x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2019. |
¨ | 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.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.0001 per share | GLOW | NYSE American |
Large accelerated filer o | Accelerated filer o |
Non-accelerated filer x | Smaller reporting company x |
Emerging growth company o |
PART I - FINANCIAL INFORMATION | ||
Item 1. Financial Statements | ||
Condensed Consolidated Balance Sheets at September 30, 2019 (unaudited) and December 31, 2018 | ||
Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 | ||
Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018 | ||
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 | ||
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 |
• | our ability to continue as a going concern; |
• | customer acceptance and demand for our video collaboration services and network applications; |
• | the quality and reliability of our services; |
• | the prices for our services; |
• | customer renewal rates; |
• | risks related to the concentration of our customers and the degree to which our sales, now or in the future, depend on certain large client relationships; |
• | customer acquisition costs; |
• | our ability to compete effectively in the video collaboration services and network services businesses; |
• | actions by our competitors, including price reductions for their competitive services, |
• | potential federal and state regulatory actions; |
• | our need for and the availability of adequate working capital; |
• | our ability to raise capital in one or more debt and/or equity offerings in order to fund operations or any growth initiatives; |
• | our ability to successfully integrate the Glowpoint and Oblong businesses following the closing of our acquisition of Oblong Industries, Inc. on October 1, 2019; |
• | our ability to innovate technologically, and, in particular, our ability to develop next generation Oblong technology; |
• | our ability to satisfy the standards for initial listing of common stock for the combined organization of Glowpoint and Oblong Industries, Inc. on the NYSE American stock exchange; |
• | our ability to satisfy the standards for continued listing of our common stock on the NYSE American stock exchange; |
• | changes in our capital structure and/or stockholder mix; |
• | the costs, disruption, and diversion of management’s attention associated with campaigns commenced by activist investors; and |
• | our management’s ability to execute its plans, strategies and objectives for future operations. |
September 30, 2019 | December 31, 2018 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 1,271 | $ | 2,007 | |||
Accounts receivable, net | 1,089 | 1,371 | |||||
Prepaid expenses and other current assets | 376 | 547 | |||||
Total current assets | 2,736 | 3,925 | |||||
Property and equipment, net | 359 | 728 | |||||
Goodwill | 2,342 | 2,795 | |||||
Intangibles, net | 404 | 499 | |||||
Other assets | 37 | 15 | |||||
Total assets | $ | 5,878 | $ | 7,962 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | 424 | 222 | |||||
Accrued expenses and other liabilities | 744 | 910 | |||||
Total current liabilities | 1,168 | 1,132 | |||||
Commitments and contingencies (see Note 9) | |||||||
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 $331 and $308 at September 30, 2019 and December 31, 2018, respectively | — | — | |||||
Preferred stock Series B, convertible; $.0001 par value; $1,000 stated value; 2,800 shares authorized, no shares issued and outstanding and liquidation preference of $0 at September 30, 2019 and 75 shares issued and outstanding and liquidation preference of $75 at December 31, 2018 | — | — | |||||
Preferred stock Series C, convertible; $.0001 par value; $1,000 stated value; 1,750 shares authorized, 475 shares issued and outstanding and liquidation preference of $475 at September 30, 2019 and 525 shares issued and outstanding and liquidation preference of $525 at December 31, 2018 | — | — | |||||
Common stock, $.0001 par value; 150,000,000 shares authorized; 5,238,900 issued and 5,140,500 outstanding at September 30, 2019 and 5,113,700 issued and 4,981,200 outstanding at December 31, 2018 | 1 | 1 | |||||
Treasury stock, 98,400 and 132,500 shares at September 30, 2019 and December 31, 2018, respectively | (165 | ) | (496 | ) | |||
Additional paid-in capital | 184,660 | 184,998 | |||||
Accumulated deficit | (179,786 | ) | (177,673 | ) | |||
Total stockholders’ equity | 4,710 | 6,830 | |||||
Total liabilities and stockholders’ equity | $ | 5,878 | $ | 7,962 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | $ | 2,370 | $ | 2,931 | $ | 7,403 | $ | 9,698 | |||||||
Operating expenses: | |||||||||||||||
Cost of revenue (exclusive of depreciation and amortization) | 1,582 | 1,804 | 4,901 | 5,881 | |||||||||||
Research and development | 190 | 215 | 652 | 690 | |||||||||||
Sales and marketing | 38 | 58 | 111 | 278 | |||||||||||
General and administrative | 1,035 | 1,170 | 2,917 | 3,132 | |||||||||||
Impairment charges | 20 | 975 | 473 | 3,150 | |||||||||||
Depreciation and amortization | 145 | 179 | 461 | 596 | |||||||||||
Total operating expenses | 3,010 | 4,401 | 9,515 | 13,727 | |||||||||||
Loss from operations | (640 | ) | (1,470 | ) | (2,112 | ) | (4,029 | ) | |||||||
Interest and other expense, net | — | — | (1 | ) | (415 | ) | |||||||||
Net loss | (640 | ) | (1,470 | ) | (2,113 | ) | (4,444 | ) | |||||||
Preferred stock dividends | 4 | 3 | 23 | 9 | |||||||||||
Net loss attributable to common stockholders | $ | (644 | ) | $ | (1,473 | ) | $ | (2,136 | ) | $ | (4,453 | ) | |||
Net loss attributable to common stockholders per share: | |||||||||||||||
Basic and diluted net loss per share | $ | (0.12 | ) | $ | (0.30 | ) | $ | (0.42 | ) | $ | (0.94 | ) | |||
Weighted-average number of shares of common stock: | |||||||||||||||
Basic and diluted | 5,184 | 4,885 | 5,128 | 4,749 |
Series A-2 Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 32 | $ | — | 75 | $ | — | 525 | — | 5,114 | $ | 1 | 133 | $ | (496 | ) | $ | 184,998 | $ | (177,673 | ) | $ | 6,830 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (598 | ) | (598 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 29 | — | 29 | |||||||||||||||||||||||||||||||||
Preferred stock conversion | — | — | (75 | ) | — | (50 | ) | — | 43 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock on vested restricted stock units | — | — | — | — | — | — | 17 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (15 | ) | — | (15 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | — | (1 | ) | — | — | (1 | ) | |||||||||||||||||||||||||||||||
Balance at March 31, 2019 | 32 | — | — | — | 475 | — | 5,174 | 1 | 133 | (497 | ) | 185,012 | (178,271 | ) | 6,245 | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (875 | ) | (875 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 24 | — | 24 | |||||||||||||||||||||||||||||||||
Issuance of stock on vested restricted stock units | — | — | — | — | — | — | — | — | (75 | ) | 382 | (382 | ) | — | — | |||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | 24 | (34 | ) | — | — | (34 | ) | |||||||||||||||||||||||||||||||
