements include the accounts of Glowpoint and our 100%-owned subsidiary, GP Communications, LLC, whose business function is to provide interstate telecommunications services for regulatory purposes. All material inter-company balances and transactions have been eliminated in consolidation. Basis of Presentation The Company's fiscal year ends on December 31 of each calendar year. The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended December 31, 2016. In the opinion of the Company's management, these interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The December 31, 2016 year-end condensed consolidated balance sheet data in this document were derived from audited consolidated financial statements and does not include all of the disclosures required by U.S. generally accepted accounting principles. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended December 31, 2016 and notes thereto included in the Company's fiscal 2016 Annual Report on Form 10-K, filed with the SEC on March 31, 2017 (the “2016 10-K”). The results of operations and cash flows for the interim periods included in these condensed consolidated financial statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our 2016 10-K, and there have been no changes to the Company's significant accounting policies during the nine months ended September 30, 2017. Taxes Billed to Customers and Remitted to Taxing Authorities We recognize taxes billed to customers in revenue and taxes remitted to taxing authorities in our cost of revenue. For the three and nine months ended September 30, 2017, we included taxes of $129,000 and $422,000, respectively in revenue, and we included taxes of $116,000 and $428,000, respectively, in cost of revenue. For the three and nine months ended September 30, 2016, we included taxes of $190,000 and $660,000, respectively, in revenue, and we included taxes of $203,000 and $895,000, respectively, in cost of revenue. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2014-09, “Revenue from Contracts with Customers” (Subtopic 606), which supersedes most existing revenue recognition guidance under U.S. generally accepted accounting principles (“U.S. GAAP”). The core principle of ASU 2014-09 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company commenced our evaluation of the impact of the pending adoption of ASU 2014-09 on our consolidated financial statements in late 2016 and we are actively reviewing hundreds of customer contracts. Under the ASU, revenue will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). Given the nature of our services and terms and conditions in our contracts, the customer obtains control as we deliver services under the contract. We recognize the majority of our revenue on a monthly recurring basis as we deliver our services. The Company intends to use the retrospective approach with the cumulative effect of initially adopting ASU 2014-09 on January 1, 2018. Based on current analysis, management does not expect the adoption of ASU 2014-09 to have a material impact on our financial statements and disclosures. In February 2016, the FASB created Topic 842 and issued ASU 2016-02, “Leases”. This guidance supersedes Topic 840, “Leases”. This ASU requires lessees to recognize a right-of-use assets and a lease liability, initially measured at the present value of the lease payments on the balance sheet. For public companies, the amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. Management is currently evaluating the impact of the adoption of ASU 2016-02 on our financial statements and disclosures. In August 2016, the FASB issued ASU 2016-09, “Statement of Cash Flows-Classification of Certain Cash Receipts and Cash Payments” (Subtopic 230). This guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The amendment addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. These updates are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The guidance should be applied retrospectively unless it is impractical to do so; in which case, the guidance should be applied prospectively as of the earliest date practicable. Management does not expect the adoption of ASU 2016-09 to have a material impact on our financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows-Restricted Cash” (Subtopic 230). These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The amendments do not provide definition of restricted cash or restricted cash equivalents. Effective date for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Management does not expect the adoption of ASU 2016-18 to have any impact on our financial statements and disclosures, as restricted cash is currently included in the change of cash on the statement of cash flows. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment” (Subtopic 350). This guidance simplifies the accounting for goodwill impairment by removal of Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. For public companies, the standard will be effective for calendar year-end December 15, 2020. Earlier adoption is permitted for any impairment test performed after January 1, 2017. Management adopted this standard on a prospective basis beginning July 1, 2017. |
Liquidity and Going Concern |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern | Liquidity and Going Concern As of September 30, 2017, we had $1,439,000 of cash and working capital of $696,000. Our cash balance as of September 30, 2017 includes restricted cash of $18,000 (as discussed in Note 6). For the nine months ended September 30, 2017, we generated net income of $5,846,000 and net cash from operating activities of $1,073,000. A substantial portion of our cash flow from operations has been dedicated to the payment of interest on our former indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures and investments in sales and marketing. For the nine months ended September 30, 2017 and 2016, our cash flow from operations was reduced by $777,000 and $841,000, respectively, for interest payments on our indebtedness. On July 31, 2017, the Company completed a recapitalization of its debt obligations as described further in Note 8 (the “Debt Recapitalization”). As a result of the Debt Recapitalization, the Company reduced debt and accrued interest obligations by $9,362,000. Although the Debt Recapitalization significantly improved the Company’s financial position, the Company will be required to meet significant debt service obligations during the next twelve months. During the fourth quarter of 2017, the Company made a principal payment of $200,000 to Western Alliance Bank and is required to make total principal and interest payments of $152,000 to Super G Capital. During 2018, the Company is required to make total principal payments of $400,000 to Western Alliance Bank and total principal and interest payments of $823,000 to Super G Capital. On October 24, 2017, the Company closed a registered direct offering of 2,800 shares of Series B convertible preferred stock for total gross proceeds of $2,800,000 (see further discussion in Note 17). The net proceeds, after estimated expenses of the offering payable by the Company, are estimated to be $2,325,000 (the “Series B Offering”). As further described in Item 2, Results of Operations, the Company anticipates continued declines in its revenue, which is expected to result in reduced cash flow from operations. The Company currently expects to use some or all of the net proceeds of the Series B Offering to fund investments in product development, sales and marketing expenses and capital expenditures to develop new service offerings to reverse the Company’s revenue trends. Given the Company’s plans to increase operating expenses and capital expenditures following the closing of the Series B Offering, the Company will seek to amend certain financial covenants for fiscal years 2018 and 2019 in the Western Alliance Bank Loan Agreement. Although we expect to agree on amended covenants with Western Alliance Bank, there can be no assurance that we will successful in doing so. There can be no assurance that we will be successful in developing new service offerings and reversing our revenue trends. There can be no assurance that our existing cash resources and the net proceeds of the Series B Offering will be adequate to fund our operations, projected capital expenditures and debt service obligations. Therefore, the Company may raise capital in one or more offerings in the future. The holders of the Series B convertible preferred stock have the right to approve certain financings. There can be no assurance the holders of the Series B convertible preferred stock will approve such financings, that we will succeed in raising necessary capital, or that any such offering will be on terms acceptable to the Company. If we cannot raise additional capital on terms acceptable to us, it could have a material adverse effect on the Company. The factors discussed above raise substantial doubt as to our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from these uncertainties. |
Capitalized Software Costs |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Capitalized Software Costs | Capitalized Software Costs The Company capitalizes certain costs incurred in connection with developing or obtaining internal-use software. All software development costs have been appropriately accounted for as required by ASC Topic 350-40 “Intangible – Goodwill and Other – Internal-Use Software”. Capitalized software costs are included in Property and Equipment on our condensed consolidated balance sheets and are amortized over three to four years. Software costs that do not meet capitalization criteria are expensed as incurred. For the three and nine months ended September 30, 2017, we capitalized $32,000 and $90,000, respectively, of internal-use software costs and we amortized $160,000 and $480,000, respectively, of these costs. For the three and nine months ended September 30, 2016, we capitalized $89,000 and $248,000, respectively, and we amortized $145,000 and $475,000, respectively, of these costs. During the three and nine months ended September 30, 2017, we recorded impairment losses of $232,000 related to capitalized software. During the three and nine months ended September 30, 2016, we recorded $0 and $25,000, respectively, of impairment losses related to capitalized software no longer in service. |
Goodwill |
9 Months Ended |
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Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill is not amortized but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment”. We test goodwill for impairment on an annual basis on September 30 each year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company operates as a single reporting unit. The Company used market-based approaches to determine the fair value of the reporting unit. These approaches used quoted market prices in active markets and revenue multiples for comparable companies. The carrying amount of our reporting unit exceeded its fair value; therefore, the Company recorded a goodwill impairment charge of $1,475,000 in the three and nine months ended September 30, 2017. The continued future decline of our revenue, cash flows and/or stock price may give rise to a triggering event that may require the Company to record additional impairment charges on goodwill in the future. |
Intangible Assets |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The Company assesses the impairment of purchased intangible assets subject to amortization when events and circumstances indicate that the carrying value of the assets might not be recoverable. Fair value of our intangible assets is determined using the relief from royalty methodology. This approach involves two steps: (a) estimating reasonable royalty rates for each intangible asset and (b) applying these royalty rates to a net revenue stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of each intangible asset. If the carrying amount of the intangible asset is greater than its implied fair value, an impairment in the amount of the excess is recognized and charged to operations. The determination of related estimated useful lives and whether or not these assets are impaired involves significant judgments, related primarily to the future profitability and/or future value of the assets. Changes in the Company’s strategic plan and/or other-than-temporary changes in market conditions could significantly impact these judgments and could require adjustments to recorded asset balances. Long-lived assets are evaluated for impairment at least annually, as well as whenever an event or change in circumstances has occurred that could have a significant adverse effect on the fair value of long-lived assets. The Company performed its annual evaluation of intangible assets as of September 30, 2017 and determined that the fair value of the long-lived assets exceeds the carrying value, therefore no impairment charges were required for the three and nine months ended September 30, 2017. |
Restricted Cash |
9 Months Ended |
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Sep. 30, 2017 | |
Restricted Cash and Investments [Abstract] | |
Restricted Cash | Restricted Cash As of September 30, 2017 and December 31, 2016, our cash balance included restricted cash of $18,000. The $18,000 letter of credit that serves as the security deposit for our lease of office space in Colorado (as discussed in Note 13) is secured by an equal amount of cash pledged as collateral and such cash is held in a restricted bank account. |
Accrued Expenses and Other Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands):
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt consisted of the following (in thousands):
On July 31, 2017, the Company completed a recapitalization of its debt obligations as summarized in the table below and as described further below (the “Debt Recapitalization”). Therefore, as of July 31, 2017, there were no remaining obligations related to the Main Street Term Loan or SRS Note. The Company reduced debt and accrued interest obligations by $9,362,000 as of July 31, 2017 in the Debt Recapitalization and lowered outstanding shares of common stock by 404,587, as summarized in the following two tables.
The Company recorded a gain on debt extinguishment of approximately $9,045,000 (which was net of the write off of approximately $89,000 of unamortized debt discounts) during the three and nine months ended September 30, 2017 for the Debt Recapitalization. The Company recorded the net 404,587 shares purchased to treasury stock in the amount of $121,376, equal to the stock price of $0.30 per share as of July 31, 2017. Main Street Payoff Letter and Redemption Agreement As of June 30, 2017, the Company had outstanding borrowings of $9,000,000 with Main Street Capital Corporation (“Main Street”) under a senior secured term loan facility (the “Main Street Term Loan”). Borrowings under the Main Street Term Loan were to mature on October 17, 2018 unless sooner terminated as provided in the Main Street Loan Agreement. As of June 30, 2017, the Company was in default of certain covenants in the Main Street Term Loan. The interest rate on the Main Street Term Loan borrowings was 12% per annum and interest payments were due monthly. As of June 30, 2017, Main Street owned 7,711,517 shares, or 21%, of the Company’s outstanding common stock.
SRS Note Exchange Agreement As of June 30, 2017, the Company had outstanding total obligations of $2,530,000 (consisting of $1,785,000 of principal and $745,000 of accrued interest) under a promissory note (the “SRS Note”) to Shareholder Representative Services LLC (“SRS”) the Company issued in connection with the 2012 acquisition of Affinity Videonet, Inc. (“Affinity”), which was amended in February 2015. The maturity date of the SRS Note was July 6, 2017 and the interest rate on the SRS Note was 15% per annum. Payment of all interest earned after March 1, 2015 was due on July 6, 2017, unless certain trailing Adjusted EBITDA targets were met as defined in the SRS Note. In June 2017, SRS granted the Company a waiver of the final installment for 60 days. The SRS Note was subordinate to borrowings under the Main Street Loan Agreement, and was only permitted to be repaid if permitted by the terms of the Main Street Loan Agreement.