Balance at June 30, 2019 | 32 | — | — | — | 475 | — | 5,174 | 1 | 82 | (149 | ) | 184,650 | (179,146 | ) | 5,356 | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (640 | ) | (640 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 14 | — | 14 | |||||||||||||||||||||||||||||||||
Issuance of stock on vested restricted stock units | — | — | — | — | — | — | 65 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | 16 | (16 | ) | — | — | (16 | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2019 | 32 | $ | — | — | $ | — | 475 | $ | — | 5,239 | $ | 1 | 98 | $ | (165 | ) | $ | 184,660 | $ | (179,786 | ) | $ | 4,710 |
Series A-2 Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | 32 | $ | — | 450 | $ | — | — | — | 4,516 | $ | 1 | 65 | $ | (352 | ) | $ | 183,118 | $ | (170,505 | ) | $ | 12,262 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (1,285 | ) | (1,285 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 50 | — | 50 | |||||||||||||||||||||||||||||||||
Issuance of preferred stock, net of expenses | — | — | — | — | 1,750 | — | — | — | — | — | 1,527 | — | 1,527 | |||||||||||||||||||||||||||||||||
Preferred stock conversion | — | — | (75 | ) | — | (475 | ) | — | 185 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of stock on vested restricted stock units | — | — | — | — | — | — | 31 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | 18 | (53 | ) | — | — | (53 | ) | |||||||||||||||||||||||||||||||
Balance at March 31, 2018 | 32 | — | 375 | — | 1,275 | — | 4,732 | 1 | 83 | (405 | ) | 184,692 | (171,790 | ) | 12,498 | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (1,689 | ) | (1,689 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 109 | — | 109 | |||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | — | 1 | — | — | 1 | |||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | 32 | — | 375 | — | 1,275 | — | 4,732 | 1 | 83 | (404 | ) | 184,798 | (173,479 | ) | 10,916 | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | — | — | (1,470 | ) | (1,470 | ) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | — | — | 111 | — | 111 | |||||||||||||||||||||||||||||||||
Preferred stock conversion | — | — | — | — | (500 | ) | — | 167 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of stock on vested restricted stock units | — | — | — | — | — | — | 24 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | — | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||||||||||||||
Purchase of treasury stock | — | — | — | — | — | — | — | — | 49 | (91 | ) | — | — | (91 | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2018 | 32 | $ | — | 375 | $ | — | 775 | $ | — | 4,923 | $ | 1 | 132 | $ | (495 | ) | $ | 184,906 | $ | (174,949 | ) | $ | 9,463 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (2,113 | ) | $ | (4,444 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 461 | 596 | |||||
Bad debt expense | 12 | 5 | |||||
Amortization of debt discount, net of gain on extinguishment | — | 104 | |||||
Stock-based compensation | 67 | 270 | |||||
Impairment charges | 473 | 3,150 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 270 | (171 | ) | ||||
Prepaid expenses and other current assets | 171 | 249 | |||||
Other assets | 76 | — | |||||
Accounts payable | 202 | 23 | |||||
Accrued expenses and other liabilities | (287 | ) | (391 | ) | |||
Net cash used in operating activities | (668 | ) | (609 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (17 | ) | (311 | ) | |||
Net cash used in investing activities | (17 | ) | (311 | ) | |||
Cash flows from financing activities: | |||||||
Principal payments under borrowing arrangements | — | (1,832 | ) | ||||
Proceeds from Series C Preferred Stock issuance, net of expenses of $223 | — | 1,527 | |||||
Purchase of treasury stock | (51 | ) | (143 | ) | |||
Net cash used in financing activities | (51 | ) | (448 | ) | |||
Decrease in cash and cash equivalents | (736 | ) | (1,368 | ) | |||
Cash at beginning of period | 2,007 | 3,946 | |||||
Cash at end of period | $ | 1,271 | $ | 2,578 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for interest | $ | — | $ | 318 | |||
Non-cash investing and financing activities: | |||||||
Accrued preferred stock dividends | $ | 23 | $ | 9 | |||
Issuance of common stock for vested restricted stock units | $ | 382 | $ | — |
September 30, 2019 | December 31, 2018 | ||||||
Accrued compensation costs | $ | 187 | $ | 189 | |||
Accrued Oblong Transaction costs | 167 | — | |||||
Accrued sales taxes and regulatory fees | 118 | 168 | |||||
Other accrued expenses | 117 | 223 | |||||
Accrued dividends on Series A-2 Preferred Stock | 94 | 71 | |||||
Lease liability | 43 | — | |||||
Accrued professional fees | 18 | 246 | |||||
Deferred rent expense | — | 13 | |||||
Accrued expenses and other liabilities | $ | 744 | $ | 910 |
Outstanding | Exercisable | ||||||||||||
Number of Shares Underlying Options | Weighted Average Exercise Price | Number of Shares Underlying Options | Weighted Average Exercise Price | ||||||||||
Options outstanding, December 31, 2018 | 118,003 | $ | 19.90 | 118,003 | $ | 19.90 | |||||||
Expired | (440 | ) | 13.18 | ||||||||||
Forfeited | (10,038 | ) | 22.79 | ||||||||||
Options outstanding, September 30, 2019 | 107,525 | $ | 19.64 | 107,525 | $ | 19.64 |
Restricted Stock | Weighted Average Grant Price | |||||
Unvested restricted stock outstanding, December 31, 2018 | 11,320 | $ | 14.88 | |||
Vested | (1,372 | ) | — | |||
Forfeited | (9,321 | ) | — | |||
Unvested restricted stock outstanding, September 30, 2019 | 627 | $ | 15.80 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
General and administrative | — | 2 | 3 | 14 | |||||||||||
$ | — | $ | 2 | $ | 3 | $ | 14 |
RSUs | Weighted Average Grant Price | |||||
Unvested restricted stock units outstanding, December 31, 2018 | 503,518 | $ | 1.94 | |||
Granted | 52,979 | 1.31 | ||||
Vested | (112,005 | ) | 3.10 | |||
Forfeited | (421,158 | ) | 1.54 | |||
Unvested restricted stock units outstanding, September 30, 2019 | 23,334 | $ | 2.20 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of revenue | $ | 2 | $ | 13 | $ | 10 | $ | 30 | |||||||
Research and development | 2 | 18 | 11 | 47 | |||||||||||
Sales and marketing | — | 1 | — | 5 | |||||||||||
General and administrative | 10 | 76 | 43 | 174 | |||||||||||
$ | 14 | $ | 108 | $ | 64 | $ | 256 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Numerator: | |||||||||||||||
Net loss | $ | (640 | ) | $ | (1,470 | ) | $ | (2,113 | ) | $ | (4,444 | ) | |||
Less: preferred stock dividends | 4 | 3 | 23 | 9 | |||||||||||
Net loss attributable to common stockholders | $ | (644 | ) | $ | (1,473 | ) | $ | (2,136 | ) | $ | (4,453 | ) | |||
Denominator: | |||||||||||||||
Weighted-average number of shares of common stock for basic and diluted net loss per share | 5,184 | 4,885 | 5,128 | 4,749 | |||||||||||
Basic and diluted net loss per share | $ | (0.12 | ) | $ | (0.30 | ) | $ | (0.42 | ) | $ | (0.94 | ) |
Nine Months Ended September 30, | |||||
2019 | 2018 | ||||