Western Alliance Bank Business Financing Agreement On July 31, 2017, the Company and its subsidiary entered into a Business Financing Agreement with Western Alliance Bank, as lender (the “Western Alliance Bank Loan Agreement”). The Western Alliance Bank Loan Agreement provides the Company with up to a total of $1,500,000 of revolving loans (the “A/R Revolver”). The maximum amount available under the A/R Revolver is limited to the lesser of (x) $1,500,000 and (y) an amount equal to the borrowing base. The borrowing base includes 85% of the Company’s eligible accounts receivable plus a non-formula amount (which was $600,000 at closing, and which steps down to $400,000 on October 1, 2017, to $200,000 on January 1, 2018, and to $0 on April 1, 2018) (“the Non-Formula Amount”). On July 31, 2017, the Company received a loan in an amount equal to $1,100,000 under the Western Alliance Bank Loan Agreement, consisting of $500,000 based on 85% of eligible accounts receivable and $600,000 of Non-Formula Amount, the proceeds of which were used to fund the Main Street Payoff. During the three months ended September 30, 2017, the Company made a payment of $100,000 on the A/R Revolver. As of September 30, 2017, the total borrowings on the A/R Revolver were $1,000,000 and we had additional availability of $49,000. All loans under the A/R Revolver mature on July 31, 2019 (unless such loans are not supported by the borrowing base, in which case any loans exceeding the borrowing base must be immediately repaid). Given the step-down of the Non-Formula Amount as described above, the Company made a principal payment of $200,000 on October 1, 2017 and will be required to make mandatory prepayments of the loans on January 1, 2018 and April 1, 2018 in amounts equal to $200,000. The Western Alliance Bank Loan Agreement provides that all borrowings bear interest at the prime rate (4.25% as of September 30, 2017) plus 1.75% (or a total of 6.00% as of September 30, 2017) per year. The prime rate is subject to a floor of 4.00%. Interest payments on the outstanding borrowings are due monthly. The Company may receive new borrowings on the A/R Revolver if supported by the borrowing base and may prepay borrowings under the Western Alliance Bank Loan Agreement at any time without premium or penalty, subject to certain notice requirements. The obligations of the Company under the Western Alliance Bank Loan Agreement are secured by substantially all of the assets of the Company and its subsidiary, including accounts receivable, intellectual property, equipment and other personal property. The Western Alliance Bank Loan Agreement contains certain restrictions and covenants, which, among other things, subject to certain exceptions, restrict the Company’s ability to incur additional debt or make guarantees, sell assets, make investments or loans, make distributions or create liens or other encumbrances. The Western Alliance Bank Loan Agreement also requires that we comply with certain financial covenants, including maintaining a specified asset coverage ratio, minimum levels of adjusted EBITDA, maximum levels of capital expenditures, minimum revenues vs. plan, and minimum amounts of unrestricted cash held with Western Alliance Bank (equal to $200,000 plus the amount outstanding on the Non-Formula Amount). As of September 30, 2017, the Company was in compliance with all required covenants. The Western Alliance Bank Loan Agreement contains customary events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, breaches of representations and warranties, certain cross defaults, certain bankruptcy related events, monetary judgments defaults and a change in control. Upon the occurrence of an event of default, the outstanding obligations may be accelerated and become immediately due and payable. Super G Loan Agreement and Warrant On July 31, 2017, the Company and its subsidiary entered into a Business Loan and Security Agreement with Super G Capital, LLC (“Super G”), as lender (the “Super G Loan Agreement”) and received a term loan from Super G in an amount equal to $1,100,000, the proceeds of which were used to fund the Main Street Payoff (the “Super G Loan”). Borrowings under the Super G Loan Agreement are to be repaid in installments (including interest) of $33,000 per month in the first 3 months following closing and approximately $68,600 per month in months four through twenty-four following closing, for total payments of $1,540,000. During the three months ended September 30, 2017, the Company made total principal and interest payments of $4,000 and $46,000, respectively, on the Super G Loan. The remaining principal balance as of September 30, 2017 is $1,096,000. Interest expense for the three months ended September 30, 2017 was $60,000. Interest payments for the fourth quarter of 2017, fiscal years 2018, and 2019 on the Super G Loan are expected to total $88,000, $246,000 and $46,000, respectively. The obligations of the Company under the Super G Loan Agreement are secured by a second lien on substantially all of the assets of the Company and its subsidiary, including accounts receivable, intellectual property, equipment and other personal property. The security interest granted and loans made under the Super G Loan Agreement are subordinated to the security interest and loans made under the Western Alliance Bank Loan Agreement pursuant to a subordination and intercreditor agreement. The Super G Loan Agreement contains certain restrictions and covenants similar to the Western Alliance Bank Loan Agreement, and requires the Company to comply with certain financial covenants, including maintaining unrestricted cash with Western Alliance and maintaining minimum levels of adjusted EBITDA. As of September 30, 2017, the Company was in compliance with all required covenants. The Super G Loan Agreement contains customary events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, breaches of representations and warranties, certain cross defaults, certain bankruptcy related events, monetary judgments defaults and failure to own 100% of the Company’s subsidiary. Upon the occurrence of an event of default, subject to the terms of the above-mentioned subordination and intercreditor agreement, the outstanding obligations may be accelerated and become immediately due and payable. On July 31, 2017, the Company also issued a warrant that entitles Super G to purchase 550,000 shares of the Company’s common stock at an exercise price of $0.30 per share (the “Super G Warrant”). The Super G Warrant has a three year term and if the profit on such warrants is not equal to at least $165,000 over the term of the warrants, at the end of the three year term, the Company must pay an exit fee equal to the difference between $165,000 and the amount of profit recognized. As of September 30, 2017, no warrants have been exercised. The $165,000 fair value of this warrant has been recorded as a derivative liability and as a discount to the carrying amount of the debt as of September 30, 2017. The warrant liability is revalued on each balance sheet date until such instrument is exercised or expires, with any changes in the fair value between reporting periods recorded as other income or expense. During the three and nine months ended September 30, 2017, there was no change to the fair value of the warrant liability. The Company estimates the fair value of this liability using an option pricing model that is based on the individual characteristics of the warrant on the valuation date, which includes assumptions for expected volatility, expected life and risk-free interest rate, as well as the present value of the minimum cash payment component of the instrument. Changes in the assumptions used could have a material impact on the resulting fair value. The primary input affecting the value of the warrant liability is the Company’s stock price. Generally, increases (decreases) in the fair value of the underlying stock would result in a corresponding increase (decrease) in the fair value of the warrant liability. The total debt discount on the Western Alliance Bank A/R Revolver and Super G Loan was $335,000, comprised of $170,000 of debt issuance costs and $165,000 related to the warrants issued. This debt discount is being amortized to interest expense using the effective interest method over the term of the debt. During the three and nine months ended September 30, 2017, the Company amortized $28,000 of the debt discount to interest expense. The unamortized debt discount as of September 30, 2017 is $308,000. During the three and nine months ended September 30, 2017 total amortization of the debt discounts related to the Main Street Term Loan and SRS Note were $0 and $36,000, respectively, which is recorded in “Interest and Other Expense, Net” on our Condensed Consolidated Statements of Operations. Future minimum principal payments on debt as of September 30, 2017, are as follows (in thousands):