Unvested restricted stock units | 23,334 | 213,700 | |||
Unvested restricted stock awards | 627 | 11,300 | |||
Outstanding stock options | 107,525 | 118,300 | |||
Shares of common stock issuable upon conversion of Series A-2 Preferred | 10,978 | 11,000 | |||
Shares of common stock issuable upon conversion of Series B Preferred | — | 133,900 | |||
Shares of common stock issuable upon conversion of Series C Preferred | 158,333 | 258,300 | |||
Total | 300,797 | 746,500 |
Year Ending December 31, | Short-Term Lease | ROU Lease | Total | |||||||||
Remaining 2019 | $ | 20 | $ | 22 | $ | 42 | ||||||
2020 | — | 23 | 23 | |||||||||
$ | 20 | $ | 45 | $ | 65 |
Year Ending December 31, | ||||
Remaining 2019 | $ | 22 | ||
2020 | 23 | |||
Total cash payments remaining | $ | 45 | ||
Effect of discounting | (2 | ) | ||
Total accrued lease liability | $ | 43 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Domestic | $ | 1,571 | $ | 1,982 | $ | 5,043 | $ | 6,477 | |||||||
Foreign | 799 | 949 | 2,360 | 3,221 | |||||||||||
Total Revenue | $ | 2,370 | $ | 2,931 | $ | 7,403 | $ | 9,698 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | |||||||||||||||
Video collaboration services | $ | 1,317 | $ | 1,803 | $ | 4,335 | $ | 5,763 | |||||||
Network services | 969 | 1,032 | 2,879 | 3,369 | |||||||||||
Professional and other services | 84 | 96 | 189 | 566 | |||||||||||
Total revenue | $ | 2,370 | $ | 2,931 | $ | 7,403 | $ | 9,698 |
• | Revenue for video collaboration services decreased $486,000 (or 27%) to $1,317,000 in the 2019 Third Quarter from $1,803,000 in the 2018 Third Quarter, and decreased $1,428,000 (or 25%) to $4,335,000 in the 2019 Period from $5,763,000 in the 2018 Period. These decreases are mainly attributable to lower revenue from existing customers (either from reductions in price or level of services) and loss of customers to competition. |
• | Revenue for network services decreased $63,000 (or 6%) to $969,000 in the 2019 Third Quarter from $1,032,000 in the 2018 Third Quarter, and $490,000 (or 15%) to $2,879,000 in the 2019 Period from $3,369,000 in the 2018 Period. These decreases are mainly attributable to net attrition of customers and lower demand for our services given the competitive environment and pressure on pricing that exists in the network services business. |
• | Revenue for professional and other services decreased $12,000 (or 13%) to $84,000 in the 2019 Third Quarter from $96,000 in the 2018 Third Quarter, and $377,000 (or 67%) to $189,000 in the 2019 Period from $566,000 in the 2018 Period. These decreases are mainly attributable to lower resale of video equipment. |
OBLONG INDUSTRIES, INC. | ||||||||||||||||
SELECTED STATEMENT OF OPERATIONS DATA | ||||||||||||||||
(Unaudited and in thousands) | ||||||||||||||||
Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||
2019 | 2018 | 2018 | 2017 | |||||||||||||
Total Revenue | $ | 12,758 | $ | 13,267 | $ | 17,249 | $ | 22,283 | ||||||||
Gross margin | 10,039 | 10,250 | 12,750 | 14,979 | ||||||||||||
Gross margin % | 79 | % | 77 | % | 74 | % | 67 | % | ||||||||
Total operating expenses | $ | 20,684 | $ | 22,907 | $ | 30,490 | $ | 35,312 | ||||||||
Loss from operations | (10,645 | ) | (12,657 | ) | (17,740 | ) | (20,333 | ) | ||||||||
Other expense, net | (272 | ) | (80 | ) | (114 | ) | (353 | ) | ||||||||
Net loss | $ | (10,917 | ) | $ | (12,737 | ) | $ | (17,854 | ) | $ | (20,686 | ) |
OBLONG INDUSTRIES, INC. | ||||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||
(Unaudited and in thousands) | ||||||||||||
Nine Months Ended September 30, | Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | ||||||||||
Cash, cash equivalents and restricted cash | $ | 2,194 | $ | 8,648 | $ | 14,685 | ||||||
Total current assets | 6,345 | 13,551 | 26,085 | |||||||||
Total assets | 11,564 | 20,060 | 33,968 | |||||||||
Total current liabilities | 9,126 | 5,280 | 12,385 | |||||||||
Long term deferred revenue | — | 716 | 1,528 | |||||||||
Notes and lease payable, long term | 3,498 | 4,591 | 2,058 | |||||||||
Stockholders’ equity (deficit) | $ | (1,401 | ) | $ | 9,298 | $ | 17,514 |
• | difficulties in integrating the acquired businesses and their respective personnel and products into our existing business; |
• | difficulties in integrating commercial organizations; |
• | difficulties or delays in realizing the anticipated benefits of the acquisition; |
• | diversion of our management’s time and attention from other business concerns; |
• | challenges due to limited or no direct prior experience in new markets or countries we may enter; |
• | inability to successfully develop new products and services on a timely basis that address our new market opportunities post-acquisition; |
• | inability to compete effectively against companies already serving the broader market opportunities expected to be available to us post-acquisition; and |
• | unanticipated costs and other contingent liabilities. |
• | using the combined organization’s cash and other assets efficiently to develop the business of the combined organization; |
• | appropriately managing the liabilities of the combined organization; |
• | limited experience of management in performing acquisitions and managing growth; |
• | potential unknown and unforeseen expenses, delays or regulatory conditions associated with the transaction; and |
• | performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the transaction and integrating the companies’ operations. |
• | Each share of Series D and Series E Preferred Stock will be entitled to receive an annual dividend equal to 6.0% of its then-existing accrued value per annum, commencing on the first anniversary of its issuance; |
• | Upon any liquidation of Glowpoint, the shares of Series D and Series E Preferred Stock will rank senior to Glowpoint’s common stock, but junior to Glowpoint’s outstanding Series A-2 Preferred Stock and Series C Preferred Stock; |
• | Holders of Series D and Series E Preferred Stock will generally not have voting rights with respect to such shares, but for so long as at least twenty percent (20%) of the shares of Series D or Series E Preferred Stock issued by the Company are outstanding, respectively, the consent of such shares, as a class, will be required for the Company to take the following actions: |
◦ | the liquidation, dissolution, or winding-up of the business and affairs of the Company, or the Company’s consent to any of the foregoing; |
◦ | the amendment, altering or repeal of any provision of the Company’s certificate of incorporation or bylaws in any manner that adversely affects the powers, preferences or rights of the Series D or Series E Preferred Stock, respectively; |
◦ | creating, or authorizing the creation of, or issuance or obligation of the Company to issue shares of, any additional class or series of the Company’s capital stock, other than Common Stock; |
◦ | certain reclassifications, alterings or amendments of any existing security of the Company that is pari passu with, or junior to, the Series D Preferred Stock or Series E Preferred Stock, respectively; |
◦ | taking or approving any of the foregoing actions with respect to a subsidiary of the Company; or |
◦ | authorizing, creating or issuing any debt security, or permitting any subsidiary to take any such action with respect to any debt security, if the aggregate indebtedness of the Company and its subsidiaries for borrowed money following such action, in excess of the amount outstanding or available for borrowing under the Company’s loan agreement with Silicon Valley Bank, would exceed $500,000. |
Period | Total Number of Shares Purchased (1)(2) | Average Price Paid Per Share (3) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||
July 1-31, 2019 | — | — | — | $673,000 | ||||
August 1-31, 2019 | 16,578 | $0.94 | — | $673,000 | ||||
September 1-30, 2019 | — | — | — | $673,000 | ||||
Total | 16,578 | $0.94 | — | $673,000 | ||||
(1) All shares purchased by the Company during the period covered by this Report were purchased from employees to offset $16,000 of minimum statutory tax withholding requirements relating to the vesting of stock awards. | ||||||||
(2) As of September 30, 2019, the maximum number of shares that may yet be purchased by the Company would not exceed the employees’ portion of taxes withheld on the vesting of the following outstanding unvested equity awards: 627 shares of restricted stock, 107,525 stock options, and 23,334 restricted stock units, plus 421,000 shares yet to be granted under the 2014 Equity Incentive Plan as of September 30, 2019. | ||||||||
(3) Price per share includes commissions and fees. |
Exhibit Number | Description | |
2.1 | Agreement and Plan of Merger, dated as of September 12, 2019, by and among Glowpoint, Inc., Oblong Industries, Inc. and Glowpoint Merger Sub II, Inc. (filed as Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed with the SEC on September 16, 2019, and incorporated herein by reference). | |
2.2 | Amendment to Agreement and Plan of Merger, dated October 1, 2019, by and among Glowpoint, Inc., Oblong Industries, Inc. and Glowpoint Merger Sub II, Inc. (filed as Exhibit 2.2 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
3.1 | Amended and Restated Certificate of Incorporation (filed as Appendix D to View Tech, Inc.’s Registration Statement on Form S-4 (File No. 333-95145) filed with the SEC on January 21, 2000, and incorporated herein by reference). | |
3.2 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Wire One Technologies, Inc. changing its name to Glowpoint, Inc. (filed as Exhibit 3.2 to Registrant’s Annual Report on Form 10-K filed with the SEC on March 30, 2004, and incorporated herein by reference). | |
3.3 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Glowpoint, Inc. increasing its authorized common stock to 150,000,000 shares from 100,000,000 shares (filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed with the SEC on September 24, 2007, and incorporated herein by reference). | |
3.4 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Glowpoint, Inc. effecting a one-for-four reverse stock split of the common stock of Glowpoint, Inc. (filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed with the SEC on January 13, 2011, and incorporated herein by reference). | |
3.5 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Glowpoint, Inc. effecting a one-for-ten reverse stock split of the common stock of Glowpoint, Inc. (filed as Exhibit 3.5 to Registrant’s Quarterly Report on Form 10-Q filed with the SEC on May 15, 2019, and incorporated herein by reference). | |
3.6 | Certificate of Designations of the 6.0% Series D Convertible Preferred Stock of Glowpoint, Inc. (filed as Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
3.7 | Certificate of Designations of the 6.0% Series E Convertible Preferred Stock of Glowpoint, Inc. (filed as Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
4.1 | Warrant to Purchase Common Stock, dated October 1, 2019 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
10.1 | Representation Agreement, dated July 19, 2019, by and among Glowpoint, Inc. and the stockholders party thereto (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on July 25, 2019, and incorporated herein by reference). | |
10.2 | Second Amended and Restated Employment Agreement, by and between Glowpoint, Inc. and Peter Holst, dated July 19, 2019 (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on July 25, 2019, and incorporated herein by reference). | |
10.3 | Amended and Restated Employment Agreement, by and between Glowpoint, Inc. and David Clark, dated July 19, 2019 (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on July 25, 2019, and incorporated herein by reference). | |
10.4 | Series E Preferred Stock Purchase Agreement, dated October 1, 2019, by and among Glowpoint, Inc. and the Purchasers party thereto (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
10.5 | Registration Rights Agreement, dated October 1, 2019, by and among Glowpoint, Inc. and the Purchasers party thereto (filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
10.6 | Second Amended and Restated Loan and Security Agreement, dated October 1, 2019, by and among Glowpoint, Inc., Oblong Industries, Inc., and Silicon Valley Bank (filed as Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference). | |
Rule 13a—14(a)/15d—14(a) Certification of the Chief Executive Officer. | ||
Rule 13a—14(a)/15d—14(a) Certification of the Chief Financial Officer. | ||
Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer. | ||
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. | ||
November 14, 2019 | By: | /s/ Peter Holst |
Peter Holst | ||
Chief Executive Officer | ||
(Principal Executive Officer) |
November 14, 2019 | 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, 2019 (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. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Oblong Transaction On September 12, 2019, Glowpoint entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Glowpoint Merger Sub II, Inc., a Delaware corporation and a direct wholly-owned subsidiary of Glowpoint (the “Merger Sub”), and Oblong (together with Glowpoint and the Merger Sub, the “Parties”), governing the Oblong Transaction. On October 1, 2019, prior to the Closing of the Oblong Transaction, the Parties entered into an Amendment to the Merger Agreement (the “Amendment”). On October 1, 2019 (the “Closing Date”), as contemplated by the Merger Agreement (as amended by the Amendment), the Oblong Transaction was effected pursuant to the merger of Merger Sub with and into Oblong, with Oblong continuing as the surviving corporation and as a wholly-owned subsidiary of Glowpoint. At the closing of the Oblong Transaction (the “Closing”), (i) the common and preferred stock of Oblong issued and outstanding immediately prior to the effective time of the Oblong Transaction were converted into the right to receive an aggregate of approximately 1.68 million shares of Glowpoint’s 6.0% Series D Convertible Preferred Stock (“Series D Preferred Stock”); (ii) all outstanding options exercisable for shares of Oblong common stock held by previously