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Preferred Stock |
9 Months Ended |
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Sep. 30, 2017 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Preferred Stock | Preferred Stock Our Certificate of Incorporation authorizes us to issue up to 5,000,000 shares of preferred stock. As of September 30, 2017, there were: 100 shares of Series B-1 Preferred Stock authorized, and no shares issued or outstanding; 7,500 shares of Series A-2 Preferred Stock authorized and 32 shares issued and outstanding; and 4,000 shares of Series D Preferred Stock authorized and no shares issued or outstanding. In connection with the Series B Offering, 2,800 shares of Series B convertible preferred stock were authorized and issued as of October 24, 2017. Each share of Series A-2 Preferred Stock has a stated value of $7,500 per share (the “A-2 Stated Value”), a liquidation preference equal to the A-2 Stated Value, and is convertible at the holder’s election into Common Stock at a conversion price per share of $2.9835 as of September 30, 2017. Therefore, each share of Series A-2 Preferred Stock is convertible into 2,514 shares of Common Stock as of September 30, 2017. The conversion price is subject to adjustment upon the occurrence of certain events set forth in our Certificate of Incorporation. During the nine months ended September 30, 2017, there were no adjustments to the conversion price. The Series B Offering completed in October 2017 resulted in an adjustment to the Series A-2 Preferred Stock conversion price to $2.40 per share. The Series A-2 Preferred Stock is subordinate to the Series B-1 Preferred Stock but senior to all other classes of equity, has weighted average anti-dilution protection and, commencing on January 1, 2013, is entitled to cumulative dividends at a rate of 5% per annum, payable quarterly, based on the A-2 Stated Value. Once dividend payments commence, all dividends are payable at the option of the holder in cash or through the issuance of a number of additional shares of Series A-2 Preferred Stock with an aggregate liquidation preference equal to the dividend amount payable on the applicable dividend payment date. As of September 30, 2017, the Company has recorded $56,000 in accrued dividends on the accompanying condensed consolidated balance sheet related to the remaining Series A-2 Preferred Stock outstanding. The Company, at our option, may redeem all or a portion of the Series A-2 Preferred Stock in cash at a price per share of $8,250 per share (equal to $7,500 per share multiplied by 110%) plus all accrued and unpaid dividends. In accordance with ASC Topic 815, we evaluated whether our convertible preferred stock contains provisions that protect holders from declines in our stock price or otherwise could result in modification of the exercise price or shares to be issued under the respective preferred stock agreements based on a variable that is not an input to the fair value of a “fixed-for-fixed” option and require derivative liability accounting. The Company determined no derivative liability is required under ASC Topic 815 with respect to our convertible preferred stock. A contingent beneficial conversion amount is required to be calculated and recognized when and if the adjusted conversion price of the convertible preferred stock is adjusted to reflect a down round stock issuance that reduces the conversion price below the $1.16 fair value of the common stock on the issuance date of the convertible preferred stock. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three and nine months ended September 30, 2017, the Company recorded an income tax benefit of $284,000 and $230,000, respectively. This income tax benefit resulted from the elimination of the deferred tax liability as of September 30, 2017, which was attributable to temporary differences on goodwill. The Company has available net operating loss (“NOL”) carryforwards to offset our taxable income for both the nine months ended September 30, 2017 and projected for calendar year 2017. The Company has experienced ownership changes within the meaning of Internal Revenue Code Section 382 in previous years that impose limitations on the Company’s NOL carryforwards. The Company performed an updated Section 382 analysis following the Debt Recapitalization and Series B Offering and determined no additional limitations will be imposed. |
Stock Based Compensation |
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Based Compensation | Stock Based Compensation Glowpoint 2014 Equity Incentive Plan On May 28, 2014, the Glowpoint, Inc. 2014 Equity Incentive Plan (the “2014 Plan”) was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. The purpose of the 2014 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means to attract, motivate, retain, and reward selected employees and other eligible persons through the grant of equity awards. Awards may be granted under the 2014 Plan to officers, employees, directors and consultants of the Company or its subsidiary. The 2014 Plan permits the grant of stock options, stock appreciation rights, restricted shares, restricted stock units, cash awards and other awards, including stock bonuses, performance stock, performance units, dividend equivalents, or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Company’s common stock, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof, or any similar securities with a value derived from the value of or related to the Company’s common stock, or returns thereon. A total of 4,400,000 shares of the Company’s common stock were initially available for issuance under the 2014 Plan. As of September 30, 2017, 733,000 shares were available for issuance under the 2014 Plan. Glowpoint 2000 Stock Incentive Plan In June 2010, the Board terminated the Glowpoint 2000 Stock Incentive Plan (as amended, the “2000 Plan”). Notwithstanding the termination of the 2000 Plan, outstanding awards under the 2000 Plan will remain in effect in accordance with their terms. As of September 30, 2017, options to purchase a total of 3,000 shares of common stock were outstanding under the 2000 Plan. No shares are available for issuance under the 2000 Plan. Glowpoint 2007 Stock Incentive Plan In May 2014, the Board terminated the Glowpoint 2007 Stock Incentive Plan (the “2007 Plan”). Notwithstanding the termination of the 2007 Plan, outstanding awards under the 2007 Plan will remain in effect in accordance with their terms. As of September 30, 2017, options to purchase a total of 1,203,000 shares of common stock and 184,000 shares of restricted stock were outstanding under the 2007 Plan. No shares are available for issuance under the 2007 Plan. Stock Options A summary of stock options granted, exercised, expired and forfeited under our stock incentive plans and stock options outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
Stock-based compensation expense related to stock options is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
There is no remaining unrecognized stock-based compensation expense for stock options as of September 30, 2017. |
Restricted Stock Awards |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Awards | Stock Based Compensation Glowpoint 2014 Equity Incentive Plan On May 28, 2014, the Glowpoint, Inc. 2014 Equity Incentive Plan (the “2014 Plan”) was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. The purpose of the 2014 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means to attract, motivate, retain, and reward selected employees and other eligible persons through the grant of equity awards. Awards may be granted under the 2014 Plan to officers, employees, directors and consultants of the Company or its subsidiary. The 2014 Plan permits the grant of stock options, stock appreciation rights, restricted shares, restricted stock units, cash awards and other awards, including stock bonuses, performance stock, performance units, dividend equivalents, or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Company’s common stock, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof, or any similar securities with a value derived from the value of or related to the Company’s common stock, or returns thereon. A total of 4,400,000 shares of the Company’s common stock were initially available for issuance under the 2014 Plan. As of September 30, 2017, 733,000 shares were available for issuance under the 2014 Plan. Glowpoint 2000 Stock Incentive Plan In June 2010, the Board terminated the Glowpoint 2000 Stock Incentive Plan (as amended, the “2000 Plan”). Notwithstanding the termination of the 2000 Plan, outstanding awards under the 2000 Plan will remain in effect in accordance with their terms. As of September 30, 2017, options to purchase a total of 3,000 shares of common stock were outstanding under the 2000 Plan. No shares are available for issuance under the 2000 Plan. Glowpoint 2007 Stock Incentive Plan In May 2014, the Board terminated the Glowpoint 2007 Stock Incentive Plan (the “2007 Plan”). Notwithstanding the termination of the 2007 Plan, outstanding awards under the 2007 Plan will remain in effect in accordance with their terms. As of September 30, 2017, options to purchase a total of 1,203,000 shares of common stock and 184,000 shares of restricted stock were outstanding under the 2007 Plan. No shares are available for issuance under the 2007 Plan. Stock Options A summary of stock options granted, exercised, expired and forfeited under our stock incentive plans and stock options outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
Stock-based compensation expense related to stock options is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
There is no remaining unrecognized stock-based compensation expense for stock options as of September 30, 2017. |
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Unvested restricted stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Awards | Restricted Stock Awards A summary of restricted stock awards granted, vested, forfeited and unvested outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
The number of shares of restricted stock awards vested during the nine months ended September 30, 2017 includes 3,271 shares withheld and repurchased by the Company on behalf of employees to satisfy $1,000 of tax obligations relating to the vesting of such shares. Such shares are held in the Company’s treasury stock as of September 30, 2017. Stock-based compensation expense related to restricted stock awards is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
Certain restricted stock awards have performance-based vesting provisions and are subject to forfeiture, in whole or in part, if these performance conditions are not achieved. Management assesses, on an ongoing basis, the probability of whether the performance criteria will be achieved and, once it is deemed probable, compensation expense is recognized over the relevant performance period. For those awards not subject to performance criteria, the cost of the restricted stock awards is expensed, which is determined to be the fair market value of the shares at the date of grant, on a straight-line basis over the vesting period. The remaining unrecognized stock-based compensation expense for restricted stock awards as of September 30, 2017 was $188,000. Of this amount, $33,000 relates to time-based awards with a remaining weighted average period of 0.55 years. The remaining $155,000 of unrecognized stock-based compensation expense relates to performance-based awards for which expense will be recognized upon it becoming probable that the Company achieves defined revenue targets and other financial goals and will expire 10 years from the grant date. |
Restricted Stock Units |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | Stock Based Compensation Glowpoint 2014 Equity Incentive Plan On May 28, 2014, the Glowpoint, Inc. 2014 Equity Incentive Plan (the “2014 Plan”) was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. The purpose of the 2014 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means to attract, motivate, retain, and reward selected employees and other eligible persons through the grant of equity awards. Awards may be granted under the 2014 Plan to officers, employees, directors and consultants of the Company or its subsidiary. The 2014 Plan permits the grant of stock options, stock appreciation rights, restricted shares, restricted stock units, cash awards and other awards, including stock bonuses, performance stock, performance units, dividend equivalents, or similar rights to purchase or acquire shares, whether at a fixed or variable price or ratio related to the Company’s common stock, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof, or any similar securities with a value derived from the value of or related to the Company’s common stock, or returns thereon. A total of 4,400,000 shares of the Company’s common stock were initially available for issuance under the 2014 Plan. As of September 30, 2017, 733,000 shares were available for issuance under the 2014 Plan. Glowpoint 2000 Stock Incentive Plan In June 2010, the Board terminated the Glowpoint 2000 Stock Incentive Plan (as amended, the “2000 Plan”). Notwithstanding the termination of the 2000 Plan, outstanding awards under the 2000 Plan will remain in effect in accordance with their terms. As of September 30, 2017, options to purchase a total of 3,000 shares of common stock were outstanding under the 2000 Plan. No shares are available for issuance under the 2000 Plan. Glowpoint 2007 Stock Incentive Plan In May 2014, the Board terminated the Glowpoint 2007 Stock Incentive Plan (the “2007 Plan”). Notwithstanding the termination of the 2007 Plan, outstanding awards under the 2007 Plan will remain in effect in accordance with their terms. As of September 30, 2017, options to purchase a total of 1,203,000 shares of common stock and 184,000 shares of restricted stock were outstanding under the 2007 Plan. No shares are available for issuance under the 2007 Plan. Stock Options A summary of stock options granted, exercised, expired and forfeited under our stock incentive plans and stock options outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
Stock-based compensation expense related to stock options is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
There is no remaining unrecognized stock-based compensation expense for stock options as of September 30, 2017. |
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Restricted Stock Units (RSUs) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units | Restricted Stock Units A summary of restricted stock units (“RSUs”) granted, vested, forfeited and unvested outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
As of September 30, 2017, 988,000 vested RSUs issued to non-employee directors remain outstanding as shares of common stock have not yet been delivered due to the deferred payment provisions set forth in these RSUs. As of September 30, 2017, there were approximately 1,715,000 unvested RSUs that have performance-based vesting provisions and are subject to forfeiture, in whole or in part, if these performance conditions are not achieved. Management assesses, on an ongoing basis, the probability of whether the performance criteria will be achieved and, once it is deemed probable, compensation expense is recognized over the relevant performance period. As of September 30, 2017, there were approximately 672,000 unvested RSUs that have timed-based vesting provisions, and the cost of the RSUs is expensed, which is determined to be the fair market value of the shares at the date of grant, on a straight-line basis over the vesting period. Stock-based compensation expense related to RSUs is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