terminated employees of Oblong were assumed by Glowpoint and will be deemed, in the aggregate, to constitute options to acquire a total of approximately 100,000 shares of Glowpoint’s Common Stock at a volume weighted average exercise price of $4.92 per share; and (iii) all outstanding options exercisable for shares of Oblong common stock (whether or not vested) held by current employees of Oblong were cancelled and exchanged for an aggregate of approximately 50,000 restricted shares of Series D Preferred Stock (“Restricted Series D Preferred Stock”). Such shares of Restricted Series D Preferred Stock are subject to vesting over a two-year period following Closing, with twenty-five percent (25%) of such shares (the “Cliff Vesting Shares”) vesting on the first anniversary of the Closing (the “Cliff Vesting Date”) and the remaining seventy-five percent (75%) of such shares vesting in ratable monthly installments thereafter, subject to the holder’s continued employment through each such vesting date; provided, however, that in the event such holder’s employment is terminated prior to the Cliff Vesting Date without Cause (as defined in the Amendment), such holder shall remain eligible to vest in the Cliff Vesting Shares on the Cliff Vesting Date. No fractional shares of Series D Preferred Stock were issued in the Oblong Transaction. Any fractional shares of Series D Preferred Stock that would have otherwise been issued in the Oblong Transaction were rounded up to the closest full share. Series E Financing On October 1, 2019, Glowpoint entered into a Series E Preferred Stock Purchase Agreement (the “Purchase Agreement”) with the investors party thereto, who, prior to the Closing of the Oblong Transaction, were stockholders of Oblong (the “Purchasers”), relating to the offer and sale by Glowpoint in a private placement (the “Offering”) of up to 131,579 shares of its Series E Preferred Stock at a price of $28.50 per share. At an initial closing on October 1, 2019, Glowpoint sold, and the Purchasers purchased, 88,070 shares of Series E Preferred Stock for gross proceeds of approximately $2.51 million. The 88,070 shares of Series E Preferred Stock issued by Glowpoint in the Series E Financing have an aggregate Accrued Value of $2.51 million and upon their conversion will convert at a conversion price of $2.85 per share into 880,700 common shares. Glowpoint did not pay any commissions or discounts in connection with the Offering, and expects to use the net proceeds from the initial closing for general corporate purposes, which may include product development, sales and marketing, and/or general administrative expenses. Certain investors in the Series E Financing have committed to purchase an additional $1.25 million of Glowpoint’s Series E Preferred Stock, upon demand by Glowpoint, on the same terms. In connection with the Purchase Agreement, Glowpoint and the Purchasers executed a Registration Rights Agreement, dated October 1, 2019 (the “Rights Agreement”). Pursuant to the Rights Agreement, among other things, Glowpoint has provided the Purchasers with certain rights to require Glowpoint to file and maintain the effectiveness of a registration statement with respect to the re-sale of shares of Glowpoint Common Stock underlying the shares of Series D Preferred Stock issued in the Oblong Transaction and Series E Preferred Stock sold in the Series E Financing and, in each case, held by the Purchasers. SVB Loan Agreement and SVB Warrant On October 1, 2019, in connection with the Closing of the Oblong Transaction on such date, Glowpoint and Oblong, as borrowers, and SVB, as lender, executed the SVB Loan Agreement. The SVB Loan Agreement provides for a term loan facility of approximately $5.2 million (the “Loan”), all of which is currently outstanding. The SVB Loan Agreement provides that interest-only payments will be due through March 31, 2020, after which equal monthly principal and interest payments will be payable in order to fully repay the Loan by September 1, 2021. The Loan accrues interest at a rate equal to the Prime Rate (as defined in the SVB Loan Agreement) plus 200 basis points (for a total of 7.00% as of October 1, 2019). The obligations under the SVB Loan Agreement are secured by substantially all of the assets of Glowpoint and its subsidiaries, including accounts receivable, intellectual property, equipment and other personal property. The SVB Loan Agreement contains certain restrictions and covenants, which, among other things, subject to certain exceptions, restrict Glowpoint’s ability to dispose of any portion of its business or property, engage in certain material changes to its business, enter into a merger, incur additional debt or make guarantees, make distributions or create liens or other encumbrances, or enter into related party transactions outside of the ordinary course of business. The SVB Loan Agreement also 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 Glowpoint’s de-listing from the NYSE American without a listing of its Common Stock on another nationally recognized stock exchange. Upon the occurrence of an event of default, the outstanding obligations under the SVB Loan Agreement may be accelerated and become immediately due and payable. In connection with its execution of the SVB Loan Agreement, Glowpoint also issued a warrant to SVB that entitles SVB to purchase 72,394 shares of Glowpoint’s Common Stock at an exercise price of $0.01 per share (the “SVB Warrant”). The SVB Warrant has a ten (10) year term. |
Goodwill & Intangibles |
9 Months Ended |
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Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill & Intangibles | Goodwill & Intangibles 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 of 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 and used its market capitalization to determine the fair value of the reporting unit as of the test date. In order to determine the market capitalization, the Company used the trailing 20 day volume weighted average price (“VWAP”) of its stock as of September 30, 2019. As of September 30, 2019, the fair value of our reporting unit exceeded its carrying amount; therefore, no impairment charges were required in the three months ended September 30, 2019. The Company recorded goodwill impairment charges of $453,000 in the nine months ended September 30, 2019. These charges are recognized as “Impairment charges” on our Condensed Consolidated Statements of Operations. The remaining goodwill balance as of September 30, 2019 was $2,342,000. 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. 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 value 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 an evaluation of intangible assets as of September 30, 2019 and determined that the undiscounted cash flows of the long-lived assets exceeded the carrying value, therefore no impairment charges were required for the three and nine months ended September 30, 2019. |
Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net 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 unvested restricted stock. Unvested restricted stock, although classified as issued and outstanding at September 30, 2019 and 2018, is considered contingently returnable until the restrictions lapse and will not be included in the basic net loss per share calculation until the shares are vested. Unvested restricted stock does not contain non-forfeitable rights to dividends and dividend equivalents. Unvested RSUs are not included in calculations of basic net loss per share, as they are not considered issued and outstanding at time of grant. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, preferred stock, RSUs, and unvested restricted stock, to the extent they are dilutive. For the three and nine months ended September 30, 2019 and 2018, 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 (due to the net loss). The following table sets forth the computation of the Company’s basic and diluted net loss per share (in thousands, except per share data):
The weighted-average number of shares for all periods presented includes 54,370 shares of vested RSUs, respectively, as discussed in Note 7. 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 loss per share for the periods presented because including them would have had an anti-dilutive effect:
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Net Loss Per Share (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of the Company’s basic and diluted net 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 loss per share for the periods presented because including them would have had an anti-dilutive effect:
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Commitments and Contingencies - Future Undiscounted Cash Payments (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
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Lessee, Lease, Description [Line Items] | |
Remaining 2019 | $ 42 |
2020 | 23 |
Total | 65 |
ROU Lease | |
Lessee, Lease, Description [Line Items] | |
Remaining 2019 | 22 |
2020 | 23 |
Total | 45 |
Effect of discounting | (2) |
Total accrued lease liability | $ 43 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands |
9 Months Ended |
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Sep. 30, 2018
USD ($)
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Series C Preferred Stock | |
Stock issuance costs | $ 223 |
Stock Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | A summary of stock options expired under our stock incentive plans and stock options outstanding as of, and changes made during, the nine months ended September 30, 2019, is presented below:
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Summary of Restricted Stock Awards Outstanding | A summary of unvested restricted stock awards outstanding as of, and changes made during, the nine months ended September 30, 2019, is presented below:
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Summary of Restricted Stock Awards | Stock-based compensation expense related to restricted stock awards is allocated as follows (in thousands):
Stock-based compensation expense related to RSUs is allocated as follows (in thousands):
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Summary of Unvested Restricted Stock Units Activity | A summary of unvested restricted stock units (“RSUs”) outstanding as of, and changes made during, the nine months ended September 30, 2019, is presented below:
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Business Description and Significant Accounting Policies (Details) $ in Thousands |
9 Months Ended | |
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Sep. 30, 2019
segment
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Jan. 01, 2019
USD ($)
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Business Acquisition [Line Items] | ||
Number of operating segments | segment | 1 | |
Ownership percentage in subsidiary | 100.00% | |
Accounting Standards Update 2016-02 | ||
Business Acquisition [Line Items] | ||
Right-of-use assets | $ 99 | |
Lease liabilities | $ 111 | |
Estimated incremental borrowing rate | 7.75% |
(Details) - Customer Concentration Risk |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Revenues | Customer No. 1 | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 26.00% | 27.00% | 23.00% | 21.00% |
Revenues | Customer No. 2 | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 25.00% | 20.00% | 27.00% | 25.00% |
Revenues | Customer No. 3 | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 11.00% | 10.00% | ||
Accounts Receivable | Customer No. 1 | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 51.00% | |||
Accounts Receivable | Customer No. 2 | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 15.00% |
Net Loss Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Earnings Per Share [Abstract] | ||||
Weighted-average shares common stock outstanding, potentially dilutive securities or unvested restricted stock (in shares) | 0 | |||
Restricted Stock Units | Non-Employee Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average number of shares, vested (in shares) | 54,370 | 54,370 | 54,370 | 54,370 |
Stock Based Compensation - Options Outstanding (Details) - $ / shares |
9 Months Ended | |
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Sep. 30, 2019 |
Dec. 31, 2018 |
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Number of Shares Underlying Options | ||
Options outstanding, beginning (in shares) | 118,003 | |
Expired (in shares) | (440) | |
Forfeited (in shares) | (10,038) | |
Options outstanding, ending (in shares) | 107,525.000 | |
Weighted Average Exercise Price | ||
Options outstanding, beginning (in dollars per share) | $ 19.90 | |
Expired (in dollars per share) | 13.18 | |
Forfeited (in dollars per share) | 22.79 | |
Options outstanding, ending (in dollars per share) | $ 19.64 | |
Number of Shares Underlying Options/Weighted Average Exercise Price | ||
Exercisable, Number of Shares Underlying Options (in shares) | 107,525 | 118,003 |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 19.64 | $ 19.90 |
Reverse Stock Split |
9 Months Ended |
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Sep. 30, 2019 | |
Equity [Abstract] | |
Reverse Stock Split | Reverse Stock Split On April 17, 2019, the Company filed an amendment to its certificate of incorporation that effected a one-for-ten reverse stock split of the Company's issued and outstanding shares of common stock. The reverse stock split did not affect the number of authorized shares of the Company’s common stock or the par value of a share of the Company’s common stock. Proportionate adjustments were made to the per share exercise or conversion price and the number of shares issuable upon the exercise or conversion of all outstanding options and other convertible or exchangeable securities, including issued and outstanding shares of the Company’s convertible preferred stock. All shares of common stock, as well as the per share exercise or conversion price and the number of shares issuable upon the exercise or conversion of all outstanding options and other convertible or exchangeable securities, including issued and outstanding shares of the Company’s convertible preferred stock, presented in this Report have been retroactively adjusted to give effect to this reverse stock split. |