The remaining unrecognized stock-based compensation expense for RSUs as of September 30, 2017 was $1,161,000. Of this amount $217,000 relates to time-based RSUs with a remaining weighted average period of 0.58 years. The remaining $944,000 of unrecognized stock-based compensation expense relates to performance-based RSUs for which expense will be recognized upon it becoming probable that the Company achieves defined revenue targets and other financial goals over fiscal years 2017 and 2018. There was no tax benefit recognized for stock-based compensation for the three and nine months ended September 30, 2017 or 2016. No compensation costs were capitalized as part of the cost of an asset during the periods presented. |
Net Income (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares of common stock outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares, although classified as issued and outstanding at September 30, 2017 and 2016, are considered contingently returnable until the restrictions lapse and will not be included in the basic net income (loss) per share calculation until the shares are vested. Unvested shares of our restricted stock do not contain non-forfeitable rights to dividends and dividend equivalents. Unvested restricted stock units are not included in calculations of basic net income (loss) per share, as they are not considered issued and outstanding at time of grant. Diluted net income (loss) per share is computed by giving effect to all potential shares of common stock, including stock options, preferred stock, restricted stock units, and unvested restricted stock awards, to the extent they are dilutive. For the three and nine months ended September 30, 2016, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive (decrease our net loss per share). The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share (in thousands, except per share data):
The weighted-average number of shares for the three and nine months ended September 30, 2017 includes 988,000 shares of vested RSUs as discussed in Note 11. The weighted-average number of shares for the three and nine months ended September 30, 2016 includes 387,000 shares of vested RSUs. The following table represents the potential shares that were excluded from the computation of weighted-average number of shares of common stock in computing the diluted net income (loss) per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Leases We lease two facilities in Denver, CO and Oxnard, CA that are under operating leases through December 2018 and March 2020, respectively. Both of these leases require us to pay increases in real estate taxes, operating costs and repairs over certain base year amounts. Rent expense for the three and nine months ended September 30, 2017 were $74,000 and $221,000, respectively. Rent expense for the three and nine months ended September 30, 2016 were $72,000 and $218,000, respectively. Future minimum rental commitments under all non-cancelable operating leases as of September 30, 2017, are as follows (in thousands):
Commercial Commitments We have entered into a number of agreements with our suppliers to purchase communications and consulting services. Some of the agreements require a minimum amount of services to be purchased over the life of the agreement, or during a specified period of time. Glowpoint believes that it will meet its commercial commitments. Historically, in certain instances where Glowpoint did not meet the minimum commitments, no penalties for minimum commitments have been assessed and the Company has entered into new agreements. It has been our experience that the prices and terms of successor agreements are similar to those offered by other suppliers. Glowpoint does not believe that any loss contingency related to a potential shortfall should be recorded in the consolidated financial statements because it is not probable, from the information available and from prior experience, that Glowpoint has incurred a liability. Letters of Credit As of September 30, 2017, the Company had an outstanding irrevocable standby letter of credit with Wells Fargo Bank, N.A., for $18,000 to serve as our security deposit for our lease of office space in Colorado. See Note 6. |
Major Customers |
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Sep. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
Major Customers | Major Customers Major customers are defined as direct customers or channel partners that account for more than 10% of the Company’s revenue. For the three months ended September 30, 2017, two major customers represented 23% and 16%, respectively of our revenue. For the nine months ended September 30, 2017, these same customers represented 22% and 16%, respectively of our revenue and represented 57% and 13%, respectively, of our accounts receivable balance at September 30, 2017. For the three months ended September 30, 2016, the same two major customers represented 17% and 13%, respectively, of our revenue. For the nine months ended September 30, 2016, these same customers represented 16% and 12%, respectively of our revenue. In January 2017, our largest customer filed a voluntary petition for protection under Chapter 11 of the United States Bankruptcy Code. This customer has paid us in full for all amounts that were due as of their bankruptcy filing date. Since the bankruptcy filing date, we have continued to perform services for this customer, and we have received payments in accordance with payment terms and expect to continue to do so. A rejection of our contract with this customer by the bankruptcy estate could have a material adverse effect on our business, financial condition and results of operations, as any reduction in the use of our services or the business failure by one of our major customers or wholesale channel partners could have such a result. |
Geographical Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geographical Data | Geographical Data For the three and nine months ended September 30, 2017 and 2016, there was no material revenue attributable to any individual foreign country. Revenue by geographic area, based on customer location, is allocated as follows (in thousands):
Long-lived assets were 100% located in domestic markets as of September 30, 2017 and December 31, 2016. |
Related Party Transactions |
9 Months Ended |
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Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of June 30, 2017, Peter Holst, the Company’s President and CEO and a prior stockholder of Affinity, held a 27.3% interest in the SRS Note, which was issued to SRS on behalf of the prior stockholders of Affinity in October 2012. See Note 8 for a description of the terms of the SRS Note. As of July 31, 2017, there were no remaining obligations related to the SRS Note, see further discussion of the Debt Recapitalization in Note 8. Our President, Chief Executive Officer, and Director, Peter Holst, held a 27.3% interest in the SRS Note (or $699,528 as of July 31, 2017 including accrued interest) and received 1,806,087 shares of the Company’s common stock in connection with the SRS Note Exchange (representing an effective exchange price into common stock of $0.387 per share). The SRS Note Exchange was negotiated and approved on behalf of the Company by a special committee of the board of directors consisting exclusively of independent, disinterested directors. As of June 30, 2017, Main Street owned 7,711,517 shares, or 21%, of the Company’s outstanding common stock. Main Street was the Company’s senior debt lender (see Note 8). On July 31, 2017, the Company purchased the 7,711,517 shares of common stock from Main Street, see further discussion of the Debt Recapitalization in Note 8. Transactions with related parties, including the transactions referred to above, are reviewed and approved by independent members of the Board of Directors of the Company in accordance with the Company’s Code of Business Conduct and Ethics. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 24, 2017, the Company closed a registered direct offering of 2,800 shares of Series B convertible preferred stock for total gross proceeds of $2,800,000. The net proceeds, after estimated expenses of the offering payable by the Company, are estimated to be $2,325,000 (the “Series B Offering”). The shares of Series B convertible preferred stock were sold at a price equal to their stated value of $1,000 per share and are convertible into shares of the Company’s common stock at a conversion price of $0.28 per share, subject to customary adjustments. The shares of Series B convertible preferred stock were offered and sold pursuant to a prospectus supplement dated October 23, 2017 and an accompanying base prospectus dated January 28, 2016 in the Company’s existing shelf registration statement on Form S-3 (333-209013) that was declared effective by the Securities and Exchange Commission on January 28, 2016. The Company has agreed to provide the Purchasers a right of participation for up to 100% of any future offering of its common stock or other securities or equity linked debt obligations for 24 months following the closing date. In addition, the Company has agreed, within 60 days after the closing date, to expand the size of the board to six members and to appoint a new independent director agreeable to the lead investor in the offering (the “Lead Investor”). Subject to limited exceptions, for as long as at least 333 shares of Series B convertible preferred stock remain outstanding and unconverted (subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations and subdivisions or similar events occurring after the date of the Purchase Agreement with respect to the Series B convertible preferred stock), the Company may not issue any common stock or convertible securities (or modify any of the foregoing that may be outstanding) to any person, or incur any debt, without the express written consent of the Lead Investor in the Series B Offering. |
Business Description and Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Glowpoint and our 100%-owned subsidiary, GP Communications, LLC, whose business function is to provide interstate telecommunications services for regulatory purposes. All material inter-company balances and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation The Company's fiscal year ends on December 31 of each calendar year. The accompanying interim condensed consolidated financial statements are unaudited and have been prepared on substantially the same basis as our annual consolidated financial statements for the fiscal year ended December 31, 2016. In the opinion of the Company's management, these interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. |
Taxes Billed to Customers and Remitted to Taxing Authorities | Taxes Billed to Customers and Remitted to Taxing Authorities We recognize taxes billed to customers in revenue and taxes remitted to taxing authorities in our cost of revenue. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ASU 2014-09, “Revenue from Contracts with Customers” (Subtopic 606), which supersedes most existing revenue recognition guidance under U.S. generally accepted accounting principles (“U.S. GAAP”). The core principle of ASU 2014-09 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company commenced our evaluation of the impact of the pending adoption of ASU 2014-09 on our consolidated financial statements in late 2016 and we are actively reviewing hundreds of customer contracts. Under the ASU, revenue will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). Given the nature of our services and terms and conditions in our contracts, the customer obtains control as we deliver services under the contract. We recognize the majority of our revenue on a monthly recurring basis as we deliver our services. The Company intends to use the retrospective approach with the cumulative effect of initially adopting ASU 2014-09 on January 1, 2018. Based on current analysis, management does not expect the adoption of ASU 2014-09 to have a material impact on our financial statements and disclosures. In February 2016, the FASB created Topic 842 and issued ASU 2016-02, “Leases”. This guidance supersedes Topic 840, “Leases”. This ASU requires lessees to recognize a right-of-use assets and a lease liability, initially measured at the present value of the lease payments on the balance sheet. For public companies, the amendments will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. Management is currently evaluating the impact of the adoption of ASU 2016-02 on our financial statements and disclosures. In August 2016, the FASB issued ASU 2016-09, “Statement of Cash Flows-Classification of Certain Cash Receipts and Cash Payments” (Subtopic 230). This guidance clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The amendment addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. These updates are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods, with early adoption permitted. The guidance should be applied retrospectively unless it is impractical to do so; in which case, the guidance should be applied prospectively as of the earliest date practicable. Management does not expect the adoption of ASU 2016-09 to have a material impact on our financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows-Restricted Cash” (Subtopic 230). These amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The amendments do not provide definition of restricted cash or restricted cash equivalents. Effective date for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. Management does not expect the adoption of ASU 2016-18 to have any impact on our financial statements and disclosures, as restricted cash is currently included in the change of cash on the statement of cash flows. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment” (Subtopic 350). This guidance simplifies the accounting for goodwill impairment by removal of Step 2 of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. For public companies, the standard will be effective for calendar year-end December 15, 2020. Earlier adoption is permitted for any impairment test performed after January 1, 2017. Management adopted this standard on a prospective basis beginning July 1, 2017. |
Capitalized Software Costs | Capitalized Software Costs The Company capitalizes certain costs incurred in connection with developing or obtaining internal-use software. All software development costs have been appropriately accounted for as required by ASC Topic 350-40 “Intangible – Goodwill and Other – Internal-Use Software”. Capitalized software costs are included in Property and Equipment on our condensed consolidated balance sheets and are amortized over three to four years. Software costs that do not meet capitalization criteria are expensed as incurred. |
Intangible Assets | Intangible Assets The Company assesses the impairment of purchased intangible assets subject to amortization when events and circumstances indicate that the carrying value of the assets might not be recoverable. Fair value of our intangible assets is determined using the relief from royalty methodology. This approach involves two steps: (a) estimating reasonable royalty rates for each intangible asset and (b) applying these royalty rates to a net revenue stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of each intangible asset. If the carrying amount of the intangible asset is greater than its implied fair value, an impairment in the amount of the excess is recognized and charged to operations. The determination of related estimated useful lives and whether or not these assets are impaired involves significant judgments, related primarily to the future profitability and/or future value of the assets. Changes in the Company’s strategic plan and/or other-than-temporary changes in market conditions could significantly impact these judgments and could require adjustments to recorded asset balances. Long-lived assets are evaluated for impairment at least annually, as well as whenever an event or change in circumstances has occurred that could have a significant adverse effect on the fair value of long-lived assets. |
Accrued Expenses and Other Liabilities (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Long-term Debt and Long-term Debt Instruments | Debt consisted of the following (in thousands):
The Company reduced debt and accrued interest obligations by $9,362,000 as of July 31, 2017 in the Debt Recapitalization and lowered outstanding shares of common stock by 404,587, as summarized in the following two tables.