Stock Based Compensation |
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Share-based Payment Arrangement [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 440,000 shares of the Company’s common stock were initially available for issuance under the 2014 Plan. At the 2018 Annual Meeting of Stockholders held on May 31, 2018, the Company’s stockholders approved an amendment to the 2014 Plan to, among other things, increase the number of shares of common stock available for issuance under the 2014 Plan by 300,000 shares (the "Amendment"). As of September 30, 2019, 421,000 shares were available for issuance under the 2014 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, 2019, options to purchase a total of 107,500 shares of common stock and 627 shares of restricted stock were outstanding under the 2007 Plan. No shares are available for issuance under the 2007 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, 2019, options to purchase a total of 25 shares of common stock were outstanding under the 2000 Plan. No shares are available for issuance under the 2000 Plan. Stock Options For the nine months ended September 30, 2019, no stock options were granted; therefore, no fair value assumptions are presented herein. A summary of stock options expired under our stock incentive plans and stock options outstanding as of, and changes made during, the nine months ended September 30, 2019, is presented below:
Stock-based compensation expense related to stock options was $0 for the three and nine months ended September 30, 2019 and 2018. There is no remaining unrecognized stock-based compensation expense for stock options as of September 30, 2019. Restricted Stock Awards A summary of unvested restricted stock awards outstanding as of, and changes made during, the nine months ended September 30, 2019, is presented below:
Stock-based compensation expense related to restricted stock awards is allocated as follows (in thousands):
There is no material remaining unrecognized stock-based compensation expense for restricted stock awards as of September 30, 2019. Restricted Stock Units A summary of unvested restricted stock units (“RSUs”) outstanding as of, and changes made during, the nine months ended September 30, 2019, is presented below:
During the nine months ended September 30, 2019, 156,391 shares were issued to satisfy vested RSUs, of which 75,175 shares were issued from the Company’s treasury stock. The number of RSUs vested during the nine months ended September 30, 2019 includes 41,022 shares withheld and repurchased by the Company from employees to satisfy $51,000 of tax obligations relating to the vesting of such shares. Such shares are included in “Purchase of treasury stock” during the nine months ended September 30, 2019. As of September 30, 2019, 54,370 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, 2019, 11,667 unvested RSUs 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, stock-based compensation expense is recognized over the relevant performance period. As of September 30, 2019, 11,667 unvested RSUs 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 (in thousands):
The remaining unrecognized stock-based compensation expense for RSUs as of September 30, 2019 was $13,000. Of this amount $6,500 relates to time-based RSUs with a remaining weighted average period of 0.79 years. The remaining $6,500 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 financial targets or a change of control occurs. |
Geographical Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geographical Data | Geographical Data For the three and nine months ended September 30, 2019 and 2018, 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, 2019 and December 31, 2018. |
Document and Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2019 |
Nov. 08, 2019 |
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Document and Entity Information | ||
Entity Registrant Name | GLOWPOINT, INC. | |
Entity Central Index Key | 0000746210 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Reporting Status | Yes | |
Smaller Reporting Company | true | |
Emerging Growth Company | false | |
Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 5,140,500 |
Reverse Stock Split (Details) |
Apr. 17, 2019 |
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Common Stock | |
Class of Stock [Line Items] | |
Stock split ratio, common stock | 0.1 |
Business Description and Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2019 | |
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, 2018. 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. |
Leases | Leases The Company determines if an arrangement is a lease at inception. For the Company’s operating leases, the right-of-use (“ROU”) assets represents the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Since all of the lease agreements do not provide an implicit rate, the Company estimated an incremental borrowing rate in determining the present value of the lease payments. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as operating costs and property taxes are expensed as incurred. |
Treasury Stock | Treasury Stock Purchases and sales of treasury stock are accounted for using the cost method. Under this method, shares acquired are recorded at the acquisition price directly to the treasury stock account. Upon sale, the treasury stock account is reduced by the original acquisition price of the shares and any difference is recorded in equity, on a first-in first-out basis. The Company does not recognize a gain or loss to income from the purchase and sale of treasury stock. |
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Standards In February 2016 the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. On January 1, 2019, the Company adopted the new lease standard using the optional transition method under which comparative financial information will not be restated and continue to apply the provisions of the previous lease standard in its annual disclosures for the comparative periods. In addition, the new lease standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The new lease standard also provides practical expedients for an entity's ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (office buildings). For leases that qualify as short-term leases, the Company has elected to not apply the balance sheet recognition requirements of Topic 842, and instead we recognize the lease payments in the condensed consolidated statement of operations on a straight-line basis over the lease term. On January 1, 2019, the Company recognized ROU assets and lease liabilities of approximately $99,000 and $111,000, respectively, using an estimated incremental borrowing rate of 7.75%. The ROU assets are recorded in other assets and the lease liabilities are recorded