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Schedule of Common Stock Outstanding |
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Schedule of Future Minimum Principal Payments | Future minimum principal payments on debt as of September 30, 2017, are as follows (in thousands):
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Stock Based Compensation (Tables) |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock options granted, exercised, expired and forfeited under our stock incentive plans and stock options outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Compensation Expense | Stock-based compensation expense related to stock options is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
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Restricted Stock Awards (Tables) - Restricted stock |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Activity | A summary of restricted stock awards granted, vested, forfeited and unvested outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
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Summary of Compensation Expense | Stock-based compensation expense related to restricted stock awards is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
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Restricted Stock Units (Tables) - Restricted Stock Units (RSUs) |
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Units Activity | A summary of restricted stock units (“RSUs”) granted, vested, forfeited and unvested outstanding as of, and changes made during, the nine months ended September 30, 2017, is presented below (shares in thousands):
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Summary of Compensation Expense | Stock-based compensation expense related to RSUs is allocated as follows for the three and nine months ended September 30, 2017 and 2016 (in thousands):
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Net Income (Loss) Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the Company’s basic and diluted net income (loss) per share (in thousands, except per share data):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table represents the potential shares that were excluded from the computation of weighted-average number of shares of common stock in computing the diluted net income (loss) per share for the periods presented because including them would have had an anti-dilutive effect (in thousands):
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum rental commitments under all non-cancelable operating leases as of September 30, 2017, are as follows (in thousands):
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Geographical Data (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Geographical Area | Revenue by geographic area, based on customer location, is allocated as follows (in thousands):
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Business Description and Significant Accounting Policies - Narrative (Details) $ in Thousands |
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USD ($)
segment
|
Sep. 30, 2016
USD ($)
|
|
Finite-Lived Intangible Assets [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Ownership percentage in subsidiary | 100.00% | 100.00% | ||
Revenues | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Excise and sales taxes | $ 129 | $ 190 | $ 422 | $ 660 |
Cost of revenue | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Excise and sales taxes | $ 116 | $ 203 | $ 428 | $ 895 |
Capitalized Software Costs - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Impairment losses | $ 1,712 | $ 630 | ||
Software and Software Development Costs | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized software costs, additions | $ 32 | $ 89 | 90 | 248 |
Amortization | 160 | 145 | 480 | 475 |
Impairment losses | $ 232 | $ 0 | $ 232 | $ 25 |
Minimum | Software and Software Development Costs | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized software costs, useful life | 3 years | |||
Maximum | Software and Software Development Costs | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized software costs, useful life | 4 years |
Goodwill - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment charge | $ 1,475 | $ 1,475 |
Intangible Assets - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment charges | $ 0 | $ 0 |
Restricted Cash - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 18 | $ 18 |
Colorado | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Letter of credit | $ 18 |
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Accrued Expenses, Current [Abstract] | ||
Accrued interest | $ 19 | $ 658 |
Accrued compensation | 285 | 133 |
Deferred rent expense | 52 | 0 |
Other accrued expenses | 490 | 374 |
Accrued expenses and other liabilities | $ 846 | $ 1,165 |
Debt - Schedule of Debt (Details) - USD ($) |
Sep. 30, 2017 |
Jul. 31, 2017 |
Jul. 28, 2017 |
Jul. 27, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Long-term debt | $ 2,096,000 | $ 2,200,000 | |||
Unamortized debt discounts | (308,000) | $ (125,000) | |||
Net carrying value | 1,788,000 | 10,660,000 | |||
Less: current maturities | (1,298,000) | (10,660,000) | |||
Long-term obligations, net of debt discount | 490,000 | 0 | |||
SRS Note | Promissory Note | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 0 | $ 1,784,692 | 1,785,000 | ||
Net carrying value | $ 0 | ||||
Western Alliance Bank A/R Revolver | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 1,000,000 | 0 | |||
Super G Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 1,096,000 | $ 1,100,000 | 0 | ||
Main Street Term Loan | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 0 | $ 9,000,000 | $ 9,000,000 | ||
Net carrying value | $ 0 |
Debt - Outstanding Stock Rollforward (Details) - shares |
9 Months Ended | ||
---|---|---|---|
Jul. 31, 2017 |
Jul. 28, 2017 |
Sep. 30, 2017 |
|
Related Party Transaction [Line Items] | |||
Outstanding Shares of Common Stock on July 31, 2017 prior to the Debt Recapitalization (in shares) | 36,534,840 | 36,455,000 | |
Shares of common stock purchased in connection with the Main Street Payoff (in shares) | (404,587) | ||
Shares of common stock issued in connection with the SRS Note Exchange (in shares) | 7,306,930 | 7,306,930 | |
Outstanding Shares of Common Stock on July 31, 2017 after the Debt Recapitalization (in shares) | 36,130,253 | 36,130,000 | |
Main Street Term Loan | |||
Related Party Transaction [Line Items] | |||
Shares of common stock purchased in connection with the Main Street Payoff (in shares) | (7,711,517) | (7,711,517) |
Debt - Future Minimum Principal Payments (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Jul. 28, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Debt Instrument, Redemption [Line Items] | |||
Remainder 2017 | $ 264 | ||
2018 | 970 | ||
Seven months ended July 31, 2019 | 862 | ||
Total | 2,096 | $ 2,200 | |
Western Alliance Bank | |||
Debt Instrument, Redemption [Line Items] | |||
Remainder 2017 | 200 | ||
2018 | 400 | ||
Seven months ended July 31, 2019 | 400 | ||
Total | 1,000 | $ 0 | |
Super G | |||
Debt Instrument, Redemption [Line Items] | |||
Remainder 2017 | 64 | ||
2018 | 570 | ||
Seven months ended July 31, 2019 | 462 | ||
Total | $ 1,096 | $ 1,100 | $ 0 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 284 | $ (37) | $ 230 | $ (108) |
Stock Based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Stock Options | General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 0 | $ 89 | $ 18 | $ 272 |
Restricted Stock Awards - Summary of Stock-Based Compensation Expense (Details) - Restricted stock - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 15 | $ 27 | $ 45 | $ 174 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 2 | 2 | 5 | 5 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 1 | 1 | 4 | 4 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 12 | $ 24 | $ 36 | $ 165 |
Net Income (Loss) Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | |||
Unvested restricted shares excluded from earnings per share computation (in shares) | 0 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vested and remaining outstanding (in shares) | 988,000 | 387,000 | 988,000 | 387,000 |
Commitments and Contingencies - Narrative (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
facility
|
Sep. 30, 2016
USD ($)
|
|
Long-term Purchase Commitment [Line Items] | ||||
Number of leased facilities | facility | 2 | |||
Rent expense | $ 74,000 | $ 72,000 | $ 221,000 | $ 218,000 |
Penalty for not meeting minimum requirements | 0 | |||
Colorado | ||||
Long-term Purchase Commitment [Line Items] | ||||
Letters of credit outstanding, amount | 18,000 | 18,000 | ||
Colorado | Wells Fargo Bank, N.A. | ||||
Long-term Purchase Commitment [Line Items] | ||||
Letters of credit outstanding, amount | $ 18,000 | $ 18,000 |
Commitments and Contingencies - Future Minimum Rental Commitments (Details) $ in Thousands |
Sep. 30, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Remaining 2017 | $ 75 |
2018 | 308 |
2019 | 88 |
2020 | 23 |
Total | $ 494 |
Major Customers - Narrative (Details) - Customer Concentration Risk - customer |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenues | |||||
Concentration Risk [Line Items] | |||||
Number of customers | 2 | 2 | |||
Revenues | Customer No. 1 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 23.00% | 17.00% | 22.00% | 16.00% | |
Revenues | Customer No. 2 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 16.00% | 13.00% | 16.00% | 12.00% | |
Accounts Receivable | Customer No. 1 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 57.00% | ||||
Accounts Receivable | Customer No. 2 | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 13.00% |
Geographical Data - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Segment Reporting [Abstract] | |||||
Material revenue attributable to individual foreign country | $ 0 | $ 0 | $ 0 | $ 0 | |
Long lived assets located in domestic markets | 100.00% | 100.00% | 100.00% |
Geographical Data - Revenue by Geographic Area (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 3,481 | $ 4,344 | $ 11,417 | $ 14,950 |
Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 2,408 | 3,158 | 8,059 | 10,971 |
Foreign | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 1,073 | $ 1,186 | $ 3,358 | $ 3,979 |
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