in accrued expenses on the Company’s condensed consolidated balance sheet. In June 2018 the FASB issued ASU 2018-07, “Compensation - Stock Compensation (Topic 718).” The guidance simplifies the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The new guidance expands the scope to include share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations and supersedes the guidance in ASC 505-50. Effective January 1, 2019, we adopted Topic 718 and this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements In June 2016 the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The amendments introduce an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g., loans and held-to-maturity securities), including certain off-balance sheet financial instruments (e.g., loan commitments). The expected credit losses should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses. In addition, the amendments provide for a simplified accounting model for purchased financial assets with a more-than-insignificant amount of credit deterioration since their origination. The update is effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. We believe the effect of adopting this guidance on our consolidated financial statements and related disclosures will not be material. |
Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Future Rental Commitments and Undiscounted Cash Payments | Future minimum rental commitments under all non-cancelable operating leases as of September 30, 2019, are as follows (in thousands):
The following table summarizes the future undiscounted cash payments reconciled to the lease liability (in thousands):
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Liquidity and Going Concern Uncertainty |
9 Months Ended |
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Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern Uncertainty | Liquidity and Going Concern Uncertainty As of September 30, 2019, we had $1,271,000 of cash and working capital of $1,568,000. For the nine months ended September 30, 2019, we incurred a net loss of $2,113,000 and used $668,000 of net cash in operating activities. As discussed further in Note 12 “Subsequent Events”, on October 1, 2019, in connection with the Oblong Transaction: a) The Company consummated the sale of 88,070 shares of its Series E Convertible Preferred Stock (“Series E Preferred Stock”) for gross proceeds of $2.51 million (the “Series E Financing”). Certain investors in the Series E Financing have committed to purchase an additional $1.25 million of Glowpoint’s Series E Preferred Stock, upon demand by Glowpoint, on the same terms. The 88,070 shares of Series E Preferred Stock issued by Glowpoint in the Series E Financing have an aggregate Accrued Value of $2.51 million and upon their conversion will convert at a conversion price of $2.85 per share into 880,700 common shares. b) The Company and Oblong, as borrowers, and Silicon Valley Bank (“SVB”), as lender, executed a Second Amended and Restated Loan and Security Agreement (the “SVB Loan Agreement”), which amended and restated, in its entirety, the Amended and Restated Loan and Security Agreement by and between Oblong and SVB. The SVB Loan Agreement provides for a term loan facility of approximately $5.2 million (the “Loan”), all of which was outstanding at the effective time of the Oblong Merger and remains outstanding. The SVB Loan Agreement provides that interest-only payments will be due through March 31, 2020, after which equal monthly principal and interest payments will be payable in order to fully repay the loan by September 1, 2021. Our capital requirements in the future will continue to depend on numerous factors, including the timing and amount of revenue for the combined organization, customer renewal rates and the timing of collection of outstanding accounts receivable, in each case particularly as it relates to the combined organization’s major customers, the expense to deliver services, expense for sales and marketing, expense for research and development, capital expenditures, the cost involved in protecting intellectual property rights, debt service obligations under the SVB Loan Agreement, and expense related to the Oblong Transaction (such costs for Glowpoint totaled $255,000 for the three months ended September 30, 2019) including expenses required to successfully integrate Glowpoint and Oblong. While our acquisition of Oblong does provide additional revenues to the Company, the cost to further develop and commercialize Oblong’s product offerings is expected to exceed its revenues for the foreseeable future. The Company believes that, based on the combined organization’s current projection of revenue, expenses, capital expenditures, debt service obligations, and cash flows, it will not have sufficient resources to fund its operations for the next twelve months following the filing of this Report. We believe additional capital will be required to fund operations and provide growth capital including investments in technology, product development and sales and marketing. To access capital to fund operations or provide growth capital, we will need to raise capital in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital that may be needed 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. |
Geographical Data - Narrative (Details) |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Segment Reporting [Abstract] | ||
Long lived assets located in domestic markets | 100.00% | 100.00% |
Commitments and Contingencies - Future Minimum Rental Commitments (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
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Lessee, Lease, Description [Line Items] | |
Remaining 2019 | $ 42 |
2020 | 23 |
Total | 65 |
Short-Term Lease | |
Lessee, Lease, Description [Line Items] | |
Remaining 2019 | 20 |
2020 | 0 |
Total | 20 |
ROU Lease | |
Lessee, Lease, Description [Line Items] | |
Remaining 2019 | 22 |
2020 | 23 |
Total | $ 45 |
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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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 31, 2019 and March 31, 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, 2019 was $52,000 and $153,000, respectively. Rent expense for the three and nine months ended September 30, 2018 was $75,000 and $223,000, respectively. Future minimum rental commitments under all non-cancelable operating leases as of September 30, 2019, are as follows (in thousands):
The following table summarizes the future undiscounted cash payments reconciled to the lease liability (in thousands):
Operating cash flow supplemental information as of September 30, 2019: On January 1, 2019, initial ROU assets of $99,000 were recognized as a non-cash addition with the adoption of the new lease standard. Cash paid for amounts included in the present value of the operating lease liabilities was $66,000, which was included within accrued expenses for the nine months ended September 30, 2019. |
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